Document:

Exhibit 4(b)(4)

 

FIRST
AMENDMENT TO

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

 

Reference is
made to First Amended and Restated Credit Agreement dated as of March 31,
2003 (the “Agreement”) between GATEWAY PIPELINE COMPANY, a Texas corporation
and GATEWAY PROCESSING COMPANY, a Texas corporation (collectively “Borrowers”),
GATEWAY ENERGY CORPORATION, a Texas corporation (“Guarantor”) and SOUTHWEST
BANK OF TEXAS, N. A., a national banking association (the “Lender”), pursuant
to which the Borrowers amended and restated, upon the terms and conditions
therein stated, a One Million Five Hundred Thousand Dollar ($1,500,000.00)
credit facility (“Loan”) with a Maturity Date of  December 31, 2005,  subject
to  the
conditions and covenants in the Agreement and Loan Documents.

 

RECITALS:

 

A                                      The Borrowers: (a) anticipate
that they will begin to collect revenues from the Madisonville Gathering System
during the third quarter of 2003 and (b) requested the Lender to extend the
interest only period, and restate and rearrange the amortization period, of the
Loan.

 

B.                                     The Lender has approved
Borrowers’ requests, subject to the conditions and covenants specified in this
First Amendment to First Amended and Restated Credit Agreement (the
“Amendment”) and in the Loan Documents to be delivered with this First
Amendment.

 

THEREFORE,
the Borrowers and the Lender hereby agree as follows, intending to be legally
bound:

 

Section 1.                                            Definitions.  All capitalized terms shall have the meaning assigned to them in
the Agreement, except as added, restated or otherwise defined herein below:

 

(a)                                  Agreement.  The definition of Agreement is hereby restated as follows:

 

“Agreement means the First Amended and Restated
Credit Agreement, as amended by the Amendment, including the Schedules and
Exhibits thereto, respectively, as the same may be amended or supplemented from
time to time.

 

(b)                                 Amendment.  The following definition of Amendment is hereby added to the
Agreement:

 

1

 

“Amendment means the First Amendment to First
Amended and Restated Credit Agreement delivered as of July 31, 2003 by
Borrowers and Guarantor to Lender.”

 

(c)                                  Loan Documents.  The definition of Loan Documents is hereby restated as follows:

 

“Loan Documents means (a) the Agreement, as amended
by the Amendment and any certificates delivered in connection therewith,
respectively, (b) any and all promissory notes (including, without limitation,
the Note issued pursuant to the Amendment), the Security Documents and any and
other agreements in favor of Lender now or hereafter delivered pursuant to the
Agreement and (c) all future renewals, extensions, rearrangements or
restatements of, or amendments or supplements to, any of the foregoing.

 

(d)                                 Madisonville Mortgage. The definition of Madisonville
Mortgage is hereby restated as follows:

 

“Madisonville Mortgage means the First Amended
and Restated Deed of Trust,
Mortgage, Assignment of Production, Security Agreement and Financing Statement
dated as of March 31, 2003, recorded in Volume 655, page 1 of the Real
Property Records of Madison County, Texas, as amended by First Amendment to First Amended and Restated Deed of Trust,
Mortgage, Assignment of Production, Security Agreement and Financing Statement
dated as of March 31, 2003, executed by
Borrowers, as Mortgagor and Debtor, to A. Stephen Kennedy, as Trustee for the
benefit of Lender, as Beneficiary, Mortgagee and Secured Party, and any amendment, extension, modification,
renewal or supplement thereof, which (a) covers the Madisonville
Gathering System and (b) partially amends, extends and restates (but does not
discharge, novate or release)  the Deed of Trust, Mortgage,
Assignment of Production, Security Agreement and Financing Statement dated as
of August 31, 2002, and recorded in Volume
632, page 186 of the Official Public Records of Madison County, Texas, which was previously amended by (i) Second Loan
Modification Agreement dated as of February 28, 2003, recording deferred,
each of which was delivered by Borrowers,
as mortgagor and debtor, to A. Stephen Kennedy, as Trustee for the benefit of
Lender, as holder and secured party, covering the Madisonville Gathering
System.”

 

(e)                                  Note.  The definition of  Note is
hereby restated as follows:

 

“Note means (a) the promissory note dated as of
March 31, 2003, executed and delivered by Borrowers pursuant to the
Amendment, which amends,
rearranges, restates, renews and extends (but does not novate)  (i) Promissory Note dated March 31,
2003 made by Borrowers and payable to the order of Lender in the original
principal amount of One Million Five Hundred Thousand and No/100
($1,500,000.00) pursuant to the First Amended and Restated Credit Agreement and
(b) any amendment,

 

2

 

rearrangement,
restatement, renewal and extension of the Note, (ii) Promissory Note dated August 31, 2002 made by Borrowers
and payable to the order of Lender in the original principal amount of One
Million Five Hundred Thousand and No/100 ($ 1,500,000.00) pursuant to the
Existing Credit Agreement and (iii) Promissory
Note dated February 21, 2002 made by Borrowers and payable to the order of
Lender in the original principal amount of
One Million Five Hundred Thousand and NO/100ths Dollars pursuant to the Credit
Agreement of even date therewith.

 

Each of the foregoing definitions as used in the
Loan Documents shall include the definition or exhibit as amended or restated
hereby.

 

Section 2.               Amendments.  The Agreement is hereby amended and restated
as follows:

 

(a)                                  Section 2.2 of the Agreement is hereby
amended and restated as follows:

 

“2.2. Payments. 
The Borrowers shall repay the principal and accrued but unpaid interest
of the Loan advanced under the Agreement in twenty-seven (27) monthly
installments, the first twenty-six installments shall be in the amount of Fifty
Four Thousand Eight Hundred Eighteen and 54/100ths Dollars ($54,818.54) each,
and the last installment shall be in the amount of the then remaining unpaid
principal balance hereof and all accrued but unpaid interest thereon.  The first monthly installment of principal
and accrued but unpaid interest shall be due and payable on October 31,
2003 and a like installment being due and payable on each Payment Date
thereafter until the Maturity Date, when the then remaining unpaid principal
balance, and accrued but unpaid interest thereon, shall be due and payable in
full. Each payment on the Obligations must be paid at Lender’s office, 5 Post
Oak Park Place Office Building, 4400 Post Oak Parkway, Houston, Texas 77027, in
funds which are or will be available for immediate use by Lender by 2:00 p.m.
(Houston time) on the day due.  If any
action is required or any payment is to be made on a day which is not a
Business Day, then that action or payment may be delayed until the next
succeeding Business Day.  Any extension
of time shall be included in the computation of payments of interest and fees.
All payments by the Borrowers of principal of and interest on the Loan, and of
all fees and other amounts payable under any Loan Document, shall be payable
without deduction for or on account of any present or future Taxes or other
charges (excluding any franchise taxes or income taxes imposed on or measured
by the overall net income, assets net worth or shareholders’ capital of Lender)
levied or imposed by the United States of America (or by any political
subdivision or taxing authority thereof or therein) through withholding or
deduction with respect to any such payments. 
If any Taxes or other charges are so levied or imposed, the Borrowers
will make additional payments in such amounts so that every net payment of
principal of and interest on the Obligations, and of all other amounts payable
by it under any Loan Document, after withholding or deduction for or on account
of any such present or future Taxes or other charges, will not be less than the
amount provided for herein or therein.”

 

3

 

(b)                                 Sections 2.3 of the Agreement is hereby
amended and restated as follows:

 

“2.3 Interest Rate and Payments.  The principal of the Loan advanced under the
Agreement shall bear interest prior to the earlier of the Maturity Date, or
Default, at a fixed rate of seven and one-quarter per cent (7.25%) per annum.
The Borrowers shall pay accrued but unpaid interest on the principal advanced
hereunder as follows: (a) the Borrowers shall pay interest only as it accrues
on the Note beginning on April 30, 2003 and continuing on each Payment
Date thereafter until September 30, 2003; and (b) the Borrowers shall pay
installments of principal and interest as it accrues in accordance with Section
2.2 beginning on October 31, 2003 and continuing until the Maturity Date.”

 

Section 3.               Conditions
Precedent.  Borrowers acknowledge
that  the Lender’s obligations under
this Amendment are conditioned upon Borrowers’ and Guarantor’s compliance with
the conditions precedent set forth in Section 4 of the Agreement
including, without limitation, delivery of Security Documents, material
contracts, lien searches, evidence of title to Collateral and environmental
information.

 

Section 4.                                            Representations.  The Borrowers represent and warrant that all of the
representations and warranties contained in the Agreement and all instruments
and documents executed pursuant thereto or contemplated thereby are true and
correct in all material respects on and as of this date, except (a) such
representations that relate solely to an earlier date and that were true and
correct on such earlier date, and (b) the breach or inaccuracy of
representations and warranties about which the Lender has been notified in
writing prior to the date of this Amendment.

 

Section 5.                                            Continued Force and Effect.  Except as specifically amended herein, all of the terms and
conditions of the Agreement and all documents executed in connection therewith
or contemplated thereby are and remain in full force and effect in accordance
with their respective terms.  All of the
terms used herein have the same meanings as set out in the Agreement, unless
amended hereby or unless the context clearly requires otherwise.  References in the Agreement to the
“Agreement,” the “Credit Agreement”, “hereof”, “herein” and words of similar
import shall be deemed to be references to the Agreement as amended hereby.  Any reference in the Note or any of the
Security Documents to the “Agreement” or the “Credit Agreement” shall be deemed
to be references to the Agreement as amended through the date hereof.

 

Section 6.                                            Severability.  In the event any one or more provisions contained in the
Agreement or this Amendment should be held to be invalid, illegal or
unenforceable in any respect, the validity, enforceability and legality of the
remaining provisions contained herein and therein shall not be affected in any
way or impaired thereby and shall be enforceable in accordance with their
respective terms.

 

Section 7.                                            Expenses.  The Borrowers agree to pay (a) a work fee of One Thousand and
no/100ths Dollars ($1,000.00 ) to Lender and (b) all out-of-pocket costs and
expenses (including reasonable fees and expenses of legal counsel) of the
Lender in connection with the preparation and enforcement of this  Amendment.

 

4

 

Section 8.                                            Acknowledgment.  The Borrowers ratify and confirm that the Agreement, and the
other Loan Documents executed in connection therewith, or pursuant thereto, are
and remain in full force and effect in accordance with their respective terms
and that the Collateral is unimpaired by this Amendment.  The officers of each of the Borrowers
executing this Amendment, or any Loan Documents executed in connection with or
contemplated by this Amendment, represent and warrant that they have full power
and authority to execute and deliver this Amendment and the Loan Documents on
behalf of each of the Borrowers, that such execution and delivery has been duly
authorized by the Board of Directors of each of the Borrowers pursuant to
resolutions delivered to Lender contemporaneously herewith and that the
resolutions previously delivered to the Lender on March 31, 2003, in connection
with the execution and delivery of the Agreement, are and remain in full force
and effect and have not been altered, amended or repealed in anywise.

 

Section 9.                                            Governing Law.  This Amendment shall be governed by and construed in accordance
with the laws of the State of Texas and, to the extent applicable, by federal
law.

 

Section 10.                                      Affirmation of Security
Interest.  The Borrowers hereby confirm and agree that
(a) any and all Liens granted to or for the benefit of, or Collateral now or
hereafter held by, the Lender as security for payment and performance of the
Note is hereby renewed and carried forth to secure payment and performance of
all of the Obligations; and (b) the Security Documents are and remain legal,
valid and binding obligations of the parties thereto, enforceable in accordance
with their respective terms.

 

Section 11.                                      ARBITRATION. THE BORROWERS, GUARANTOR AND
LENDER AGREE THAT ALL DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN THEM, OR ANY
OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, WHETHER INDIVIDUAL, JOINT OR CLASS
IN NATURE, ARISING FROM THIS AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS
(INCLUDING CONTRACT AND TORT DISPUTES) SHALL BE ARBITRATED PURSUANT TO THE
RULES OF THE AMERICAN ARBITRATION ASSOCIATION UPON THE REQUEST OF ANY PARTY. NO
ACT TO TAKE OR DISPOSE OF ANY COLLATERAL SECURING THE OBLIGATIONS SHALL
CONSTITUTE A WAIVER OF THIS ARBITRATION PROVISION OR BE PROHIBITED BY THIS
ARBITRATION PROVISION. THE FOREGOING INCLUDES OBTAINING INJUNCTIVE RELIEF OR A
TEMPORARY RESTRAINING ORDER; INVOKING A POWER OF SALE UNDER ANY OF THE SECURITY
DOCUMENTS; OBTAINING A WRIT OF ATTACHMENT OR THE IMPOSITION OF A RECEIVER; OR
EXERCISING ANY RIGHTS RELATING TO PERSONAL PROPERTY, INCLUDING TAKING OR
DISPOSING OF SUCH PROPERTY WITH OR WITHOUT JUDICIAL PROCESS PURSUANT TO ARTICLE
9 OF THE UCC. ANY DISPUTES, CLAIMS AND CONTROVERSIES CONCERNING THE LAWFULNESS
OR REASONABLENESS OF ANY ACT OR EXERCISE OF ANY RIGHTS OR ANY RIGHT RELATING TO
THE COLLATERAL SECURING THE OBLIGATIONS (INCLUDING, WITHOUT LIMITATION, ANY
CLAIM TO RESCIND, REFORM OR OTHERWISE MODIFY ANY AGREEMENT RELATING TO THE
COLLATERAL SECURING THE OBLIGATIONS) SHALL ALSO BE ARBITRATED; PROVIDED THAT NO
ARBITRATOR SHALL HAVE THE RIGHT OR POWER TOENJOIN OR RESTRAIN ANY ACT OF ANY
PARTY.  JUDGMENT UPON ANY AWARD RENDERED
BY ANY ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION;
PROVIDED THAT NOTHING CONTAINED

 

5

 

HEREIN SHALL BE
DEEMED TO BE A WAIVER BY LENDER OF THE PROTECTIONS AFFORDED TO THE LENDER UNDER
12 USC § 91, TEX. FIN. CODE § 59.007, OR THE LAWS OF ANY OTHER STATE (TO THE
EXTENT APPLICABLE TO THE LENDER) OR ANY OTHER PROTECTION PROVIDED TO THE LENDER
BY THE LAWS OF THE STATE OF TEXAS OR THE UNITED STATES. THE STATUTE OF
LIMITATIONS, OR ESTOPPEL, LACHES, WAIVER OR SIMILAR DOCTRINES THAT WOULD
OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY A PARTY SHALL BE APPLICABLE IN
ANY ARBITRATION PROCEEDING AND THE COMMENCEMENT OF ANY ARBITRATION PROCEEDING
SHALL BE DEEMED THE COMMENCEMENT OF AN ACTION FOR THESE PURPOSES. THE FEDERAL
ARBITRATION ACT SHALL APPLY TO THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT
OF THIS ARBITRATION PROVISION. IF THE FEDERAL ARBITRATION ACT IS INAPPLICABLE
TO ANY SUCH DISPUTE, CLAIM OR CONTROVERSY FOR ANY REASON, THE ARBITRATION SHALL
BE CONDUCTED PURSUANT TO THE TEXAS GENERAL ARBITRATION ACT, THIS ARBITRATION
PROVISION AND THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION.

 

Section 12.                                      JURISDICTION AND VENUE. SUBJECT TO THE
PROVISIONS OF SECTION 11, ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO, ARISING
DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF RELATED TO OR FROM THIS
AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE LITIGATED, AT THE SOLE
DISCRETION AND ELECTION OF THE LENDER, IN THE COURTS HAVING SITUS IN HOUSTON,
HARRIS COUNTY, TEXAS. IN THAT REGARD, THE BORROWERS AND GUARANTOR HEREBY SUBMIT
TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED IN HOUSTON,
HARRIS COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO TRANSFER
OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST IT BY THE
LENDER IN ACCORDANCEWITH THIS SECTION.

 

Section 13.                                      Notice and Acknowledgment of
No Oral Agreements.  To the extent allowed by law,
the parties hereto agree to be bound by the terms of the following notice:

 

NOTICE:  THIS
AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS LOAN CONSTITUTE A WRITTEN
LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES RELATING TO THIS LOAN.

 

6

 

EXECUTED
effective as of March 31, 2003.

 

	
  Address:

  	
  BORROWERS:    

  
	
   

  	
   

  
	
  One Allen
  Center

  	
  GATEWAY
  PIPELINE COMPANY

  
	
  500 Dallas Street, Suite 2615

  	
   

  
	
  Houston,
  Texas 77002

  	
  By: 

  	
   

  	
   

  
	
  Phone:  (713) 336-0844

  	
  Michael T. Fadden, President

  
	
  Fax:  (713) 336-0855

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  GATEWAY
  PIPELINE COMPANY  

  
	
  One Allen
  Center

  	
   

  
	
  500 Dallas Street, Suite 2615

  	
  By: 

  	
   

  	
   

  
	
  Houston,
  Texas 77002

  	
  Michael T. Fadden, President

  
	
  Phone:  (713) 336-0844

  	
   

  
	
  Fax:  (713) 336-0855

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  SOUTHWEST
  BANK OF TEXAS, N.A.  

  
	
   

  	
   

  
	
  5 Post Oak
  Park Office Building

  	
   

  
	
  4400 Post
  Oak Parkway

  	
  By: 

  	
   

  	
   

  
	
  Houston,
  Texas 77027

  	
  Name:Ken
  Batson 

  
	
  Mail:

  	
  Title:Assistant
  Vice President - Energy Lending

  
	
  P. O. Box
  27459

  	
   

  
	
  Houston,
  Texas 77227-7459

  	
   

  
	
  Phone:  (713) 232-1247

  	
   

  
	
  Fax:  (713) 561-0345

  	
   

  
							

 

7Exhibit
10.1

 

 

$100,000,000

 

CREDIT AGREEMENT

 

Dated as of May
19, 2003

 

Among

 

GLADSTONE BUSINESS
LOAN, LLC

 

as the Borrower

 

GLADSTONE
ADVISERS, INC.

 

as the Servicer

 

THE FINANCIAL
INSTITUTIONS FROM TIME TO TIME PARTY HERETO

 

as Committed
Lenders

 

THE COMMERCIAL
PAPER LENDERS FROM TIME TO TIME PARTY HERETO

 

as CP Lenders

 

THE FINANCIAL
INSTITUTIONS FROM TIME TO TIME PARTY HERETO

 

as Managing Agents

 

CIBC WORLD MARKETS
CORP.

 

as the Structuring
and Syndication Agent

 

and

 

CANADIAN IMPERIAL
BANK OF COMMERCE

 

as the
Administrative Agent

 

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE I 
  DEFINITIONS

  
	
   

  	
  Section 1.1

  	
  Certain Defined Terms.

  
	
   

  	
  Section 1.2

  	
  Other Terms.

  
	
   

  	
  Section 1.3

  	
  Computation of Time Periods.

  
	
   

  	
  Section 1.4

  	
  Interpretation.

  
	
   

  	
   

  	
   

  
	
  ARTICLE II 
  ADVANCES

  
	
   

  	
  Section 2.1

  	
  Advances.

  
	
   

  	
  Section 2.2

  	
  Procedures for Advances.

  
	
   

  	
  Section 2.3

  	
  Optional Changes in Facility Amount;
  Prepayments.

  
	
   

  	
  Section 2.4

  	
  Principal Repayments.

  
	
   

  	
  Section 2.5

  	
  The Notes.

  
	
   

  	
  Section 2.6

  	
  Interest Payments.

  
	
   

  	
  Section 2.7

  	
  Fees.

  
	
   

  	
  Section 2.8

  	
  Settlement Procedures.

  
	
   

  	
  Section 2.9

  	
  Collections and Allocations.

  
	
   

  	
  Section 2.10

  	
  Payments, Computations, Etc.

  
	
   

  	
  Section 2.11

  	
  Breakage Costs.

  
	
   

  	
  Section 2.12

  	
  Increased Costs; Capital Adequacy;
  Illegality.

  
	
   

  	
  Section 2.13

  	
  Taxes.

  
	
   

  	
   

  	
   

  
	
  ARTICLE III  CLOSING; CONDITIONS OF CLOSING AND ADVANCES

  
	
   

  	
  Section 3.1

  	
  Conditions to Closing and Initial Advances.

  
	
   

  	
  Section 3.2

  	
  Conditions Precedent to All Advances.

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV 
  REPRESENTATIONS AND WARRANTIES

  
	
   

  	
  Section 4.1

  	
  Representations and Warranties of the
  Borrower.

  
	
   

  	
   

  	
   

  
	
  ARTICLE V 
  GENERAL COVENANTS OF THE BORROWER

  
	
   

  	
  Section 5.1

  	
  Covenants of the Borrower.

  
	
   

  	
  Section 5.2

  	
  Hedging Agreement.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI  SECURITY INTEREST

  
	
   

  	
  Section 6.1

  	
  Security Interest.

  
	
   

  	
  Section 6.2

  	
  Remedies.

  
	
   

  	
  Section 6.3

  	
  Release of Liens.

  
	
   

  	
  Section 6.4

  	
  Assignment of the Purchase Agreement.

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII  ADMINISTRATION AND SERVICING OF LOANS

  
	
   

  	
  Section 7.1

  	
  Appointment of the Servicer.

  
	
   

  	
  Section 7.2

  	
  Duties and Responsibilities of the
  Servicer.

  
	
   

  	
  Section 7.3

  	
  Authorization of the Servicer.

  
	
   

  	
  Section 7.4

  	
  Collection of Payments.

  

 

i

 

	
   

  	
  Section 7.5

  	
  Servicer Advances.

  
	
   

  	
  Section 7.6

  	
  Realization Upon Defaulted Loans or
  Charged-Off Loans.

  
	
   

  	
  Section 7.7

  	
  Representations and Warranties of the
  Servicer.

  
	
   

  	
  Section 7.8

  	
  Covenants of the Servicer.

  
	
   

  	
  Section 7.9

  	
  Payment of Certain Expenses by Servicer.

  
	
   

  	
  Section 7.10

  	
  Reports.

  
	
   

  	
  Section 7.11

  	
  Annual Statement as to Compliance.

  
	
   

  	
  Section 7.12

  	
  Limitation on Liability of the Servicer
  and Others.

  
	
   

  	
  Section 7.13

  	
  The Servicer Not to Resign.

  
	
   

  	
  Section 7.14

  	
  Access to Certain Documentation and
  Information Regarding the Loans.

  
	
   

  	
  Section 7.15

  	
  Merger or Consolidation of the Servicer.

  
	
   

  	
  Section 7.16

  	
  Identification of Records.

  
	
   

  	
  Section 7.17

  	
  Servicer Termination Events.

  
	
   

  	
  Section 7.18

  	
  Appointment of Successor Servicer.

  
	
   

  	
  Section 7.19

  	
  Market Servicing Fee.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII  TERMINATION EVENTS

  
	
   

  	
  Section 8.1

  	
  Termination Events.

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX  INDEMNIFICATION

  
	
   

  	
  Section 9.1

  	
  Indemnities by the Borrower.

  
	
   

  	
  Section 9.2

  	
  Indemnities by the Servicer.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X  THE ADMINISTRATIVE AGENT AND THE
  MANAGING AGENTS

  
	
   

  	
  Section 10.1

  	
  Authorization and Action.

  
	
   

  	
  Section 10.2

  	
  Delegation of Duties.

  
	
   

  	
  Section 10.3

  	
  Exculpatory Provisions.

  
	
   

  	
  Section 10.4

  	
  Reliance.

  
	
   

  	
  Section 10.5

  	
  Non-Reliance on Administrative Agent,
  Managing Agents and Other Lenders.

  
	
   

  	
  Section 10.6

  	
  Reimbursement and Indemnification.

  
	
   

  	
  Section 10.7

  	
  Administrative Agent and Managing Agents
  in their Individual Capacities.

  
	
   

  	
  Section 10.8

  	
  Successor Administrative Agent or Managing
  Agent.

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI  ASSIGNMENTS; PARTICIPATIONS

  
	
   

  	
  Section 11.1

  	
  Assignments and Participations.

  
	
   

  	
  Section 11.2

  	
  Additional Lender Groups.

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII  MISCELLANEOUS

  
	
   

  	
  Section 12.1

  	
  Amendments and Waivers.

  
	
   

  	
  Section 12.2

  	
  Notices, Etc.

  
	
   

  	
  Section 12.3

  	
  No Waiver, Rights and Remedies.

  
	
   

  	
  Section 12.4

  	
  Binding Effect.

  
	
   

  	
  Section 12.5

  	
  Term of this Agreement.

  

 

ii

 

	
   

  	
  Section 12.6

  	
  GOVERNING LAW; CONSENT TO JURISDICTION;
  WAIVER OF OBJECTION TO VENUE.

  
	
   

  	
  Section 12.7

  	
  WAIVER OF JURY TRIAL.

  
	
   

  	
  Section 12.8

  	
  Costs, Expenses and Taxes.

  
	
   

  	
  Section 12.9

  	
  No Proceedings.

  
	
   

  	
  Section 12.10

  	
  Recourse Against Certain Parties.

  
	
   

  	
  Section 12.11

  	
  Protection of Security Interest;
  Appointment of Administrative Agent as Attorney-in-Fact.

  
	
   

  	
  Section 12.12

  	
  Confidentiality.

  
	
   

  	
  Section 12.13

  	
  Execution in Counterparts; Severability;
  Integration.

  

 

EXHIBITS

 

	
  EXHIBIT A

  	
  Form of Borrower Notice

  
	
  EXHIBIT B

  	
  Form of Note

  
	
  EXHIBIT C

  	
  Form of Assignment and
  Acceptance

  
	
  EXHIBIT D

  	
  Form of Joinder
  Agreement

  
	
  EXHIBIT E

  	
  Form of Monthly Report

  
	
  EXHIBIT F

  	
  Form of Servicer’s
  Certificate

  
	
  EXHIBIT G

  	
  [Reserved]

  
	
  EXHIBIT H

  	
  Form of Primary
  Document Trust Receipt

  
	
  EXHIBIT I

  	
  Form of Assignment of
  Mortgage

  
	
  EXHIBIT J-l

  	
  Officer’s Certificate
  as to Solvency from Originator

  
	
  EXHIBIT J-2

  	
  Officer’s Certificate
  as to Solvency from Borrower

  
	
  EXHIBIT K-1

  	
  Officer’s Closing
  Certificate from Originator

  
	
  EXHIBIT K-2

  	
  Officer’s Closing
  Certificate from Borrower

  
	
  EXHIBIT K-3

  	
  Officer’s Closing
  Certificate from Servicer

  
	
  EXHIBIT L

  	
  Form of Lock-Box
  Agreement

  
	
  EXHIBIT M

  	
  Credit Report and
  Transaction Summary

  

 

SCHEDULES

 

	
  SCHEDULE I

  	
  Schedule of Documents

  
	
  SCHEDULE II

  	
  List of Lock-Box Banks,
  Lock-Box Accounts, Collection Account and Securities Accounts

  
	
  SCHEDULE III

  	
  Loan List

  
	
  SCHEDULE IV

  	
  Form of Loans

  

 

iii

 

THIS
CREDIT AGREEMENT is made as of May 19, 2003, among:

 

(1)                                  GLADSTONE
BUSINESS LOAN, LLC, a Delaware limited liability company,  as borrower (the “Borrower”);

 

(2)                                  GLADSTONE
ADVISERS, INC., a Virginia corporation, as servicer (the “Servicer”);

 

(3)                                  Each
financial institution from time to time party hereto as a “Committed Lender”
and their respective successors and assigns (collectively, the “Committed Lenders”);

 

(4)                                  Each
commercial paper issuer from time to time party hereto as a “CP Lender” and
their respective successors and assigns (collectively, the “CP Lenders”);

 

(5)                                  Each
financial institution from time to time party hereto as a “Managing Agent” and
their respective successors and assigns (collectively, the “Managing Agents”);

 

(6)                                  CIBC
WORLD MARKETS CORP. (“CIBC World Markets”), as Structuring and
Syndication Agent (the “Structuring and
Syndication Agent”); and

 

(7)                                  CANADIAN
IMPERIAL BANK OF COMMERCE (“CIBC”), as “Administrative Agent” and its
respective successors and assigns (the “Administrative
Agent”).

 

IT IS AGREED as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                                   Certain
Defined Terms.

 

(a)                                  Certain
capitalized terms used throughout this Agreement are defined above or in this
Section 1.1.

 

(b)                                 As
used in this Agreement and its exhibits, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined).

 

Additional Amount:  Defined in Section 2.13.

 

Adjusted
Eurodollar Rate:  For
any Settlement Period, an interest rate per annum equal to the quotient,
expressed as a percentage and rounded upwards (if necessary), to the nearest
1/100 of 1%, (i) the numerator of which is equal to the LIBO Rate for such
Settlement Period and (ii) the denominator of which is equal to 100% minus
the Eurodollar Reserve Percentage for such Settlement Period.

 

Administrative
Agent:  Defined in the
preamble hereto.

