Document:

Exhibit

EXECUTION VERSION
Exhibit 10.3

MASTER PARTICIPATION AGREEMENT
Master Participation and Assignment Agreement (as amended from time to time, this “Agreement”), dated as of May 9, 2019, between Barings BDC Senior Funding I, LLC, a Delaware limited liability company (the “Financing Subsidiary”), and Barings BDC Static CLO Ltd. 2019-I, an exempted company incorporated in the Cayman Islands (the “Issuer”).
RECITALS
WHEREAS, the Financing Subsidiary owns certain loans (the “Collateral Obligations”) and the Issuer desires to purchase certain of such Collateral Obligations and/or portions thereof as set forth on Annex A hereto;
WHEREAS, the Transferor has made or will make, on or prior to the date hereof, a capital contribution to the Financing Subsidiary, and the Financing Subsidiary intends to distribute the Transferred Assets to Barings BDC, Inc. (the “Transferor”) as an equity distribution in the form of a dividend (through an intermediate entity) (the “Dividend”), in each case pursuant to (i) that certain amended and restated credit agreement, dated as of December 13, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Financing Subsidiary, as borrower, Bank of America Merrill Lynch, in its capacities as sole lead arranger and sole book manager, Bank of America, N.A., as the administrative agent (in such capacity, the “Administrative Agent”) and the lenders from time to time party thereto (the “Lenders”) and (ii) the Request for Waiver and Consent to Lien Release Dividend, dated as of May 9, 2019 (the “Lien Release Dividend”), consented to by the Administrative Agent, the Lenders, Barings BDC Finance I, LLC, and Barings BDC, Inc., and acknowledged and agreed to by State Street Bank and Trust Company, as collateral administrator;
WHEREAS, the Issuer and the Transferor have entered into a master loan sale agreement (as amended from time to time, the “Loan Sale Agreement”), dated as of May 9, 2019, pursuant to which the Transferor has agreed to sell certain loans, including the Transferred Assets, to the Issuer, subject to the conditions precedent to each such sale set forth in the Loan Sale Agreement and, with respect to the Transferred Assets that will be Closing Date Participation Interests until elevated to assignments, as set forth herein and subject to the terms of the Indenture;
WHEREAS, the settlement of the acquisition of the Transferred Assets by the Transferor from the Financing Subsidiary and by the Issuer from the Transferor shall occur, solely for administrative convenience, pursuant to and in accordance with this Agreement whereby the Financing Subsidiary will (i) grant a participation interest in each Transferred Asset directly to the Issuer pursuant to Section 2.01 and (ii) thereafter cause an assignment of each such Transferred Asset to be delivered to the Issuer so that the Issuer becomes the record owner of such Transferred Asset pursuant to Section 2.05; 
WHEREAS, such grant by the Financing Subsidiary and acquisition by the Issuer of such participation interest in each Transferred Asset is referred to herein as the “Transfer” of such Transferred Asset; and

WHEREAS, with respect to any Transferred Asset, the Financing Subsidiary and the Issuer will cause the relevant participation to be elevated to an assignment as soon as practicable, pursuant to the provisions of Section 2.05, after the Settlement Date.  Such elevation is referred to herein as the “Elevation” with respect to any Transferred Asset, and the date of any Elevation of such Transferred Asset is referred to herein as the related “Elevation Date”. 
AGREEMENT
Accordingly, in consideration of the mutual agreements set forth herein and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows.  
ARTICLE I 
Definitions
SECTION 1.01    Certain Definitions; Interpretation.
(a)    Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Loan Sale Agreement or, if not defined therein, in the Indenture. In addition, as used herein, the following defined terms, unless the context otherwise requires, shall have the following meanings (to the extent not otherwise defined herein): 
“Administrative Agent” has the meaning specified in the Recitals.
“Agreement” has the meaning specified in the Preamble.
 “Business Day” has the meaning specified in the Indenture. 
“Collateral Agent” has the meaning specified in the Recitals.
“Collateral Manager” means Barings BDC, Inc., in its capacity as collateral manager under the Collateral Management Agreement, dated as of May 9, 2019, by and between the Issuer and the Collateral Manager.
“Collateral Obligations” has the meaning specified in the Recitals. 
“Commitment” means, with respect to any Participation Interest, the commitment or obligation under the related Underlying Instruments to advance funds in connection with the related Collateral Obligation.
“Credit Agreement” has the meaning specified in the Recitals.
“Dividend” has the meaning specified in the Recitals.
 “Elevation” has the meaning specified in the Recitals.
“Elevation Date” has the meaning specified in the Recitals.

“Excluded Amounts” means (a) any amount received by, on or with respect to any Collateral Obligation, which amount is attributable to the payment of any tax, fee or other charge imposed by any Authority on such Collateral Obligation, (b) any amount representing escrows relating to taxes, insurance and other amounts in connection with any Collateral Obligation which is held in an escrow account for the benefit of the related Obligor and the secured party (other than the Financing Subsidiary in its capacity as lender with respect to such Collateral Obligation) pursuant to escrow arrangements, (c) any Retained Fee retained by the Person(s) entitled thereto in connection with the origination of any Collateral Obligation, (d) any accrued and unpaid interest on any Collateral Obligation with respect to the period of time prior to and excluding the Closing Date and (e) any Equity Security related to any Collateral Obligation that the Financing Subsidiary determines will not be transferred by the Financing Subsidiary in connection with the sale of any related Collateral Obligation hereunder.
“Financing Subsidiary” has the meaning specified in the Preamble.
“Funding Advance” has the meaning specified in Section 2.06. 
“Funding Date” has the meaning specified in Section 2.06. 
“Funding Notice” has the meaning specified in Section 2.06. 
“Indenture” means the Indenture, dated as of May 9, 2019 (as amended, modified, restated or supplemented from time to time), between the Issuer, Barings BDC Static CLO 2019-I, LLC, as co-issuer and State Street Bank and Trust Company, as trustee (together with its successors and assigns in such capacity, the “Trustee”). 
“Issuer” has the meaning specified in the Preamble.
“Lenders” has the meaning specified in the Recitals.
“Lien Release Dividend” has the meaning specified in the Recitals.
“Loan Sale Agreement” has the meaning specified in the Recitals.
 “Participation Interest” and “Participation Interests” have the meanings specified in Section 2.01.
“Participation Percentage” means, with respect to each Collateral Obligation, the percentage set forth on Annex A hereto representing the percentage portion of such Collateral Obligation conveyed to the Issuer by the Financing Subsidiary pursuant to the terms of this Agreement.
 “Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding thereof.
“Pro Rata Share” means, with respect to any amount, as of any date of determination, the product obtained by multiplying such amount by the applicable Participation Percentage.

“Representing Party” has the meaning specified in Section 3.01.
“Settlement Date” means May 9, 2019.
“Transfer” has the meaning specified in the Recitals.
“Transferor” has the meaning specified in the Recitals.
“Transferred Assets” means the Collateral Obligations (excluding any Excluded Amounts) or portions thereof (if less than 100%) equal to the applicable Participation Percentage of each such Collateral Obligation conveyed by the Financing Subsidiary to the Issuer hereunder, in each case as set forth on Annex A hereto.
(b)    In this Agreement, unless a contrary intention appears:
(i)    the singular number includes the plural number and vice versa;
(ii)    reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by the Transaction Documents;
(iii)    reference to any gender includes each other gender;
(iv)    reference to day or days without further qualification means calendar days;
(v)    unless otherwise stated, reference to any time means New York, New York time;
(vi)    references to “writing” include printing, typing, lithography, electronic or other means of reproducing words in a visible form;
(vii)    reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, supplemented, replaced, restated, waived or extended and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other 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; 
(viii)    reference to any requirement of law means such requirement of 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 requirement of law means that provision of such requirement of law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such Section or other provision; and