 

Advance:  Defined in Section 2.1(a).

 

 

Advances
Outstanding:  On any
day, the aggregate principal amount of Advances outstanding on such day, after
giving effect to all repayments of Advances and makings of new Advances on such
day.

 

Adverse Claim:  A lien, security interest, pledge, charge,
encumbrance or other right or claim of any Person.

 

Affected Committed
Lender:  Defined in Section
11.1(c).

 

Affected Party:  Defined in Section 2.12(a).

 

Affiliate:  With respect to a Person means any other
Person controlling, controlled by or under common control with such
Person.  For purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” or “controlled” have meanings
correlative to the foregoing.

 

Agent’s Account:  Account number 2000010217564 in the name of
the Administrative Agent at First Union Bank.

 

Aggregate
Outstanding Loan Balance: 
On any day, the sum of the Outstanding Loan Balances of all Eligible
Loans included as part of the Collateral on such date.

 

Aggregate
Purchased Loan Balance: 
On any day, (a) the sum of the Purchased Loan Balances of all Eligible
Loans included as part of the Collateral on such date minus (b) the
Excess Concentration Amount as of such date.

 

Agreement
or Credit Agreement:  This Credit
Agreement, dated as of May 19, 2003, as amended, modified, supplemented or
restated from time to time.

 

Alternative Rate:  An interest rate per annum equal to the
Adjusted Eurodollar Rate; provided, however, that the Alternative Rate shall be
the Base Rate if a Eurodollar Disruption Event occurs; and, provided, further,
that the Alternative Rate for the first two (2) Business Days following any
Advance made by a Committed Lender shall be the Base Rate unless such Committed
Lender has received at least two (2) Business Days’ prior notice of such
Advance.

 

Amortization
Period:  The period
beginning on the Termination Date and ending on the Collection Date.

 

Applicable Law:  For any Person, all existing and future
applicable laws, rules, regulations (including proposed, temporary and final
income tax regulations), statutes, treaties, codes, ordinances, permits,
certificates, orders and licenses of and interpretations by any Governmental
Authority (including, without limitation, usury laws, the Federal Truth in
Lending Act, and Regulation Z, Regulation W and Regulation B of the Federal
Reserve Board), and applicable judgments, decrees, injunctions, writs, orders,
or line action of any court, arbitrator or other administrative, judicial, or
quasi-judicial tribunal or agency of competent jurisdiction.

 

2

 

Assignment and Acceptance:  Defined in Section 11.1(b).

 

Assignment of
Mortgage:  As to each
Loan secured by an interest in real property, one or more assignments, notices
of transfer or equivalent instruments, each in recordable form and sufficient
under the laws of the relevant jurisdiction to reflect the transfer of the
related mortgage, deed of trust, security deed or similar security instrument
and all other documents related to such Loan and to the Borrower and to grant a
perfected lien thereon by the Borrower in favor of the Administrative Agent on
behalf of the Secured Parties, each such Assignment of Mortgage to be
substantially in the form of Exhibit I hereto.

 

Availability:  On any day, the lesser of (i) the amount by
which the Borrowing Base exceeds the Advances Outstanding on such day and (ii)
the amount by which the Facility Amount exceeds the Advances Outstanding on
such day; provided, however, during the Amortization Period, the
Availability shall be zero.

 

Available
Collections:  Defined
in Section 2.8(a).

 

Backup Servicer:  BNY Asset Solutions, LLC, in its capacity as
Backup Servicer under the Backup Servicing Agreement, together with its
successors and assigns.

 

Backup Servicer
Expenses:  The
out-of-pocket expenses to be paid to the Backup Servicer under the Backup
Servicing Agreement.

 

Backup Servicer
Fee:  The fee to be
paid to the Backup Servicer as set forth in the Backup Servicing Agreement.

 

Backup Servicing
Agreement:  The Backup
Servicing Agreement, dated as of the date hereof among the Borrower, the Servicer,
the Administrative Agent and the Backup Servicer, as the same may from time to
time be amended, supplemented, waived or modified.

 

Bankruptcy Code:  The United States Bankruptcy Reform Act of
1978 (11 U.S.C. §§ 101, et  seq.), as amended from time to time.

 

Base Rate:  On any date, a fluctuating rate of interest
per annum equal to the higher of (a) the Prime Rate or (b) the Federal Funds
Rate plus 1.0%.

 

Benefit Plan:  Any employee benefit plan as defined in
Section 3(3) of ERISA in respect of which the Borrower or any ERISA Affiliate
of the Borrower is, or at any time during the immediately preceding six years
was, an “employer” as defined in Section 3(5) of ERISA.

 

Borrower:  Gladstone Business Loan, LLC, a Delaware
limited liability company, or any permitted successor thereto.

 

Borrowing Base:  On any date of determination, (a) the
Aggregate Purchased Loan Balance minus (b) the Required Equity
Contribution.

 

Borrowing Base
Test:  As of any date,
a determination that the Borrowing Base shall be equal to or greater than the
Advances Outstanding.

 

3

 

Borrower Notice:  A written notice, in the form of Exhibit
A, to be used for each borrowing, repayment of each Advance or termination
or reduction of the Facility Amount or Prepayments of Advances.

 

Breakage Costs:  Defined in Section 2.11.

 

Business Day:  Any day of the year other than a Saturday or
a Sunday on which (a) (i) banks are not required or authorized to be closed in
New York, New York, and Virginia or (ii) which is not a day on which the Bond
Market Association recommends a closed day for the U.S. Bond Market, and (b) if
the term “Business Day” is used in connection with the Adjusted Eurodollar
Rate, means the foregoing only if such day is also a day of year on which
dealings in United States dollar deposits are carried on in the London
interbank market.

 

Change-in-Control:  With respect to any entity, the date on
which (i) any Person or “group” acquires any “beneficial ownership” (as such
terms are defined under Rule 13d-3 of, and Regulation 13D under, the Securities
Exchange Act of 1934, as amended), either directly or indirectly, of membership
interests or other equity interests or any interest convertible into any such
interest in such entity having more than fifty percent (50%) of the voting
power for the election of managers of such entity, if any, under ordinary
circumstances, or (ii) (except in connection with any Securitization) an entity
sells, transfers, conveys, assigns or otherwise disposes of all or
substantially all of the assets of such entity.

 

Charged-Off Loan:  Any Loan (i) that is 120 days past due with
respect to any interest or principal payment, (ii) for which an Insolvency
Event has occurred with respect to the related Obligor or (iii) that is or
should be written off as uncollectible by the Servicer in accordance with the
Credit and Collection Policy.

 

Charged-Off Ratio:  With respect to any Settlement Period, the
percentage equivalent of a fraction, calculated as of the Determination Date
for such Settlement Period, (i) the numerator of which is equal to the
aggregate Outstanding Loan Balance of all Loans that became Charged-Off Loans
during such Settlement Period and (ii) the denominator of which is equal to the
sum of (A) the Aggregate Outstanding Loan Balance as of the first day of such
Settlement Period and (B) the Aggregate Outstanding Loan Balance as of the last
day of such Settlement Period divided by 2.

 

CIBC:  Canadian Imperial Bank of Commerce, in its
individual capacity, and its successors or assigns.

 

Closing Date:  May 19, 2003.

 

Code:  The Internal Revenue Code of 1986, as
amended.

 

Collateral:  All right, title and interest, whether now
owned or hereafter acquired or arising, and wherever located, of the Borrower
in, to and under any and all of the following:

 

(i)                                     the
Transferred Loans, and all monies due or to become due in payment of such Loans
on and after the related Purchase Date;

 

4

 

(ii)                                  any
Related Property securing the Transferred Loans including all proceeds from any
sale or other disposition of such Related Property;

 

(iii)                               the
Loan Documents relating to the Transferred Loans;

 

(iv)                              all
Supplemental Interests related to any Transferred Loans;

 

(v)                                 the
Collection Account, all funds held in such account, and all certificates and
instruments, if any, from time to time representing or evidencing the
Collection Account or such funds;

 

(vi)                              all
Collections and all other payments made or to be made in the future with
respect to the Transferred Loans, including such payments under any guarantee
or similar credit enhancement with respect to such Loans;

 

(vii)                           all
Hedge Collateral;

 

(viii)                        all income
and Proceeds of the foregoing;

 

Collateral
Custodian:  BNY
Midwest Trust Company, in its capacity as Collateral Custodian under the
Custody Agreement, together with its successors and assigns.

 

Collateral
Custodian Expenses: 
The out-of-pocket expenses to be paid to the Collateral Custodian under
the Custody Agreement.

 

Collateral
Custodian Fee:  The
fee to be paid to the Collateral Custodian as set forth in the Custody
Agreement.

 

Collection Account:  Defined in Section 7.4(e).

 

Collection Date:  The date following the Termination Date on
which all Advances Outstanding have been reduced to zero, the Lenders have
received all accrued Interest, fees, and all other amounts owing to them under
this Agreement and the Hedging Agreement, the Hedge Counterparties have
received all amounts due and owing hereunder and under the Hedge Transactions,
and each of the Backup Servicer, the Collateral Custodian, the Administrative
Agent and the Managing Agents have each received all amounts due to them in
connection with the Transaction Documents.

 

Collections:  (a) All cash collections or other cash
proceeds of a Transferred Loan received by or on behalf of the Borrower by the
Servicer or Originator from or on behalf of any Obligor in payment of any
amounts owed in respect of such Transferred Loan, including, without
limitation, Interest Collections, Principal Collections, Deemed Collections,
Insurance Proceeds, and all Recoveries, (b) all amounts received by the Buyer
in connection with the repurchase of an Ineligible Loan pursuant to Section 6.1
of the Purchase Agreement, (c) all amounts received by the Administrative Agent
in connection with the purchase of a Transferred Loan pursuant to Section
7.7, (d) all payments received pursuant to any Hedging Agreement or Hedge
Transaction, and (e) interest earnings in the Collection Account.

 

5

 

Commercial Paper
Notes:  On any day,
any short-term promissory notes issued by any CP Lender with respect to
financing any Advance hereunder that are allocated, in whole or in part, by
such CP Lender to fund or maintain the Advances Outstanding.

 

Commitment:  (a) For each Committed Lender, the
commitment of such Committed Lender to fund any Advance to the Borrower in an
amount not to exceed the amount set forth opposite such Committed Lender’s name
on the signature pages of this Agreement, as such amount may be modified in
accordance with the terms hereof and (b) with respect to any Person who becomes
a Committed Lender pursuant to an Assignment and Acceptance or a Joinder
Agreement, the commitment of such Person to fund any Advance to the Borrower in
an amount not to exceed the amount set forth in such Assignment and Acceptance
or Joinder Agreement, as such amount may be modified in accordance with the
terms hereof.

 

Commitment
Termination Date:  May
17, 2004 or such later date to which the Commitment Termination Date may be
extended (if extended) in the sole discretion of the Lenders in accordance with
the terms of Section 2.1(b).

 

Committed Lenders:  Defined in the preamble hereto.

 

Concord:  Concord Minutemen Capital Company, LLC, a
Delaware limited liability company.

 

Contractual
Obligation:  With
respect to any Person, means any provision of any securities issued by such
Person or any indenture, mortgage, deed of trust, contract, undertaking,
agreement, instrument or other document to which such Person is a party or by
which it or any of its property is bound or is subject.

 

CP Lenders:  Defined in the preamble hereto.

 

CP Rate:  For any Settlement Period for any Advances
made by a CP Lender, the per annum rate equivalent to the weighted average of
the per annum rates paid or payable by such CP Lender from time to time as
interest on or otherwise (by means of interest rate hedges or otherwise taking
into consideration any incremental carrying costs associated with short-term
promissory notes issued by such CP Lender maturing on dates other than those
certain dates on which such CP Lender is to receive funds) in respect of the
Commercial Paper Notes issued by such CP Lender during such period, as
determined by such CP Lender and reported to the Borrower and the Servicer,
which rates shall reflect and give effect to (i) the commissions of placement
agents and dealers in respect of such promissory notes, to the extent such
commissions are allocated, in whole or in part, to such promissory notes by
such CP Lender and (ii) an additional 0.03% for any Advance made during any
Peak CP Funding Period, provided, however, that if any component
of such rate is a discount rate, in calculating the CP Rate, such CP Lender
shall for such component use the rate resulting from converting such discount
rate to an interest bearing equivalent rate per annum.

 

Credit and
Collection Policy: 
Those credit, collection, customer relation and service policies (i)
determined by the Borrower, the Originator and the initial Servicer as of the
date hereof relating to the Transferred Loans and related Loan Documents, as on
file with the Administrative Agent and as the same may be amended or modified
from time to time in

 

6

 

accordance with Sections
5.1(r) and 7.8(g); and (ii) with respect to any Successor Servicer,
the collection procedures and policies of such person (as approved by the
Administrative Agent) at the time such Person becomes Successor Servicer.

 

Custody Agreement:  The Custodial Agreement, dated as of the
date hereof among the Borrower, the Servicer, the Originator, the
Administrative Agent and the Collateral Custodian, as the same may from time to
time be amended, supplemented, waived or modified.

 

Deemed Collections:  On any day, the aggregate of all amounts
Borrower shall have been deemed to have received as a Collection of a
Transferred Loan.  Borrower shall be
deemed to have received a Collection in an amount equal to the unpaid balance
(including any accrued interest thereon) of a Transferred Loan if at any time
the Outstanding Loan Balance of any such Loan is either (i) reduced as a result
of any discount or any adjustment or otherwise by Borrower (other than receipt
of cash Collections) or (ii) reduced or canceled as a result of a setoff in
respect of any claim by any Person (whether such claim arises out of the same
or a related transaction or an unrelated transaction).

 

Defaulted Loan:  Any Transferred Loan (i) that is 60 days
past due with respect to any interest or principal payments or (ii) in respect
of which the Servicer or Originator shall have taken any of the following
actions: charging a default rate of interest, restricting Obligor’s right to
make subordinated payments (other than payments in respect of owner’s debts and
seller financings), acceleration of the Transferred Loan, foreclosure on
collateral for the Loan, increasing its representation on the Obligor’s Board
of Directors or similar governing body, or increasing the frequency of its
inspection rights to permit inspection on demand.

 

Default Ratio:  With respect to any Settlement Period, the
percentage equivalent of a fraction, calculated as of the Determination Date
for such Settlement Period, (a) the numerator of which is equal to the
aggregate Outstanding Loan Balance of all Transferred Loans (excluding
Charged-Off Loans) included as part of the Collateral that became Defaulted
Loans during such Settlement Period and (b) the denominator of which is equal
to (i) the sum of (x) the Aggregate Outstanding Loan Balance as of the first
day of such Settlement Period and (y) the Aggregate Outstanding Loan Balance as
of the last day of such Settlement Period divided by (ii) two.

 

Derivatives:  Any exchange-traded or over-the-counter (i)
forward, future, option, swap, cap, collar, floor, foreign exchange contract,
any combination thereof, whether for physical delivery or cash settlement,
relating to any interest rate, interest rate index, currency, currency exchange
rate, currency exchange rate index, debt instrument, debt price, debt index,
depository instrument, depository price, depository index, equity instrument,
equity price, equity index, commodity, commodity price or commodity index, (ii)
any similar transaction, contract, instrument, undertaking or security, or
(iii) any transaction, contract, instrument, undertaking or security containing
any of the foregoing.

 

Determination Date:  The last day of each Settlement Period.

 

Early Termination
Event:  Defined in Section
8.1.

 

Eligible Assignee:  A Person (a) whose short-term rating is at
least A-1 from S&P and P-1 from Moody’s, or whose obligations under this
Agreement are guaranteed by a Person

 

7

 

whose short-term rating
is at least A-1 from S&P and P-1 from Moody’s and (b) who is approved by
the Administrative Agent (such approval not to be unreasonably withheld) and,
if such Person will become a Liquidity Bank for a CP Lender, by such CP Lender.

 

Eligible Loan:  On any date of determination, each Loan
which satisfies each of the following requirements:

 

(i)                                     the
Loan is evidenced by a promissory note that has been duly authorized and that,
together with the related Loan Documents, is in full force and effect and
constitutes the legal, valid and binding obligation of the Obligor of such Loan
to pay the stated amount of the Loan and interest thereon, and the related Loan
Documents are enforceable against such Obligor in accordance with their
respective terms;

 

(ii)                                  the
Loan was originated in accordance with the terms of the Credit and Collection
Policy and arose in the ordinary course of the Originator’s business from the
lending of money to the Obligor thereof;

 

(iii)                               the
Loan is not a Defaulted Loan;

 

(iv)                              the
Obligor of such Loan has executed all appropriate documentation required by the
Originator;

 

(v)                                 the
Loan, together with the Loan Documents related thereto, is a “general
intangible”, an “instrument”, an “account”, or “chattel paper” within the
meaning of the UCC of all jurisdictions that govern the perfection of the
security interest granted therein;

 

(vi)                              all
material consents, licenses, approvals or authorizations of, or registrations
or declarations with, any Governmental Authority required to be obtained,
effected or given in connection with the making of such Loan have been duly
obtained, effected or given and are in full force and effect;

 

(vii)                           the
Loan is denominated and payable only in United States dollars in the United
States;

 

(viii)                        except for
PIK Loans, the Loan bears interest, which is due and payable no less frequently
than quarterly;

 

(ix)                                the
Loan, together with the Loan Documents related thereto, does not contravene in
any material respect any Applicable Laws (including, without limitation, laws,
rules and regulations relating to usury, truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy) and with respect to which no party to the Loan Documents related
thereto is in material violation of any such Applicable Laws;

 

(x)                                   the
Loan, together with the related Loan Documents, is fully assignable, (and if
such Loan is secured by an interest in real property, an Assignment of Mortgage
executed in blank has been delivered to the Collateral Custodian);

 

8

 

(xi)                                the
Loan was documented and closed in accordance with the Credit and Collection
Policy, including the relevant opinions and assignments, and there is only one
current original promissory note;

 

(xii)                             the
Loan and all Related Property are free of any Liens except for Permitted Liens;

 

(xiii)                          the Loan
has an original term to maturity of no more than 84 months, and is either fully
amortizing in installments (which installments need not be in identical
amounts) over such term or the principal amount thereof is due in a single
installment at the end of such term;

 

(xiv)                         no right
of rescission, set off, counterclaim, defense or other material dispute has
been asserted with respect to such Loan;

 

(xv)                            any
Related Property with respect to such Loan is insured in accordance with the
Credit and Collection Policy;

 

(xvi)                         the
Obligor with respect to such Loan is an Eligible Obligor;

 

(xvii)                      if such Loan
is a PIK Loan, such Loan shall pay a minimum of nine percent (9.0%) per annum
current interest, on at least a quarterly basis;

 

(xviii)                   the addition of
which to the Transferred Loans will not cause (A) the remaining weighted
average life of the Transferred Loans to exceed 48 months, (B) the weighted average
interest rate in respect of Transferred Loans which accrue interest at a fixed
rate to be less than 8.0%, (C) the weighted average interest rate in respect of
Transferred Loans which accrue interest at a floating rate (x) to be less than
the sum of the LIBO Rate plus 5.00% or (y) to be less than 8.0% or (D) the
weighted average risk rating of the portfolio to be less than 4 (or the
equivalent of B-/B3 by S&P and Moody’s respectively), as determined by the
Servicer’s risk rating model; and

 

(xix)                           the Loan
is not a loan or extension of credit made by the Originator or one of its
subsidiaries to an Obligor for the purpose of making any principal, interest or
other payment on such Loan necessary in order to keep such Loan from becoming
delinquent.

 

Eligible Obligor:
On any day, any Obligor that satisfies each of the following requirements:

 

(i)                                     such
Obligor’s principal office and any Related Property are located in the United
States or any territory of the United States

 

(ii)                                  no
other Loan of such Obligor is a Defaulted Loan;

 

(iii)                               the
business being financed by such Obligor has been operating in the same line of
business for at least 36 months from the date of its incorporation or
formation;

 

9

 

(iv)                              such
Obligor is not the subject of any Insolvency Event;

 

(v)                                 such
Obligor is not a Governmental Authority; and

 

(vi)                              such
Obligor is in material compliance with all material terms and conditions of its
Loan Documents.

 

ERISA:  The U.S. Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.

 

ERISA Affiliate:  (a) Any corporation that is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as the Borrower; (b) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with the Borrower or (c) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Code) as the Borrower, any
corporation described in clause (a) above or any trade or business described in
clause (b) above.

 

Eurodollar
Disruption Event: 
With respect to any Advance as to which Interest accrues or is to accrue
at a rate based upon the Adjusted Eurodollar Rate, any of the following:  (a) a determination by a Lender that it
would be contrary to law or to the directive of any central bank or other
governmental authority (whether or not having the force of law) to obtain
United States dollars in the London interbank market to make, fund or maintain
any Advance; (b) the inability of any Lender to obtain timely information for
purposes of determining the Adjusted Eurodollar Rate; (c) a determination by a
Lender that the rate at which deposits of United States dollars are being
offered to such Lender in the London interbank market does not accurately
reflect the cost to such Lender of making, funding or maintaining any Advance;
or (d) the inability of a Lender to obtain United States dollars in the London
interbank market to make, fund or maintain any Advance.

 

Eurodollar Reserve
Percentage:  On any
day, the then applicable percentage (expressed as a decimal) prescribed by the
Federal Reserve Board (or any successor) for determining reserve requirements
applicable to “Eurocurrency Liabilities” pursuant to Regulation D or any other
then applicable regulation of the Federal Reserve Board (or any successor) that
prescribes reserve requirements applicable to “Eurocurrency Liabilities” as presently
defined in Regulation D.

 

Excess
Concentration Amount: 
On any date of determination, the sum of, without duplication, (a) the
aggregate amount by which the Outstanding Loan Balances of Eligible Loans
included as part of the Collateral, the Obligors of which are residents of any
one state, exceeds 30% of the Aggregate Outstanding Loan Balance, (b) the
aggregate amount by which the Outstanding Loan Balances of Eligible Loans
included as part of the Collateral, the Obligors of which are in the same Industry,
exceeds 25% of the Aggregate Outstanding Loan Balance, (c) the aggregate amount
by which the Outstanding Loan Balance of each Eligible Loan included as part of
the Collateral exceeds the Large Loan Limit applicable to such Eligible Loan,
(d) the aggregate amount by which the Outstanding Loan Balances of all Eligible
Loans included as part of the Collateral whose interest payments are due and
payable less frequently than monthly exceeds 33 1/3% of the Aggregate
Outstanding Loan Balance, and (e) the aggregate amount by

 

10

 

which the Outstanding
Loan Balances of all Eligible Loans included as part of the Collateral which
are PIK Loans exceeds 25% of the Aggregate Outstanding Loan Balance.

 

Facility Amount:  At any time, $100,000,000; provided, however,
that on or after the Termination Date, the Facility Amount shall be equal to
the amount of Advances outstanding.

 

Fair Market Value:  With respect to each Eligible Loan, the
lesser of (a) the original principal amount of such Eligible Loan, and (b) if
such Eligible Loan has been reduced in value below the original principal
amount thereof (other than as a result of the allocation of a portion of the
original principal amount to warrants), the value of such Eligible Loan as
required by, and in accordance with, the 1940 Act, as amended, and any orders
of the SEC issued to the Originator, to be determined by the Board of Directors
of the Originator and reviewed by its auditors.

 

FASB:  Defined in Section 2.12(a).

 

Federal Funds Rate:  For any period, a fluctuating interest rate
per annum for each day during such period equal to (a) the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the preceding Business Day) by the
Federal Reserve Bank of New York; or (b) if such rate is not so published for
any day which is a Business Day, the average of the quotations at approximately
10:30 a.m. (New York City time) for such day on such transactions received by
CIBC from three federal funds brokers of recognized standing selected by it.

 

Federal Reserve
Board:  The Board of
Governors of the Federal Reserve System.

 

Fee Letter:  Any letter agreement in respect of fees
among the Borrower, the Originator and the Administrative Agent or any Managing
Agent, as it may be amended or modified and in effect from time to time.

 

Funding Date:  Any day on which an Advance is made in
accordance with and subject to the terms and conditions of this Agreement.

 

Funding Request:  A Borrower Notice requesting an Advance and
including the items required by Section 2.2.

 

GAAP:  Generally accepted accounting principles as
in effect from time to time in the United States.

 

Governmental
Authority:  With
respect to any Person, any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
court or arbitrator having jurisdiction over such Person.

 

Group Advance
Limit:  For each
Lender Group, the sum of the Commitments of the Committed Lenders in such
Lender Group.

 

11

 

Guarantor Event of
Default:  The
occurrence of any “Event of Default” under and as defined in the Performance
Guaranty.

 

Hedge Breakage
Costs:  For any Hedge
Transaction, any amount payable by the Borrower for the early termination of
that Hedge Transaction or any portion thereof.

 

Hedge Collateral:  Defined in Section 5.2(b).

 

Hedge Counterparty:  CIBC or any entity that (a) on the date of
entering into any Hedge Transaction (i) is an interest rate swap dealer that is
either a Lender or an Affiliate of a Lender, or has been approved in writing by
the Administrative Agent (which approval shall not be unreasonably withheld),
and (ii) has a short-term unsecured debt rating of not less than A-1 by S&P
and not less than P-1 by Moody’s, and (b) in a Hedging Agreement (i) consents
to the assignment of the Borrower’s rights under the Hedging Agreement to the
Administrative Agent pursuant to Section 5.2(b) and (ii) agrees that in
the event that S&P or Moody’s reduces its short-term unsecured debt rating
below A-1 or P-1, respectively, it shall transfer its rights and obligations
under each Hedging Transaction to another entity that meets the requirements of
clause (a) and (b) hereof or make other arrangements acceptable to the
Administrative Agent and the Rating Agencies.

 

Hedge Notional
Amount:  The aggregate
notional amount in effect on any day under all Hedge Transactions entered into
pursuant to Section 5.2 which have not matured, been terminated or
cancelled.

 

Hedge Transaction:  Each interest rate cap transaction between
the Borrower and a Hedge Counterparty that is entered into pursuant to Section
5.2 and is governed by a Hedging Agreement.

 

Hedging Agreement:  Each agreement between the Borrower and a
Hedge Counterparty that governs one or more Hedge Transactions entered into
pursuant to Section 5.2, which agreement shall consist of a “Master
Agreement” in a form published by the International Swaps and Derivatives Association,
Inc., together with a “Schedule” thereto substantially in a form as the
Administrative Agent shall approve in writing, and each “Confirmation”
thereunder confirming the specific terms of each such Hedge Transaction.

 

Increased Costs:  Any amounts required to be paid by the
Borrower to an Affected Party pursuant to Section 2.12.

 

Indebtedness:  With respect to the Borrower or the initial
Servicer at any date, (a) all indebtedness of such Person for borrowed money or
for the deferred purchase price of property or services (other than current
liabilities incurred in the ordinary course of business and payable in
accordance with customary trade practices) or that is evidenced by a note,
bond, debenture or similar instrument, (b) all obligations of such Person under
capital leases, (c) all obligations of such Person in respect of acceptances
issued or created for the account of such Person, (d) all liabilities secured
by any Adverse Claims on any property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment thereof, and
(e) all indebtedness, obligations or liabilities of that Person in respect of
Derivatives, and (f) obligations under direct or indirect guaranties in respect
of obligations (contingent or otherwise) to purchase

 

12

 

or otherwise acquire, or
to otherwise assure a creditor against loss in respect of, clauses (a)
through (e) above.

 

Indemnified
Amounts:  Defined in Section
9.1.

 

Indemnified Party:  Defined in Section 9.1.

 

Industry:  The industry of an Obligor as determined by
reference to the four digit standard industry classification codes.

 

Ineligible Loan:  Defined in the Purchase Agreement.

 

Insolvency Event:  With respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable Insolvency Law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person’s
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable Insolvency Law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person
generally to pay its debts as such debts become due, or the taking of action by
such Person in furtherance of any of the foregoing.

 

Insolvency Laws:  The Bankruptcy Code and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments, or similar
debtor relief laws from time to time in effect affecting the rights of
creditors generally.

 

Insolvency
Proceeding:  Any case,
action or proceeding before any court or Governmental Authority relating to an
Insolvency Event.

 

Insurance Policy:  With respect to any Loan included in the
Collateral, an insurance policy covering physical damage to or loss to any
assets or Related Property of the Obligor securing such Loan.

 

Insurance Proceeds:  Any amounts payable or any payments made, to
the Borrower or to the Servicer on its behalf under any Insurance Policy.

 

Interest:  For each Settlement Period and each Advance
outstanding during such Settlement Period, the product of:

 

	
   

  	
  IR x P x 

  	
  AD

  360

  

 

13

 

where

 

IR                                    =                                         the
Interest Rate applicable to such Advance;

 

P                                         =                                         the
principal amount of such Advance on the first day of such Settlement Period, or
if such

Advance was first
made during such Settlement Period, the principal amount of such Advance on the
day such Advance is made; and

 

AD                             =                                         the
actual number of days in such Settlement Period, or if such Advance was first
made during

such Settlement
Period, the actual number of days beginning on the day such Advance was first
made through the end of such Settlement Period;

 

provided, however, that (i)
no provision of this Agreement shall require or permit the collection of
Interest in excess of the maximum permitted by Applicable Law and (ii) Interest
shall not be considered paid by any distribution if at any time such
distribution is rescinded or must otherwise be returned for any reason.

 

Interest
Collections:  Any and
all amounts received in respect of any interest, fees or other similar charges
on a Transferred Loan from or on behalf of any Obligors that are deposited into
the Collection Account, or received by the Borrower or on behalf of the
Borrower by the Servicer or Originator in respect of the Transferred Loans, in
the form of cash, checks, wire transfers, electronic transfers or any other
form of cash payment (net of any payment owed by the Borrower to, and including
any receipts from, any Hedge Counterparties) and, solely for purposes of
calculating the Portfolio Rate, any and all amounts accrued in respect of any
fees and interest (but only to the extent such fees or interest were not
received during the applicable Settlement Period) owed by any Obligor in
respect of any Transferred Loan.

 

Interest Rate:  For any Settlement Period:

 

(a)                                  to
the extent the Lender is a CP Lender that is funding the applicable Advance or
portion thereof through the issuance of Commercial Paper Notes, a rate equal to
the CP Rate for such Settlement Period on such portion; or

 

(b)                                 to
the extent the relevant Lender is not funding the applicable Advance or portion
thereof through the issuance of Commercial Paper Notes, a rate equal to the
Alternative Rate on such portion.

 

Investment:  With respect to any Person, any direct or
indirect loan, advance or investment by such Person in any other Person,
whether by means of share purchase, capital contribution, loan or otherwise,
excluding the acquisition of assets pursuant to the Purchase Agreement and
excluding commission, travel and similar advances to officers, employees and
directors made in the ordinary course of business.

 

Joinder Agreement:  A joinder agreement substantially in the form
set forth in Exhibit D hereto pursuant to which a new Lender Group
becomes party to this Agreement.

 

14

 

Key Man Event:
Either of (i) David Gladstone, and (ii) Terry Brubaker shall cease to be
employed by the Originator in the capacity as executive officers thereof.

 

Large Loan Limit:  For the Eligible Loans of the three Obligors
with the largest Outstanding Loan Balances, $15,000,000, and for the Eligible
Loans of each other Obligor, $10,000,000.

 

Lender Group:  Any CP Lender, its related Committed Lenders
and their related Managing Agent.

 

Lenders:  Collectively, the CP Lenders, the Committed
Lenders and any other Person that agrees, pursuant to the pertinent Joinder
Agreement or Assignment and Acceptance, as applicable, to fund Advances
pursuant to this Agreement.

 

LIBO Rate:  For any Settlement Period and any Advance,
an interest rate per annum equal to:

 

(i)                                     the
posted rate for 30-day deposits in United States dollars appearing on Telerate
page 3750 as of 11:00 a.m. (London time) on the Business Day that is the second
Business Day immediately preceding the applicable Funding Date (with respect to
the initial Settlement Period for such Advance) and as of the second Business
Day immediately preceding the first day of the applicable Settlement Period
(with respect to all subsequent Settlement Periods for such Advance); or

 

(ii)                                  if
no rate appears on Telerate page 3750 at such time and day, then the LIBO Rate
shall be determined by CIBC at its principal office in New York, New York as
its rate (each such determination, absent manifest error, to be conclusive and
binding on all parties hereto and their assignees) at which 30-day deposits in
United States dollars are being, have been, or would be offered or quoted by
CIBC to major banks in the applicable interbank market for Eurodollar deposits
at or about 11:00 a.m. (New York City time) on such day.

 

Lien:  With respect to any Collateral, (a) any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such Collateral, or (b) the interest of a vendor or lessor under any
conditional sale agreement, financing loan or other title retention agreement
relating to such Collateral.

 

Liquidation
Expenses:  With
respect to any Defaulted Loan or Charged-Off Loan, the aggregate amount of
out-of-pocket expenses reasonably incurred by the Borrower or on behalf of the
Borrower by the Servicer (including amounts paid to any subservicer) in
connection with the repossession, refurbishing and disposition of any related
assets securing such Loan including the attempted collection of any amount
owing pursuant to such Loan.

 

Liquidity
Agreement:  A
liquidity agreement entered into by a CP Lender with a group of financial
institutions in connection with this Agreement.

 

Liquidity Bank:  Each financial institution that is a party
to a Liquidity Agreement.

 

15

 

Liquidity
Commitment Fee: 
Defined in each Fee Letter.

 

Loan:  Any senior or subordinate loan arising from
the extension of credit to an Obligor by the Originator in the ordinary course
of the Originator’s business.

 

Loan Documents:  With respect to any Loan, the related
promissory note and any related loan agreement, security agreement, mortgage,
assignment of Loans, all guarantees, and UCC financing statements and
continuation statements (including amendments or modifications thereof)
executed by the Obligor thereof or by another Person on the Obligor’s behalf in
respect of such Loan and related promissory note, including, without
limitation, general or limited guaranties and, for each Loan secured by real
property an Assignment of Mortgage.

 

Loan File:  With respect to any Loan, each of the Loan
Documents related thereto.

 

Loan List:  The Loan List provided by the Borrower to
the Administrative Agent and the Collateral Custodian, as set forth in Schedule
III hereto (which shall include the specific documents that should be
included in each Loan File), as the same may be changed from time to time in
accordance with the provisions hereof.

 

Lock-Box:  A post office box to which Collections are
remitted for retrieval by a Lock-Box Bank and deposited by such Lock-Box Bank
into a Lock-Box Account.

 

Lock-Box Account:  An account, subject to a Lock-Box Agreement,
maintained in the name of the Borrower for the purpose of receiving Collections
at a Lock-Box Bank.

 

Lock-Box Agreement:  A letter agreement, substantially in the
form of Exhibit L, among the Borrower, the Administrative Agent and a
Lock-Box Bank.

 

Lock-Box Bank:  Any of the banks or other financial
institutions holding one or more Lock-Box Accounts.

 

Managing Agent:
As to any CP Lender, the financial institution identified as such on the
signature pages hereof or in the applicable Assignment and Acceptance or
Joinder Agreement.

 

Mandatory
Prepayment:  Defined
in Section 2.4(a).

 

Market Servicing
Fee:  Defined in Section
7.20.

 

Market Servicing
Fee Differential:  On
any date of determination, an amount equal to the positive difference between
the Market Servicing Fee and Servicing Fee.

 

Material Adverse
Change:  With respect
to any Person, any material adverse change in the business, condition
(financial or otherwise), operations, performance, properties or prospects of
such Person.

 

Material Adverse
Effect:  With respect
to any event or circumstance, means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Servicer or the Borrower, (b) the validity,
enforceability or

 

16

 

collectibility of this
Agreement or any other Transaction Document or any Liquidity Agreement or the
validity, enforceability or collectibility of the Loans, (c) the rights and
remedies of the Administrative Agent or any Secured Party under this Agreement
or any Transaction Document or any Liquidity Agreement or (d) the ability of
the Borrower or the Servicer to perform its obligations under this Agreement or
any other Transaction Document, or (e) the status, existence, perfection,
priority, or enforceability of the Administrative Agent’s or Secured Parties’
interest in the Collateral.

 

Maximum Lawful
Rate:  Defined in Section
2.6(d).

 

Monthly Report:  Defined in Section 7.11(a).

 

Moody’s:  Moody’s Investors Service, Inc., and any
successor thereto.

 

Multiemployer Plan:  A “multiemployer plan” as defined in Section
4001(a)(3) of ERISA that is or was at any time during the current year or the
immediately preceding five years contributed to by the Borrower or any ERISA
Affiliate on behalf of its employees.

 

1940 Act:  Defined in Section 4.1(x).

 

Notes:  Defined in Section 2.5(a).

 

Obligations:  All loans, advances, debts, liabilities and
obligations, for monetary amounts owing by the Borrower to the Lenders, the
Administrative Agent, the Managing Agents or any of their assigns, as the case
may be, whether due or to become due, matured or unmatured, liquidated or
unliquidated, contingent or non-contingent, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, arising under
or in respect of any of this Agreement, any other Transaction Document or any
Fee Letter delivered in connection with the transactions contemplated by this
Agreement, or any Hedging Agreement, as amended or supplemented from time to
time, whether or not evidenced by any separate note, agreement or other
instrument.  This term includes, without
limitation, all principal, interest (including interest that accrues after the
commencement against the Borrower of any action under the Bankruptcy Code),
Breakage Costs, Hedge Breakage Costs, fees, including, without limitation, any
and all arrangement fees, loan fees, facility fees, and any and all other fees,
expenses, costs or other sums (including attorney costs) chargeable to the
Borrower under any of the Transaction Documents or under any Hedging Agreement.

 

Obligor:  With respect to any Loan, the Person or
Persons obligated to make payments pursuant to such Loan, including any
guarantor thereof.  For purposes of
calculating the Excess Concentration Amount, all Loans included in the
Collateral or to become part of the Collateral the Obligor of which is an
Affiliate of another Obligor shall be aggregated with all Loans of such other
Obligor.

 

Officer’s
Certificate:  A
certificate signed by any officer of the Borrower or the Servicer, as the case
may be, and delivered to the Administrative Agent.

 

17

 

Opinion of Counsel:  A written opinion of counsel, who may be
counsel for the Borrower or the Servicer, as the case may be, and who shall be
reasonably acceptable to the Administrative Agent.

 

Originator:  Gladstone Capital Corporation, a Maryland
corporation.

 

Outstanding Loan
Balance: With respect to any Loan, the then outstanding
principal balance thereof.

 

Participant:  Defined in Section 11.1(g).

 

Payment Date:  The
twelfth (12th) day of each calendar month or, if such day is not a Business
Day, the next succeeding Business Day; provided that for the purposes of
distributions required pursuant to Section 2.8(a)(vii) only, “Payment
Date” shall mean any Business Day.

 

Peak CP Funding
Period:    The 15th day of any calendar
month, the last 5 Business Days of any calendar month, the last 10 Business
Days of November and the last 20 Business Days of December.

 

Performance
Guaranty:  The
Performance Guaranty dated as of the date hereof, by the Originator in favor of
the Borrower and the Administrative Agent, as amended, modified, supplemented
or restated from time to time.

 

Permitted
Investments:  Any one
or more of the following types of investments:

 

(a)                                  marketable
obligations of the United States, the full and timely payment of which are
backed by the full faith and credit of the United States and that have a
maturity of not more than 270 days from the date of acquisition;

 

(b)                                 marketable
obligations, the full and timely payment of which are directly and fully
guaranteed by the full faith and credit of the United States and that have a
maturity of not more than 270 days from the date of acquisition;

 

(c)                                  bankers’
acceptances and certificates of deposit and other interest-bearing obligations
(in each case having a maturity of not more than 270 days from the date of
acquisition) denominated in dollars and issued by any bank with capital,
surplus and undivided profits aggregating at least $100,000,000, the short-term
obligations of which are rated A-1 by S&P and P-1 by Moody’s;

 

(d)                                 repurchase
obligations with a term of not more than ten days for underlying securities of
the types described in clauses (a), (b) and (c) above entered into with any
bank of the type described in clause (c) above;

 

(e)                                  commercial
paper rated at least A-1 by S&P and P-1 by Moody’s; and

 

(f)                                    demand
deposits, time deposits or certificates of deposit (having original maturities
of no more than 365 days) of depository institutions or trust companies
incorporated under the laws of the United States or any state thereof (or
domestic branches of any foreign

 

18

 

bank) and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided, however that at the time such
investment, or the commitment to make such investment, is entered into, the
short-term debt rating of such depository institution or trust company shall be
at least A-1 by S&P and P-1 by Moody’s.

 

Permitted Liens:  Liens created pursuant to the Transaction
Documents in favor of the Administrative Agent, as agent for the Secured
Parties.

 

Person:  An individual, partnership, corporation
(including a statutory trust), limited liability company, joint stock company,
trust, unincorporated association, sole proprietorship, joint venture,
government (or any agency or political subdivision thereof) or other entity.

 

PIK Loan:  A Loan to an Obligor, which provides for a
portion of the interest that accrues thereon to be added to the principal
amount of such Loan for some period of the time prior to such Loan requiring
the cash payment of interest on a monthly or quarterly basis.

 

Portfolio Rate:  On any day, with respect to any Settlement
Period, the annualized percentage equivalent of a fraction, the numerator of
which is equal to all Interest Collections for such Settlement Period, and the
denominator of which is equal to the Advances Outstanding on the last day of
such Settlement Period.

 

Portfolio Yield:  On any day, the excess, if any, of (a) the
Portfolio Rate on such day over (b) the Interest Rate plus the Program Fee Rate
on such day.

 

Prime Rate:  The rate publicly announced by CIBC from
time to time on Reuters telerate page 3750 as its prime rate in the United
States, such rate to change as and when such designated rate changes.  The Prime Rate is not intended to be the
lowest rate of interest charged by CIBC in connection with extensions of credit
to debtors.

 

Principal
Collections:  Any and
all amounts received in respect of any principal due and payable under any
Transferred Loan from or on behalf of Obligors that are deposited into the
Collection Account, or received by the Borrower or on behalf of the Borrower by
the Servicer or Originator in respect of the Transferred Loans, in the form of
cash, checks, wire transfers, electronic transfers or any other form of cash
payment.

 

Proceeds:  With respect to any Collateral, whatever is
receivable or received when such Collateral is sold, collected, liquidated,
foreclosed, exchanged, or otherwise disposed of, whether such disposition is
voluntary or involuntary, including all rights to payment with respect to any
insurance relating to such Collateral.

 

Program Fee:  For each Settlement Period and each Advance
Outstanding during such Settlement Period, the product of:

 

PFR x P x AD/360

 

where

PFR                          =                                         the
Program Fee Rate;

 

19

 

P                                         =                                         the
principal amount of such Advance on the first day of such Settlement Period, or
if such

Advance was first
made during such Settlement Period, the principal amount of such Advance on the
day such Advance is made; and

 

AD                             =                                         the
actual days comprising such Settlement Period, or if such Advance was first
made during such

Settlement Period,
the actual number of days beginning on the day such Advance was first made
through the end of such Settlement Period.

 

Program Fee Rate:  Defined in each Fee Letter.

 

Pro-Rata Share:  With respect to any Committed Lender on any
day, the percentage equivalent of a fraction the numerator of which is such
Committed Lender’s Commitment and the denominator of which is the Group Advance
Limit of the related CP Lender’s Lender Group.

 

Purchase Agreement:  The Purchase and Sale Agreement dated as of
the date hereof, between the Originator and the Borrower, as amended, modified,
supplemented or restated from time to time.

 

Purchase Date:  Defined in the Purchase Agreement.

 

Purchased Loan
Balance:  As of any
date of determination and any Transferred Loan, the lesser of (i) the
Outstanding Loan Balance of such Loan, and (ii) the Fair Market Value of such
Loan.

 

Purchasing
Committed Lender: 
Defined in Section 11.1(b).

 

Qualified
Institution:  Defined
in Section 7.4(e).

 

Rating Agency:
Any rating agency that has been requested to issue a rating with respect to the
Commercial Paper Notes issued by a CP Lender.

 

Records:  With respect to any Transferred Loans, all
documents, books, records and other information (including without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) maintained with respect to any item of Collateral
and the related Obligors, other than the Loan Documents.

 

Recoveries:  With respect to any Defaulted Loan or
Charged-Off Loan, proceeds of the sale of any Related Property, proceeds of any
related Insurance Policy, and any other recoveries with respect to such Loan
and Related Property, and amounts representing late fees and penalties, net of
Liquidation Expenses and amounts, if any, received that are required to be
refunded to the Obligor on such Loan.

 

Reference Bank:  Any bank that furnishes information for
purposes of determining the Adjusted Eurodollar Rate.

 

Register:  Defined in Section 11.1(e).

 

20

 

Regulatory Change:  Defined in Section 2.12(a).

 

Related Property:  With respect to a Loan, any property or
other assets of the Obligor thereunder pledged as collateral to the Originator
to secure the repayment of such Loan.

 

Reporting Date:  The date that is two (2) Business Days prior
to each Payment Date.

 

Repurchase Price:  For any Transferred Loan purchased by the
Servicer pursuant to Section 7.7, an amount equal to the outstanding
principal balance of such Loan as of the date of purchase, plus all accrued and
unpaid interest on such Loan.

 

Required Committed
Lenders:  At a
particular time, Committed Lenders with Commitments in excess of 66 2/3 % of
the Facility Amount.

 

Required Equity
Contribution:  A
capital contribution to the Borrower by the Originator, on or before the
Closing Date, in the form of Eligible Loans and/or cash having an outstanding
principal balance on the Closing Date and at all times prior to the Termination
Date of at least $100,000,000.

 

Required Notional
Amount:  $35,000,000.

 

Required Ratings:  With respect to any Committed Lender, the
short term ratings from S&P and Moody’s equal to or greater than the
ratings required in order to maintain the rating of the commercial paper issued
by the related CP Lender.

 

Required Reports:  Collectively, the Monthly Report, the
Servicer’s Certificate and the annual and quarterly financial statements of the
Originator required to be delivered to the Borrower, the Managing Agents,
Concord, the Administrative Agent and the Backup Servicer pursuant to Section
7.11 hereof.

 

Responsible
Officer:  As to the
Borrower, David Gladstone, Terry Brubaker, George Stelljes, Harry Brill or
Donya Kolcio, and as to any other Person, any officer of such Person with
direct responsibility for the administration of this Agreement and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer’s knowledge of and familiarity with the
particular subject.  The Borrower may
designate other Responsible Officers from time to time by notice to the
Administrative Agent.

 

Revolving Period:  The period commencing on the Closing Date
and ending on the day immediately preceding the Termination Date.

 

Rolling
Three-Month Charged-Off Ratio:  For any day, beginning after the end of the third Settlement
Period following the Closing Date, the rolling three period average Charged-Off
Ratio for the three immediately preceding Settlement Periods.

 

Rolling
Three-Month Default Ratio: 
For any day, beginning after the end of the third Settlement Period
following the Closing Date, the rolling three period average Default Ratio for
the three immediately preceding Settlement Periods.

 

21

 

S&P:  Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc. and any successor thereto.

 

Scheduled Payment:  On any Determination Date, with respect to
any Loan, each monthly payment (whether principal, interest or principal and
interest) scheduled to be made by the Obligor thereof after such Determination
Date under the terms of such Loan.

 

Secured Party:  (i) Each Lender, (ii) each Managing Agent,
(iii) each Liquidity Bank and (iv) each Hedge Counterparty that is either a
Lender or an Affiliate of a Lender if that Affiliate executes a counterpart of
this Agreement agreeing to be bound by the terms of this Agreement applicable
to a Secured Party.

 

Securitization:  A disposition of Transferred Loans in one or
a series of structured finance securitization transactions.

 

Servicer:  Gladstone Advisers, Inc., a Virginia
corporation, and its permitted successors and assigns.

 

Servicer Advance:  An advance of Scheduled Payments made by the
Servicer pursuant to Section 7.5.

 

Servicer
Termination Event: 
Defined in Section 7.18.

 

Servicer’s
Certificate:  Defined
in Section 7.11(b).

 

Servicing Duties:  Those duties of the Servicer which are
enumerated in Section 7.2.

 

Servicing Fee:  For each Payment Date, an amount equal to
the sum of the products, for each day during the related Settlement Period, of
(i) Aggregate Outstanding Loan Balance as of the preceding Determination Date,
(ii) the Servicing Fee Rate, and (iii) a fraction, the numerator of which is 1
and the denominator of which is 360.

 

Servicing Fee Rate:  A rate equal to 1.5% per annum.

 

Servicing Records:  All documents, books, records and other
information (including, without limitation, computer programs, tapes, disks, data
processing software and related property rights) prepared and maintained by the
Servicer with respect to the Transferred Loans and the related Obligors.

 

Settlement Period:  Each period from and including a Payment
Date to but excluding the following Payment Date, except in the case of the
first Settlement Period, which shall be the period beginning on the Closing
Date to but excluding July 12, 2003.

 

Solvent:  As to any Person at any time, having a state
of affairs such that all of the following conditions are met:  (a) the fair value of the property owned by
such Person is greater than the amount of such Person’s liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy
Code; (b) the present fair salable value of the property owned by such Person

 

22

 

in an orderly liquidation
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its property and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in a business or a transaction, for which such Person’s
property would constitute unreasonably small capital.

 

Successor Servicer:  Defined in Section 7.19(a).

 

Supplemental
Interests:  With
respect to any Transferred Loan, any warrants, equity or other equity interests
or interests convertible into or exchangeable for any such interests received
by the Originator from the Obligor in connection with such Transferred Loan.

 

Taxes:  Any present or future taxes, levies,
imposts, duties, charges, assessments or fees of any nature (including
interest, penalties, and additions thereto) that are imposed by any Government
Authority.

 

Termination Date:  The earliest to occur of (a) the date
declared by the Administrative Agent or occurring automatically in respect of
the occurrence of an Early Termination Event pursuant to Section 8.1,
(b) a date selected by the Borrower upon at least 30 days’ prior written notice
to the Administrative Agent, each Managing Agent and Concord, (c) the
Commitment Termination Date and (d) the date designated by the Administrative
Agent following the occurrence of a Key Man Event.

 

Termination Notice:  Defined in Section 7.18.

 

Transaction
Documents:  This
Agreement, the Purchase Agreement, all Hedging Agreements, the Custody
Agreement, the Backup Servicing Agreement, the Performance Guaranty and any
additional document, letter, fee letter, certificate, opinion, agreement or
writing the execution of which is necessary or incidental to carrying out the
terms of the foregoing documents.

 

Transferred Loans:  Each Loan that is acquired by the Borrower
under the Purchase Agreement and all Loans received by the Borrower in respect
of the Required Equity Contribution. 
Any Transferred Loan that is (i) repurchased or reacquired by the
Originator pursuant to the terms of Section 6.1 of the Purchase Agreement, (ii)
purchased by the Servicer pursuant to the terms of Section 7.7 or (iii)
otherwise released from the lien of this Agreement pursuant to Section 6.3
shall not be treated as a Transferred Loan for purposes of this Agreement (provided,
that the purchase or repurchase of any Defaulted Loan or Charged-Off Loan shall
not alter such Transferred Loan’s status as a Defaulted Loan or Charged-Off Loan
for purposes of calculating ratios for periods occurring prior to the purchase
or repurchase of such Transferred Loan).

 

Transition Costs:  The reasonable costs and expenses incurred
by the Backup Servicer in transitioning to Servicer; provided, however,
that the Administrative Agent’s consent shall be required if such Transition
Costs exceed $50,000.00 in the aggregate.

 

23

 

UCC:  The Uniform Commercial Code as from time to
time in effect in the specified jurisdiction or, if no jurisdiction is
specified, the State of New York.

 

United States:  The United States of America.

 

Unmatured
Termination Event:  An
event that, with the giving of notice or lapse of time, or both, would become
an Early Termination Event.

 

Unreimbursed
Servicer Advances:  At
any time, the amount of all previous Servicer Advances (or portions thereof) as
to which the Servicer has not been reimbursed as of such time pursuant to Section
2.8 and that the Servicer has determined in its sole discretion will not be
recoverable from Collections with respect to the related Transferred Loan.

 

Section 1.2                                   Other Terms.

 

All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. 
All terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9.

 

Section 1.3                                   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” and the words “to” and “until”
each mean “to but excluding.”

 

Section 1.4                                   Interpretation.

 

In each Transaction Document, 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 Transaction Document;

 

(iii)                               reference to any gender
includes each other gender;

 

(iv)                              reference
to any agreement (including any Transaction Document), document or instrument
means such agreement, document or instrument as amended, supplemented or
modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms of the other Transaction Documents and reference
to any promissory note includes any promissory note that is an extension or
renewal thereof or a substitute or replacement therefor; and

 

(v)                                 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

 

24

 

in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section or other
provision.

 

ARTICLE II

 

ADVANCES

Section 2.1                                   Advances.

 

(a)                                  On
the terms and conditions hereinafter set forth, the Borrower may, by delivery
of a Funding Request to the Administrative Agent, from time to time on any
Business Day during the Revolving Period, at its option, request that the
Lenders make advances (each, an “Advance”) to it in an amount which, at any
time, shall not exceed the Availability in effect on the related Funding
Date.  Such Funding Request shall be
delivered not later than 5:00 p.m. (New York City time) on the date which is
four (4) Business Days prior to the requested Funding Date.  Following receipt by the Administrative
Agent of a Funding Request, the Administrative Agent shall forward such Funding
Request to each Managing Agent not later than 12:00 p.m. (New York City time)
on the date which is three (3) Business Days prior to the requested Funding
Date.  Upon receipt of such Funding
Request, each Managing Agent shall request the CP Lender in its Lender Group to
make the Advance, and such CP Lender may from time to time during the Revolving
Period, in its sole discretion, agree or decline to make the Advance.  If any CP Lender declines to make all or any
part of a proposed Advance, it shall so notify the Committed Lenders and the
applicable portion of the Advance will be made by the Committed Lenders in such
CP Lender’s Lender Group in accordance with their Pro-Rata Shares.  Notwithstanding anything contained in this Section
2.1 or elsewhere in this Agreement to the contrary, no Committed Lender
shall be obligated to make any Advance in an amount that would result in the
aggregate Advances then funded by such Committed Lender exceeding its
Commitment then in effect (minus the unrecovered principal amount of such
Committed Lender’s advances made, downgrade draws funded or purchase prices
paid pursuant to any applicable Liquidity Agreement to which it is a
party).  The obligation of each
Committed Lender to remit its Pro-Rata Share of any such Investment shall be
several from that of each other Committed Lender, and the failure of any
Committed Lender to so make such amount available to the Borrower shall not
relieve any other Committed Lender of its obligation hereunder.  Each Advance to be made hereunder shall be
made ratably among the Lender Groups in accordance with their Group Advance
Limits.

 

(b)                                 The
Borrower may, within 60 days, but no later than 45 days, prior to the then
current Commitment Termination Date, by written notice to the Administrative
Agent, make written requests for the Lenders to extend the Commitment
Termination Date for an additional revolving period of 364 days.  The Administrative Agent will give prompt
notice to each Managing Agent of its receipt of such request, and each Managing
Agent shall give prompt notice to each of the Lenders in its related Lender
Group of its receipt of such request for extension of the Commitment
Termination Date.  Each Lender shall
make a determination, in its sole discretion and after a full credit review,
not less than fifteen (15) days prior to the then applicable Commitment
Termination Date as to whether or not it will agree to extend the Commitment
Termination Date; provided, however, that the failure of any
Lender to make a timely response to the Borrower’s request for extension of the
Commitment Termination Date

 

25

 

shall be deemed to constitute a refusal by such Lender
to extend the Commitment Termination Date. 
In the event that at least one Committed Lender agrees to extend the
Commitment Termination Date, the Borrower, the Servicer, the Administrative
Agent and the extending Committed Lenders and, if such extension is approved by
a CP Lender in its sole discretion, such CP Lender shall enter into such
documents as such extending Committed Lenders and CP Lenders may deem necessary
or appropriate to reflect such extension, and all reasonable costs and expenses
incurred by such CP Lenders, such Committed Lenders and the Administrative
Agent (including reasonable attorneys’ fees) shall be paid by the
Borrower.  In the event that any
Committed Lender declines the request to extend the Commitment Termination Date
(each such Committed Lender being referred to herein as a “Non-Renewing
Committed Lender”), and the Commitment of such Non-Renewing Committed
Lender is not assigned to another Person in accordance with the terms of Article
XI prior to the then current Commitment Termination Date, (i) the Facility
Amount shall be reduced by an amount equal to each such Non-Renewing Committed
Lender’s Commitment on the then current Commitment Termination Date, and (ii)
the Group Advance Limits of the applicable Lender Groups shall be reduced by an
amount equal to the applicable Non-Renewing Committed Lender’s Commitment on
the then current Commitment Termination Date.

 

Section 2.2                                   Procedures
for Advances.

 

(a)                                  In
the case of the making of any Advance, the repayment of any Advance, or any
termination, increase or reduction of the Facility Amount and prepayments of
Advances, the Borrower shall give the Administrative Agent a Borrower
Notice.  Each Borrower Notice shall
specify the amount (subject to Section 2.1 hereof) of Advances to be
borrowed or repaid and the Funding Date or repayment date (which, in all cases,
shall be a Business Day).

 

(b)                                 Subject
to the conditions described in Section 2.1, the Borrower may request an
Advance from the Lenders by delivering to the Administrative Agent at certain
times the information and documents set forth in this Section 2.2.