(ix)    references to “including” means “including, without limitation”.
(c)    The titles of Articles and Sections hereof are for convenience only, and they neither form a part of this Agreement nor are to be used in the construction or interpretation hereof.
ARTICLE II     
Transfer
SECTION 2.01    Transfer.  Upon the terms and subject to the conditions hereof on the Settlement Date, the Financing Subsidiary hereby irrevocably grants to the Issuer, and the Issuer hereby acquires from the Financing Subsidiary, an undivided participation interest in each Transferred Asset, which interest shall be understood to include all of the Financing Subsidiary’s right, title, benefit and interest in and to the Pro Rata Share of any interest accruing from and after the Settlement Date, any Interest Proceeds and Principal Proceeds to the extent provided in Section 2.02 and, to the extent permitted to be transferred under applicable law and under the applicable transfer document or assignment agreement (or, in the case of any Underlying Instrument that is in the form of a note, any chain of endorsement) executed and delivered in connection with a Transferred Asset, all claims, causes of action and any other right of the Financing Subsidiary (in its capacity as a lender under such documentation), whether known or unknown, against any Obligor or any of its affiliates, agents, representatives, contractors, advisors or other Person arising under or in connection with such documentation or that is in any way based on or related to any of the foregoing or the loan transactions governed thereby, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and purchased pursuant to this Agreement (each, a “Participation Interest” and, collectively, the “Participation Interests”), upon the terms and subject to the conditions set forth in this Agreement.  The Issuer hereby assumes all obligations and liabilities of the Financing Subsidiary as lender with respect to or in connection with each related Participation Interest arising or occurring on or after the Settlement Date.  The consideration for the transfer of the Participation Interests from the Financing Subsidiary to the Issuer shall consist of cash paid to the Financing Subsidiary by the Issuer.  The purchase price for each Collateral Obligation sold pursuant to this Agreement shall be a dollar amount equal to the fair market value thereof (calculated as described in the Lien Release Dividend) as determined by the Financing Subsidiary and the Issuer and shall be on terms no less favorable to the Issuer than the Issuer would then obtain in a comparable arm’s length transaction with a person that is not an Affiliate.  The parties hereto agree that, solely for administrative convenience, any amount paid in cash by the Issuer to the Financing Subsidiary pursuant to this Agreement on account of its purchase of a Participation Interest to be conveyed hereunder shall be treated for all purposes hereunder and under the Loan Sale Agreement as if such amount had been paid by the Issuer to the Transferor, in partial or full satisfaction of its obligations to pay the purchase price of such initial Transferred Assets under the Loan Sale Agreement and/or a capital contribution (through an intermediate entity) by the Transferor to the Financing Subsidiary and the corresponding Dividend by the Financing Subsidiary to the Transferor; provided that the Issuer, the Financing Subsidiary and the Transferor may agree to net certain amounts payable hereunder with other amounts paid in connection with the closing of the notes issued under the Indenture and the distribution of the proceeds thereof.  The Participation Interests are certain of the “Closing Date Participation Interests” referred to in the Loan Sale Agreement and in the Indenture.

SECTION 2.02    Interest Proceeds and Principal Proceeds; Payments of Interest Proceeds and Principal Proceeds and Other Payments Received After the Settlement Date.
(a)    With respect to each Transferred Asset, the Issuer shall acquire its Pro Rata Share of all rights to Interest Proceeds and Principal Proceeds that, as of the Settlement Date, are accrued but unpaid with respect to the period from and after the Settlement Date (which, for the avoidance of doubt, shall not include any Excluded Amounts).
(b)    If at any time after the Settlement Date the Financing Subsidiary receives any Interest Proceeds or Principal Proceeds (in each case, other than any Excluded Amounts) in respect of the Transferred Assets, the Financing Subsidiary shall deliver (or cause to be delivered) promptly to the Issuer its Pro Rata Share of such Interest Proceeds and Principal Proceeds.  If at any time after the Settlement Date the Financing Subsidiary receives any other payment (including principal, interest (to the extent relating to the period from and after the Settlement Date) or any other amount) with respect to a Transferred Asset, the Financing Subsidiary shall deliver (or cause to be delivered) promptly to the Issuer its Pro Rata Share of such payment, and in the case of any such payment of interest, the Financing Subsidiary shall provide (or cause to be provided) a written notice to the Issuer at the time of such delivery setting forth calculations and certifying as to the portion of any interest received that relates to the period from and after the Settlement Date.
(c)    Without limiting the foregoing, the Financing Subsidiary agrees (a) until the Elevation of each Transferred Asset has been completed, to maintain its existing custodial arrangements and bank accounts established to receive proceeds of such Transferred Asset and (b) to remit (or cause to be remitted) to the Issuer, promptly (but not more than two Business Days) after receipt of such payment and identification thereof, the Issuer’s Pro Rata Share of each payment received in connection with each Transferred Asset to which the Issuer is entitled in accordance with Section 2.01.  The Financing Subsidiary acknowledges that from and after the Settlement Date it shall have no equitable or beneficial interest in the Pro Rata Share of any payment received by it with respect to any Transferred Asset (other than any Excluded Amounts).  If the Financing Subsidiary modifies or amends the standing instructions delivered to the Financing Subsidiary’s custodian under the Credit Agreement on the date hereof in connection with this clause (c), the Financing Subsidiary shall notify the Issuer of such modification or amendment.
SECTION 2.03    Treatment of Transfer; Backup Grant of Security Interest.
(a)    Each party hereto (i) agrees that each Transfer shall be a sale or contribution of a participation interest in the relevant Transferred Asset for all relevant purposes (other than tax and accounting purposes) and (ii) intends, and has as its business objective, that each Transfer be an absolute transfer and not be a transfer as security for a loan.  The relationship between the Financing Subsidiary and the Issuer shall be that of seller and buyer.  Neither party is a trustee or agent for the other party, nor does either party have any fiduciary obligations to the other party.  

This Agreement shall not be construed to create a partnership or joint venture between the parties hereto.
(b)    If, notwithstanding such intention, any Transfer is characterized by a court of competent jurisdiction as a transfer as security for a loan rather than a sale of a participation interest in the relevant Transferred Asset, or any Transfer shall for any reason be ineffective to transfer to the Issuer all of the Financing Subsidiary’s right, title and interest in any Transferred Asset (including the Interest Proceeds and Principal Proceeds by it with respect to such Transferred Asset), then the Financing Subsidiary shall be deemed to have granted to the Issuer, and the Financing Subsidiary hereby grants to the Issuer, a security interest in and lien on all the Financing Subsidiary’s right, title and interest in and to such Transferred Asset (including the Issuer’s Pro Rata Share of any Interest Proceeds and Principal Proceeds received by the Financing Subsidiary with respect to such Transferred Asset), whether now existing or hereafter acquired, in order to secure such loan and all other obligations of the Financing Subsidiary hereunder.
(c)      After the Settlement Date, the Financing Subsidiary shall record in the Financing Subsidiary’s books and records the fact that the Financing Subsidiary is no longer the beneficial owner of the Transferred Assets conveyed to the Issuer hereunder and, after the relevant Elevation Date with respect to any Transferred Asset, the Financing Subsidiary shall record in the Financing Subsidiary’s books and records the fact that the Financing Subsidiary is no longer the record owner or beneficial owner of such Transferred Asset.  After the Settlement Date, the Issuer shall record in the Issuer’s books and records that fact that the Issuer is the beneficial owner of the Transferred Assets and, after the relevant Elevation Date with respect to any Transferred Asset, the Issuer shall record in the Issuer’s books and records the fact that the Issuer is the record owner and beneficial owner of such Transferred Asset.  
SECTION 2.04    Documents; Exercise of Rights and Remedies; Indemnification.  
(a)    Prior to Elevation, the Financing Subsidiary shall furnish to the Issuer (or its collateral administrator) copies of any Underlying Instruments and applicable credit documentation in its possession in respect of a Transferred Asset and, as and when available to the Financing Subsidiary (without prejudice to Section 2.05(b)), a copy of each transfer document or assignment agreement (or, in the case of any Underlying Instrument that is in the form of a note, any chain of endorsement), amendment, consent or waiver in connection with any such documentation, provided that the Financing Subsidiary is not prohibited from doing so under the related Underlying Instruments or applicable credit documentation after taking into account the next sentence.  The Issuer agrees that it shall maintain the confidentiality of any such documents to the extent required therein and to the same extent as if it were a party thereto and shall, upon the Financing Subsidiary’s request, provide to the Financing Subsidiary a confidentiality undertaking to such effect in accordance with the terms of the such documentation prior to the delivery thereof.
(b)    From and after the Settlement Date, the Financing Subsidiary agrees to promptly forward to the Issuer and the Collateral Manager all notices, requests, reports and communications of any nature received from any Person with respect to each Transferred Asset.  Unless restricted or prohibited under applicable law, rule, order or the relevant Underlying Instruments and/or credit documentation, the Financing Subsidiary will not exercise any voting, 

consent or other right or remedy, or take or refrain from taking any action, in each case with respect to any Transferred Asset, except as directed by the Issuer; provided that the consent of the Financing Subsidiary shall be required (which consent shall be subject to the terms and conditions set forth in the Credit Agreement, including terms requiring consent of Lenders or Administrative Agent thereunder) in connection with any such action that (1) increases the funding obligations of the Financing Subsidiary with respect to such Transferred Asset or (2) would subject the Financing Subsidiary, the Lenders or the Administrative Agent under the Credit Agreement to additional liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements.  With respect to the exercise of any such voting, consent or other right or remedy, or the taking or refraining from taking any action with respect to any Transferred Asset, pursuant to the sentences in this clause (b) not directed by the Collateral Manager on behalf of the Issuer, the Financing Subsidiary will consult with the Issuer with respect thereto and the Financing Subsidiary will take such action or refrain from taking such action as the Financing Subsidiary would take if such Transferred Asset were beneficially owned by the Financing Subsidiary for its own account (but subject to the terms and conditions set forth in the Credit Agreement, including terms requiring consent of Lenders or Administrative Agent thereunder).
(c)    Provided that the Collateral Manager on behalf of the Issuer has directed the Financing Subsidiary to take such action and the Financing Subsidiary does so, the Issuer shall reimburse the Financing Subsidiary for any and all liabilities, obligations, actual losses, actual damages, penalties, actions, judgments, suits, costs, expenses, and disbursements, including legal fees, which may be incurred or made by the Financing Subsidiary in connection with any such action so taken by the Financing Subsidiary for which the Financing Subsidiary is not reimbursed at any time by or on behalf of any Obligor under any applicable Underlying Instruments or credit documentation (other than any amounts thereof resulting from the Financing Subsidiary’s gross negligence or willful misconduct).  In no event will the Issuer reimburse the Financing Subsidiary for any special, indirect, consequential or punitive damages in respect to any claim hereunder, whether or not known or suspected, unless any such special, indirect, consequential or punitive damages are actually incurred by or are payable by the Financing Subsidiary.  In no event will the Financing Subsidiary reimburse the Issuer for any special, indirect, consequential or punitive damages in respect to any claim hereunder, whether or not known or suspected, unless any such special, indirect, consequential or punitive damages are actually incurred by or are payable by the Issuer.
SECTION 2.05    Elevation.
(a)    Subject to the terms and provisions of the applicable Transferred Assets and of applicable law, the Financing Subsidiary shall use commercially reasonable efforts to effect an Elevation, as soon as reasonably practicable, with respect to each such Transferred Asset and take such action (including the execution and delivery of any transfer document or assignment agreement (or, in the case of any Underlying Instrument that is in the form of a note, any chain of endorsement)) as shall be reasonably necessary in connection therewith and in accordance with the terms and conditions of each such Transferred Asset and consistent with the terms of this Agreement.  The Financing Subsidiary has prepared, or will prepare on or following the Closing Date, individual assignments (or a master assignment) consistent with the requirements of the related Underlying 

Instruments and provided them to the Persons required under such Underlying Instruments, which assignments will become effective in accordance with such Underlying Instruments upon obtaining certain consents thereto or upon the passage of time or both.  The Financing Subsidiary shall pay any transfer fees and other expenses payable in connection with an Elevation and the Issuer will reimburse the Financing Subsidiary for half of such fees and expenses after receipt of an invoice therefor from the Financing Subsidiary detailing such amounts.  The Issuer shall be responsible for any expenses of administering each Transferred Asset prior to its Elevation.  At Elevation, the Financing Subsidiary shall deliver such assignment and the credit documentation  with respect to the related Transferred Asset in its possession to or as directed by the Issuer.  The Issuer and the Financing Subsidiary acknowledge and agree that, solely for administrative convenience, any transfer document or assignment agreement (or, in the case of any Underlying Instrument that is in the form of a note, any chain of endorsement) required to be executed and delivered in connection with the transfer of a Transferred Asset in accordance with the terms of any related Underlying Instruments may reflect that (i) the Financing Subsidiary is assigning such Transferred Asset directly to the Issuer or (ii) the Issuer is acquiring such Transferred Asset at the closing of such Transferred Asset.  Nothing in any such transfer document or assignment agreement (or, in the case of any Underlying Instrument that is in the form of a note, nothing in such chain of endorsement) shall be deemed to impair the transfers of the Transferred Assets by the Financing Subsidiary to the Issuer in accordance with the terms of this Agreement.
(b)    The Financing Subsidiary shall (so far as the same is within its power and control) maintain its existence as a Delaware limited liability company until an Elevation has been effected with respect to each Transferred Asset.  If the Financing Subsidiary has not effected an Elevation of a Transferred Asset on or before the day that is 120 days from the Settlement Date for whatever reason or if at any time prior thereto the Financing Subsidiary is dissolved prior to effecting an Elevation, the Financing Subsidiary and the Issuer agree that the Participation Interests in each of the Transferred Assets shall elevate automatically and immediately to an assignment and all of Financing Subsidiary’s rights, title, interests and ownership of such Transferred Assets shall vest in the Issuer.  Upon the execution of this Agreement, the Financing Subsidiary shall be deemed to have consented and agreed to the Elevation with respect to each of the Transferred Assets.  The Financing Subsidiary agrees that, following any such date, the Issuer shall be permitted to take any and all action necessary to effectuate an Elevation and/or finalize an assignment of any of the Transferred Assets, and in furtherance of the foregoing, effective immediately upon such date, the Financing Subsidiary hereby makes, constitutes and appoints the Issuer, with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead, to sign, execute, certify, swear to, acknowledge, deliver, file, receive and record any and all documents that the Issuer reasonably deems appropriate or necessary in connection with any Elevation or finalization of an assignment of any of the Transferred Assets. In addition, the Financing Subsidiary, effective as of the Settlement Date, hereby makes, constitutes and appoints the Issuer, with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead, to sign, execute, certify, swear to, acknowledge, deliver, file, receive and record any and all documents that the Issuer reasonably deems appropriate or necessary to direct the applicable Obligor or agent bank with respect to any Transferred Asset  to deposit directly into the Collection Account the Issuer’s Pro Rata Share of Interest Proceeds and Principal Proceeds in respect of any Transferred Asset.  The foregoing powers of attorney are hereby 

declared to be irrevocable and a power coupled with an interest, and shall survive and not be affected by the bankruptcy or insolvency or dissolution of the Financing Subsidiary.
SECTION 2.06    Release of Excluded Amounts.  The parties acknowledge and agree that the Issuer has no interest in the Excluded Amounts.  Promptly upon the receipt by or release to the Issuer of any Excluded Amounts, the Issuer hereby irrevocably agrees to deliver and release to (or as directed by) the Financing Subsidiary such Excluded Amounts, which release shall be automatic and shall require no further act by the Issuer; provided that the Issuer agrees that it will execute and deliver such instruments of release and assignment or other documents, or otherwise confirm the foregoing release of such Excluded Amounts, as may be reasonably requested by the Financning Subsidiary in writing.
SECTION 2.07    Conduct of Business.  The Financing Subsidiary represents, warrants and agrees that, from and after the Settlement Date, it will not engage in any activities with respect to the Transferred Assets other than holding record ownership of the Transferred Assets, receiving payments in respect of the Transferred Assets and remitting (or causing to be remitted) to the Issuer its Pro Rata Share of such payments as required hereunder, effecting Elevations with respect to the Transferred Assets and performing its other agreements hereunder with respect to such Transferred Assets.  The Financing Subsidiary represents, warrants and agrees that, from and after the date hereof, it shall not sell, grant a security interest in or lien on, or otherwise pledge, mortgage, hypothecate or encumber (or permit such to occur or suffer such to exist other than any security interest therein which will be released contemporaneously with the Transfer of such Transferred Asset hereunder and the grant of the security interest therein granted by the Financing Subsidiary to the Issuer hereunder), any part of the Transferred Assets except for (i) the transfer to the Transferor (by way of Dividend) and (ii) the grant of the Participation Interests to the Issuer as provided herein.  
SECTION 2.08    Further Assurances.  Each party agrees to execute and deliver all such further documents as may be reasonably requested by the other party in order to effect each Transfer and each Elevation as contemplated hereby.
ARTICLE III     
Representations and Warranties
SECTION 3.01    Representations and Warranties of Each Party.  Each party hereto (each, the “Representing Party”) represents and warrants to the other party as follows:
(i)    the Representing Party is duly incorporated or formed, as applicable, and validly existing as an entity and is in good standing under the laws of its jurisdiction of incorporation;
(ii)    the Representing Party has the requisite power and authority to enter into and perform this Agreement;
(iii)    this Agreement has been duly authorized by all necessary action on the part of the Representing Party, has been duly executed by the Representing Party 

and is the valid and binding agreement of the Representing Party enforceable against such party in accordance with its terms;
(iv)    the Representing Party is adequately capitalized in light of its contemplated business or activities;
(v)    no Transfer will be a transfer of property in connection with any preexisting indebtedness owed by the Financing Subsidiary to the Issuer;
(vi)    there are no agreements or understandings between the Representing Parties (other than this Agreement) relating to or affecting the Transfer or the Transferred Assets and the proceeds thereof;
(vii)    the Representing Party conducts its business or activities solely in its own name;
(viii)    the Representing Party provides for the payment of its expenses and liabilities from its own funds;
(ix)    the Representing Party has not guaranteed and is not otherwise contractually liable for the payment of any liability of the other party;
(x)    neither the assets nor the creditworthiness of the Representing Party is generally held out as being available for the payment of any liability of the other party;
(xi)    the Representing Party maintains an arm’s-length relationship with the other party;
(xii)    the Representing Party maintains separate financial records that enable its assets to be readily ascertained as separate and apart from those of the other party;
(xiii)    the Representing Party’s funds are not commingled with those of the other party; and
(xiv)    none of the execution, delivery and performance of this Agreement by the Representing Party will:
		
	(A)
	conflict with, result in any breach of or constitute a default (or an event which, with the giving of notice or passage of time, or both, would constitute a default) under, any term or provision of the organizational documents of the Representing Party or any indenture, agreement, order, decree or other instrument to which the Representing Party is a party or by which the Representing Party is bound, which conflict, 

breach or default would have a material adverse effect with respect to the Representing Party; or
		
	(B)
	violate any provision of any law, rule or regulation applicable to the Representing Party of any regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Representing Party or its properties, which violation would have a material adverse effect with respect to the Representing Party.