 

(c)                                  No
later than 10:00 a.m. (New York City time) five (5) Business Days prior to the
proposed Funding Date, the Borrower shall notify (i) the Collateral Custodian
by delivery to the Collateral Custodian of written notice of such proposed
Funding Date, and (ii) the Administrative Agent by delivery to the
Administrative Agent of a credit report and transaction summary for each Loan
that is the subject of the proposed Advance setting forth the credit
underwriting by the Originator of such Loan, including without limitation a
description of the Obligor and the proposed loan transaction in the form of Exhibit
M hereto.  By 5:00 p.m. (New York
City time) on the next Business Day, the Administrative Agent shall use its
best efforts to confirm to the Borrower the receipt of such items and whether
it has reviewed such items and found them to be complete and in proper
form.  If the Administrative Agent makes
a determination that the items are incomplete or not in proper form, it will
communicate such determination to the Borrower.  Failure by the Administrative Agent to respond to the Borrower by
5:00 on the day the related Funding Request is delivered by the Borrower shall
constitute an implied determination that the items are incomplete or not in
proper form.  The Borrower will take
such steps requested by the Administrative Agent to correct the
problem(s).  In the event of a delay in
the actual Funding Date due to the need to correct any such problems, the
Funding Date shall be no earlier than three (3) Business Days after the day on
which the Administrative

 

26

 

Agent confirms to the Borrower that the problems have been
corrected.  No more than one Funding
Date per calendar week shall be permitted without the consent of the
Administrative Agent and each CP Lender. 
No Funding Date on which a CP Lender is requested to make an Advance
shall occur during any Peak CP Funding Period without the consent of the CP
Lender.

 

(d)                                 No
later than 11:00 a.m. (New York City time) three (3) Business Days prior to the
proposed Funding Date, the Administrative Agent, each Managing Agent, Concord
and the Collateral Custodian, as applicable, shall receive or shall have
previously received the following:

 

(i)                                     a
Funding Request in the form of Exhibit A;

 

(ii)                                  a
wire disbursement and authorization form shall be delivered to the
Administrative Agent; and

 

(iii)                               a certification
substantially in the form of Exhibit H concerning the Collateral
Custodian’s receipt of certain documentation relating to the Eligible Loan(s)
related to such Advance shall be delivered to the Administrative Agent.

 

(e)                                  Each
Funding Request shall specify the aggregate amount of the requested Advance,
which shall be in an amount equal to at least $3,000,000.  Each Funding Request shall be accompanied by
(i) a Borrower Notice, depicting the outstanding amount of Advances under this
Agreement and representing that all conditions precedent for a funding have
been met, including a representation by the Borrower that the requested Advance
shall not, on the Funding Date thereof, exceed the Availability on such day,
(ii) a calculation of the Borrowing Base as of the date the Advance is
requested, (iii) an updated Loan List including each Loan that is subject to
the requested Advance, (iv) the proposed Funding Date, and (v) wire transfer
instructions for the Advance.  A Funding
Request shall be irrevocable when delivered.

 

(f)                                    On
the Funding Date following the satisfaction of the applicable conditions set
forth in this Section 2.2 and Article III, each CP Lender may, or
the related Committed Lenders, as applicable, shall, make available to the
Administrative Agent at its address listed beneath its signature on its
signature page to this Agreement (or on the signature page to the Joinder
Agreement pursuant to which it became a party hereto), for deposit to the
account of the Borrower or its designee in same day funds, at the account
specified in the Funding Request, an amount equal to such Lender’s ratable
share of the Advance then being made. 
Each wire transfer of an Advance to the Borrower shall be initiated by
the applicable Lender no later than 3:00 p.m. (New York city time) on the
applicable Funding Date.

 

Section 2.3                                   Optional
Changes in Facility Amount; Prepayments.

 

(a)                                  The
Borrower shall be entitled at its option, at any time prior to the occurrence
of an Early Termination Event, to reduce the Facility Amount in whole or in
part; provided that the Borrower shall give prior written notice of such
reduction to the Administrative Agent, each Managing Agent and Concord as
provided in paragraph (b) of this Section 2.3 and that any partial
reduction of the Facility Amount shall be in an amount equal to $3,000,000 with
integral multiples of $500,000 above such amount.  Unless otherwise agreed by the Committed Lenders, the Commitment
of each Committed Lender shall be reduced ratably in proportion to such

 

27

 

reduction in the Facility Amount.  Any request for a reduction or termination
pursuant to this Section 2.3 shall be irrevocable.

 

(b)                                 From
time to time during the Revolving Period the Borrower may prepay any portion or
all of the Advances Outstanding, other than with respect to Mandatory
Prepayments, by delivering to the Administrative Agent, each Managing Agent and
Concord a Borrower Notice at least (i) in the case of any partial prepayment
(other than a partial prepayment during the month of  December), at least five (5) Business Days prior to the date of
such prepayment, (ii) in the case of any partial prepayment during the month of
December, at least five (5) Business Days prior to the Payment Date occurring
in November, and (iii) in the case of any prepayment in full, at least thirty
(30) Business Days prior to the date of such prepayment (or, in each case, such
later time as the applicable Lender, in its sole discretion, may agree),
specifying the date and amount of the prepayment and certifying that, following
such prepayment, the Borrower will be in compliance with the terms of this
Agreement; provided, that no such reduction shall be given effect unless
the Borrower has complied with the terms of any Hedging Agreement requiring
that one or more Hedge Transactions be terminated in whole or in part as the
result of any such prepayment of the Advances Outstanding, and the Borrower has
paid all Hedge Breakage Costs owing to the relevant Hedge Counterparty for any
such termination.  If any Borrower
Notice relating to any prepayment is given, the amount specified in such
Borrower Notice shall be due and payable on the date specified therein,
together with accrued Interest to the payment date on the amount prepaid and
any Breakage Costs (including Hedge Breakage Costs) related thereto.  Any partial prepayment by the Borrower of
Advances hereunder, other than with respect to Mandatory Prepayments, shall be
in a minimum amount of $1,000,000 with integral multiples of $100,000  above such amount.  Any amount so prepaid may, subject to the terms and conditions
hereof, be reborrowed during the Revolving Period.  A Borrower Notice relating to any such prepayment shall be
irrevocable when delivered.

 

Section 2.4                                   Principal
Repayments.

 

(a)                                  The
Advances Outstanding shall be due and payable in accordance with Section 2.8
on the Termination Date.  In addition,
Advances Outstanding shall be repaid as and when necessary to cause the
Borrowing Base Test to be met, in accordance with Section 2.8 (each such
payment, a “Mandatory
Prepayment”), and any amount so repaid may, subject to the terms and
conditions hereof, be reborrowed hereunder during the Revolving Period.

 

(b)                                 All
repayments of any Advance or any portion thereof shall be made together with
payment of (i) all Interest accrued and unpaid on the amount repaid to (but
excluding) the date of such repayment, (ii) any and all Breakage Costs, and
(iii) all Hedge Breakage Costs and any other amounts payable by the Borrower
under or with respect to any Hedging Agreement.

 

Section 2.5                                   The Notes.

 

(a)                                  The
Advances made by the Lenders hereunder shall be evidenced by a duly executed
promissory note of the Borrower payable to each Managing Agent, on behalf of
the applicable Lenders in the related Lender Group, in substantially the form
of Exhibit B hereto (collectively, the “Notes”).  The Notes shall be dated the Closing Date
and shall be in a

 

28

 

maximum principal amount equal to the applicable
Lender Group’s Group Advance Limit, and shall otherwise be duly completed.

 

(b)                                 Each
Managing Agent is hereby authorized to enter on a schedule attached to its
Notes the following notations (which may be computer generated) with respect to
each Advance made by each Lender in the applicable Lender Group:  (i) the date and principal amount thereof
and (ii) each payment and repayment of principal thereof, and any such
recordation shall constitute prima facie
evidence of the accuracy of the information so recorded.  The failure of a Managing Agent to make any
such notation on the schedule attached to the applicable Note shall not limit
or otherwise affect the obligation of the Borrower to repay the Advances in
accordance with their respective terms as set forth herein.

 

Section 2.6                                   Interest
Payments.

 

(a)                                  Interest
shall accrue on each Advance during each Settlement Period at the applicable
Interest Rate.  The Borrower shall pay
Interest on the unpaid principal amount of each Advance for the period
commencing on and including the Funding Date of such Advance until but
excluding the date that such Advance shall be paid in full.  Interest shall accrue during each Settlement
Period and be payable on the Advances Outstanding on each Payment Date, unless
earlier paid pursuant to (i) a prepayment in accordance with Section 2.3(b)
or (ii) a repayment in accordance with Section 2.4(b).

 

(b)                                 Each
Managing Agent shall determine (in accordance with information provided by the
relevant CP Lender and/or Committed Lenders in the related Lender Group, as
applicable) its estimate of the Interest (including unpaid Interest, if any due
and payable on a prior Payment Date) to be paid to the Lenders in the
applicable Lender Group on each Payment Date for the related Settlement Period
and shall advise the Administrative Agent and the Servicer, on behalf of the
Borrower, thereof three (3) Business Days prior to each Payment Date.  In the event that any Managing Agent’s, CP
Lender’s or Committed Lender’s, as applicable, estimate of the Interest payable
for a related Settlement Period is different from the actual amount of Interest
for such Settlement Period, the Managing Agent shall increase or decrease its
estimate of Interest for the next succeeding Settlement Period by the amount of
such difference, plus Interest thereon, if applicable.  Failure to set aside any amount so accrued
shall not relieve the Borrower or the Servicer on behalf of the Borrower of its
obligation to remit or cause the Servicer to remit Collections to the
Administrative Agent with respect to such accrued amount as and to the extent
provided in Section 2.8.

 

(c)                                  If
any Managing Agent, on behalf of the applicable Lenders, shall notify the
Administrative Agent that a Eurodollar Disruption Event as described in clause
(a) of the definition of “Eurodollar Disruption Event” has occurred, the
Administrative Agent shall in turn so notify the Borrower, whereupon all
Advances in respect of which Interest accrues at the LIBO Rate shall
immediately be converted into Advances in respect of which Interest accrues at
the Base Rate.

 

(d)                                 Anything
in this Agreement or the other Transaction Documents to the contrary
notwithstanding, if at any time the rate of interest payable by any Person
under this Agreement and the Transaction Documents exceeds the highest rate of
interest permissible under Applicable

 

29

 

Law (the “Maximum
Lawful Rate”), then, so long as the Maximum Lawful Rate would be
exceeded, the rate of interest under this Agreement and the Transaction
Documents shall be equal to the Maximum Lawful Rate.  If at any time thereafter the rate of interest payable under this
Agreement and the Transaction Documents is less than the Maximum Lawful Rate,
such Person shall continue to pay interest under this Agreement and the
Transaction Documents at the Maximum Lawful Rate until such time as the total
interest received from such Person is equal to the total interest that would
have been received had Applicable Law not limited the interest rate payable
under this Agreement and the Transaction Documents.  In no event shall the total interest received by a Lender under
this Agreement and the Transaction Documents exceed the amount that such Lender
could lawfully have received, had the interest due under this Agreement and the
Transaction Documents been calculated since the Closing Date at the Maximum
Lawful Rate.

 

Section 2.7                                   Fees.

 

(a)                                  The
Borrower shall pay to the Administrative Agent from the Collection Account on
each Payment Date, monthly in arrears in accordance with Section 2.8,
the Program Fee and Liquidity Commitment Fee.

 

(b)                                 The
Borrower shall pay to the Servicer from the Collection Account on each Payment
Date, monthly in arrears in accordance with Section 2.8, the Servicing
Fee.

 

(c)                                  The
Backup Servicer shall be entitled to receive from the Collection Account on
each Payment Date, monthly in arrears in accordance with Section 2.8,
the Backup Servicing Fee.

 

(d)                                 The
Collateral Custodian shall be entitled to receive from the Collection Account
on each Payment Date, monthly in arrears in accordance with Section 2.8,
the Collateral Custodian Fee.

 

(e)                                  The
Borrower shall pay to the Administrative Agent, on the Closing Date, the
structuring fee agreed to between the Borrower and the Administrative Agent
(net of any amounts previously paid) in immediately available funds.

 

Section 2.8                                   Settlement
Procedures.

 

On each Payment Date, the
Servicer on behalf of the Borrower shall pay for receipt by the applicable
Lender no later than 11:00 a.m. (New York City time) to the following Persons,
from (i) the Collection Account, to the extent of available funds, (ii)
Servicer Advances, and (iii) amounts received in respect of any Hedge Agreement
during such Settlement Period (the sum of such amounts described in clauses
(i), (ii) and (iii) being the “Available
Collections”) the following amounts in the following order of
priority

 

(i)                                     FIRST,
to each Hedge Counterparty, any amounts owing that Hedge Counterparty under its
respective Hedging Agreement in respect of any Hedge Transaction(s), for the
payment thereof;

 

30

 

(ii)                                  SECOND,
to the Servicer, in an amount equal to any Unreimbursed Servicer Advances, for
the payment thereof;

 

(iii)                               THIRD, to the
extent not paid by the Servicer, to the Backup Servicer and any Successor
Servicer, as applicable, in amount equal to any accrued and unpaid Backup
Servicing Fee and, if any, accrued and unpaid Transition Costs, Backup Servicer
Expenses and Market Servicing Fee Differential, each for the payment thereof;

 

(iv)                              FOURTH,
to the extent not paid by the Servicer, to the Collateral Custodian in an
amount equal to any accrued and unpaid Collateral Custodian Fee and Collateral
Custodian Expenses, if any, for the payment thereof;

 

(v)                                 FIFTH,
to the Servicer, in an amount equal to its accrued and unpaid Servicing Fees to
the end of the preceding Settlement Period, for the payment thereof;

 

(vi)                              SIXTH,
to the Administrative Agent for payment to each Managing Agent, on behalf of
the related Lenders, in an amount equal to any accrued and unpaid Interest,
Program Fee and Liquidity Commitment Fee for such Payment Date;

 

(vii)                           SEVENTH, to the
Administrative Agent for payment to each Managing Agent, on behalf of the
related Lenders, an amount equal to the excess, if any, of Advances Outstanding
over the lesser of (i) the Borrowing Base or (ii) the Facility Amount, together
with the amount of Breakage Costs incurred by the applicable Lenders in
connection with any such payment (as such Breakage Costs are notified to the
Borrower by the applicable Lender(s));

 

(viii)                        EIGHTH, following the
occurrence of the Termination Date resulting from an Early Termination Event,
to the Administrative Agent for ratable payment to each Managing Agent, on
behalf of the related Lenders, in an amount to reduce Advances Outstanding to
zero and to pay any other Obligations in full;

 

(ix)                                NINTH,
to the Administrative Agent for payment to each Managing Agent, on behalf of
the related Lenders, in the amount of unpaid Breakage Costs (other than
Breakage Costs covered in clause (vii) above) with respect to any prepayments
made on such Payment Date, Increased Costs and/or Taxes (if any);

 

(x)                                   TENTH,
to the Administrative Agent, all other amounts then due under this Agreement to
the Administrative Agent, the Lenders, the Affected Parties or Indemnified
Parties, each for the payment thereof; and

 

(xi)                                ELEVENTH,
all remaining amounts to the Borrower.

 

Section 2.9                                   Collections
and Allocations.

 

(a)                                  The
Borrower or the Servicer on behalf of the Borrower shall promptly (but in no
event later than two (2) Business Days after the receipt thereof) identify any
Collections received by it as being on account of Interest Collections or
Principal Collections and deposit all such Interest Collections or Principal
Collections received directly by it into the Collection Account.

 

31

 

The Servicer on behalf of the Borrower shall make such
deposits or payments on the date indicated by wire transfer, in immediately
available funds.

 

(b)                                 Until
the occurrence of an Early Termination Event, to the extent there are
uninvested amounts deposited in the Collection Account, all amounts shall be
invested in Permitted Investments selected by the Servicer on behalf of the
Borrower that mature no later than the Business Day immediately preceding the
next Payment Date; from and after the occurrence of an Early Termination Event,
to the extent there are uninvested amounts deposited in the Collection Account,
all amounts may be invested in Permitted Investments selected by the
Administrative Agent that mature no later than the next Business Day.  Any earnings (and losses) thereon shall be
for the account of the Servicer on behalf of the Borrower.

 

Section 2.10                            Payments,
Computations, Etc.

 

(a)                                  Unless
otherwise expressly provided herein, all amounts to be paid or deposited by the
Borrower or the Servicer on behalf of the Borrower hereunder shall be paid or
deposited in accordance with the terms hereof no later than 10:00 a.m. (New
York City time) on the day when due in lawful money of the United States in
immediately available funds to the Agent’s Account.  The Borrower shall, to the extent permitted by law, pay to the
Secured Parties interest on all amounts not paid or deposited when due
hereunder at 2.0% per annum above the Base Rate, payable on demand; provided,
however, that such interest rate shall not at any time exceed the
Maximum Lawful Rate.  All computations
of interest and all computations of the Interest Rate and other fees hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.

 

(b)                                 Whenever
any payment hereunder shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment
of Interest, other interest or any fee payable hereunder, as the case may be.

 

(c)                                  All
payments hereunder shall be made without set-off or counterclaim and in such
amounts as may be necessary in order that all such payments shall not be less
than the amounts otherwise specified to be paid under this Agreement (after
withholding for or on account of any Taxes).

 

Section 2.11                            Breakage
Costs.

 

The Borrower shall pay to the Administrative Agent for
the account of the applicable Managing Agent, on behalf of the related Lenders,
upon the request of any Managing Agent, any Lender or the Administrative Agent
on each Payment Date on which a prepayment is made, such amount or amounts as
shall, without duplication, compensate the Lenders for any loss, cost or expense
(the “Breakage Costs”) incurred
by the Lenders (as reasonably determined by the applicable Lender) as a result
of any prepayment of an Advance (and interest thereon).  The determination by any Managing Agent, on
behalf of the related Lenders, of the amount of any such loss or expense shall
be set forth in a written notice to the Borrower delivered by the applicable
Lender prior to the date of such prepayment in the case where notice of such
prepayment is delivered to such Lender in accordance with Section 2.3(b)
or within two (2)

 

32

 

Business Days following such prepayment in the case where no such
notice is delivered (in which case, Breakage Costs shall include interest
thereon from the date of such prepayment) and shall be conclusive absent
manifest error.  No Breakage Costs shall
be payable to any CP Lender to the extent that (a) notice of such prepayment
shall have been delivered to such CP Lender in accordance with the provisions
of Section 2.3(b) or 7.7(c), (b) such prepayment is made on a
Payment Date, and (c) such prepayment does not exceed the lesser of (i) 20% of
the Advances made by such CP Lender and (ii) $20,000,000.

 

Section 2.12                            Increased
Costs; Capital Adequacy; Illegality.

 

(a)                                  If
after the date hereof, any Managing Agent, Lender, Liquidity Bank or any
Affiliate thereof (each of which, an “Affected
Party”) shall be charged any fee, expense or increased cost on
account of the adoption of any applicable law, rule or regulation (including
any applicable law, rule or regulation regarding capital adequacy), any
accounting principles or any change in any of the foregoing, or any change in
the interpretation or administration thereof by any governmental authority, the
Financial Accounting Standards Board (“FASB”), any central bank or any comparable
agency charged with the interpretation or administration thereof, or compliance
with any request or directive (whether or not having the force of law) of any
such authority or agency (a “Regulatory Change”):  (i) that subjects any Affected Party to any
charge or withholding on or with respect to any Transaction Document or an
Affected Party’s obligations under a Transaction Document, or on or with
respect to the Advances, or changes the basis of taxation of payments to any
Affected Party of any amounts payable under any Transaction Document (except
for changes in the rate of tax on the overall net income of an Affected Party
or taxes excluded by Section 2.13) or (ii) that imposes, modifies or
deems applicable any reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for the account of an
Affected Party, or credit extended by an Affected Party pursuant to a
Transaction Document or (iii) that imposes any other condition the result of
which is to increase the cost to an Affected Party of performing its
obligations under a Transaction Document, or to reduce the rate of return on an
Affected Party’s capital as a consequence of its obligations under a Transaction
Document, or to reduce the amount of any sum received or receivable by an
Affected Party under a Transaction Document or to require any payment
calculated by reference to the amount of interests or loans held or interest
received by it, then, upon demand by the applicable Managing Agent, Borrower
shall pay to the Administrative Agent, for payment to the applicable Managing
Agent for the benefit of the relevant Affected Party, such amounts charged to
such Affected Party or such amounts to otherwise compensate such Affected Party
for such increased cost or such reduction. 
For the avoidance of doubt, if the issuance of FASB Interpretation No.
46, or any other change in accounting standards or the issuance of any other
pronouncement, release or interpretation, causes or requires the consolidation
of all or a portion of the assets and liabilities of Company or Borrower with
the assets and liabilities of any Affected Party, such event shall constitute a
circumstance on which such Affected Party may base a claim for reimbursement
under this Section.

 

(b)                                 If
as a result of any event or circumstance similar to those described in clause
(a) of this Section 2.12, an Affected Party is required to
compensate a bank or other financial institution providing liquidity support,
credit enhancement or other similar support to such Affected Party in
connection with this Agreement or the funding or maintenance of Advances

 

33

 

hereunder, then within ten days after demand by such
Affected Party, the Borrower shall pay to such Affected Party such additional
amount or amounts as may be necessary to reimburse such Affected Party for any
such amounts paid by it.

 

(c)                                  In
determining any amount provided for in this section, the Affected Party may use
any reasonable averaging and attribution methods.  Any Affected Party making a claim under this section shall submit
to the Borrower a certificate as to such additional or increased cost or
reduction, which certificate shall calculate in reasonable detail any such
charges and shall be conclusive absent demonstrable error.

 

Section 2.13                            Taxes.

 

(a)                                  All
payments made by the Borrower in respect of any Advance and all payments made
by the Borrower under this Agreement will be made free and clear of and without
deduction or withholding for or on account of any Taxes, unless such
withholding or deduction is required by law. 
In such event, the Borrower shall pay to the appropriate taxing
authority any such Taxes required to be deducted or withheld and the amount
payable to each Lender or the Administrative Agent (as the case may be) will be
increased (such increase, the “Additional
Amount”) such that every net payment made under this Agreement after
deduction or withholding for or on account of any Taxes (including, without
limitation, any Taxes on such increase) is not less than the amount that would
have been paid had no such deduction or withholding been deducted or
withheld.  The foregoing obligation to pay
Additional Amounts, however, will not apply with respect to, and the term
“Additional Amount” shall be deemed not to include net income or franchise
taxes imposed on a Lender, any Managing Agent or the Administrative Agent,
respectively, with respect to payments required to be made by the Borrower or
Servicer on behalf of the Borrower under this Agreement, by a taxing
jurisdiction in which such Lender, such Managing Agent or the Administrative
Agent is organized, conducts business or is paying taxes as of the Closing Date
(as the case may be).  If a Lender, any
Managing Agent or the Administrative Agent pays any Taxes in respect of which
the Borrower is obligated to pay Additional Amounts under this Section
2.13(a), the Borrower shall promptly reimburse such Lender or
Administrative Agent in full.

 

(b)                                 The
Borrower will indemnify each Lender, each Managing Agent and the Administrative
Agent for the full amount of Taxes in respect of which the Borrower is required
to pay Additional Amounts (including, without limitation, any Taxes imposed by
any jurisdiction on such Additional Amounts) paid by such Lender, Managing
Agent or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto; provided, however, that such Lender, Managing Agent or
the Administrative Agent, as appropriate, making a demand for indemnity
payment, shall provide the Borrower, at its address set forth under its name on
the signature pages hereof, with a certificate from the relevant taxing authority
or from a Responsible Officer of such Lender, Managing Agent or the
Administrative Agent stating or otherwise evidencing that such Lender, Managing
Agent or the Administrative Agent has made payment of such Taxes and will
provide a copy of or extract from documentation, if available, furnished by
such taxing authority evidencing assertion or payment of such Taxes.  This indemnification shall be made within
ten days from the date such Lender, Managing Agent or the Administrative Agent
(as the case may be) makes written demand therefor.

 

34

 

(c)                                  Within
30 days after the date of any payment by the Borrower of any Taxes, the
Borrower will furnish to the Administrative Agent, the Managing Agent or the
Lender, as applicable, at its address set forth under its name on the signature
pages hereof, appropriate evidence of payment thereof.

 

(d)                                 If
a Lender is not created or organized under the laws of the United States or a
political subdivision thereof, such Lender shall, to the extent that it may
then do so under Applicable Laws, deliver to the Borrower with a copy to the
Administrative Agent (i) within 15 days after the date hereof, or, if later,
the date on which such Lender becomes a Lender hereof two (or such other number
as may from time to time be prescribed by Applicable Laws) duly completed
copies of IRS Form W-8EC1 or Form W-8BEN for any successor forms or other
certificates or statements that may be required from time to time by the
relevant United States taxing authorities or Applicable Laws), as appropriate,
to permit the Borrower to make payments hereunder for the account of such
Lender, as the case may be, without deduction or withholding of United States
federal income or similar Taxes and (ii) upon the obsolescence of or after the
occurrence of any event requiring a change in, any form or certificate
previously delivered pursuant to this Section 2.13(d), two copies (or
such other number as may from time to time be prescribed by Applicable Laws) of
such additional, amended or successor forms, certificates or statements as may
be required under Applicable Laws to permit the Borrower to make payments
hereunder for the account of such Lender, without deduction or withholding of
United States federal income or similar Taxes.

 

(e)                                  For
any period with respect to which a Lender has failed to provide the Borrower
with the appropriate form, certificate or statement described in clause (d)
of this section (other than if such failure is due to a change in law occurring
after the date of this Agreement), such Lender, as the case may be, shall not
be entitled to indemnification under clauses (a) or (b) of this
section with respect to any Taxes.

 

(f)                                    Within
30 days of the written request of the Borrower therefor, the Administrative
Agent, the Managing Agent or the Lender, as appropriate, shall execute and
deliver to the Borrower such certificates, forms or other documents that can be
furnished consistent with the facts and that are reasonably necessary to assist
the Borrower in applying for refunds of Taxes remitted hereunder; provided,
however, that the Administrative Agent, the Managing Agent and the
Lender shall not be required to deliver such certificates forms or other
documents if in their respective sole discretion it is determined that the
delivery of such certificate, form or other document would have a material
adverse effect on the Administrative Agent, the Managing Agent or the Lender
and provided  further, however, that the Borrower shall
reimburse the Administrative Agent, the Managing Agent or the Lender for any
reasonable expenses incurred in the delivery of such certificate, form or other
document.

 

(g)                                 If,
in connection with an agreement or other document providing liquidity support,
credit enhancement or other similar support to the Lenders in connection with
this Agreement or the funding or maintenance of Advances hereunder, the Lenders
are required to compensate a bank or other financial institution in respect of
Taxes under circumstances similar to those described in this section then
within ten days after demand by the Lenders, the Borrower shall pay to the
Lenders such additional amount or amounts as may be necessary to reimburse the
Lenders for any amounts paid by them.

 

35

 

ARTICLE III

 

CLOSING; CONDITIONS OF
CLOSING AND ADVANCES

 

Section 3.1                                   Conditions
to Closing and Initial Advances.

 

No Lender shall be obligated to make any Advance
hereunder on the occasion of the initial Advance, nor shall any Lender, the
Administrative Agent or the Managing Agents be obligated to take, fulfill or
perform any other action hereunder, until the following conditions have been
satisfied, in the sole discretion of, or waived in writing by, the Managing
Agents:

 

(a)                                  This
Agreement and all other Transaction Documents and each Liquidity Agreement or
counterparts hereof or thereof shall have been duly executed by, and delivered
to, the parties hereto and thereto and the Administrative Agent shall have
received such other documents, instruments, agreements and legal opinions as
any Managing Agent shall reasonably request in connection with the transactions
contemplated by this Agreement, including all those listed in the Schedule of
Documents, attached hereto as Schedule I, as due on the Closing
Date, each in form and substance satisfactory to the Administrative Agent.

 

(b)                                 The
Borrower shall have paid all fees required to be paid by it on the Closing
Date, including all fees required hereunder and under the Fee Letters to be paid
as of such date, and shall have reimbursed each Lender and the Administrative
Agent for all fees, costs and expenses of closing the transactions contemplated
hereunder and under the other Transaction Documents and each Liquidity
Agreement, including the legal and other document preparation costs incurred by
any Lender and/or the Administrative Agent.

 

(c)                                  Each
CP Lender whose commercial paper is being rated by one or more Rating Agency
shall have received, to the extent required under the terms of such CP Lender’s
program documents, the written confirmation of each such Rating Agency that the
execution and delivery of this Agreement will not result in a withdrawal or
downgrading of the then-current rating of such commercial paper by such Rating
Agency.

 

(d)                                 The
Required Equity Contribution shall have been made.

 

The Administrative Agent shall promptly notify each
Lender of the satisfaction or waiver of the conditions set forth above.

 

Section 3.2                                   Conditions
Precedent to All Advances.