SECTION 3.02    Representations and Warranties of the Financing Subsidiary.  The Financing Subsidiary represents and warrants to the Issuer as follows:
(i)    Upon the Elevation on the relevant Elevation Date with respect to any Transferred Asset, the Issuer will receive good and marketable title to such Transferred Asset, free and clear of any pledge, lien, investment interest, charge, claim, equity or encumbrance of any kind created by the Financing Subsidiary or any Person claiming through the Financing Subsidiary.  The participation in each Transferred Asset granted hereunder will be granted by the Financing Subsidiary to the Issuer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest (other than any security interest therein which will be released contemporaneously with the Transfer of such Transferred Asset hereunder, the security interest granted hereunder by the Financing Subsidiary to the Issuer and Financing Subsidiary’s record ownership of the related Transferred Asset which, from and after the Settlement Date to and including the Elevation Date with respect thereto will be and remain free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest). There is no funding obligation in respect of the Transferred Assets that the Issuer is or shall be required to pay or otherwise perform that the Financing Subsidiary has not paid or otherwise performed in full.
(ii)    None of the execution, delivery and performance by the Financing Subsidiary of this Agreement will adversely affect the nature of the title to any Transferred Asset received by the Issuer as provided in Section 3.02(i).
(iii)    No consent, license, approval or authorization from, or registration or qualification with, any governmental body, agency or authority, nor any consent, approval, waiver or notification of any creditor or lessor is required in connection with the execution, delivery and performance by the Financing Subsidiary of this Agreement, except (A) such as have been obtained and are in full force and effect or (B) those with respect to which the failure to obtain them would not have a material adverse effect with respect to the Financing Subsidiary.
(iv)    The Financing Subsidiary has valid business reasons for transferring the Transferred Assets to the Issuer rather than obtaining a secured loan with the Transferred Assets as collateral.  The Financing Subsidiary is not effecting any 

Transfer in contemplation of the Financing Subsidiary’s insolvency or with any actual intent to hinder, delay or defraud any of its creditors.
(v)    All corporate actions of the Financing Subsidiary, with respect to the transactions contemplated hereby, have been and will continue to be reflected in any minutes of the Financing Subsidiary.  This Agreement is and will continue to be an official record of the Financing Subsidiary.
(vi)    The Financing Subsidiary has been solvent at all relevant times before each Transfer and will not be rendered insolvent by any Transfer.  Before the date hereof, the Financing Subsidiary did not engage in or have plans to engage in any business or transaction as a result of which the total assets remaining with the Financing Subsidiary would constitute an unreasonably small amount of capital.  The Financing Subsidiary has not incurred and does not intend to incur, debts that would be beyond its ability to pay as they mature.
SECTION 3.03    No Liability.  The Financing Subsidiary makes no representation or warranty, express or implied, and assumes no responsibility, with respect to the genuineness, authorization, execution, delivery, validity, legality, value, sufficiency, perfection, priority, enforceability or collectability of any Underlying Instruments or credit documentation executed and delivered in connection with a Transferred Asset.  The Financing Subsidiary assumes no responsibility for (except as otherwise expressly provided herein) (a) any representation or warranty made by, or the accuracy, completeness, correctness or sufficiency of any information (or the validity, completeness or adequate disclosure of assumptions underlying any estimates, forecasts or projections contained in such information) provided directly or indirectly by, any obligor in respect of a Transferred Asset or any Underlying Instruments or credit documentation thereof or by any other Person, (b) the performance or observance by any obligor of any of the provisions of any Underlying Instruments or credit documentation in respect of a Transferred Asset (whether on, before or after the Settlement Date), (c) the filing, recording, or taking of any action with respect to any Underlying Instruments or credit documentation in respect of a Transferred Asset, (d) the financial condition of any obligor in respect of a Transferred Asset or of any other Person or (e) any other matter whatsoever relating to any obligor in respect of a Transferred Asset, any other Person or the Transferred Assets.
In making, managing, handling and transferring the Transferred Assets, the Financing Subsidiary shall exercise the same care as it normally exercises with respect to loans held for its own account, but the Financing Subsidiary shall have no further responsibility to the Issuer except as expressly provided herein and except for its own gross negligence or willful misconduct which results in actual loss to the Issuer.
ARTICLE IV     
Miscellaneous
SECTION 4.01    Amendments.  This Agreement may not be amended, altered, supplemented or otherwise modified, except by the execution and delivery of a written agreement by each of the parties hereto and the Administrative Agent.

SECTION 4.02    Communications.  Except as may be otherwise agreed between the parties, all communications hereunder shall be made in writing to the relevant party by personal delivery or by courier or first-class mail by facsimile or email transmission as follows:
To the Financing Subsidiary:
Barings BDC Senior Funding I, LLC
300 South Tryon Street, Suite 2500 
Charlotte, North Carolina 28202
Email: chris.cary@barings
Attention: Barings BDC Static CLO 2019-I, Attn: Chris Cary

To the Issuer:
 
Barings BDC Static CLO Ltd. 2019-I
c/o MaplesFS Limited
P.O. Box 1093, Boundary Hall
Cricket Square, Grand Cayman, KY1-1102
Cayman Islands
Email: cayman@maples.com
Attention: The Directors

or to such other address, telephone number or facsimile number as either party may notify to the other party in accordance with the terms hereof from time to time.  Any communications hereunder shall be effective upon receipt.
SECTION 4.03    Governing Law; Waiver of Trial by Jury; Jurisdiction.  
(a)    This Agreement shall be construed in accordance with the law of the State of New York, and this Agreement, and all matters arising out of or relating in any way whatsoever to this Agreement (whether in contract, tort or otherwise), shall be governed by such law without reference to its conflicts of laws provisions (other than Section 5-1401 of the New York General Obligations Law).
(b)    EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. Each party hereto (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 4.03(b).
(c)    Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New York State or Federal court sitting in the Borough of Manhattan in The City of New York in any action or proceeding arising out of or relating this Agreement, and hereby 

irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State or Federal court. Each party hereto hereby irrevocably waives, to the fullest extent that it may legally do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. Each party hereto irrevocably consents to the service of any and all process in any action or proceeding by the mailing or delivery of copies of such process to it the address set forth in Section 4.02. Each party hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
SECTION 4.04    Non-Petition; Limited Recourse.
(a)    Notwithstanding any other provision of this Agreement, the Financing Subsidiary agrees that it may not, prior to the date which is one year and one day (or if longer, any applicable preference period then in effect plus one day) after the payment in full of all Notes and any other debt obligations of the Issuer that have been rated upon issuance by any rating agency at the request of the Issuer, institute against, or join any other Person in instituting against, the Issuer any bankruptcy, reorganization, arrangement, insolvency, winding-up, moratorium or liquidation Proceedings, or other Proceedings under U.S. federal or state bankruptcy or similar laws.  Nothing in this Section 4.04(a) shall preclude, or be deemed to stop, the Financing Subsidiary:
(i)    from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily filed or commenced by the Issuer or (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Issuer; or
(ii)    from commencing against the Issuer or any of its properties any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, winding-up, moratorium or liquidation Proceeding.
(b)    Notwithstanding any other provision of this Agreement, the Issuer agrees that it may not, prior to the date which is one year and one day (or if longer, any applicable preference period then in effect plus one day) after the payment in full of all “Obligations” (as defined in the Credit Agreement) of the Financing Subsidiary under the Credit Agreement, institute against, or join any other Person in instituting against, the Financing Subsidiary any bankruptcy, reorganization, arrangement, insolvency, winding-up, moratorium or liquidation Proceedings, or other Proceedings under U.S. federal or state bankruptcy or similar laws.  Nothing in this Section 4.04(b) shall preclude, or be deemed to stop, the Issuer:
(i)    from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily filed or commenced by the Financing Subsidiary or (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Financing Subsidiary; or
(ii)    from commencing against the Financing Subsidiary or any of its properties any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, winding-up, moratorium or liquidation Proceeding.

(c)    Notwithstanding any other provision of this Agreement:
(i)    The obligations of the parties under this Agreement are at all times limited recourse obligations of such party payable solely from such party’s assets available at such time, and, following realization of such assets and application of the proceeds thereof (including, in the case of the Issuer, in accordance with the applicable priority of payments under the Indenture and, in the case of the Financing Subsidiary, in accordance with the applicable priority of payments under the Credit Agreement), all obligations of and any claims against such party hereunder or in connection herewith after such realization shall be extinguished and shall not thereafter revive.  
(ii)    No recourse shall be had against any officer, director, employee, shareholder, member, manager, beneficial owner, trustee, authorized person or incorporator of either party or its manager or their respective affiliates, successors or assigns for any amounts payable under this Agreement.
(iii)    The foregoing provisions of this Section 4.04(c) shall not:
		
	(A)
	prevent recourse to such party’s assets for the sums due or to become due under any security, instrument or agreement that is part of such assets;

		
	(B)
	constitute a waiver, release or discharge of any indebtedness or obligation evidenced by this Agreement until all such assets have been realized; or

		
	(C)
	limit the right of either party to name the other party as a party defendant in any Proceeding or in the exercise of any other remedy under this Agreement, so long as no judgment in the nature of a deficiency judgment or seeking personal liability shall be asked for or (if obtained) enforced against any Person referred to in Section 4.04(c)(ii).

(d)    This Section 4.04 shall survive the termination of this Agreement and the issuance of the Notes pursuant to the Indenture and the payment in full of all “Obligations” (as defined in the Credit Agreement) of the Financing Subsidiary under the Credit Agreement.
SECTION 4.05    Parties Benefited.
(a)    This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  Neither this Agreement nor any right or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) or delegated by either party without the prior written consent of the other party, except that (i) a party may make a transfer of all (but not less than all) of its rights and obligations under this 

Agreement pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity, and (ii) the Issuer may assign and transfer its rights hereunder to the Trustee under the Indenture.  Any purported transfer that is not in compliance with this provision will be void.
(b)    Except for the Trustee, the Lenders, the Administrative Agent and the Collateral Agent (each of whom is an express third party beneficiary hereof), no Person shall be a third party beneficiary of this Agreement.
SECTION 4.06    Severability.  If any term, provision, covenant or condition of this Agreement, or the application thereof to the Financing Subsidiary or the Issuer or any circumstance, is held to be unenforceable, invalid or illegal (in whole or in part) for any reason (in any relevant jurisdiction), the remaining terms, provisions, covenants and conditions of this Agreement, modified by the deletion of the unenforceable, invalid or illegal portion (in any relevant jurisdiction), will continue in full force and effect, and such unenforceability, invalidity, or illegality will not otherwise affect the enforceability, validity or legality of the remaining terms, provisions, covenants and conditions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the Financing Subsidiary and the Issuer as to the subject matter hereof and the deletion of such portion of this Agreement will not substantially impair the respective expectations of the Financing Subsidiary and the Issuer or the practical realization of the benefits hereof that would otherwise be conferred upon the Financing Subsidiary and the Issuer.  The Financing Subsidiary and the Issuer will endeavor in good faith to replace the prohibited or unenforceable provision with a valid provision, the economic effect of which comes as close as possible to that of the prohibited or unenforceable provision.
SECTION 4.07    Counterparts.  This Agreement (and each amendment, modification and waiver in respect of it) may be executed in any number of counterparts (including by facsimile transmission or other form of electronic transmission), each of which shall be an original, but all of which together shall constitute one and the same agreement.  Delivery of an executed counterpart signature page of this Agreement by facsimile transmission or by electronic transmission (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as a deed as of the date first written above.

	
		
	 
	BARINGS BDC SENIOR FUNDING I, LLC, 
as Financing Subsidiary

By:   /s/ Jonathan Bock                                        
   Name: Jonathan Bock
   Title: Managing Director

	 
	 

	 
	 

	
		
	 
	BARINGS BDC STATIC CLO LTD. 2019-I, 
as Issuer

By:   /s/ Yun Zheng                                          
   Name: Yun Zheng
   Title: Director

	 
	 

ACKNOWLEDGED:

	
	
	BARINGS BDC, INC., 
as Transferor

By:   /s/ Jonathan Bock                          
   Name: Jonathan Bock
   Title: CFO

ANNEX A

SCHEDULE OF TRANSFERRED ASSETS

[Attached]Exhibit

EXECUTION VERSION
Exhibit 10.4

COLLATERAL MANAGEMENT AGREEMENT
dated as of May 9, 2019
by and between
BARINGS BDC STATIC CLO LTD. 2019-I, 
as Issuer
and
BARINGS BDC, INC., 
as Collateral Manager

TABLE OF CONTENTS

Page

	
			
	 
	 
	Page

	Section 1.
	Definitions.
	2

	Section 2.
	General Duties and Authority of the Collateral Manager.
	4

	Section 3.
	Purchase and Sale Transactions; Brokerage.
	8

	Section 4.
	Additional Activities of the Collateral Manager.
	9

	Section 5.
	Conflicts of Interest.
	10

	Section 6.
	Records; Confidentiality.
	11

	Section 7.
	Obligations of Collateral Manager.
	11

	Section 8.
	Compensation.
	12

	Section 9.
	Benefit of the Agreement.
	14

	Section 10.
	Limits of Collateral Manager Responsibility and Liability.
	14

	Section 11.
	No Joint Venture.
	17

	Section 12.
	Term; Termination.
	17

	Section 13.
	Assignments.
	19

	Section 14.
	Removal for Cause.
	19

	Section 15.
	Obligations of Resigning or Removed Collateral Manager.
	22

	Section 16.
	Representations and Warranties.
	23

	Section 17.
	Limited Recourse; No Petition.
	26

	Section 18.
	Notices.
	26

	Section 19.
	Binding Nature of Agreement; Successors and Assigns.
	27

	Section 20.
	Entire Agreement; Amendment.
	27

	Section 21.
	Governing Law.
	27

	Section 22.
	Submission to Jurisdiction.
	27

	Section 23.
	Waiver of Jury Trial.
	28

	Section 24.
	Conflict with the Indenture.
	28

	Section 25.
	Subordination; Assignment of Agreement.
	28

	Section 26.
	Indulgences Not Waivers.
	28

	Section 27.
	Costs and Expenses.
	28

	Section 28.
	Third Party Beneficiaries.
	29

	Section 29.
	Titles Not to Affect Interpretation.
	30

	Section 30.
	Execution in Counterparts.
	30

	Section 31.
	Provisions Separable.
	30

	Section 32.
	Gender.
	30

i

COLLATERAL MANAGEMENT AGREEMENT
This Collateral Management Agreement (as amended from time to time, this “Agreement”), dated as of May 9, 2019, is entered into by and between BARINGS BDC STATIC CLO LTD. 2019-I, an exempted company incorporated with limited liability under the laws of the Cayman Islands, with its registered office located at the offices of MaplesFS Limited, PO Box 1093, Queensgate House, Grand Cayman, KY1-1102, Cayman Islands (the “Issuer”), and BARINGS BDC, INC., a Maryland corporation, located at 300 South Tryon Street, Suite 2500, Charlotte, NC 28202, U.S.A., as collateral manager (“Barings BDC” and the “Collateral Manager”). 
WITNESSETH:
WHEREAS, the Secured Notes and the Subordinated Notes (each as defined in the Indenture) will be issued pursuant to an Indenture (the “Indenture”) to be dated as of May 9, 2019 (the “Closing Date”), between the Issuer, Barings BDC Static CLO 2019-I, LLC, a limited liability company organized under the laws of the State of Delaware (the “Co-Issuer” and, together with the Issuer, the “Co-Issuers”) and State Street Bank and Trust Company, as trustee (the “Trustee”);
WHEREAS, the Issuer intends to pledge all Collateral Obligations and the other Assets, all as set forth in the Indenture, to the Trustee as security for the Secured Notes and certain other obligations of the Issuer under the Indenture;
WHEREAS, the Issuer desires to appoint Barings BDC as the Collateral Manager to provide the services described herein and Barings BDC desires to accept such appointment;
WHEREAS, the Indenture authorizes the Issuer to enter into this Agreement, pursuant to which the Collateral Manager agrees to perform, on behalf of the Issuer, certain investment management duties with respect to the administration and disposition of Assets in the manner and on the terms set forth herein and to perform such additional duties as are consistent with the terms of this Agreement and the Indenture as the Issuer may from time to time reasonably request; and
WHEREAS, the Collateral Manager has the capacity to provide the services required hereby and is prepared to perform such services upon the terms and conditions set forth herein. 
NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the parties hereto agree as follows:

Section 1.Definitions.
(a)    As used in this Agreement:
“17(d) Order” shall have the meaning set forth in Section 5(b).
“Actions” shall mean any claim, action, proceeding or investigation with respect to any pending or threatened litigation. 
“Advisers Act” shall mean the U.S. Investment Advisers Act of 1940, as amended. 
“Agreement” shall have the meaning set forth in the preamble.
“Barings BDC” shall have the meaning set forth in the preamble.
“Board of Directors” shall mean the board of directors of the Issuer.
“Cause” shall have the meaning set forth in Section 14.
“Change-in-Control” shall mean the entity or entities with the power to direct or cause the direction of the management or policies of the Collateral Manager as of the Closing Date, whether through the ownership of voting securities, by contract or otherwise, cease to have such power, unless there is no material change to the principal investment professionals which manage non-investment grade loans of the Collateral Manager and such investment professionals remain actively involved in the selection and management of the Issuer’s Assets.
“Co-Issuer” shall have the meaning set forth in the recitals hereto.
“Collateral Administrator” shall mean State Street Bank and Trust Company in its capacity as such.
“Collateral Manager” shall have the meaning set forth in the preamble.
“Collateral Manager Breaches” shall have the meaning set forth in Section 10(a).
“Collateral Manager Information” shall mean the information in the Final Offering Circular set forth under the headings “Base Offering Circular—Risk Factors—Relating to the Collateral Manager” (including the subsections thereunder) and “Term Sheet—Certain Transaction Parties—The Collateral Manager”. 
“Collateral Manager Parties” shall have the meaning set forth in Section 10(a).
“Collateral Manager Standard” shall have the meaning set forth in Section 2(a).
 “Cumulative Deferred Senior Servicing Fee” shall have the meaning set forth in Section 8(e).