 

Each Advance (including
the Initial Advance) shall be subject to the further conditions precedent that:

 

(a)                                  On
the related Funding Date, the Borrower or the Servicer, as the case may be,
shall have certified in the related Borrower Notice that:

 

36

 

(i)                                     The
representations and warranties set forth in Sections 4.1 and 7.7
are true and correct on and as of such date, before and after giving effect to
such borrowing and to the application of the proceeds therefrom, as though made
on and as of such date; and

 

(ii)                                  No
event has occurred, or would result from such Advance or from the application
of the proceeds therefrom, that constitutes an Early Termination Event.

 

(b)                                 The
Termination Date shall not have occurred;

 

(c)                                  Before
and after giving effect to such borrowing and to the application of proceeds
therefrom the Borrowing Base Test shall be satisfied, as calculated on such
date;

 

(d)                                 No
claim has been asserted or proceeding commenced challenging enforceability or
validity of any of the Loan Documents, excluding any instruments, certificates
or other documents relating to Loans that were the subject of prior Advances;

 

(e)                                  There
shall have been no Material Adverse Change with respect to the Borrower or the
Servicer since the preceding Advance; and

 

(f)                                    The
Servicer and Borrower shall have taken such other action, including delivery of
approvals, consents, opinions, documents, and instruments to the Managing
Agents as each may reasonably request.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.1                                   Representations
and Warranties of the Borrower.

 

The Borrower represents and warrants as follows:

 

(a)                                  Organization
and Good Standing.  The Borrower is
a Delaware limited liability company duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its formation, and has full
power, authority and legal right to own or lease its properties and conduct its
business as such business is presently conducted.

 

(b)                                 Due
Qualification.  The Borrower is
qualified to do business as a limited liability company, is in good standing,
and has obtained all licenses and approvals as required under the laws of all
jurisdictions in which the ownership or lease of its property and or the
conduct of its business (other than the performance of its obligations
hereunder) requires such qualification, standing, license or approval, except
to the extent that the failure to so qualify, maintain such standing or be so
licensed or approved would not have an adverse effect on the interests of the
Lenders.  The Borrower is qualified to
do business as a limited liability company, is in good standing, and has
obtained all licenses and approvals as required under the laws of all states in
which the performance of its obligations pursuant to this Agreement requires
such qualification, standing, license or approval and where the failure to
qualify or obtain such license or approval would have material adverse effect
on its ability to perform hereunder.

 

37

 

(c)                                  Due
Authorization.  The execution and
delivery of this Agreement and each Transaction Document to which the Borrower
is a party and the consummation of the transactions provided for herein and
therein have been duly authorized by the Borrower by all necessary action on
the part of the Borrower.

 

(d)                                 No
Conflict.  The execution and
delivery of this Agreement and each Transaction Document to which the Borrower
is a party, the performance by the Borrower of the transactions contemplated
hereby and thereby and the fulfillment of the terms hereof and thereof will not
conflict with or result in any breach of any of the terms and provisions of,
and will not constitute (with or without notice or lapse of time or both) a
default under, the Borrower’s limited liability company agreement or any
material Contractual Obligation of the Borrower.

 

(e)                                  No
Violation.  The execution and
delivery of this Agreement and each Transaction Document to which the Borrower
is a party, the performance of the transactions contemplated hereby and thereby
and the fulfillment of the terms hereof and thereof will not conflict with or
violate, in any material respect, any Applicable Law.

 

(f)                                    No
Proceedings.  There are no
proceedings or investigations pending or, to the best knowledge of the
Borrower, threatened against the Borrower, before any Governmental Authority
(i) asserting the invalidity of this Agreement or any Transaction Document to
which the Borrower is a party, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or any Transaction Document
to which the Borrower is a party or (iii) seeking any determination or ruling
that could reasonably be expected to have a Material Adverse Effect.

 

(g)                                 All
Consents Required.  All material
approvals, authorizations, consents, orders or other actions of any Person or
of any Governmental Authority (if any) required in connection with the due
execution, delivery and performance by the Borrower of this Agreement and any
Transaction Document to which the Borrower is a party, have been obtained.

 

(h)                                 Reports
Accurate.  All Monthly Reports (if
prepared by the Borrower, or to the extent that information contained therein
is supplied by the Borrower), information, exhibit, financial statement, document,
book, record or report furnished or to be furnished by the Borrower to the
Administrative Agent or a Lender in connection with this Agreement are true,
complete and accurate in all material respects.

 

(i)                                     Solvency.  The transactions contemplated under this
Agreement and each Transaction Document to which the Borrower is a party do not
and will not render the Borrower not Solvent.

 

(j)                                     Selection
Procedures.  No procedures believed
by the Borrower to be materially adverse to the interests of the Secured
Parties were utilized by the Borrower in identifying and/or selecting the Loans
that are part of the Collateral.

 

(k)                                  Taxes.  The Borrower has filed or caused to be filed
all Tax returns required to be filed by it. 
The Borrower has paid all Taxes and all assessments made against it or
any of its property (other than any amount of Tax the validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in accordance with GAAP

 

38

 

have been provided on the books of the Borrower), and
no Tax lien has been filed and, to the Borrower’s knowledge, no claim is being
asserted, with respect to any such Tax, fee or other charge.

 

(l)                                     Agreements
Enforceable.  This Agreement and
each Transaction Document to which the Borrower is a party constitute the
legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with their respective terms, except as such
enforceability may be limited by Insolvency Laws and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).

 

(m)                               No
Liens.  The Collateral is owned by
the Borrower free and clear of any Liens except for Permitted Liens as provided
herein, and the Administrative Agent, as agent for the Secured Parties, has a
valid and perfected first priority security interest in the Collateral then
existing or thereafter arising, free and clear of any Liens except for Permitted
Liens.  No effective financing statement
or other instrument similar in effect covering any Collateral is on file in any
recording office except such as may be filed in favor of the Administrative
Agent relating to this Agreement or reflecting the transfer of the Collateral
from the Originator to the Borrower.

 

(n)                                 Security
Interest.  The Borrower has granted
a security interest (as defined in the UCC) to the Administrative Agent, as
agent for the Secured Parties, in the Collateral, which is enforceable in
accordance with Applicable Law.  All
filings (including, without limitation, such UCC filings) as are necessary in
any jurisdiction to perfect the interest of the Administrative Agent as agent
for the Secured Parties, in the Collateral have been made.

 

(o)                                 Location
of Offices.  The Borrower’s
jurisdiction of organization, principal place of business and chief executive
office and the office where the Borrower keeps all the Records is located at
the address of the Borrower referred to in Section 12.2 hereof (or at
such other locations as to which the notice and other requirements specified in
Section 5.1(m) shall have been satisfied).

 

(p)                                 Tradenames.  The Borrower has no trade names, fictitious
names, assumed names or “doing business as” names or other names under which it
has done or is doing business.

 

(q)                                 Purchase
Agreement.  The Purchase Agreement
is the only agreement pursuant to which the Borrower acquires Collateral (other
than the Hedge Collateral).

 

(r)                                    Value
Given.  The Borrower gave reasonably
equivalent value to the Originator in consideration for the transfer to the
Borrower of the Transferred Loans under the Purchase Agreement, no such
transfer was made for or on account of an antecedent debt owed by the
Originator to the Borrower, and no such transfer is voidable or subject to
avoidance under any Insolvency Law.

 

(s)                                  Accounting.  The Borrower accounts for the transfers to
it from the Originator of interests in the Loans under the Purchase Agreement
as sales of such Loans in its books, records and financial statements, in each
case consistent with GAAP.

 

39

 

(t)                                    Separate
Entity.  The Borrower is operated as
an entity with assets and liabilities distinct from those of the Originator and
any Affiliates thereof (other than the Borrower), and the Borrower hereby
acknowledges that the Administrative Agent and the Lenders are entering into
the transactions contemplated by this Agreement in reliance upon the Borrower’s
identity as a separate legal entity from the Originator and from each such
other Affiliate of the Originator.

 

(u)                                 Investments.  Except for Supplemental Interests or
Supplemental Interests that convert into an equity interest in any Person, the
Borrower does not own or hold directly or indirectly, any capital stock or
equity security of, or any equity interest in, any Person.

 

(v)                                 Business.  Since its formation, the Borrower has
conducted no business other than the purchase and receipt of Loans and Related
Property from the Originator under the Purchase Agreement, the borrowing of
funds under this Agreement and such other activities as are incidental to the
foregoing.

 

(w)                               ERISA.  The Borrower is in compliance with ERISA and
has not incurred and does not expect to incur any liabilities (except for
premium payments arising in the ordinary course of business) payable to the
Pension Benefit Guaranty Corporation under ERISA.

 

(x)                                   Investment
Company Act.

 

(i)                                     The
Borrower represents and warrants that the Borrower is exempt and will remain
exempt from registration as an “investment company” within the meaning of the
Investment Company Act of 1940, as amended (the “1940 Act”).

 

(ii)                                  The
business and other activities of the Borrower, including but not limited to,
the making of the Advances by the Lenders, the application of the proceeds and
repayment thereof by the Borrower and the consummation of the transactions
contemplated by the Transaction Documents to which the Borrower is a party do
not now and will not at any time result in any violations, with respect to the
Borrower, of the provisions of the 1940 Act or any rules, regulations or orders
issued by the SEC thereunder.

 

(y)                                 Government
Regulations.  The Borrower is not
engaged in the business of extending credit for the purpose of “purchasing” or
“carrying” any “margin security,” as such terms are defined in Regulation U of
the Federal Reserve Board as now and from time to time hereafter in effect
(such securities being referred to herein as “Margin
Stock”).  The Borrower owns
no Margin Stock, and no portion of the proceeds of any Advance hereunder will
be used, directly or indirectly, for the purpose of purchasing or carrying any
Margin Stock, for the purpose of reducing or retiring any Indebtedness that was
originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any portion of such proceeds to be considered a
“purpose credit” within the meaning of Regulation T, U or X of the Federal
Reserve Board.  The Borrower will not
take or permit to be taken any action that might cause any Related Document to
violate any regulation of the Federal Reserve Board.

 

(z)                                   Eligibility
of Loans.  As of the Closing Date,
(i) the Loan List and the information contained in the Borrower Notice
delivered pursuant to Sections 2.1 and 2.2 is an accurate and
complete listing in all material respects of all the Loans that are part of the
Collateral as of the

 

40

 

Closing Date, and the information contained therein
with respect to the identity of such Loans and the amounts owing thereunder is
true and correct in all material respects as of such date and (ii) each such
Loan is an Eligible Loan.  On each
Funding Date, the Borrower shall be deemed to represent and warrant that any
additional Loan referenced on the related Borrower Notice delivered pursuant to
Sections 2.1 and 2.2 is an Eligible Loan.

 

ARTICLE V

 

GENERAL COVENANTS OF THE
BORROWER

 

Section 5.1                                   Covenants of
the Borrower.

 

The Borrower hereby covenants that:

 

(a)                                  Compliance
with Laws.  The Borrower will comply
in all material respects with all Applicable Laws, including those with respect
to the Loans in the Collateral and any Related Property.

 

(b)                                 Preservation
of Corporate Existence.  The
Borrower will preserve and maintain its existence, rights, franchises and
privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing in each jurisdiction where the failure to maintain
such existence, rights, franchises, privileges and qualification has had, or
could reasonably be expected to have, a Material Adverse Effect.

 

(c)                                  Security
Interests.  Except as contemplated
in this Agreement, the Borrower will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien
on any Loan or Related Property that is part of the Collateral, whether now
existing or hereafter transferred hereunder, or any interest therein.  The Borrower will promptly notify the
Administrative Agent of the existence of any Lien on any Loan or Related
Property that is part of the Collateral and the Borrower shall defend the
right, title and interest of the Administrative Agent as agent for the Secured
Parties in, to and under any Loan and the Related Property that is part of the Collateral,
against all claims of third parties; provided, however, that
nothing in this Section 5.1(c) shall prevent or be deemed to prohibit
the Borrower from suffering to exist Permitted Liens upon any Loan or any
Related Property that is part of the Collateral.

 

(d)                                 Delivery
of Collections.  The Borrower agrees
to cause the delivery to the Servicer promptly (but in no event later than two
(2) Business Days after receipt) all Collections (including any Deemed
Collections) received by Borrower in respect of the Loans that are part of the
Collateral.

 

(e)                                  Activities
of Borrower.  The Borrower shall not
engage in any business or activity of any kind, or enter into any transaction
or indenture, mortgage, instrument, agreement, contract, Loan or other
undertaking, which is not incidental to the transactions contemplated and
authorized by this Agreement or the Purchase Agreement.

 

(f)                                    Indebtedness.  The Borrower shall not create, incur, assume
or suffer to exist any Indebtedness or other liability whatsoever, except (i)
obligations incurred under this Agreement,

 

41

 

under any Hedging Agreement required by Section 5.2(a), or the
Purchase Agreement, or (ii) liabilities incident to the maintenance of its
existence in good standing.

 

(g)                                 Guarantees.  The Borrower shall not become or remain
liable, directly or indirectly, in connection with any Indebtedness or other
liability of any other Person, whether by guarantee, endorsement (other than
endorsements of negotiable instruments for deposit or collection in the
ordinary course of business), agreement to purchase or repurchase, agreement to
supply or advance funds, or otherwise.

 

(h)                                 Investments.  The Borrower shall not make or suffer to
exist any loans or advances to, or extend any credit to, or make any
investments (by way of transfer of property, contributions to capital, purchase
of stock or securities or evidences of indebtedness, acquisition of the
business or assets, or otherwise) in, any Person except for purchases of Loans
and Supplemental Interests pursuant to the Purchase Agreement, or for
investments in Permitted Investments in accordance with the terms of this
Agreement.

(i)                                     Merger;
Sales.  The Borrower shall not enter
into any transaction of merger or consolidation, or liquidate or dissolve
itself (or suffer any liquidation or dissolution), or acquire or be acquired by
any Person, or convey, sell, loan or otherwise dispose of all or substantially
all of its property or business, except as provided for in this Agreement.

 

(j)                                     Distributions.  The Borrower may not declare or pay or make,
directly or indirectly, any distribution (whether in cash or other property)
with respect to any Person’s equity interest in the Borrower (collectively, a “Distribution”); provided, however,
if no Early Termination Event has occurred or will occur as a result thereof,
the Borrower may make Distributions.

 

(k)                                  Agreements.  The Borrower shall not amend or modify (i)
the provisions of its limited liability company agreement or (ii) the Purchase
Agreement without the consent of the Administrative Agent and prior written
notice to each Managing Agent and Concord, or issue any power of attorney
except to the Administrative Agent or the Servicer.

 

(l)                                     Separate
Existence.  The Borrower shall:

 

(i)                                     Maintain
its own deposit account or accounts, separate from those of any Affiliate, with
commercial banking institutions.  The
funds of the Borrower will not be diverted to any other Person or for other
than corporate uses of the Borrower.

 

(ii)                                  Ensure
that, to the extent that it shares the same persons as officers or other
employees as any of its Affiliates, the salaries of and the expenses related to
providing benefits to such officers or employees shall be fairly allocated
among such entities, and each such entity shall bear its fair share of the
salary and benefit costs associated with all such common officers and
employees.

 

(iii)                               Ensure that, to the
extent that it jointly contracts with any of its Affiliates to do business with
vendors or service providers or to share overhead expenses, the costs incurred
in so doing shall be allocated fairly among such entities, and each such entity
shall bear its fair share of such costs. 
To the extent that the Borrower contracts or does

 

42

 

business with
vendors or service providers when the goods and services provided are partially
for the benefit of any other Person, the costs incurred in so doing shall be
fairly allocated to or among such entities for whose benefit the goods and
services are provided, and each such entity shall bear its fair share of such
costs.  All material transactions
between Borrower and any of its Affiliates shall be only on an arm’s length
basis.

 

(iv)                              Maintain
a principal executive and administrative office through which its business is
conducted separate from those of its Affiliates.  To the extent that Borrower and any of its Affiliates have
offices in the same location, there shall be a fair and appropriate allocation
of overhead costs among them, and each such entity shall bear its fair share of
such expenses.

 

(v)                                 Conduct
its affairs strictly in accordance with its limited liability company agreement
and observe all necessary, appropriate and customary legal formalities,
including, but not limited to, holding all regular and special director’s
meetings appropriate to authorize all action, keeping separate and accurate
records of such meetings, passing all resolutions or consents necessary to
authorize actions taken or to be taken, and maintaining accurate and separate
books, records and accounts, including, but not limited to, payroll and
transaction accounts.

 

(vi)                              Take
or refrain from taking, as applicable, each of the activities specified or
assumed in the “non-consolidation” opinion of Williams Mullen delivered on the
Closing Date, upon which the conclusions expressed therein are based.

 

(vii)                           Maintain the effectiveness
of, and continue to perform under the Purchase Agreement and the Performance
Guaranty, such that it does not amend, restate, supplement, cancel, terminate
or otherwise modify the Purchase Agreement or the Performance Guaranty, or give
any consent, waiver, directive or approval thereunder or waive any default,
action, omission or breach under the Purchase Agreement or the Performance
Guaranty or otherwise grant any indulgence thereunder, without (in each case)
the prior written consent of the Administrative Agent and each Managing Agent
and notice to Concord.

 

(m)                               Change
of Name or Jurisdiction of Borrower; Records.    The
Borrower (x) shall not change its name or jurisdiction of organization, without
30 days’ prior written notice to the Administrative Agent and (y) shall not
move, or consent to the Servicer or Collateral Custodian moving, the Loan
Documents without 30 days’ prior written notice to the Administrative Agent and
(z) will promptly take all actions required of each relevant jurisdiction in
order to continue the first priority perfected security interest of the
Administrative Agent as agent for the Secured Parties (except for Permitted
Liens) in all Collateral, and such other actions as the Administrative Agent
may reasonably request, including but not limited to delivery of an Opinion of
Counsel.

 

(n)                                 ERISA
Matters.  The Borrower will not (a)
engage or permit any ERISA Affiliate to engage in any prohibited transaction
for which an exemption is not available or has not previously been obtained
from the United States Department of Labor; (b) permit to exist any accumulated
funding deficiency, as defined in Section 302(a) of ERISA and Section 412(a) of
the Code, or funding deficiency with respect to any Benefit Plan other than a
Multiemployer

 

43

 

Plan; (c) fail to make any payments to a Multiemployer
Plan that the Borrower or any ERISA Affiliate may be required to make under the
agreement relating to such Multiemployer Plan or any law pertaining thereto;
(d) terminate any Benefit Plan so as to result in any liability; or (e) permit
to exist any occurrence of any reportable event described in Title IV of ERISA.

 

(o)                                 Originator
Collateral.  With respect to each
item of Collateral acquired by the Borrower, the Borrower will (i) acquire such
Collateral pursuant to and in accordance with the terms of the Purchase
Agreement, (ii) take all action necessary to perfect, protect and more fully
evidence the Borrower’s ownership of such Collateral, including, without
limitation, (A) filing and maintaining, effective financing statements (Form
UCC-1) naming the Originator as seller/debtor and the Borrower as
purchaser/creditor 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, including, without
limitation, Assignments of Mortgage, and (iii) take all additional action that
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.

 

(p)                                 Transactions
with Affiliates.  The Borrower will
not enter into, or be a party to, any transaction with any of its Affiliates,
except (i) the transactions permitted or contemplated by this Agreement, the
Purchase Agreement and any Hedging Agreements and (ii) other transactions
(including, without limitation, transactions related to the use of office space
or computer equipment or software by the Borrower to or from an Affiliate) (A)
in the ordinary course of business, (B) pursuant to the reasonable requirements
of the Borrower’s business, (C) upon fair and reasonable terms that are no less
favorable to the Borrower than could be obtained in a comparable arm’s-length
transaction with a Person not an Affiliate of the Borrower, and (D) not
inconsistent with the factual assumptions set forth in the “non-consolidation”
legal opinion letter issued by Williams Mullen and delivered to the
Administrative Agent as a condition to the initial Advance, as such assumptions
may be modified in any subsequent opinion letters delivered to the
Administrative Agent pursuant to Section 3.2 or otherwise.  It is understood that any compensation
arrangement for any officer or employee shall be permitted under clause
(ii)(A) through (C) above if such arrangement has been expressly
approved by the managers of the Borrower in accordance with the Borrower’s
limited liability company agreement.

 

(q)                                 Change
in the Transaction Documents.  The
Borrower will not amend, modify, waive or terminate any terms or conditions of
any of the Transaction Documents to which it is a party, without the prior
written consent of Administrative Agent.

 

(r)                                    Credit
and Collection Policy.  The Borrower
will (a) comply in all material respects with the Credit and Collection Policy
in regard to each Loan and the Related Property included in the Collateral, and
(b) furnish to the Administrative Agent and each Managing Agent, at least 20
days prior to its proposed effective date, prompt notice of any material
changes in the Credit and Collection Policy. 
The Borrower will not agree or otherwise permit to occur any material
change in the Credit and Collection Policy, which change would impair the
collectibility of any Loan or otherwise adversely affect the interests or
remedies of the Administrative Agent or the Secured Parties under this
Agreement or any other Transaction Document, without the prior written consent
of the Administrative Agent (in its sole discretion).

 

44

 

(s)                                  Extension
or Amendment of Loans.   The Borrower will not, except as
otherwise permitted in Section 7.4(a) extend, amend or otherwise modify,
or permit the Servicer on its behalf to extend, amend or otherwise modify, the
terms of any Loan.

 

(t)                                    Reporting.     The
Borrower will furnish to the Administrative Agent, each Managing Agent and
Concord:

 

(i)                                     as
soon as possible and in any event within two (2) Business Days after the
occurrence of each Early Termination Event and each Unmatured Termination
Event, a written statement, signed by a Responsible Officer, setting forth the
details of such event and the action that the Borrower proposes to take with
respect thereto;

 

(ii)                                  promptly
upon request, such other information, documents, records or reports respecting
the Transferred Loans or the condition or operations, financial or otherwise,
of the Borrower or Originator as the Administrative Agent may from time to time
reasonably request in order to protect the interests of the Administrative
Agent or the Secured Parties under or as contemplated by this Agreement; and

 

(iii)                               promptly, but in no
event later than two (2) Business Days after its receipt thereof, copies of any
and all notices, certificates, documents, or reports delivered to it by the
Originator under the Purchase Agreement.

 

Section 5.2                                   Hedging
Agreement.

 

(a)                                  The
Borrower shall, on or before the initial Advance hereunder, enter into a Hedge
Transaction with a Hedge Counterparty, which shall: (i) be in the form of an
interest rate cap having a notional amount equal to (A) prior to the
Termination Date, the Required Notional Amount and (B) thereafter, an amount
reflecting amortization at a rate to be agreed upon between the Borrower and
the Administrative Agent and (ii) shall provide for payments to the Borrower to
the extent that the LIBO Rate shall exceed a rate agreed upon between the
Administrative Agent and the Borrower.

 

(b)                                 As
additional security hereunder, the Borrower hereby assigns to the
Administrative Agent, as agent for the Secured Parties, all right, title and
interest of the Borrower in each Hedging Agreement, each Hedge Transaction, and
all present and future amounts payable by a Hedge Counterparty to the Borrower
under or in connection with the respective Hedging Agreement and Hedge
Transaction(s) with that Hedge Counterparty (“Hedge
Collateral”), and grants a security interest to the Administrative
Agent, as agent for the Secured Parties, in the Hedge Collateral.  The Borrower acknowledges that, as a result
of that assignment, the Borrower may not, without the prior written consent of
the Administrative Agent, exercise any rights under any Hedging Agreement or
Hedge Transaction, except for the Borrower’s right under any Hedging Agreement
to enter into Hedge Transactions in order to meet the Borrower’s obligations
under Section 5.2(a) hereof. 
Nothing herein shall have the effect of releasing the Borrower from any
of its obligations under any Hedging Agreement or any Hedge Transaction, nor be
construed as requiring the consent of the Administrative Agent or any Secured
Party for the performance by the Borrower of any such obligations.

 

45

 

ARTICLE
VI

 

SECURITY
INTEREST

 

Section 6.1                                   Security
Interest.

 

As collateral security
for the prompt, complete and indefeasible payment and performance in full when
due, whether by lapse of time, acceleration or otherwise, of the Obligations,
the Borrower hereby assigns, pledges and grants to the Administrative Agent, as
agent for the Secured Parties, a lien on and security interest in all of the
Borrower’s right, title and interest in, to and under (but none of its
obligations under) the Collateral, whether now existing or owned or hereafter
arising or acquired by the Borrower, and wherever located.  The assignment under this Section 6.1
does not constitute and is not intended to result in a creation or an
assumption by the Administrative Agent, the Managing Agents or any of the
Secured Parties of any obligation of the Borrower or any other Person in
connection with any or all of the Collateral or under any agreement or
instrument relating thereto.  Anything
herein to the contrary notwithstanding, (a) the Borrower shall remain liable
under the Transferred Loans to the extent set forth therein to perform all of
its duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by the Administrative Agent, as agent
for the Secured Parties, of any of its rights in the Collateral shall not
release the Borrower from any of its duties or obligations under the
Collateral, and (c) none of the Administrative Agent, the Managing Agents or
any Secured Party shall have any obligations or liability under the Collateral
by reason of this Agreement, nor shall the Administrative Agent, the Managing
Agents or any Secured Party be obligated to perform any of the obligations or
duties of the Borrower thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.

 

Section 6.2                                   Remedies.

 

The Administrative Agent
(for itself and on behalf of the other Secured Parties) shall have all of the
rights and remedies of a secured party under the UCC and other Applicable
Law.  Upon the occurrence and during the
continuance of an Early Termination Event, the Administrative Agent or its
designees may (i) deliver a notice of exclusive control to the Collateral
Custodian; (ii) instruct the Collateral Custodian to deliver any or all of the
Collateral to the Administrative Agent or its designees and otherwise give all
instructions and entitlement orders to the Collateral Custodian regarding the
Collateral; (iii) require that the Borrower or the Collateral Custodian
immediately take action to liquidate the Collateral to pay amounts due and
payable in respect of the Obligations; (iv) sell or otherwise dispose of the
Collateral in a commercially reasonable manner, all without judicial process or
proceedings; (v) take control of the Proceeds of any such Collateral; (vi)
exercise any consensual or voting rights in respect of the Collateral; (vii)
release, make extensions, discharges, exchanges or substitutions for, or
surrender all or any part of the Collateral; (viii) enforce the Borrower’s
rights and remedies under the Custody Agreement with respect to the Collateral;
(ix) institute and prosecute legal and equitable proceedings to enforce
collection of, or realize upon, any of the Collateral; (x) remove from the
Borrower’s, the Servicer’s, the Collateral Custodian’s and their respective
agents’ place of business all books, records and documents relating to the
Collateral; and/or (xi) endorse the name of the Borrower upon any items of
payment relating to the Collateral or upon any proof of

 

46

 

claim in bankruptcy
against an account debtor.  For purposes
of taking the actions described in subsections (i) through (xi)
of this Section 6.2 the Borrower hereby irrevocably appoints the
Administrative Agent as its attorney-in-fact (which appointment being coupled
with an interest is irrevocable while any of the Obligations remain unpaid),
with power of substitution, in the name of the Administrative Agent or in the
name of the Borrower or otherwise, for the use and benefit of the
Administrative Agent, but at the cost and expense of the Borrower and without
notice to the Borrower; provided that the Administrative Agent hereby agrees to
exercise such power only so long as an Early Termination Event shall be
continuing.

 

Section 6.3                                   Release of
Liens.

 

(a)                                  If
(i) the Borrowing Base Test is met, and (ii) no Early Termination Event or
Unmatured Termination Event has occurred and is continuing, at the same time as
any Loan that is part of the Collateral expires by its terms and all amounts in
respect thereof have been paid by the related Obligor and deposited in the
Collection Account, the Administrative Agent as agent for the Secured Parties
will, to the extent requested by the Borrower or the Servicer on behalf of the
Borrower, release its interest in such Loan and any Supplemental Interests
related thereto.  In connection with any
such release on or after the occurrence of the above, the Administrative Agent,
as agent for the Secured Parties, will execute and deliver to the Borrower or
the Servicer on behalf of the Borrower any termination statements and any other
releases and instruments as the Borrower or the Servicer on behalf of the
Borrower may reasonably request in order to effect the release of such Loan and
Supplemental Interest; provided, that, the Administrative Agent
as agent for the Secured Parties will make no representation or warranty,
express or implied, with respect to any such Loan or Supplemental Interest in
connection with such sale or transfer and assignment.

 

(b)                                 Upon
receipt by the Administrative Agent of the proceeds of a repurchase of an
Ineligible Loan (as such term is defined in the Purchase Agreement) by the
Originator pursuant to the terms of Section 6.1 of the Purchase Agreement, the
Administrative Agent, as agent for the Secured Parties, shall be deemed to have
automatically released its interest in such Ineligible Loan and any
Supplemental Interests related thereto without any further action on its
part.  In connection with any such
release on or after the occurrence of such repurchase, the Administrative
Agent, as agent for the Secured Parties, will execute and deliver to the
Borrower or the Servicer on behalf of the Borrower any releases and instruments
as the Borrower or the Servicer on behalf of the Borrower may reasonably request
in order to effect the release of such Ineligible Loan and Supplemental
Interest.