2    

“Cumulative Deferred Subordinated Servicing Fee” shall have the meaning set forth in Section 8(e).  
“Current Deferred Senior Servicing Fee” shall have the meaning set forth in Section 8(e).
“Current Deferred Servicing Fees” shall have the meaning set forth in Section 8(e).
“Current Deferred Subordinated Servicing Fee” shall have the meaning set forth in Section 8(e).
“Expenses” shall mean losses, claims, damages, judgments, assessments, costs or other liabilities, together with reasonable fees and expenses (including reasonable fees and expenses of counsel).
“Final Offering Circular” shall mean the offering circular, dated May 7, 2019, with respect to the Notes.
“Indemnified Party” shall have the meaning set forth in Section 10(c). 
“Indemnifying Party” shall have the meaning set forth in Section 10(c). 
“Indenture” shall have the meaning set forth in the recitals hereto.
“Instrument of Acceptance” shall have the meaning set forth in Section 12(c).
“Issuer” shall have the meaning set forth in the preamble.
“MassMutual” shall mean Massachusetts Mutual Life Insurance Company.
“Organizational Instruments” shall mean the memorandum and articles of association or certificate of incorporation and bylaws (or the comparable documents for the applicable jurisdiction), in the case of a corporation, or the partnership agreement, in the case of a partnership, or the certificate of formation and limited liability company agreement (or the comparable documents for the applicable jurisdiction), in the case of a limited liability company.
“Private Placement” shall have the meaning set forth in Section 5(b).
“Proceedings” shall have the meaning set forth in Section 22.
“Qualifying Affiliate” shall mean an Affiliate of the Collateral Manager that: (i) employs principal investment professionals which manage non-investment grade loans and that are actively involved in the servicing of the Issuer’s Assets and (ii) has other comparable personnel and expertise to the Collateral Manager.
“Registered Funds” shall have the meaning set forth in Section 5(b). 
“Section 28(e)” shall have the meaning set forth in Section 3(b).

3    

“Supermajority” shall mean, with respect to any Class of Notes, the holders of at least 66-2/3% of the Aggregate Outstanding Amount of the Notes of such Class.
“Transaction” shall mean any action taken by the Collateral Manager on behalf of the Issuer with respect to the Assets, including, without limitation, (i) selecting the Collateral Obligations and Eligible Investments to be disposed of by the Issuer and (ii) monitoring the Collateral Obligations and providing the Issuer and the Trustee certain information with respect to the composition and characteristics of the Collateral Obligations, any disposition or tender of a Collateral Obligation and the reinvestment of the proceeds of any such disposition in Eligible Investments.
“Trustee” shall have the meaning set forth in the recitals hereto.
(b)    Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned thereto in the Indenture.  Unless the context requires otherwise, references to “Section” mean a section of this Agreement.

Section 2.    General Duties and Authority of the Collateral Manager.
(a)    Barings BDC is hereby appointed as Collateral Manager of the Issuer for the purpose of performing certain investment management functions including, without limitation, directing the sale of the Collateral Obligations and the investment, reinvestment and sale of Eligible Investments and performing certain administrative functions on behalf of the Issuer in accordance with the applicable provisions of the Indenture, and Barings BDC hereby accepts such appointment.  The Collateral Manager will perform its obligations hereunder and under the Indenture with reasonable care and in good faith (i) using a degree of skill and attention no less than that which the Collateral Manager exercises with respect to comparable assets that it manages for itself and others having similar investment objectives and restrictions, and (ii) in accordance with its existing practices and procedures and in a manner reasonably consistent with practices and procedures followed by reasonable and prudent institutional managers of assets of the nature and character of the Assets, except as expressly provided otherwise herein or pursuant to the terms of the Indenture that are applicable to the duties to be performed by the Collateral Manager on behalf of the Issuer (the standard of care set forth in clauses (i) and (ii) of this section 2(a), the “Collateral Manager Standard”).  In no event shall the Collateral Manager be (i) liable or responsible for the performance of the Collateral Obligations contained in the Assets, (ii) obligated to perform any other duties other than as specified in this Agreement or in the Indenture as to be performed by the Collateral Manager or (iii) obligated to pursue any particular investment strategy or opportunity with respect to Collateral Obligations.  To the extent consistent with the foregoing, the Collateral Manager may follow its customary standards, policies and procedures in performing its duties hereunder. 
(b)    Subject to Section 2(d) and Section 10 hereof and to the applicable provisions of the Indenture, the Collateral Manager will, and is hereby authorized to:
(i)    select the Collateral Obligations and Eligible Investments to be disposed of by the Issuer;

4    

(ii)    monitor the Collateral Obligations and provide the Issuer and the Trustee certain information with respect to the composition and characteristics of the Collateral Obligations, any disposition or tender of a Collateral Obligation and the reinvestment of the proceeds of any such disposition in Eligible Investments;
(iii)    select assets that are to be sold in accordance with Section 12.1 of the Indenture; and
(iv)    perform all other tasks and take all other actions that the Indenture, the Collateral Administration Agreement or this Agreement specify are to be taken by the Collateral Manager.
The Collateral Manager shall, and is hereby authorized to, perform its obligations hereunder and under the Indenture in a manner which is consistent with the terms hereof and of the Indenture.  In performing its obligations, the Collateral Manager shall take into consideration, among other things, the payment obligations of the Issuer on each Payment Date and (if applicable) the conditions or terms of any optional redemption of the Notes (based in part upon information furnished to it by (A) the Collateral Administrator with respect to amounts payable on the Notes, expenses of the Issuer, and amounts on deposit in various Accounts, and (B) the Trustee in its capacity as Calculation Agent with respect to the determination of the amount of interest payable on the Secured Notes), and the Priority of Payments, with one of the primary objectives being that expected distributions on the Assets will permit timely performance by the Issuer of such payment obligations.  The Collateral Manager will not be bound to comply with any amendment or supplement to the Indenture unless it has consented thereto.
(c)    Subject to the provisions concerning its general duties and obligations as set forth in paragraphs (a) and (b) above, the Collateral Manager shall provide, and is hereby authorized to provide, the following services to the Issuer:
(i)    The Collateral Manager shall perform, on behalf of the Issuer, those investment-related duties and functions (including, without limitation, the furnishing of Issuer Orders and Officer’s certificates) as are required under the Indenture with regard to acquisitions, sales or other dispositions of Collateral Obligations, Equity Securities, Eligible Investments and other securities permitted to be acquired or disposed of under, and subject to, the Indenture and shall comply with the requirements in the Indenture (and the Collateral Manager shall have no obligation to perform any other duties other than as specified herein or in the Indenture).  The Issuer hereby irrevocably (except as provided below) appoints the Collateral Manager as its true and lawful agent and attorney-in-fact (with full power of substitution) in its name, place and stead and at its expense, in connection with the performance of its duties provided for in this Agreement, including, without limitation, the following powers: (A) to give any necessary receipts or acquittance for amounts collected or received hereunder, (B) to make all necessary transfers of the Collateral Obligations, Equity Securities and Eligible Investments in connection with any sale or other disposition made pursuant hereto and the Indenture, (C) to execute (under hand, under seal or as a deed) and deliver on behalf of the Issuer all necessary or appropriate bills of sale, assignments, agreements and other instruments in connection with any such sale or other disposition and 

5    

(D) to execute (under hand, under seal or as a deed) and deliver on behalf of the Issuer any agreements, instruments, orders or other documents in connection with or pursuant to this Agreement and relating to any Collateral Obligation, Equity Security or Eligible Investment.  The Issuer hereby ratifies and confirms what such attorney-in-fact (or any substitute) shall lawfully do hereunder and pursuant hereto.  Nevertheless, if so requested by the Collateral Manager or by a purchaser of any Collateral Obligation or Eligible Investment, the Issuer shall ratify and confirm any such sale or other disposition by executing and delivering to the Collateral Manager or such purchaser all proper bills of sale, assignments, releases and other instruments as may reasonably be designated in any such request.  The appointment herein of the Collateral Manager as the Issuer’s agent and attorney-in-fact shall automatically cease and terminate upon any termination of this Agreement, the resignation of the Collateral Manager pursuant to Section 12 hereof or any removal of the Collateral Manager pursuant to Section 14 hereof.
(ii)    The Collateral Manager shall facilitate the delivery of Collateral Obligations by the Issuer.
(iii)    The Collateral Manager shall monitor the Assets on behalf of the Issuer on an ongoing basis and shall provide to the Issuer all reports, schedules and other data that the Issuer is required to prepare and deliver under the Indenture, in such forms and containing such information required thereby, in sufficient time for such required reports, schedules and data to be reviewed and delivered by or on behalf of the Issuer to the parties entitled thereto under the Indenture.
(iv)    The Collateral Manager, on behalf of the Issuer, shall be responsible for obtaining, to the extent reasonably practicable and to the extent such information, with respect to a Collateral Obligation held by the Issuer, is available to it, any information concerning whether a Collateral Obligation has become a Defaulted Obligation or Credit Risk Obligation.  If the Issuer requests an Applicable Rating Agency to provide an estimate in connection with the impact of particular Transactions (A) on the rating of any Secured Notes or (B) on the rating of any Collateral Obligation or Eligible Investment, the Collateral Manager, on behalf of the Issuer, shall, upon request of an Applicable Rating Agency, provide such Applicable Rating Agency with any information reasonably requested by and necessary for such Applicable Rating Agency to provide such estimate to the extent the Collateral Manager has or can, with reasonable efforts, obtain such information without undue burden, cost or expense.
(v)    The Collateral Manager may, subject to and in accordance with the Indenture, as agent of the Issuer, direct the Trustee to take any of the following actions with respect to a Collateral Obligation, Equity Security or Eligible Investment:
(A)    purchase or otherwise acquire such Eligible Investment;
(B)    retain such Collateral Obligation, Equity Security or Eligible Investment;