 

(c)                                  Upon
receipt by the Administrative Agent of the proceeds of a purchase of a
Transferred Loan by the Servicer pursuant to the terms of Section 7.7,
the Administrative Agent, as agent for the Secured Parties, shall be deemed to
have automatically released its interest in such Transferred Loan and any
Supplemental Interests related thereto without any further action on its
part.  In connection with any such
release on or after the occurrence of such purchase, the Administrative Agent,
as agent for the Secured Parties, will execute and deliver to the Borrower or
the Servicer on behalf of the Borrower any releases and instruments as the
Borrower or the Servicer on behalf of the Borrower may reasonably request in
order to effect the release of such Transferred Loan and Supplemental Interest.

 

47

 

Section 6.4                                   Assignment
of the Purchase Agreement.

 

The Borrower hereby
represents, warrants and confirms to the Administrative Agent that the Borrower
has assigned to the Administrative Agent, for the ratable benefit of the
Secured Parties hereunder, all of the Borrower’s right and title to and
interest in the Purchase Agreement.  The
Borrower confirms that following an Early Termination Event the Administrative
Agent shall have the sole right to enforce the Borrower’s rights and remedies
under the Purchase Agreement for the benefit of the Secured Parties, but
without any obligation on the part of the Administrative Agent, the Secured
Parties or any of their respective Affiliates to perform any of the obligations
of the Borrower under the Purchase Agreement. 
The Borrower further confirms and agrees that such assignment to the
Administrative Agent shall terminate upon the Collection Date; provided,
however, that the rights of the Administrative Agent and the Secured
Parties pursuant to such assignment with respect to rights and remedies in
connection with any indemnities and any breach of any representation, warranty
or covenants made by the Originator pursuant to the Purchase Agreement, which
rights and remedies survive the Termination of the Purchase Agreement, shall be
continuing and shall survive any termination of such assignment.

 

ARTICLE VII

 

ADMINISTRATION AND SERVICING OF LOANS

 

Section 7.1                                   Appointment
of the Servicer.

 

The Borrower hereby
appoints the Servicer to service the Transferred Loans and enforce its
respective rights and interests in and under each Transferred Loan in accordance
with the terms and conditions of this Article VII and to serve in such
capacity until the termination of its responsibilities pursuant to Section
7.18.  The Servicer hereby agrees to
perform the duties and obligations with respect thereto set forth herein.  The Servicer and the Borrower hereby
acknowledge that the Administrative Agent and the Secured Parties are third
party beneficiaries of the obligations undertaken by the Servicer hereunder.

 

Section 7.2                                   Duties and
Responsibilities of the Servicer.

 

(a)                                  The
Servicer shall conduct the servicing, administration and collection of the
Transferred Loans and shall take, or cause to be taken, all such actions as may
be necessary or advisable to service, administer and collect Transferred Loans
from time to time on behalf of the Borrower and as the Borrower’s agent.

 

(b)                                 The
duties of the Servicer, as the Borrower’s agent, shall include, without
limitation:

 

(i)                                     preparing
and submitting of claims to, and post-billing liaison with, Obligors on
Transferred Loans;

 

(ii)                                  maintaining
all necessary Servicing Records with respect to the Transferred Loans and
providing such reports to the Borrower, the Managing Agents and the
Administrative Agent in respect of the servicing of the Transferred Loans
(including information relating to its performance under this Agreement) as may
be required

 

48

 

hereunder or as the Borrower, any Managing Agent or
the Administrative Agent may reasonably request;

 

(iii)                               maintaining and
implementing administrative and operating procedures (including, without
limitation, an ability to recreate Servicing Records evidencing the Transferred
Loans in the event of the destruction of the originals thereof) and keeping and
maintaining all documents, books, records and other information reasonably
necessary or advisable for the collection of the Transferred Loans (including,
without limitation, records adequate to permit the identification of each new
Transferred Loan and all Collections of and adjustments to each existing
Transferred Loan); provided, however, that any Successor Servicer
shall only be required to recreate the Servicing Records of each prior Servicer
to the extent such records have been delivered to it in a format reasonably
acceptable to such Successor Servicer;

 

(iv)                              promptly
delivering to the Borrower, any Managing Agent or the Administrative Agent,
from time to time, such information and Servicing Records (including
information relating to its performance under this Agreement) as the Borrower,
such Managing Agent or the Administrative Agent from time to time reasonably
request;

 

(v)                                 identifying
each Transferred Loan clearly and unambiguously in its Servicing Records to
reflect that such Transferred Loan is owned by the Borrower and pledged to the
Administrative Agent;

 

(vi)                              complying
in all material respects with the Credit and Collection Policy in regard to
each Transferred Loan;

 

(vii)                           complying in all material
respects with all Applicable Laws with respect to it, its business and
properties and all Transferred Loans and Collections with respect thereto;

 

(viii)                        preserving and maintaining its
existence, rights, licenses, franchises and privileges as a corporation in the
jurisdiction of its organization, and qualifying and remaining qualified in
good standing as a foreign corporation and qualifying to and remaining
authorized and licensed to perform obligations as Servicer (including
enforcement of collection of Transferred Loans on behalf of the Borrower,
Lenders, each Hedge Counterparty and the Collateral Custodian) in each
jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would materially adversely affect (A)
the rights or interests of the Borrower, Lenders, each Hedge Counterparty and
the Collateral Custodian in the Transferred Loans, (B) the collectibility of
any Transferred Loan, or (C) the ability of the Servicer to perform its
obligations hereunder; and

 

(ix)                                notifying
the Borrower, each Managing Agent, Concord and the Administrative Agent of any
material action, suit, proceeding, dispute, offset deduction, defense or
counterclaim that is or is threatened to be (1) asserted by an Obligor with 

 

49

 

respect to any Transferred Loan; or (2) reasonably
expected to have a Material Adverse Effect; and

 

(c)                                  The
Borrower and Servicer hereby acknowledge that the Secured Parties, the
Administrative Agent and the Collateral Custodian shall not have any obligation
or liability with respect to any Transferred Loans, nor shall any of them be
obligated to perform any of the obligations of the Servicer hereunder.

 

Section 7.3                                   Authorization
of the Servicer.

 

(a)                                  Each
of the Borrower, each Managing Agent, on behalf of itself and the related
Lenders, the Administrative Agent and each Hedge Counterparty hereby authorizes
the Servicer (including any successor thereto) to take any and all reasonable
steps in its name and on its behalf necessary or desirable and not inconsistent
with the pledge of the Transferred Loans to the Lender, each Hedge
Counterparty, and the Collateral Custodian, in the determination of the
Servicer, to collect all amounts due under any and all Transferred Loans,
including, without limitation, endorsing any of their names on checks and other
instruments representing Collections, executing and delivering any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Transferred
Loans and, after the delinquency of any Transferred Loan and to the extent
permitted under and in compliance with Applicable Law, to commence proceedings
with respect to enforcing payment thereof, to the same extent as the Originator
could have done if it had continued to own such Loan.  The Borrower shall furnish the Servicer (and any successors
thereto) with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder, and shall cooperate with the Servicer to the
fullest extent in order to ensure the collectibility of the Transferred
Loans.  In no event shall the Servicer
be entitled to make the Borrower, any Lender, any Managing Agent, any Hedge
Counterparty, the Collateral Custodian or the Administrative Agent a party to
any litigation without such party’s express prior written consent, or to make
the Borrower a party to any litigation (other than any routine foreclosure or
similar collection procedure) without the Administrative Agent’s consent.

 

(b)                                 After
an Early Termination Event has occurred and is continuing, at the
Administrative Agent’s direction, the Servicer shall take such action as the
Administrative Agent may deem necessary or advisable to enforce collection of
the Transferred Loans; provided, however, that the Administrative
Agent may, at any time that an Early Termination Event has occurred and is
continuing, notify any Obligor with respect to any Transferred Loans of the
assignment of such Transferred Loans to the Administrative Agent and direct
that payments of all amounts due or to become due to the Borrower thereunder be
made directly to the Administrative Agent or any servicer, collection agent or
lock-box or other account designated by the Administrative Agent and, upon such
notification and at the expense of the Borrower, the Administrative Agent may
enforce collection of any such Transferred Loans and adjust, settle or
compromise the amount or payment thereof. 
The Administrative Agent shall give written notice to any Successor
Servicer of the Administrative Agent’s actions or directions pursuant to this Section
7.3(b), and no Successor Servicer shall take any actions pursuant to this Section
7.3(b) that are outside of its Credit and Collection Policy.

 

50

 

Section 7.4                                   Collection
of Payments.

 

(a)                                  Collection
Efforts, Modification of Loans.  The
Servicer will make reasonable efforts to collect all payments called for under
the terms and provisions of the Transferred Loans as and when the same become
due, and will follow those collection procedures which it follows with respect
to all comparable Loans that it services for itself or others.  The Servicer may not waive, modify or
otherwise vary any provision of a Transferred Loan, except as may be in
accordance with the provisions of the Credit and Collection Policy, including
the waiver of any late payment charge or any other fees that may be collected
in the ordinary course of servicing any Loan included in the Collateral.

 

(b)                                 Acceleration.  The Servicer shall accelerate the maturity
of all or any Scheduled Payments under any Transferred Loan under which a
default under the terms thereof has occurred and is continuing (after the lapse
of any applicable grace period) promptly after such Loan becomes a Defaulted
Loan or such earlier or later time as is consistent with the Credit and
Collection Policy.

 

(c)                                  Taxes
and other Amounts.  To the extent
provided for in any Transferred Loan, the Servicer will use its best efforts to
collect all payments with respect to amounts due for taxes, assessments and
insurance premiums relating to such Transferred Loans or the Related Property
and remit such amounts to the appropriate Governmental Authority or insurer on
or prior to the date such payments are due.

 

(d)                                 Payments
to Lock-Box Account: On or before the Closing Date, the Servicer shall have
instructed all Obligors to make all payments in respect of Loans included in
the Collateral to a Lock-Box or directly to a Lock-Box Account or the
Collection Account.

 

(e)                                  Establishment
of the Collection Account.  The
Borrower or the Servicer on its behalf shall cause to be established, on or
before the Closing Date, and maintained in the name of the Borrower and assigned
to the Administrative Agent as agent for the Secured Parties, with an office or
branch of a depository institution or trust company organized under the laws of
the United States or any one of the States thereof or the District of Columbia
(or any domestic branch of a foreign bank) a segregated corporate trust account
(the “Collection Account”) for
the purpose of receiving Collections from the Collateral; provided, however,
that at all times such depository institution or trust company shall be a
depository institution organized under the laws of the United States or any one
of the States thereof or the District of Columbia (or any domestic branch of a
foreign bank), (i) (A) that has either (1) a long-term unsecured debt rating of
A- or better by S&P and A-3 or better by Moody’s or (2) a short-term
unsecured debt rating or certificate of deposit rating of A-1 or better by
S&P or P-1 or better by Moody’s, (B) the parent corporation of which has
either (1) a long-term unsecured debt rating of A- or better by S&P and A-3
or better by Moody’s or (2) a short-term unsecured debt rating or certificate
of deposit rating of A-1 or better by S&P and P-1 or better by Moody’s or
(C) is otherwise acceptable to the Administrative Agent and (ii) whose deposits
are insured by the Federal Deposit Insurance Corporation (any such depository
institution or trust company, a “Qualified
Institution”).

 

(f)                                    Adjustments.  If (i) the Servicer makes a deposit into the
Collection Account in respect of a Collection of a Loan in the Collateral and
such Collection was received by the 

 

51

 

Servicer in the form of a check that is not honored
for any reason or (ii) the Servicer makes a mistake with respect to the amount
of any Collection and deposits an amount that is less than or more than the
actual amount of such Collection, the Servicer shall appropriately adjust the
amount subsequently deposited into the Collection Account to reflect such
dishonored check or mistake.  Any
Scheduled Payment in respect of which a dishonored check is received shall be
deemed not to have been paid.

 

Section 7.5                                   Servicer
Advances.

 

For each Settlement
Period, if the Servicer determines that any Scheduled Payment (or portion
thereof) that was due and payable pursuant to a Loan included in the Collateral
during such Settlement Period was not received prior to the end of such
Settlement Period, the Servicer may, but shall not be obligated to, make an
advance in an amount up to the amount of such delinquent Scheduled Payment (or
portion thereof) to the extent that the Servicer reasonably expects to be
reimbursed for such advance; in addition, if on any day there are not
sufficient funds on deposit in the Collection Account to pay accrued Interest
on any Advance the Settlement Period of which ends on such day, the Servicer
may make an advance in the amount necessary to pay such Interest (in either
case, any such advance, a “Servicer Advance”).  Notwithstanding the preceding sentence, any
Successor Servicer will not be obligated to make any Servicer Advances.  The Servicer will deposit any Servicer
Advances into the Collection Account on or prior to 11:00 a.m. (New York City
time) on the related Payment Date, in immediately available funds.

 

Section 7.6                                   Realization
Upon Defaulted Loans or Charged-Off Loans.

 

The Servicer will use
reasonable efforts to repossess or otherwise comparably convert the ownership
of any Related Property with respect to a Defaulted Loan or Charged-Off Loan
and will act as sales and processing agent for Related Property that it
repossesses.  The Servicer will follow
the practices and procedures set forth in the Credit and Collection Policy in
order to realize upon such Related Property. 
Without limiting the foregoing, the Servicer may sell any such Related
Property with respect any Defaulted Loan or Charged-Off Loan to the Servicer or
its Affiliates for a purchase price equal to the then fair market value
thereof; any such sale to be evidenced by a certificate of a Responsible
Officer of the Servicer delivered to the Administrative Agent identifying the
Defaulted Loan or Charged-Off Loan and the Related Property, setting forth the
sale price of the Related Property and certifying that such sale price is the
fair market value of such Related Property.  In any case in which any such Related Property has suffered
damage, the Servicer will not expend funds in connection with any repair or
toward the repossession of such Related Property unless it reasonably determines
that such repair and/or repossession will increase the Recoveries by an amount
greater than the amount of such expenses. 
The Servicer will remit to the Collection Account the Recoveries
received in connection with the sale or disposition of Related Property with
respect to a Defaulted Loan or Charged-Off Loan.

 

Section 7.7                                   Optional
Repurchase of Transferred Loans.

 

(a)                                  The
Servicer may, at any time, notify the Borrower and the Administrative Agent
that it is requesting to purchase any Transferred Loan with respect to which
the Borrower or any

 

52

 

Affiliate of the Borrower has received notice of the
related Obligor’s intention to prepay such Transferred Loan in full within a
period of not more than 60 days from the date of such notification.

 

(b)                                 The
Servicer may, at its sole option, with respect to any Transferred Loan that it
determines, in the exercise of its reasonable discretion, will likely become a
Defaulted Loan or a Charged-Off Loan, or that has become a Defaulted Loan or a
Charged-Off Loan, notify the Borrower and the Administrative Agent that it is
requesting to purchase each such Transferred Loan; provided, however, that the
Servicer shall not purchase more than six Transferred Loans pursuant to this paragraph
(b) during the term of this Agreement.

 

(c)                                  The
Servicer may request purchase of a Transferred Loan pursuant to paragraph
(a) or (b) above by providing five Business Days’ prior written
notice to Borrower and the Administrative Agent.  The Borrower may agree to such purchase with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld).  With respect to any such purchase of a
Transferred Loan, the Servicer shall, on the date of purchase, remit to the
Borrower in immediately available funds an amount equal to the Repurchase Price
therefor.  Upon each purchase of a
Transferred Loan by the Servicer pursuant to this Section 7.7, the
Borrower shall automatically and without further action be deemed to transfer,
assign and set-over to the Servicer all the right, title and interest of the
Borrower in, to and under such Transferred Loan and all monies due or to become
due with respect thereto, all proceeds thereof and all rights to security for
any such Transferred Loan, and all proceeds and products of the foregoing, free
and clear of any Lien created pursuant to this Agreement, all of the Borrower’s
right, title and interest in such Transferred Loan, including any related
Supplemental Interests.  Each Lender
shall receive five Business Days’ notice of any repurchase that results in a
prepayment of all or a portion of any Advance.

 

(d)                                 The
Borrower shall, at the sole expense of the Servicer, execute such documents and
instruments of transfer as may be prepared by the Servicer and take such other
actions as shall reasonably be requested by the Servicer to effect the transfer
of a Transferred Loan pursuant to this Section 7.7.

 

Section 7.8                                   Representations
and Warranties of the Servicer.

 

The initial Servicer, and
any Successor Servicer (mutatis mutandis), hereby represents and warrants as
follows:

 

(a)                                  Organization
and Good Standing.  The Servicer is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation with all requisite corporate
power and authority to own its properties and to conduct its business as
presently conducted and to enter into and perform its obligations pursuant to
this Agreement.

 

(b)                                 Due
Qualification.  The Servicer is
qualified to do business as a corporation, is in good standing, and has
obtained all licenses and approvals as required under the laws of all
jurisdictions in which the ownership or lease of its property and or the
conduct of its business (other than the performance of its obligations
hereunder) requires such qualification, standing, license or approval, except
to the extent that the failure to so qualify, maintain such standing or

 

53

 

be so licensed or approved would not have an adverse
effect on the interests of the Borrower or of the Lenders.  The Servicer is qualified to do business as
a corporation, is in good standing, and has obtained all licenses and approvals
as required under the laws of all states in which the performance of its
obligations pursuant to this Agreement requires such qualification, standing,
license or approval and where the failure to qualify or obtain such license or
approval would have material adverse effect on its ability to perform
hereunder.

 

(c)                                  Power
and Authority.  The Servicer has the
corporate power and authority to execute and deliver this Agreement and to
carry out its terms.  The Servicer has
duly authorized the execution, delivery and performance of this Agreement by
all requisite corporate action.

 

(d)                                 No
Violation.  The consummation of the
transactions contemplated by, and the fulfillment of the terms of, this
Agreement by the Servicer (with or without notice or lapse of time) will not
(i) conflict with, result in any breach of any of the terms or provisions of,
or constitute a default under, the articles of incorporation or by-laws of the
Servicer, or any Contractual Obligation to which the Servicer is a party or by
which it or any of its property is bound, (ii) result in the creation or
imposition of any Adverse Claim upon any of its properties pursuant to the
terms of any such Contractual Obligation (other than this Agreement), or (iii)
violate any Applicable Law.

 

(e)                                  No
Consent.  No consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any Governmental Authority having jurisdiction over the Servicer or any
of its properties is required to be obtained by or with respect to the Servicer
in order for the Servicer to enter into this Agreement or perform its
obligations hereunder.

 

(f)                                    Binding
Obligation.  This Agreement
constitutes a legal, valid and binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms, except as such
enforceability may be limited by (i) applicable Insolvency Laws and (ii)
general principles of equity (whether considered in a suit at law or in
equity).

 

(g)                                 No
Proceeding.  There are no
proceedings or investigations pending or threatened against the Servicer,
before any Governmental Authority (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (iii) seeking any determination or ruling
that might (in the reasonable judgment of the Servicer) have a Material Adverse
Effect.

 

(h)                                 Reports
Accurate.  All Servicer
Certificates, Monthly Reports, information, exhibits, financial statements,
documents, books, Servicer Records or other reports furnished or to be
furnished by the Servicer to the Administrative Agent or a Lender in connection
with this Agreement are and will be accurate, true and correct in all material
respects.

 

Section 7.9                                   Covenants of
the Servicer.

 

The Servicer hereby
covenants that:

 

(a)                                  Compliance
with Law.  The Servicer will comply
in all material respects with all Applicable Laws, including those with respect
to the Transferred Loans and Related Property and Loan Documents or any part
thereof.

 

54

 

(b)                                 Preservation
of Corporate Existence.  The
Servicer will preserve and maintain its corporate existence, rights, franchises
and privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction where
the failure to maintain such existence, rights, franchises, privileges and
qualification has had, or could reasonably be expected to have, a Material
Adverse Effect.

 

(c)                                  Obligations
with Respect to Loans.  The Servicer
will duly fulfill and comply with all material obligations on the part of the Borrower
to be fulfilled or complied with under or in connection with each Loan and will
do nothing to impair the rights of the Borrower or the Administrative Agent as
agent for the Secured Parties or of the Secured Parties in, to and under the
Collateral.

 

(d)                                 Preservation
of Security Interest.  The Servicer
on behalf of the Borrower will execute and file (or cause the execution and
filing of) such financing and continuation statements and any other documents
that may be required by any law or regulation of any Governmental Authority to
preserve and protect fully the interest of the Administrative Agent as agent
for the Secured Parties in, to and under the Collateral.

 

(e)                                  No
Bankruptcy Petition.  With respect
to any CP Lender, prior to the date that is one year and one day after the
payment in full of all amounts owing in respect of all outstanding commercial
paper issued by such CP Lender and, with respect to the Borrower, prior to the
date that is one year and one day after the Collection Date, the Servicer will
not institute against the Borrower or such CP Lender, or join any other Person
in instituting against the Borrower or such CP Lender, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the
United States.  This Section 7.9(e)
will survive the termination of this Agreement.

 

(f)                                    Change
of Name or Jurisdiction; Records. 
The Servicer (i) shall not change its name or jurisdiction of incorporation,
without 30 days’ prior written notice to the Borrower and the Administrative
Agent, and (ii) shall not move, or consent to the Collateral Custodian moving,
the Loan Documents relating to the Transferred Loans without 30 days’ prior
written notice to the Borrower and the Administrative Agent and, in either
case, will promptly take all actions required of each relevant jurisdiction in
order to continue the first priority perfected security interest of the
Administrative Agent as agent for the Secured Parties on all collateral, and
such other actions as the Administrative Agent may reasonably request,
including but not limited to delivery of an Opinion of Counsel.

 

(g)                                 Credit
and Collection Policy.  The Servicer
will (i) comply in all material respects with the Credit and Collection Policy
in regard to each Transferred Loan and (ii) furnish to each Managing Agent and
the Administrative Agent, at least 20 days prior to its proposed effective
date, prompt notice of any material change in the Credit and Collection
Policy.  The Servicer will not agree or
otherwise permit to occur any material change in the Credit and Collection
Policy, which change would impair the collectibility of any Transferred Loan or
otherwise adversely affect the interests or remedies of the Administrative
Agent or the Secured Parties under this Agreement or any other Transaction
Document, without the prior written consent of the Administrative Agent (in its
sole discretion).

 

55

 

(h)                                 Early
Termination Events.  The Servicer
will furnish to each Managing Agent, Concord and the Administrative Agent, as
soon as possible and in any event within three (3) Business Days after the
occurrence of each Early Termination Event or Unmatured Termination Event, a
written statement setting forth the details of such event and the action that
the Servicer proposes to take with respect thereto.

 

(i)                                     Extension
or Amendment of Loans.  The Servicer
will not, except as otherwise permitted in Section 7.4(a), extend, amend
or otherwise modify the terms of any Transferred Loan.

 

(j)                                     Other.  The Servicer will furnish to the Borrower,
any Managing Agent and the Administrative Agent such other information,
documents records or reports respecting the Transferred Loans or the condition
or operations, financial or otherwise of the Servicer as the Borrower, such
Managing Agent or the Administrative Agent may from time to time reasonably
request in order to protect the respective interests of the Borrower, such
Managing Agent, the Administrative Agent or the Secured Parties under or as
contemplated by this Agreement.

 

Section 7.10                            Payment of
Certain Expenses by Servicer.

 

The Servicer will be
required to pay all expenses incurred by it in connection with its activities
under this Agreement, including fees and disbursements of legal counsel and
independent accountants, Taxes imposed on the Servicer, expenses incurred in
connection with payments and reports pursuant to this Agreement, and all other
fees and expenses not expressly stated under this Agreement for the account of
the Borrower.  In consideration for the
payment by the Borrower of the Servicing Fee, the Servicer will be required to
pay all reasonable fees and expenses owing to any bank or trust company in
connection with the maintenance of the Collection Account and the Backup
Servicer Fee pursuant to the Backup Servicing Agreement and the Collateral
Custodian Fee pursuant to the Custody Agreement.  The Servicer shall be required to pay such expenses for its own
account and shall not be entitled to any payment therefor other than the
Servicing Fee.

 

Section 7.11                            Reports.

 

(a)                                  Monthly
Report.  With respect to each
Determination Date and the related Settlement Period, the Servicer will provide
to the Borrower, the Backup Servicer, each Managing Agent, Concord and the
Administrative Agent, on the related Reporting Date, a monthly statement (a “Monthly
Report”) signed by a Responsible Officer of the Servicer and
substantially in the form of Exhibit E. 
Except as otherwise set forth in the Backup Servicing Agreement, the
Backup Servicer shall have no obligation to review any information in the
Monthly Report.

 

(b)                                 Servicer
Certificate.  Together with each
Monthly Report, the Servicer shall submit to the Borrower, the Backup Servicer,
each Managing Agent, Concord and the Administrative Agent a certificate (a “Servicer’s
Certificate”), signed by a Responsible Officer of the Servicer and
substantially in the form of Exhibit F. 
Except as otherwise set forth in the Backup Servicing Agreement, the
Backup Servicer shall have no obligation to review any information in the
Servicer Certificate.

 

56

 

(c)                                  Financial
Statements.  The Borrower will
submit to the Backup Servicer, each Managing Agent, Concord and the
Administrative Agent, promptly upon receipt thereof, the quarterly and annual
financial statements received from the Originator pursuant to Section 5.1(a) of
the Purchase Agreement.  Except as otherwise
set forth in the Backup Servicing Agreement, the Backup Servicer shall have no
duty to review any of the financial information set forth in such financial
statements.

 

Section 7.12                            Annual
Statement as to Compliance.

 

The Servicer will provide
to the Borrower, each Managing Agent, the Administrative Agent, and the Backup
Servicer, within 90 days following the end of each fiscal year of the Servicer,
commencing with the fiscal year ending on September 30, 2003, an annual report
signed by a Responsible Officer of the Servicer certifying that (a) a review of
the activities of the Servicer, and the Servicer’s performance pursuant to this
Agreement, for the period ending on the last day of such fiscal year has been
made under such Person’s supervision and (b) the Servicer has performed or has
caused to be performed in all material respects all of its obligations under
this Agreement throughout such year and no Servicer Termination Event has
occurred and is continuing (or if a Servicer Termination Event has so occurred
and is continuing, specifying each such event, the nature and status thereof
and the steps necessary to remedy such event, and, if a Servicer Termination
Event occurred during such year and no notice thereof has been given to the
Administrative Agent, specifying such Servicer Termination Event and the steps
taken to remedy such event).

 

Section 7.13                            Limitation
on Liability of the Servicer and Others.

 

Except as provided
herein, neither the Servicer (including any Successor Servicer) nor any of the
directors or officers or employees or agents of the Servicer shall be under any
liability to the Borrower, the Administrative Agent, the Lenders or any other
Person for any action taken or for refraining from the taking of any action
expressly provided for in this Agreement; provided, however, that
this provision shall not protect the Servicer or any such Person against any
liability that would otherwise be imposed by reason of its willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of its
willful misconduct hereunder.

 

The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its duties to service the Transferred Loans in accordance
with this Agreement that in its reasonable opinion may involve it in any
expense or liability.  The Servicer may,
in its sole discretion, undertake any legal action relating to the servicing,
collection or administration of Transferred Loans and the Related Property that
it may reasonably deem necessary or appropriate for the benefit of the Borrower
and the Secured Parties with respect to this Agreement and the rights and
duties of the parties hereto and the respective interests of the Borrower and
the Secured Parties hereunder.

 

Section 7.14                            The Servicer
Not to Resign.

 

The Servicer shall not
resign from the obligations and duties hereby imposed on it except upon its
determination that (i) the performance of its duties hereunder is or becomes
impermissible under Applicable Law and (ii) there is no reasonable action that
it could take to

 

57

 

make the performance of
its duties hereunder permissible under Applicable Law.  Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by
an Opinion of Counsel to such effect delivered to the Borrower and the
Administrative Agent.  No such
resignation shall become effective until a successor shall have assumed the
responsibilities and obligations of the Servicer in according with the terms of
this Agreement.

 

Section 7.15                            Access to
Certain Documentation and Information Regarding the Loans.

 

The Borrower or the
Servicer, as applicable, shall provide to the Administrative Agent and each
Managing Agent access to the Loan Documents and all other documentation
regarding the Loans included as part of the Collateral and the Related
Property, such access being afforded without charge but only (i) upon
reasonable prior notice, (ii) during normal business hours and (iii) subject to
the Servicer’s normal security and confidentiality procedures.  From and after (x) the Closing Date and
periodically thereafter at the discretion of the Administrative Agent (but in
no event limited to fewer than twice per calendar year), the Administrative
Agent, on behalf of and with the input of each Managing Agent, may review the
Borrower’s and the Servicer’s collection and administration of the Loans in
order to assess compliance by the Servicer with the Servicer’s written policies
and procedures, as well as with this Agreement and may conduct an audit of the
Transferred Loans, Loan Documents and Records in conjunction with such a
review, which audit shall be reasonable in scope and shall be completed in a
reasonable period of time and (y) the occurrence, and during the continuation
of an Early Termination Event, the Administrative Agent and each Managing Agent
may review the Borrower’s and the Servicer’s collection and administration of
the Transferred Loans in order to assess compliance by the Servicer with the
Servicer’s written policies and procedures, as well as with this Agreement,
which review shall not be limited in scope or frequency, nor restricted in
period.  The Administrative Agent may
also conduct an audit (as such term is used in clause (x) of this Section
7.15) of the Transferred Loans, Loan Documents and Records in conjunction
with such a review.  The Borrower shall
bear the cost of such reviews and audits.

 

Section 7.16                            Merger or
Consolidation of the Servicer.

 

The Servicer shall not
consolidate with or merge into any other Person or convey or transfer its
properties and assets substantially as an entirety to any Person and unless:

 

(i)                                     the
Person formed by such consolidation or into which the Servicer is merged or the
Person that acquires by conveyance or transfer the properties and assets of the
Servicer substantially as an entirety shall be, if the Servicer is not the
surviving entity, organized and existing under the laws of the United States or
any State or the District of Columbia and shall expressly assume, by an
agreement supplemental hereto, executed and delivered to the Borrower and the
Administrative Agent in form satisfactory to the Borrower and the
Administrative Agent, the performance of every covenant and obligation of the
Servicer hereunder (to the extent that any right, covenant or obligation of the
Servicer, as applicable hereunder, is inapplicable to the successor entity,
such successor entity shall be subject to such covenant or obligation, or
benefit from such right, as would apply, to the extent practicable, to such
successor entity);

 

58

 

(ii)                                  the
Servicer shall have delivered to the Borrower and the Administrative Agent an
Officer’s Certificate that such consolidation, merger, conveyance or transfer
and such supplemental agreement comply with this Section 7.16 and that
all conditions precedent herein provided for relating to such transaction have
been complied with and an Opinion of Counsel that such supplemental agreement
is legal, valid and binding with respect to the successor entity and that the
entity surviving such consolidation, conveyance or transfer is organized and
existing under the laws of the United States or any State or the District of
Columbia.  The Borrower and the
Administrative Agent shall receive prompt written notice of such merger or
consolidation of the Servicer; and

 

(iii)                               after giving effect
thereto, no Early Termination Event, Unmatured Termination Event or Servicer
Termination Event shall have occurred.

 

Section 7.17                            Identification
of Records.

 

The Servicer shall
clearly and unambiguously identify each Loan that is part of the Collateral and
the Related Property in its computer or other records to reflect that the
interest in such Loans and Related Property have been transferred to and are
owned by the Borrower and that the Administrative Agent has the interest
therein granted by Borrower pursuant to this Agreement.

 

Section 7.18                            Servicer
Termination Events.

 

(a)                                  If
any one of the following events (a “Servicer
Termination Event”) shall occur and be continuing on any day:

 

(i)                                     any
failure by the Servicer to make any payment, transfer or deposit as required by
this Agreement;

 

(ii)                                  any
failure by the Servicer to give instructions or notice to the Borrower, any
Managing Agent, Concord and/or the Administrative Agent as required by this
Agreement or to deliver any Required Reports hereunder on or before the date
occurring two Business Days after the date such instructions, notice or report
is required to be made or given, as the case may be, under the terms of this
Agreement;

 

(iii)                               any failure on the part
of the Servicer duly to observe or perform in any material respect any other
covenants or agreements of the Servicer set forth in this Agreement or any
other Transaction Document to which it is a party as Servicer that continues
unremedied for a period of five (5) days after the first to occur of (i) the
date on which written notice of such failure requiring the same to be remedied
shall have been given to the Servicer by the Administrative Agent, any Managing
Agent or the Borrower and (ii) the date on which the Servicer becomes or should
have become aware thereof;

 

(iv)                              any
representation, warranty or certification made by the Servicer in this
Agreement or in any certificate delivered pursuant to this Agreement shall
prove to have been false or incorrect in any material respect when made;

 

59

 

(v)                                 the
Servicer shall fail to service the Transferred Loans in accordance with the
Credit and Collection Policy;

 

(vi)                              an
Insolvency Event shall occur with respect to the Servicer;

 

(vii)                           the Servicer agrees to
materially alter the Credit and Collection Policy without the prior written
consent of the Administrative Agent;

 

(viii)                        any financial or asset
information reasonably requested by the Administrative Agent or any Managing
Agent as provided herein is not provided as requested within five (5) Business
Days (or such longer period as the Administrative Agent or such Managing Agent
may consent to) of the receipt by the Servicer of such request;

 

(ix)                                the
rendering against the Servicer of a final judgment, decree or order for the
payment of money in excess of U.S. $5,000,000 (individually or in the
aggregate) and the continuance of such judgment, decree or order unsatisfied
and in effect for any period of 30 consecutive days without a stay of
execution;

 

(x)                                   the
failure of the Servicer to make any payment due with respect to aggregate
recourse debt or other obligations with an aggregate principal amount exceeding
U.S. $1,000,000 or the occurrence of any event or condition that would permit
acceleration of such recourse debt or other obligations if such event or
condition has not been waived;

 

(xi)                                any
Guarantor Event of Default shall occur;

 

(xii)                             any Material Adverse
Change occurs in the financial condition of the Servicer or the collectibility
of the Transferred Loans; or

 

(xiii)                          any Change-in-Control of the
Servicer is made without the prior written consent of the Borrower and the
Administrative Agent;

 

then, notwithstanding
anything herein to the contrary, so long as any such Servicer Termination
Events shall not have been remedied at the expiration of any applicable cure
period, the Administrative Agent may, or at the direction of the Required
Lenders shall, by written notice to the Servicer and the Backup Servicer (a “Termination
Notice”), subject to the provisions of Section 7.19,
terminate all of the rights and obligations of the Servicer as Servicer under
this Agreement.  The Borrower shall pay
all reasonable set-up and conversion costs associated with the transfer of
servicing rights to the Successor Servicer.

 

Section 7.19                            Appointment
of Successor Servicer.

 

(a)                                  On
and after the receipt by the Servicer of a Termination Notice pursuant to Section
7.18, the Servicer shall continue to perform all servicing functions under
this Agreement until the date specified in the Termination Notice or otherwise
specified by the Administrative Agent, to the Servicer and the Backup Servicer in
writing.  The Administrative Agent may
at the time described in the immediately preceding sentence in its sole
discretion, appoint the Backup

 

60

 

Servicer as the Servicer hereunder, and the Backup
Servicer shall within seven (7) days assume all obligations of the Servicer
hereunder, and all authority and power of the Servicer under this Agreement
shall pass to and be vested in the Backup Servicer; provided, however,
that any Successor Servicer (including, without limitation, the Backup
Servicer) shall not (i) be responsible or liable for any past actions or
omissions of the outgoing Servicer or (ii) be obligated to make Servicer
Advances.  The Administrative Agent may
appoint (i) the Backup Servicer as successor servicer, or (ii) if the
Administrative Agent does not so appoint the Backup Servicer, there is no
Backup Servicer or the Backup Servicer is unwilling or unable to assume such
obligations on such date, the Administrative Agent shall as promptly as possible
appoint an alternate successor servicer to act as Servicer (in each such case,
the “Successor
Servicer”), and such Successor Servicer shall accept its appointment
by a written assumption in a form acceptable to the Administrative Agent.

 

(b)                                 Upon
its appointment as Successor Servicer, the Backup Servicer (subject to Section
7.19(a)) or the alternate successor servicer, as applicable, shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement, shall assume all Servicing Duties hereunder and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof, and all references
in this Agreement to the Servicer shall be deemed to refer to the Backup
Servicer or the Successor Servicer, as applicable.  Any Successor Servicer shall be entitled, with the prior consent
of the Administrative Agent, to appoint agents to provide some or all of its
duties hereunder, provided that no such appointment shall relieve such
Successor Servicer of the duties and obligations of the Successor Servicer
pursuant to the terms hereof and that any such subcontract may be terminated
upon the occurrence of a Servicer Termination Event.

 

(c)                                  All
authority and power granted to the Servicer under this Agreement shall
automatically cease and terminate upon termination of the Servicer under this
Agreement and shall pass to and be vested in the Successor Servicer, and,
without limitation, the Successor Servicer is hereby authorized and empowered
to execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights.  The
Servicer agrees to cooperate with the Successor Servicer in effecting the
termination of the responsibilities and rights of the Servicer to conduct
servicing on the Collateral.

 

(d)                                 Upon
the Backup Servicer receiving notice that it is required to serve as the
Servicer hereunder pursuant to the foregoing provisions of this Section 7.19,
the Backup Servicer will promptly begin the transition to its role as Servicer.

 

(e)                                  The
Backup Servicer shall be entitled to receive its Transition Costs incurred in
transitioning to Servicer.

 

Section 7.20                            Market
Servicing Fee.

 

Notwithstanding anything
to the contrary herein, in the event that a Successor Servicer is appointed
Servicer, the Servicing Fee shall equal the market rate for comparable
servicing duties 

 

61

 

to be fixed upon the date
of such appointment by such Successor Servicer with the consent of the
Administrative Agent (the “Market Servicing Fee”).

 

ARTICLE VIII

 

EARLY
TERMINATION EVENTS

 

Section 8.1                                   Early
Termination Events.

 

If any of the following
events (each, an “Early Termination Event”) shall occur and be continuing:

 

(a)                                  the
Borrower shall default in the payment of any amount required to be made under
the terms of this Agreement; or

 

(b)                                 the
Borrowing Base Test shall not be met, and such failure shall continue for more
than two (2) Business Days; or

 

(c)                                  (i)
the Borrower shall fail to perform or observe in any material respect any other
covenant or other agreement of the Borrower set forth in this Agreement and any
other Transaction Document to which it is a party, or (ii) the Originator shall
fail to perform or observe in any material respect any term, covenant or
agreement of such Originator set forth in any other Transaction Document to
which it is a party, in each case when such failure continues unremedied for
more than five (5) days after the first to occur of (i) the date on which
written notice of such failure requiring the same to be remedied shall have been
given to such Person by the Administrative Agent, any Managing Agent or the
Collateral Custodian and (ii) the date on which such Person becomes or should
have become aware thereof; or

 

(d)                                 any
representation or warranty made or deemed made hereunder shall prove to be
incorrect in any material respect as of the time when the same shall have been
made; or

 

(e)                                  an
Insolvency Event shall occur with respect to the Borrower or the Originator; or

 

(f)                                    a
Servicer Termination Event occurs; or

 

(g)                                 any
Change-in-Control of the Borrower or Originator occurs; or

 

(h)                                 the
Borrower or the Servicer defaults in making any payment required to be made
under any material agreement for borrowed money to which either is a party and
such default is not cured within the relevant cure period; or

 

(i)                                     the
Administrative Agent, as agent for the Secured Parties, shall fail for any
reason to have a valid and perfected first priority security interest in any of
the Collateral; or

 

(j)                                     (i)
a final judgment for the payment of money in excess of (A) $5,000,000 shall
have been rendered against the Originator or (B) $100,000 against the Borrower
by a court of competent jurisdiction and, if such judgment relates to the
Originator, such judgment, decree or order shall continue unsatisfied and in
effect for any period of 30 consecutive days without a stay

 

62

 

of execution, or (ii) the Originator or the Borrower,
as the case may be, shall have made payments of amounts in excess of $5,000,000
or $50,000, respectively, in settlement of any litigation; or

 

(k)                                  the
Borrower or the Servicer agrees or consents to, or otherwise permits to occur,
any amendment, modification, change, supplement or recession of or to the
Credit and Collection Policy in whole or in part that could have a material
adverse effect upon the Transferred Loans or interest of any Lender, without
the prior written consent of the Administrative Agent; or

 

(l)                                     on
any day, either (i) the Hedge Notional Amount is less than the Required Notional
Amount, or (ii) any Hedge Transaction fails to meet the requirements set forth
in Section 5.2; or

 

(m)                               on
any Determination Date, the Portfolio Yield does not equal or exceed 5.0% and
such failure continues for a period of thirty (30) consecutive days; or

 

(n)                                 the
Rolling Three-Month Default Ratio shall exceed 7.5%; or

 

(o)                                 the
Rolling Three-Month Charged-Off Ratio shall exceed 5.0%; or

 

(p)                                 the
Borrower shall become an “investment company” subject to registration under the
1940 Act; or

 

(q)                                 the
business and other activities of the Borrower or the Originator, including but
not limited to, the acceptance of the Advances by the Borrower made by the
Lenders, the application and use of the proceeds thereof by the Borrower and
the consummation and conduct of the transactions contemplated by the
Transaction Documents to which the Borrower or the Originator is a party result
in a violation by the Originator, the Borrower, or any other person or entity
of the 1940 Act or the rules and regulations promulgated thereunder;

 

then, and in any such
event, the Administrative Agent shall, at the request, or may with the consent,
of the Required Committed Lenders, by notice to the Borrower declare the
Termination Date to have occurred, without demand, protest or future notice of
any kind, all of which are hereby expressly waived by the Borrower, and all
Advances Outstanding and all other amounts owing by the Borrower under this
Agreement shall be accelerated and become immediately due and payable, provided,
that in the event that the Early Termination Event described in subsection
(e) herein has occurred, the Termination Date shall automatically occur,
without demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.  Upon
its receipt of written notice thereof, the Administrative Agent shall promptly
notify each Lender of the occurrence of any Early Termination Event.

 

63

 

ARTICLE IX

 

INDEMNIFICATION

 

Section 9.1                                   Indemnities
by the Borrower.

 

(a)                                  Without
limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Borrower hereby agrees to indemnify the Administrative
Agent, the Managing Agents, the Backup Servicer, any Successor Servicer, the
Collateral Custodian, any Secured Party or its assignee and each of their
respective Affiliates and officers, directors, employees, members and agents
thereof (collectively, the “Indemnified Parties”), forthwith on
demand, from and against any and all damages, losses, claims, liabilities and
related costs and expenses, including reasonable attorneys’ fees and
disbursements (all of the foregoing being collectively referred to as “Indemnified
Amounts”) awarded against or incurred by, any such Indemnified Party
or other non-monetary damages of any such Indemnified Party any of them arising
out of or as a result of this Agreement, excluding, however, Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of any Indemnified Party. 
Without limiting the foregoing, the Borrower shall indemnify the
Indemnified Parties for Indemnified Amounts relating to or resulting from:

 

(i)                                     any
Loan treated as or represented by the Borrower to be an Eligible Loan that is
not at the applicable time an Eligible Loan;

 

(ii)                                  reliance
on any representation or warranty made or deemed made by the Borrower, the
Servicer (or one of its Affiliates) or any of their respective officers under
or in connection with this Agreement, which shall have been false or incorrect
in any material respect when made or deemed made or delivered;

 

(iii)                               the failure by the
Borrower or the Servicer (or one of its Affiliates) to comply with any term,
provision or covenant contained in this Agreement or any agreement executed in
connection with this Agreement, or with any Applicable Law with respect to any
Loan comprising a portion of the Collateral, or the nonconformity of any Loan,
the Related Property with any such Applicable Law or any failure by the
Originator, the Borrower or any Affiliate thereof to perform its respective
duties under the Loans included as a part of the Collateral;

 

(iv)                              the
failure to vest and maintain vested in the Administrative Agent a first
priority perfected security interest in the Collateral;

 

(v)                                 the
failure to file, or any delay in filing, financing statements or other similar
instruments or documents under the UCC of any applicable jurisdiction or other
Applicable Laws with respect to any Collateral whether at the time of any
Advance or at any subsequent time and as required by the Transaction Documents;

 

(vi)                              any
dispute, claim, offset or defense (other than the discharge in bankruptcy of
the Obligor) of the Obligor to the payment of any Loan included as part of the
Collateral that is, or is purported to be, an Eligible Loan (including, without

 

64

 

limitation, a defense based on the Loan not being a
legal, valid and binding obligation of such Obligor enforceable against it in
accordance with its terms);

 

(vii)                           any failure of the Borrower
or the Servicer (if the Originator or one of its Affiliates) to perform its
duties or obligations in accordance with the provisions of this Agreement or
any failure by the Originator, the Borrower or any Affiliate thereof to perform
its respective duties under the Transferred Loans;

 

(viii)                        any products liability claim or
personal injury or property damage suit or other similar or related claim or
action of whatever sort arising out of or in connection with merchandise or
services that are the subject of any Loan included as part of the Collateral or
the Related Property included as part of the Collateral;

 

(ix)                                the
failure by Borrower to pay when due any Taxes for which the Borrower is liable,
including without limitation, sales, excise or personal property taxes payable
in connection with the Collateral;

 

(x)                                   any
repayment by the Administrative Agent, any Managing Agent or a Secured Party of
any amount previously distributed in reduction of Advances Outstanding or
payment of Interest or any other amount due hereunder or under any Hedging
Agreement, in each case which amount the Administrative Agent, such Managing
Agent or a Secured Party believes in good faith is required to be repaid.

 

(xi)                                any
investigation, litigation or proceeding related to this Agreement or the use of
proceeds of Advances or in respect of any Loan included as part of the
Collateral or the Related Property included as part of the Collateral;

 

(xii)                             any failure by the
Borrower to give reasonably equivalent value to the Originator in consideration
for the transfer by the Originator to the Borrower of any Transferred Loan or
the Related Property or any attempt by any Person to void or otherwise avoid
any such transfer under any statutory provision or common law or equitable
action, including, without limitation, any provision of the Bankruptcy Code, or

 

(xiii)                          the failure of the Borrower,
the Originator or any of their respective agents or representatives to remit to
the Servicer or the Administrative Agent, Collections on the Collateral
remitted to the Borrower or any such agent or representative in accordance with
the terms hereof or the commingling by the Borrower or any Affiliate of any
collections.

 

(b)                                 Any
amounts subject to the indemnification provisions of this Section 9.1
shall be paid by the Borrower to the applicable Indemnified Party within two
(2) Business Days following the Administrative Agent’s demand therefor.

 

(c)                                  If
for any reason the indemnification provided above in this Section 9.1 is
unavailable to the Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Borrower, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnified Party on the one hand and the Borrower, 

 

65

 

on the other hand but also the relative fault of such
Indemnified Party as well as any other relevant equitable considerations.

 

(d)                                 The
obligations of the Borrower under this Section 9.1 shall survive the
removal of the Administrative Agent or any Managing Agent and the termination
of this Agreement.

 

(e)                                  The
parties hereto agree that the provisions of Section 9.1 shall not be
interpreted to provide recourse to the Borrower against loss by reason of the
bankruptcy or insolvency (or other credit condition) of, or default by, an
Obligor on, any Transferred Loan.

 

Section 9.2                                   Indemnities
by the Servicer.

 

(a)                                  Without
limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Servicer hereby agrees to indemnify each Indemnified Party,
forthwith on demand, from and against any and all Indemnified Amounts
(calculated without duplication of Indemnified Amounts paid by the Borrower
pursuant to Section 9.1 above) awarded against or incurred by any such
Indemnified Party by reason of any acts, omissions or alleged acts or omissions
of the Servicer, including, but not limited to (i) any representation or
warranty made by the Servicer under or in connection with any Transaction
Documents to which it is a party, any Monthly Report, Servicer’s Certificate or
any other information or report delivered by or on behalf of the Servicer
pursuant hereto, which shall have been false, incorrect or misleading in any
material respect when made or deemed made, (ii) the failure by the Servicer to
comply with any Applicable Law, (iii) the failure of the Servicer to comply
with its duties or obligations in accordance with the Agreement, or (iv) any
litigation, proceedings or investigation against the Servicer, excluding,
however, (a) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of such Indemnified Party, and (b) under any
Federal, state or local income or franchise taxes or any other Tax imposed on
or measured by income (or any interest or penalties with respect thereto or
arising from a failure to comply therewith) required to be paid by such
Indemnified Party in connection herewith to any taxing authority.  The provisions of this indemnity shall run
directly to and be enforceable by an injured party subject to the limitations
hereof.  If the Servicer has made any
indemnity payment pursuant to this Section 9.2 and such payment fully
indemnified the recipient thereof and the recipient thereafter collects any
payments from others in respect of such Indemnified Amounts, the recipient
shall repay to the Servicer an amount equal to the amount it has collected from
others in respect of such indemnified amounts.

 

(b)                                 If
for any reason the indemnification provided above in this Section 9.2 is
unavailable to the Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then Servicer shall contribute to the amount paid or payable to
such Indemnified Party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party on the one hand and Servicer on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.

 

(c)                                  The
obligations of the Servicer under this Section 9.2 shall survive the
resignation or removal of the Administrative Agent or any Managing Agents and
the termination of this Agreement.

 

66

 

(d)                                 The
parties hereto agree that the provisions of this Section 9.2 shall not
be interpreted to provide recourse to the Servicer against loss by reason of
the bankruptcy or insolvency (or other credit condition) of, or default by,
related Obligor on, any Transferred Loan.

 

(e)                                  Any
indemnification pursuant to this Section 9.2 shall not be payable from
the Collateral.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT AND THE MANAGING AGENTS

 

Section 10.1                            Authorization
and Action.

 

(a)                                  Each
Secured Party hereby designates and appoints CIBC as Administrative Agent
hereunder, and authorizes CIBC to take such actions as agent on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the
terms of this Agreement together with such powers as are reasonably incidental
thereto.  The Administrative Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Secured Party, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of the Administrative Agent shall be read into this Agreement or
otherwise exist for the Administrative Agent. 
In performing its functions and duties hereunder, the Administrative
Agent shall act solely as agent for the Secured Parties and does not assume nor
shall be deemed to have assumed any obligation or relationship of trust or
agency with or for the Borrower or any of its successors or assigns.  The Administrative Agent shall not be
required to take any action that exposes the Administrative Agent to personal
liability or that is contrary to this Agreement or Applicable Law.  The appointment and authority of the
Administrative Agent hereunder shall terminate at the indefeasible payment in
full of the Obligations.

 

(b)                                 Each
Lender hereby designates and appoints the Managing Agent for such Lender’s
Lender Group as its Managing Agent hereunder, and authorizes such Managing
Agent to take such actions as agent on its behalf and to exercise such powers
as are delegated to the Managing Agents by the terms of this Agreement together
with such powers as are reasonably incidental thereto.  No Managing Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities on the part of the applicable Managing Agent
shall be read into this Agreement or otherwise exist for the applicable
Managing Agent.  In performing its
functions and duties hereunder, each Managing Agent shall act solely as agent
for the Lenders in the related Lender Group and does not assume nor shall be
deemed to have assumed any obligation or relationship of trust or agency with
or for the Borrower or any of its successors or assigns.  No Managing Agent shall be required to take
any action that exposes it to personal liability or that is contrary to this
Agreement or Applicable Law.  The
appointment and authority of each Managing Agent hereunder shall terminate at
the indefeasible payment in full of the Obligations.

 

67

 

Section 10.2                            Delegation
of Duties.

 

(a)                                  The
Administrative Agent may execute any of its duties under this Agreement by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.

 

(b)                                 Each
Managing Agent may execute any of its duties under this Agreement by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  No Managing Agent shall be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.

 

Section 10.3                            Exculpatory
Provisions.

 

(a)                                  Neither
the Administrative Agent nor any of its directors, officers, agents or
employees shall be (i) liable for any action lawfully taken or omitted to be
taken by it or them under or in connection with this Agreement (except for its,
their or such Person’s own gross negligence or willful misconduct or, in the
case of the Administrative Agent, the breach of its obligations expressly set
forth in this Agreement), or (ii) responsible in any manner to any of the
Secured Parties for any recitals, statements, representations or warranties
made by the Borrower contained in this Agreement or in any certificate, report,
statement or other document referred to or provided for in, or received under
or in connection with, this Agreement for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
document furnished in connection herewith, or for any failure of the Borrower
to perform its obligations hereunder, or for the satisfaction of any condition
specified in Article III.  The
Administrative Agent shall not be under any obligation to any Secured Party to
ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of the Borrower.  The Administrative Agent shall not be deemed
to have knowledge of any Early Termination Event unless the Administrative
Agent has received notice of such Early Termination Event, in a document or
other written communication titled “Notice of Early Termination Event” from the
Borrower or a Secured Party.

 

(b)                                 Neither
any Managing Agent nor any of its respective directors, officers, agents or
employees shall be (i) liable for any action lawfully taken or omitted to be
taken by it or them under or in connection with this Agreement (except for its,
their or such Person’s own gross negligence or willful misconduct or, in the
case of a Managing Agent, the breach of its obligations expressly set forth in
this Agreement), or (ii) responsible in any manner to the Administrative Agent
or any of the Secured Parties for any recitals, statements, representations or
warranties made by the Borrower contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for
in, or received under or in connection with, this Agreement or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement
or any other document furnished in connection herewith, or for any failure of
the Borrower to perform its obligations hereunder, or for the satisfaction of
any condition specified in Article III. 
No Managing Agent shall be under any obligation to the Administrative
Agent or any Secured Party to ascertain or to inquire as to the observance or
performance of any of the agreements or covenants contained in, or conditions
of, this

 

68

 

Agreement, or to inspect the properties, books or
records of the Borrower.  No Managing
Agent shall be deemed to have knowledge of any Early Termination Event unless
such Managing Agent has received notice of such Early Termination Event, in a
document or other written communication titled “Notice of Early Termination
Event” from the Borrower, the Administrative Agent or a Secured Party.

 

Section 10.4                            Reliance.

 

(a)                                  The
Administrative Agent shall in all cases be entitled to rely, and shall be fully
protected in relying, upon any document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. 
The Administrative Agent shall in all cases be fully justified in
failing or refusing to take any action under this Agreement or any other document
furnished in connection herewith unless it shall first receive such advice or
concurrence of the Required Committed Lenders or all of the Secured Parties, as
applicable, as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders, provided, that, unless and until the
Administrative Agent shall have received such advice, the Administrative Agent
may take or refrain from taking any action, as the Administrative Agent shall
deem advisable and in the best interests of the Secured Parties, The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, in accordance with a request of the Required Committed
Lenders or all of the Secured Parties, as applicable, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Secured Parties.

 

(b)                                 Each
Managing Agent shall in all cases be entitled to rely, and shall be fully
protected in relying, upon any document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by such Managing Agent.  Each
Managing Agent shall in all cases be fully justified in failing or refusing to
take any action under this Agreement or any other document furnished in
connection herewith unless it shall first receive such advice or concurrence of
the Committed Lenders in its related Lender Group as it deems appropriate or it
shall first be indemnified to its satisfaction by the Committed Lenders in its
related Lender Group, provided that unless and until such Managing Agent shall
have received such advice, the Managing Agent may take or refrain from taking
any action, as the Managing Agent shall deem advisable and in the best
interests of the Lenders in its Lender Group. 
Each Managing Agent shall in all cases be fully protected in acting, or
in refraining from acting, in accordance with a request of the Committed
Lenders in such Managing Agent’s Lender Group and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
in such Managing Agent’s Lender Group.

 

Section 10.5                            Non-Reliance
on Administrative Agent, Managing Agents and Other Lenders.

 

Each Secured Party
expressly acknowledges that neither the Administrative Agent, any other Secured
Party nor any of their respective officers, directors, employees, agents,
attorneys-

 

69

 

in-fact or affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent or any other Secured Party hereafter taken, including,
without limitation, any review of the affairs of the Borrower, shall be deemed
to constitute any representation or warranty by the Administrative Agent or any
other Secured Party.  Each Secured Party
represents and warrants to the Administrative Agent and to each other Secured
Party that it has and will, independently and without reliance upon the
Administrative Agent or any other Secured Party and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Borrower and made its own decision
to enter into this Agreement

 

Section 10.6                            Reimbursement
and Indemnification.

 

The Committed Lenders
agree to reimburse and indemnify the Administrative Agent, and the Committed
Lenders in each Lender Group agree to reimburse the Managing Agent for such
Lender Group, and their respective officers, directors, employees,
representatives and agents ratably according to their Commitments, as
applicable, to the extent not paid or reimbursed by the Borrower (i) for any
amounts for which the Administrative Agent, acting in its capacity as
Administrative Agent, or any Managing Agent, acting in its capacity as a
Managing Agent, is entitled to reimbursement by the Borrower hereunder and (ii)
for any other expenses incurred by the Administrative Agent, in its capacity as
Administrative Agent, or any Managing Agent, acting in its capacity as a
Managing Agent, and acting on behalf of the related Lenders, in connection with
the administration and enforcement of this Agreement and the other Transaction
Documents.

 

Section 10.7                            Administrative
Agent and Managing Agents in their Individual Capacities.