6    

(C)    sell or otherwise dispose of such Collateral Obligation, Equity Security or Eligible Investment in the open market or otherwise;
(D)    if applicable, tender such Collateral Obligation, Equity Security or Eligible Investment pursuant to an Offer;
(E)    if applicable, consent to or refuse to consent to any proposed amendment, modification or waiver pursuant to an Offer or in connection with any Collateral Obligation, Equity Security or Eligible Investment;
(F)    retain or dispose of any securities or other property (if other than cash) received pursuant to an Offer or in connection with any Collateral Obligation, Equity Security or Eligible Investment;
(G)    waive or elect not to exercise remedies in respect of any default with respect to any Defaulted Obligation;
(H)    vote to accelerate the maturity of any Defaulted Obligation;
(I)    participate in a committee or group formed by creditors of an issuer or a borrower under a Collateral Obligation, Equity Security or Eligible Investment; and
(J)    exercise any other rights or remedies with respect to such Collateral Obligation, Equity Security or Eligible Investment as provided in the Underlying Instruments of the obligor under such Assets or the other documents governing the terms of such Assets or take any other action consistent with the terms of the Indenture which the Collateral Manager reasonably and in good faith believes to be in the best interests of the Issuer and otherwise consistent with this Agreement.
(d)    In providing services hereunder, the Collateral Manager may employ third parties, including its Affiliates to perform any of its duties hereunder; provided, however, that (x) the Collateral Manager shall not be relieved of any of its duties hereunder as a result of such delegation to or employment of third parties and will be liable for acts and omissions of such third parties to the same extent (including the Collateral Manager Standard) as if such acts and omissions were acts or omissions of the Collateral Manager and (y) the Collateral Manager will be solely responsible for the fees and expenses payable to any such third party except to the extent such expenses are payable by the Issuer hereunder.  The Collateral Manager shall notify the Applicable Rating Agencies of any such delegation of its duties.
(e)    At any time after the Closing Date, the Issuer may not sell Collateral Obligations to the Collateral Manager or any non-special purpose bankruptcy remote affiliate thereof in an aggregate amount exceeding 20% of the Aggregate Principal Balance of the Collateral Obligations as of the Closing Date.

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Section 3.    Purchase and Sale Transactions; Brokerage.
(a)    The Collateral Manager, subject to and in accordance with the Indenture, hereby agrees that it shall cause any Transaction to be conducted on terms and conditions negotiated on an arm’s-length basis.  Except as expressly permitted under the Indenture, no Eligible Investment shall be purchased if such Asset may give rise to any obligation or liability on the Issuer’s part to take any action (other than in connection with the elevation of participations to assignments) or make any payment other than at the Issuer’s option.
(b)    The Collateral Manager will use all commercially reasonable efforts to obtain the best execution (but shall have no obligation to obtain the lowest price available) for all orders placed with respect to each Transaction, considering all relevant circumstances.  Subject to the objective of obtaining best execution, the Collateral Manager may, in the allocation of business, select brokers and/or dealers with whom to effect trades on behalf of the Issuer and open cash trading accounts with such brokers and dealers (provided that none of the Assets may be credited to, held in or subject to the lien of the broker or dealer with respect to any such account).  In addition, subject to the objective of obtaining best execution the Collateral Manager may, in the allocation of business, take into consideration research and other brokerage services furnished to the Collateral Manager or its Affiliates by brokers and dealers which are not Affiliates of the Collateral Manager; provided that the Collateral Manager in good faith believes that the compensation for such services rendered by such brokers and dealers complies with the requirements of Section 28(e) of the Securities Exchange Act of 1934, as amended (“Section 28(e)”), or in the case of principal or fixed income Transactions for which the “safe harbor” of Section 28(e) is not available, the amount of the spread charged is reasonable in relation to the value of the research and other brokerage services provided.  Such services may be used by the Collateral Manager in connection with its other advisory activities or investment operations.  The Collateral Manager may also consider any factors it deems relevant in its sole discretion, including but not limited to the size of the Transaction, difficulty of execution, the operation facilities and reliability of the firm involved, the firm’s promptness of execution, adequacy of the firm’s trading infrastructure, technology and capital, quality of service rendered to the Collateral Manager in other transactions, confidentiality considerations, the firm’s financial stability and reputation, special execution capability, access to underwritten offerings, secondary markets and other investment opportunities, and the firm’s ability to accommodate any special execution or order handling requirements that may surround a particular Transaction. The Collateral Manager need not solicit competitive bids.  The Collateral Manager may (but is not obligated to) aggregate sales and purchase orders placed with respect to the Assets with similar orders being made simultaneously for other accounts managed by the Collateral Manager or with accounts of the Affiliates of the Collateral Manager, if in the Collateral Manager’s reasonable judgment (as determined at the time of such aggregation) such aggregation shall result in an overall benefit to the Issuer over time, taking into consideration all circumstances considered relevant by the Collateral Manager.  When a Transaction occurs as part of any aggregate sales or purchase orders, the objective of the Collateral Manager (and any of its Affiliates involved in such Transactions) will be to allocate the executions among the accounts in an equitable manner over time.

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Section 4.    Additional Activities of the Collateral Manager.
Nothing herein shall prevent the Collateral Manager or any of its Affiliates from engaging, to the extent permitted by law and not prohibited hereby or by the Indenture, in other businesses, or from rendering services of any kind to the Issuer and its Affiliates, the Trustee, the Holders or any other Person or entity.  Without prejudice to the generality of the foregoing, directors, officers, employees and agents of the Collateral Manager, Affiliates of the Collateral Manager, and the Collateral Manager may, subject to the Indenture and applicable law, among other things:
(a)    serve as directors (whether supervisory or managing), officers, employees, partners, agents, nominees or signatories for the Issuer or any Affiliate thereof, or for any obligor or issuer in respect of any of the Collateral Obligations, Equity Securities or Eligible Investments or any Affiliate thereof, to the extent permitted by their respective Organizational Instruments and Underlying Instruments, as from time to time amended, or by any resolutions duly adopted by the Issuer, its Affiliates or any obligor or issuer in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities (or any Affiliate thereof) pursuant to their respective Organizational Instruments on an arm’s-length basis; provided that such activity will, in the reasonable belief of the Collateral Manager, have no material adverse effect on the Assets (including the enforceability thereof);
(b)    receive fees for services of whatever nature rendered to the obligor or issuer in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities or any Affiliate thereof; provided that such activity, in the reasonable belief of the Collateral Manager, shall have no material adverse effect on the Assets;
(c)    be retained to provide services unrelated to this Agreement to the Issuer or its Affiliates and be paid therefor, on an arm’s-length basis;
(d)    be a secured or unsecured creditor of, or hold a debt obligation of or equity interest in the Issuer or any Affiliate thereof or any obligor or issuer of any Collateral Obligation, Eligible Investment or Equity Security or any Affiliate thereof; provided that the Collateral Manager may not hold any such interest if the existence of such interest would require registration of the Issuer as an “investment company” under the Investment Company Act or violate the Indenture;
(e)    subject to Section 3(b) and Section 5 hereof, dispose of any Collateral Obligation or Eligible Investment to, or acquire any Collateral Obligation or Equity Security from, the Issuer while acting in the capacity of principal or agent;
i.underwrite, arrange, structure, originate, syndicate, act as a distributor of or make a market in any Collateral Obligation, Equity Security or Eligible Investment;
ii.serve as a member of any “creditors’ board,” “creditors’ committee” or similar creditor group with respect to any Collateral Obligation, Defaulted Obligation, Eligible Investment or Equity Security; or

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iii.act as collateral manager, portfolio manager, investment manager and/or investment adviser or sub-adviser in collateralized bond obligation vehicles, collateralized loan obligation vehicles and other similar investment vehicles. 