 

The Administrative Agent,
each Managing Agent and each of their respective Affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower or any Affiliate of the Borrower as though the Administrative Agent or
such Managing Agent, as the case may be, were not the Administrative Agent or a
Managing Agent, as the case may be, hereunder. 
With respect to the acquisition of Advances pursuant to this Agreement,
the Administrative Agent, each Managing Agent and each of their respective
Affiliates shall have the same rights and powers under this Agreement as any
Lender and may exercise the same as though it were not the Administrative Agent
or a Managing Agent, as the case may be, and the terms “Committed Lender”
“Lender” “Committed Lenders” and “Lenders” shall include the Administrative
Agent or a Managing Agent, as the case may be, in its individual capacity.

 

Section 10.8                            Successor
Administrative Agent or Managing Agent.

 

(a)                                  The
Administrative Agent may, upon 5 days’ notice to the Borrower and the Secured
Parties, and the Administrative Agent will, upon the direction of all of the
Lenders resign as Administrative Agent. 
If the Administrative Agent shall resign, then the Required Committed
Lenders during such 5-day period shall appoint from among the Secured Parties a
successor agent.  If for any reason no
successor Administrative Agent is appointed by the Required Committed Lenders
during such 5-day period, then effective upon the expiration of

 

70

 

such 5-day period, the Secured Parties shall perform
all of the duties of the Administrative Agent hereunder and the Borrower shall
make all payments in respect of the Obligations or under any Fee Letter
delivered by the Borrower to the Administrative Agent and the Secured Parties
directly to the applicable Managing Agents, on behalf of the Lenders in the
applicable Lender Group and for all purposes shall deal directly with the
Secured Parties.  After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of Article IX and Article X shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

 

(b)                                 Any
Managing Agent may, upon 5 days’ notice to the Borrower, the Administrative
Agent and the related Lenders, and any Managing Agent will, upon the direction
of all of the related Committed Lenders resign as a Managing Agent.  If a Managing 1Agent shall resign, then the
related Committed Lenders during such 5-day period shall appoint from among the
related Committed Lenders a successor Managing Agent.  If for any reason no successor Managing Agent is appointed by
such Committed Lenders during such 5-day period, then effective upon the
expiration of such 5-day period, such Committed Lenders shall perform all of
the duties of the related Managing Agent hereunder.  After any retiring Managing Agent’s resignation hereunder as a
Managing Agent, the provisions of Article IX and Article X shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was a Managing Agent under this Agreement.

 

ARTICLE XI

ASSIGNMENTS;
PARTICIPATIONS

Section 11.1                            Assignments
and Participations.

 

(a)                                  Borrower
and each Committed Lender hereby agree and consent to the complete or partial
assignment by each CP Lender of all or any portion of its rights under,
interest in, title to and obligations under this Agreement (i) to its Liquidity
Banks pursuant to a Liquidity Agreement, (ii) (A) with respect to Concord, to
any Person which issues commercial paper for which Liberty Hampshire Company,
LLC provides services, (B) to any other issuer of commercial paper notes
sponsored or administered by the Managing Agent of such CP Lender’s Lender
Group or (C) to any Lender or any Affiliate of a Lender hereunder, or (iii) to
any other Person; provided that, prior to the occurrence of an Early
Termination Event, such CP Lender may not make any such assignment pursuant to
this clause (iii), except in the event that the circumstances described in Section
11.1(c) occur, without the consent of the Borrower (which consent shall not
be unreasonably withheld or delayed). 
Upon such assignment, such CP Lender shall be released from its
obligations so assigned.  Further,
Borrower and each Committed Lender hereby agree that any assignee of any CP
Lender of this Agreement or all or any of the outstanding Advances of such CP
Lender shall have all of the rights and benefits under this Agreement as if the
term “CP Lender” explicitly referred to such party, and no such assignment
shall in any way impair the rights and benefits of such CP Lender
hereunder.  Neither Borrower nor the
Servicer shall have the right to assign its rights or obligations under this
Agreement.

 

(b)                                 Any
Committed Lender may at any time and from time to time assign to one or more
Persons (“Purchasing
Committed Lenders”) all or any part of its rights and obligations

 

71

 

under this Agreement pursuant to an assignment
agreement, substantially in the form set forth in Exhibit C hereto (the
“Assignment
and Acceptance”) executed by such Purchasing Committed Lender and
such selling Committed Lender.  The
consent of the CP Lender or CP Lenders in such Committed Lender’s Lender Group
shall be required prior to the effectiveness of any such assignment.  In addition, so long as no Early Termination
Event or Unmatured Termination Event has occurred and is continuing at such
time, the consent of the Borrower (such consent not to be unreasonably withheld
or delayed) shall be required prior to the effectiveness of any such
assignment.  Each assignee of a
Committed Lender must be an Eligible Assignee and must agree to deliver to the
Administrative Agent, promptly following any request therefor by the Managing
Agent for its Lender Group or the affected CP Lender or CP Lenders, an
enforceability opinion in form and substance satisfactory to such Managing
Agent and such CP Lender or CP Lenders. 
Upon delivery of the executed Assignment and Acceptance to the
Administrative Agent, such selling Committed Lender shall be released from its
obligations hereunder to the extent of such assignment.  Thereafter the Purchasing Committed Lender
shall for all purposes be a Committed Lender party to this Agreement and shall
have all the rights and obligations of a Committed Lender under this Agreement
to the same extent as if it were an original party hereto and no further
consent or action by Borrower, the Lenders or the Administrative Agent shall be
required.

 

(c)                                  Each
of the Committed Lenders agrees that in the event that it shall cease to have
the Required Ratings (an “Affected Committed Lender”), such Affected
Committed Lender shall be obliged, at the request of the CP Lenders in such
Committed Lender’s Lender Group or the applicable Managing Agent, to assign all
of its rights and obligations hereunder to (x) another Committed Lender or (y)
another funding entity nominated by such Managing Agent and acceptable to such
affected CP Lenders, and willing to participate in this Agreement through the
Termination Date in the place of such Affected Committed Lender; provided
that the Affected Committed Lender receives payment in full, pursuant to an
Assignment Agreement, of an amount equal to such Committed Lender’s Pro Rata
Share of the outstanding Advances and Interest owing to the Committed Lenders
and all accrued but unpaid fees and other costs and expenses payable in respect
of its Pro Rata Share of the outstanding Advances of the Committed Lenders.

 

(d)                                 By
executing and delivering an Assignment and Acceptance, the Purchasing Committed
Lender thereunder and the selling Committed Lender thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than
as provided in such Assignment and Acceptance, such selling Committed Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; (ii) such selling Committed Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the related CP Lender or the performance or observance
by such CP Lender of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such Purchasing
Committed Lender confirms that it has received a copy of this Agreement, together
with copies of such financial statements and other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such Purchasing Committed Lender
will, independently and without reliance upon the Administrative Agent or any
Managing Agent, the selling Committed Lender or any

 

72

 

other Committed Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
Purchasing Committed Lender and such selling Committed Lender confirm that such
Purchasing Committed Lender is an Eligible Assignee; (vi) such Purchasing
Committed Lender appoints and authorizes each of the Administrative Agent and
the applicable Managing Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to such agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such Purchasing Committed Lender agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Committed Lender.

 

(e)                                  The
Administrative Agent shall maintain at its address referred to herein a copy of
each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Committed Lenders and the
Commitment of, and principal amount of, each Advance owned by each Committed
Lender from time to time (the “Register”).  The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Lenders, the Borrower and the
Managing Agents may treat each Person whose name is recorded in the Register as
a Committed Lender hereunder for all purposes of this Agreement.  The Register shall be available for
inspection by the Lenders, any Managing Agent or the Borrower at any reasonable
time and from time to time upon reasonable prior notice.

 

(f)                                    Subject
to the provisions of this Section 11.1, upon their receipt of an
Assignment and Acceptance executed by an selling Committed Lender and an
Purchasing Committed Lender, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit
C hereto, accept such Assignment and Acceptance, and the Administrative
Agent shall then (i) record the information contained therein in the Register
and (ii) give prompt notice thereof to each Managing Agent.

 

(g)                                 Any
Committed Lender may, in the ordinary course of its business at any time sell
to one or more Persons (each a “Participant”) participating interests in
its Pro-Rata Share of the Advances of the Committed Lenders or any other
interest of such Committed Lender hereunder. 
Notwithstanding any such sale by a Committed Lender of a participating
interest to a Participant, such Committed Lender’s rights and obligations under
this Agreement shall remain unchanged, such Committed Lender shall remain
solely responsible for the performance of its obligations hereunder, and the
Borrower, the CP Lenders, the Managing Agents and the Administrative Agent
shall continue to deal solely and directly with such Committed Lender in
connection with such Committed Lender’s rights and obligations under this
Agreement.  Each Committed Lender agrees
that any agreement between such Committed Lender and any such Participant in
respect of such participating interest shall not restrict such Committed
Lender’s right to agree to any amendment, supplement, waiver or modification to
this Agreement, except for any amendment, supplement, waiver or modification
set forth in Section 12.1 of this Agreement.

 

(h)                                 Each
Committed Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.1,
disclose to the assignee or participant or proposed assignee or participant any
information relating to the Borrower or Servicer furnished to such Committed
Lender by or on behalf of the Borrower or the Servicer.

 

73

 

(i)                                     Nothing
herein shall prohibit any Committed Lender from pledging or assigning as
collateral any of its rights under this Agreement to any Federal Reserve Bank
in accordance with Applicable Law and any such pledge or collateral assignment
may be made without compliance with Section 11.1(a) or Section
11.1(b).

 

(j)                                     In
the event any Committed Lender causes increased costs, expenses or taxes to be
incurred by the Administrative Agent, Managing Agents or the related CP Lender
in connection with the assignment or participation of such Committed Lender’s
rights and obligations under this Agreement to an Eligible Assignee then such
Committed Lender agrees that it will make reasonable efforts to assign such
increased costs, expenses or taxes to such Eligible Assignee in accordance with
the provisions of this Agreement.

 

Section 11.2                            Additional
Lender Groups.

 

Upon the Borrower’s
request, with the consent of the Administrative Agent, an additional Lender
Group may be added to this Agreement at any time by the execution and delivery
of a Joinder Agreement by the members of such proposed additional Lender Group,
the Borrower, the Servicer and the Administrative Agent, which execution and
delivery shall not be unreasonably refused by such parties.  Upon the effective date of such Joinder
Agreement, (i) each Person specified therein as a “CP Lender” shall become a
party hereto as a CP Lender, entitled to the rights and subject to the
obligations of a CP Lender hereunder, (ii) each Person specified therein as a
“Committed Lender” shall become a party hereto as a Committed Lender, entitled
to the rights and subject to the obligations of a Committed Lender hereunder,
(iii) each Person specified therein as a “Managing Agent” shall become a party
hereto as a Managing Agent, entitled to the rights and subject to the
obligations of a Managing Agent hereunder and (iv) the Facility Amount shall be
increased by an amount equal to the aggregate Commitments of the Committed
Lenders party to such Joinder Agreement. 
On or prior to the effective date of such Joinder Agreement, the
Borrower, the Servicer and the new Managing Agent shall enter into a fee letter
for purposes of setting forth the fees payable to the members of such Lender
Group in connection with this Agreement, which fee letter shall be considered a
“Fee Letter” for all purposes of this Agreement.  The Administrative Agent shall give each Lender prompt notice of
the addition of any Lender Group.

 

ARTICLE XII

 

MISCELLANEOUS

 

Section 12.1                            Amendments
and Waivers.

 

Except as provided in
this Section 12.1, no amendment, waiver or other modification of any
provision of this Agreement shall be effective without (x) written notice to
Concord delivered two (2) Business Days prior to effectiveness, which notice
requirement may be waived in Concord’s sole discretion and (y) the written
agreement of the Borrower, the Administrative Agent, the Managing Agents and
the Required Committed Lenders; provided, however, that (i)
without the consent of the Committed Lenders in any Lender Group (other than
the Lender Group to which such Committed Lenders are being added), the
Administrative Agent and the applicable Managing Agent may, with the consent of
Borrower, amend this Agreement solely to

 

74

 

add additional Persons as
Committed Lenders hereunder, (ii) any amendment of this Agreement that is
solely for the purpose of increasing the Commitment of a specific Committed
Lender may be effected with the written consent of the Borrower, the
Administrative Agent and the affected Committed Lender, (iii) any amendment
waiver or other modification, the effect of which is to create a commitment by
any CP Lender to fund Advances hereunder, shall not be effective without the
consent of such CP Lender, and (iv) the consent of each affected Lender shall
be required to: (A) extend the Commitment Termination Date or the date of any
payment or deposit of Collections by the Borrower or the Servicer, (B) reduce
the amount (other than by reason of the repayment thereof) or extend the time
of payment of Advances Outstanding or reduce the rate or extend the time of
payment of Interest (or any component thereof) or increase the Group Advance
Limit of the related Lender Group, (C) reduce any fee payable to the
Administrative Agent or any Managing Agent for the benefit of the Lenders, (D)
amend, modify or waive any provision of the definition of Required Committed
Lenders or Sections 2.11, 11.1(a), 12.1, 12.9, or 12.10,
(E) consent to or permit the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement, (F) amend or waive any
Servicer Termination Event or Early Termination Event, (G) change the
definition of “Borrowing Base,” “Charged-Off Ratio,” “Default Ratio,” “Eligible
Loan,” “Peak CP Funding Period,” or “Settlement Date,” or (H) amend or modify
any defined term (or any defined term used directly or indirectly in such
defined term) used in clauses (A) through (G) above in a manner that would
circumvent the intention of the restrictions set forth in such clauses.  Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

 

No amendment, waiver or
other modification (i) affecting the rights or obligations of any Hedge
Counterparty or (ii) having a material affect on the rights or obligations of
the Collateral Custodian or the Backup Servicer (including any duties of the
Servicer that the Backup Servicer would have to assume as Successor Servicer)
shall be effective against such Person without the written agreement of such
Person.  The Borrower or the Servicer on
its behalf will deliver a copy of all waivers and amendments to the Collateral
Custodian and the Backup Servicer.

 

Section 12.2                            Notices, Etc.

 

All notices and other
communications provided for hereunder shall, unless otherwise stated herein, be
in writing (including telex communication and communication by facsimile copy)
and mailed, telexed, transmitted or hand delivered, as to each party hereto, at
its address set forth under its name on the signature pages hereof or specified
in such party’s Assignment and Acceptance or Joinder Agreement 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, five days after being deposited in the United States mail, first class
postage prepaid, (b) notice by telex, when telexed against receipt of answer
back, or (c) notice by facsimile copy, when verbal communication of receipt is
obtained, except that notices and communications pursuant to this Article
XII shall not be effective until received with respect to any notice sent
by mail or telex.

 

Section 12.3                            No Waiver,
Rights and Remedies.

 

No failure on the part of
the Administrative Agent or any Secured Party or any assignee of any Secured
Party to exercise, and no delay in exercising, any right or remedy hereunder
shall

 

75

 

operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right.  The rights and remedies
herein provided are cumulative and not exclusive of any rights and remedies
provided by law.

 

Section 12.4                            Binding
Effect.

 

This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Administrative
Agent, the Secured Parties and their respective successors and permitted
assigns and, in addition, the provisions of Section 2.8 shall inure to
the benefit of each Hedge Counterparty, whether or not that Hedge Counterparty
is a Secured Party, and the provisions relating to the Backup Servicer,
including Sections 2.8, 7.18, 9.1 and 9.2 shall
inure to the benefit of the Backup Servicer.

 

Section 12.5                            Term of this
Agreement.

 

This Agreement, including, without limitation, the
Borrower’s obligation to observe its covenants set forth in Article V,
and the Servicer’s obligation to observe its covenants set forth in Article
VII, shall remain in full force and effect until the Collection Date; provided,
however, that the rights and remedies with respect to any breach of any
representation and warranty made or deemed made by the Borrower pursuant to Articles
III and IV and the indemnification and payment provisions of Article
IX and Article X and the provisions of Section 12.9 and Section
12.10 shall be continuing and shall survive any termination of this
Agreement.

 

Section 12.6                            GOVERNING
LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE.

 

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  EACH OF THE SECURED PARTIES, THE BORROWER AND THE ADMINISTRATIVE
AGENT HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT
LOCATED WITHIN THE STATE OF NEW YORK. 
EACH OF THE PARTIES HERETO AND EACH SECURED PARTY 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.

 

Section 12.7                            WAIVER OF
JURY TRIAL.

 

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE
SECURED PARTIES, THE BORROWER AND THE ADMINISTRATIVE AGENT 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

 

76

 

SUCH DISPUTE RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

 

Section 12.8                            Costs,
Expenses and Taxes.

 

(a)                                  In
addition to the rights of indemnification granted to the Administrative Agent,
the Managing Agents, the other Secured Parties and its or their Affiliates and
officers, directors, employees and agents thereof under Article IX
hereof, the Borrower agrees to pay on demand all reasonable costs and expenses
of the Administrative Agent, the Managing Agents, Concord and the other Secured
Parties incurred in connection with the preparation, execution, delivery,
administration (including periodic auditing), amendment or modification of, or
any waiver or consent issued in connection with, this Agreement and the other
documents to be delivered hereunder or in connection herewith, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Administrative Agent, the Managing Agents, Concord and the other
Secured Parties with respect thereto and with respect to advising the
Administrative Agent, the Managing Agents, Concord and the other Secured
Parties as to their respective rights and remedies under this Agreement and the
other documents to be delivered hereunder or in connection herewith, and all
costs and expenses, if any (including reasonable counsel fees and expenses),
incurred by the Administrative Agent, the Managing Agents, Concord or the other
Secured Parties in connection with the enforcement of this Agreement and the
other documents to be delivered hereunder or in connection herewith (including
any Hedge Agreement).

 

(b)                                 The
Borrower shall pay on demand any and all stamp, sales, excise and other taxes
and fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement, the other documents to be
delivered hereunder or any agreement or other document providing liquidity
support, credit enhancement or other similar Support to the Lender in
connection with this Agreement or the funding or maintenance of Advances
hereunder.

 

(c)                                  The
Borrower shall pay on demand all other costs, expenses and taxes (excluding
income taxes) (“Other Costs”),
including, without limitation, all reasonable costs and expenses incurred by
the Administrative Agent or any Managing Agent in connection with periodic
audits of the Borrower’s or the Servicer’s books and records, which are
incurred as a result of the execution of this Agreement.

 

Section 12.9                            No
Proceedings.

 

Each party hereto (other
than the applicable CP Lender) hereby covenants and agrees that on behalf of
itself and each of its affiliates, that prior to the date which is one year and
one day after the payment in full of all indebtedness for borrowed money of a
CP Lender, such party will not institute against, or join any other Person in
instituting against, such CP Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.  The provisions of this Section 12.9
shall survive the termination of this Agreement.

 

Each of the parties
hereto (other than the Administrative Agent and the Secured Parties) hereby
agrees that it will not institute against, or join any other Person in
instituting against the

 

77

 

Borrower any Insolvency
Proceeding so long as there shall not have elapsed one year and one day since
the Collection Date.

 

Section 12.10                     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 Administrative Agent, any Secured Party as contained in
this Agreement or any other agreement, instrument or document entered into by
it pursuant hereto or in connection herewith shall be had against any Person or
any manager or administrator of such Person or any incorporator, affiliate,
stockholder, officer, employee or director of such Person or of the Borrower or
of any such manager or administrator, as such, by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise.

 

(b)                                 Each
of parties hereto hereby acknowledges and agrees that any other transactions
with a CP Lender hereunder shall be without recourse of any kind to such CP
Lender.  A CP Lender shall have no
obligation to pay any amounts owing hereunder in excess of any amount available
to such CP Lender after paying or making provision for the payment of any
commercial paper notes of such CP Lender. 
In addition, each party hereto agrees that a CP Lender shall have no
obligation to pay any other party, any amounts constituting fees, a
reimbursement for expenses or indemnities (collectively, “Expense Claims”), and
such Expense Claims shall not constitute a claim against such CP Lender (as
defined in Section 101 of Title 11 of the United States Bankruptcy Code),
unless or until such CP Lender has received amounts sufficient to pay such
Expense Claims and such amounts are not required to pay the commercial paper of
such CP Lender.

 

(c)                                  The
provisions of this Section 12.10 shall survive the termination of this
Agreement.

 

Section 12.11                     Protection
of Security Interest; Appointment of Administrative Agent as Attorney-in-Fact.

 

(a)                                  The
Borrower shall, or shall cause the Servicer to, cause this Agreement, all
amendments hereto and/or all financing statements and continuation statements
and any other necessary documents covering the right, title and interest of the
Administrative Agent as agent for the Secured Parties and of the Secured
Parties to the Collateral to be promptly recorded, registered and filed, and at
all time 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 right,
title and interest of the Administrative Agent as agent for the Secured Parties
hereunder to all property comprising the Collateral.  The Borrower shall deliver or, shall cause the Servicer to
deliver, to the Administrative Agent 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 Borrower and the Servicer shall cooperate fully in connection
with the obligations set forth above and will execute any and all documents
reasonably required to fulfill the intent of this Section 12.11.

 

78

 

(b)                                 The
Borrower agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
may reasonably be necessary or desirable, or that the Administrative Agent may
reasonably request, to perfect, protect or more fully evidence the security
interest granted to the Administrative Agent, as agent for the Secured Parties,
in the Collateral, or to enable the Administrative Agent or the Secured Parties
to exercise and enforce their rights and remedies hereunder.

 

(c)                                  If
the Borrower or the Servicer fails to perform any of its obligations hereunder
after five Business Days’ notice from the Administrative Agent, the
Administrative Agent or any Lender may (but shall not be required to) perform,
or cause performance of, such obligation; and the Administrative Agent’s or
such Lender’s reasonable costs and expenses incurred in connection therewith
shall be payable by the Borrower (if the Servicer that fails to so perform is
the Borrower or an Affiliate thereof) as provided in Article IX, as
applicable.  The Borrower irrevocably
authorizes the Administrative Agent and appoints the Administrative Agent as
its attorney-in-fact to act on behalf of the Borrower, (i) to execute on behalf
of the Borrower as debtor and to file financing statements necessary or
desirable in the Administrative Agent’s sole discretion to perfect and to
maintain the perfection and priority of the interest of the Secured Parties in
the Collateral and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Collateral as a
financing statement in such offices as the Administrative Agent in its sole discretion
deems necessary or desirable to perfect and to maintain the perfection and
priority of the interests of the Lenders in the Collateral.  This appointment is coupled with an interest
and is irrevocable.

 

(d)                                 Without
limiting the generality of the foregoing, Borrower will, not earlier than six
(6) months and not later than three (3) months prior to the fifth anniversary
of the date of filing of the financing statement referred to in Section 3.1
or any other financing statement filed pursuant to this Agreement or in
connection with any Advance hereunder, unless the Collection Date shall have
occurred:

 

(i)                                     execute
and deliver and file or cause to be filed an appropriate continuation statement
with respect to such financing statement; and

 

(ii)                                  deliver
or cause to be delivered to the Administrative Agent an opinion of the counsel
for Borrower, in form and substance reasonably satisfactory to the
Administrative Agent, confirming and updating the opinion delivered pursuant to
Section 3.1 with respect to perfection and otherwise to the effect that
the Collateral hereunder continues to be subject to a perfected security
interest in favor of the Administrative Agent, as agent for the Secured
Parties, subject to no other Liens of record except as provided herein or
otherwise permitted hereunder, which opinion may contain usual and customary
assumptions, limitations and exceptions.

 

Section 12.12                     Confidentiality.

 

(a)                                  Each
of the Administrative Agent, the Managing Agents, the other Secured Parties and
the Borrower shall maintain and shall cause each of its employees and officers
to maintain the confidentiality of the Agreement and the other confidential
proprietary information with respect to the other parties hereto and their
respective businesses obtained by it or them in

 

79

 

connection with the structuring, negotiating and
execution of the transactions contemplated herein, except that each such party
and its officers and employees may (i) disclose such information to its
external accountants and attorneys and as required by an Applicable Law, as
required to be publicly filed with SEC, or as required by an order of any
judicial or administrative proceeding, (ii) disclose the existence of this
Agreement, but not the financial terms thereof and (iii) disclose the Agreement
and such information in any suit, action, proceeding or investigation (whether
in law or in equity or pursuant to arbitration) involving and of the Loan
Documents or any Hedging Agreement for the purpose of defending itself,
reducing itself, reducing its liability, or protecting or exercising any of its
claims, rights, remedies, or interests under or in connection with any of the
Loan Documents or any Hedging Agreement.

 

(b)                                 Anything
herein to the contrary notwithstanding, the Borrower hereby consents to the
disclosure of any nonpublic information with respect to it for use in
connection with the transactions contemplated herein and in the Transaction
Documents (i) to the Administrative Agent or the Secured Parties by each other,
(ii) by the Administrative Agent or the Secured Parties to any prospective or
actual Eligible Assignee or participant of any of them or (iii) by the
Administrative Agent or the Secured Parties to any Rating Agency, commercial paper
dealer or provider of a surety, guaranty or credit or liquidity enhancement to
a Secured Party and to any officers, directors, members, employees, outside
accountants and attorneys of any of the foregoing, provided each such Person is
informed of the confidential nature of such information and agree to be bound
hereby.  In addition, the Secured
Parties and the Administrative Agent may disclose any such nonpublic
information pursuant to any law, rule, regulation, direction, request or order
of any judicial, administrative or regulatory authority or proceedings.

 

(c)                                  The
Borrower and the Servicer each agrees that it shall not (and shall not permit
any of its Affiliates to) issue any news release or make any public
announcement pertaining to the transactions contemplated by this Agreement and
the Transaction Documents without the prior written consent of the
Administrative Agent (which consent shall not be unreasonably withheld) and, if
such news release or public announcement shall directly or indirectly reference
Concord, Concord (which consent shall not be unreasonably withheld) unless such
news release or public announcement is required by law, in which case the
Borrower or the Servicer shall consult with the Administrative Agent, Concord
and each Managing Agent prior to the issuance of such news release or public
announcement.  The Borrower and the
Servicer each may, however, disclose the general terms of the transactions
contemplated by this Agreement and the Transaction Documents to trade
creditors, suppliers and other similarly-situated Persons so long as such
disclosure is not in the form of a news release or public announcement.

 

Section 12.13                     Execution in
Counterparts; Severability; Integration.

 

This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, 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 contains the final and
complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof

 

80

 

and shall constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof, superseding all prior oral or written understandings other than any Fee
Letter.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

81

 

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

 

 

	
  BORROWER:

  	
  GLADSTONE BUSINESS
  LOAN, LLC

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Terry Brubaker

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Gladstone Business
  Loan, LLC 1750 Tysons Blvd.,

  4th Floor McLean, Virginia 
  22102 Attention:

  President Facsimile No.: (703) 286-0795

  Confirmation No.: (703) 744-1165

  
	
   

  	
   

  
	
  SERVICER:

  	
  GLADSTONE ADVISERS,
  INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ David Gladstone

  
	
   

  	
   

  	
  Title:  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
  Gladstone Advisers,
  Inc.

  1616 Anderson Road

  McLean, Virginia  22102

  Attention: Chairman

  Facsimile No.: (703) 286-0795

  Confirmation No.: (703) 286-0776

  
				

 

[SIGNATURES
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  COMMITTED LENDER:

  	
  CANADIAN IMPERIAL BANK
  OF

  COMMERCE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mark O’Keefe

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  Commitment:
  $100,000,000  

  
	
   

  	
   

  
	
   

  	
  Canadian Imperial Bank
  Of Commerce

  425 Lexington Avenue

  New York, New York  10017

  Attention:  Asset Securitization Group
  – Gladstone

  Business Loan Officer

  Facsimile No.:  (212) 856-3643

  Confirmation No.:  (212) 856-4000

  
	
   

  	
   

  
	
  CP LENDER:

  	
  CONCORD MINUTEMEN
  CAPITAL COMPANY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Thomas J. Irvin

  
	
   

  	
   

  	
  Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  Concord Minutemen Capital
  Company, LLC

  227 West Monroe

  Suite 4000

  Chicago, Illinois  60606

  Attention:  Operations Department

  Facsimile No.:  (312) 977-1967/1699

  Confirmation No.:  (312) 977-4560

  
				

 

[SIGNATURES
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  MANAGING AGENT for the
  Concord

  Lender Group:

  	
  CANADIAN IMPERIAL BANK
  OF

  COMMERCE

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mark O’Keefe

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  Canadian Imperial Bank
  Of Commerce

  425 Lexington Avenue

  New York, New York  10017

  Attention:  Asset Securitization Group
  – Gladstone

  Business Loan Officer

  Facsimile No.:  (212) 856-3643

  Confirmation No.:  (212) 856-4000

  
	
   

  	
   

  
	
  ADMINISTRATIVE AGENT

  	
  CANADIAN IMPERIAL BANK
  OF

  COMMERCE

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mark O’Keefe 

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  Canadian Imperial Bank
  Of Commerce

  425 Lexington Avenue

  New York, New York  10017

  Attention:  Asset Securitization Group
  – Gladstone Business Loan Officer

  Facsimile No.:  (212) 856-3643

  Confirmation No.:  (212) 856-4000

  
				

 

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