Section 5.    Conflicts of Interest.
(a)    The Issuer acknowledges that certain employees of the Collateral Manager and its Affiliates may possess information relating to particular obligors or issuers who have issued Collateral Obligations, Eligible Investments or Equity Securities, respectively, which information is not known to employees of the Collateral Manager who are responsible for monitoring the Assets, and performing the other obligations of the Collateral Manager under this Agreement.  The Collateral Manager will be required to act hereunder with respect to any information within its possession only if such information was known to those employees of the Collateral Manager responsible for performing the obligations of the Collateral Manager hereunder and only if such information is not deemed by the Collateral Manager to be confidential or non-public or subject to other limitations on its use.  The Collateral Manager is not otherwise obligated to share such information.
It is understood that the Collateral Manager and any of its Affiliates may engage in any other business and furnish investment management and advisory services to others, including Persons which may have investment policies similar to those followed by the Collateral Manager with respect to the Assets and which may own obligations of the same class, or of the same type, as the Collateral Obligations, Eligible Investments or Equity Securities or other securities of the issuers of Collateral Obligations, Eligible Investments or Equity Securities.  The Collateral Manager will be free, in its sole discretion, to make recommendations to others, or effect transactions on behalf of itself or for others, which may be the same as or different from those it recommends that the Trustee effect with respect to the Assets.
(b)    The external advisor to the Collateral Manager is an indirect, wholly-owned subsidiary of MassMutual.  The external advisor to the Collateral Manager and MassMutual are parties to an order of the United States Securities and Exchange Commission granting exemptions from the limitations of Section 17(d) of the Investment Company Act and Rule 17d-1 thereunder (the “17(d) Order”) to the extent necessary to permit MassMutual, several registered funds (the “Registered Funds”) and private investment funds for which MassMutual or the external advisor to the Collateral Manager or certain of their Affiliates serve as investment adviser to co-invest in securities acquired in private placements (“Private Placements”).  Under the terms of the 17(d) Order, if MassMutual and its Affiliates, including the external advisor to the Collateral Manager, are required to offer to the Registered Funds an opportunity to co-invest in certain Private Placements, such co-investments must meet the conditions of the 17(d) Order. The 17(d) Order also provides that if any party to the 17(d) Order proposes to sell all or dispose of any portion of a Private Placement that is also owned by a Registered Fund, such Registered Fund must be offered the opportunity to dispose of a proportionate amount of such Private Placement securities on identical terms and conditions.  A similar condition applies with respect to the exercise of warrants, conversion privileges and other rights in respect of Private Placements having equity features held by a Registered Fund.  A Registered Fund has five Business Days from the date of notification within which to make an election to participate in such disposition or exercise. 

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The Issuer agrees to comply fully with the 17(d) Order and to take all steps necessary or desirable to permit the external advisor to the Collateral Manager and the other parties to the 17(d) Order to comply fully with the 17(d) Order, including causing any successor collateral manager to manage the Assets in a manner that will enable the external advisor to the Collateral Manager and other parties subject to the 17(d) Order to comply fully therewith.

Section 6.    Records; Confidentiality.
The Collateral Manager shall maintain appropriate books of account and records relating to services performed hereunder, and such books of account and records shall be accessible for inspection by representatives of the Issuer, the Trustee and the Independent accountants selected by the Collateral Manager on behalf of the Issuer pursuant to Article 10 of the Indenture at any time during normal business hours and upon not less than three Business Days’ prior notice.  The Collateral Manager shall keep confidential any and all information obtained in connection with the services rendered hereunder and shall not disclose any such information to non-Affiliated third parties except (a) with the prior written consent of the Issuer, (b) such information as any Applicable Rating Agency shall reasonably request in connection with its rating of the Secured Notes, (c) in connection with establishing trading or investment accounts or otherwise in connection with effecting Transactions on behalf of the Issuer, (d) as required by (i) applicable law, regulation, court order, or a request by a governmental regulatory agency with jurisdiction over the Collateral Manager, (ii) the rules or regulations of any self-regulating organization, body or official having jurisdiction over the Collateral Manager or (iii) the rules and regulations of any stock exchange (including the Cayman Islands Stock Exchange) on which the Notes may be listed, (e) to its professional advisors (including, without limitation, legal, tax and accounting advisors) or (f) such information as shall have been publicly disclosed other than in violation of this Agreement or the provisions of the Indenture or shall have been obtained by the Collateral Manager on a non-confidential basis.  Notwithstanding the foregoing, it is agreed that (I) the Collateral Manager may disclose (A) that it is serving as collateral manager of the Issuer, (B) the nature, aggregate principal amount and overall performance of the Issuer’s assets, (C) the amount of earnings on the Issuer’s assets and (D) such other information about the Issuer, the Issuer’s assets and the Notes as is customarily disclosed by managers of collateralized loan obligations and (II) each party hereto (and each of their respective employees, representatives or other agents) may disclose to any and all Persons, without limitation of any kind, the U.S. federal income tax treatment and U.S. federal income tax structure of the transactions contemplated by the Indenture, this Agreement and the related documents and all materials of any kind (including opinions and other tax analyses) that are provided to them relating to such U.S. federal income tax treatment and U.S. income tax structure.  For purposes of this Section 6, the Holders shall not be considered “non-Affiliated third parties.”

Section 7.    Obligations of Collateral Manager.
In accordance with the Collateral Manager Standard, the Collateral Manager shall not intentionally take any action which the Collateral Manager knows would (a) materially adversely affect the status of either of the Issuer or the Co-Issuer for purposes of the laws of the Cayman Islands, United States federal or state law, or other law applicable to either of them, (b) not be permitted by either of the Issuer’s or the Co-Issuer’s Organizational Instruments, (c) violate any 

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law, rule or regulation of any governmental body or agency having jurisdiction over either of the Issuer or the Co-Issuer, including, without limitation, any law of the Cayman Islands or United States federal, state or other applicable securities law, in each case the violation of which would have a material adverse effect on either of them, (d) require registration of either of the Issuer or the Co-Issuer or the pool of Assets as an “investment company” under the Investment Company Act or (e) cause either of the Issuer or the Co-Issuer to violate any material provision of the Indenture, the Purchase Agreement or any other Transaction Document.  The Collateral Manager covenants that it shall comply with all laws and regulations applicable to it in connection with the performance of its duties under this Agreement and the Indenture to the extent failure to comply would have a material adverse effect on the Issuer or the Assets.  Notwithstanding anything in this Agreement, the Collateral Manager shall not take any discretionary action that, in the reasonable belief of the Collateral Manager, would reasonably be expected to cause an Event of Default under the Indenture.  If the Collateral Manager is ordered by the Board of Directors or the requisite Holders to take any action which would have any such consequences, the Collateral Manager shall promptly notify the Issuer, the Applicable Rating Agencies and the Trustee of the Collateral Manager’s judgment that such action would have one or more of the consequences set forth above and need not take such action unless the Board of Directors then requests the Collateral Manager to do so.  Notwithstanding any such request, the Collateral Manager need not take such action unless arrangements satisfactory to it are made to insure or indemnify the Collateral Manager, Affiliates of the Collateral Manager and members, managers, officers, agents or employees of the Collateral Manager or such Affiliates from any liability and expense it may incur as a result of such action.  Neither the Collateral Manager nor its Affiliates, members, managers, officers, agents or employees shall be liable to the Issuer or any other Person, except as provided in Section 10.  Notwithstanding anything contained in this Agreement to the contrary, any indemnification or insurance by the Issuer provided for in this Section or Section 10 shall be payable out of the Assets in accordance with the Priority of Payments.  The Collateral Manager covenants for the benefit of the Issuer that, so long as the Secured Notes are Outstanding, it will retain 100% of the Outstanding Subordinated Notes and shall not transfer such Subordinated Notes unless it receives, in connection with any proposed transfer, written advice of counsel of nationally recognized standing in the United States that is experienced in such matters to the effect that such proposed transfer will not require the Collateral Manager to register as an investment adviser under the Advisers Act.

Section 8.    Compensation.
(a)    The Issuer shall pay to the Collateral Manager, for services rendered and performance of its obligations under this Agreement, the Servicing Fee.  The Servicing Fee will be payable on each Payment Date to the extent of the funds available for such purpose in accordance with the Priority of Payments.
(b)    The Senior Servicing Fee is payable on each Payment Date only to the extent that sufficient Interest Proceeds or Principal Proceeds are available.  To the extent the Senior Servicing Fee is not paid on any Payment Date when due, the Senior Servicing Fee shall be deferred and shall be payable on subsequent Payment Dates in accordance with the Priority of Payments, without interest.  

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(c)    If amounts distributable on any Payment Date in accordance with the Priority of Payments are insufficient to pay the Subordinated Servicing Fee in full (other than as a result of a waiver or deferral of such Subordinated Servicing Fee by the Collateral Manager), then a portion of the Subordinated Servicing Fee equal to the shortfall will be deferred and will accrue interest at a rate of LIBOR for the applicable period plus 3.00% per annum and will be payable on subsequent Payment Dates on which funds are available therefor according to the Priority of Payments.
(d)    Notwithstanding any other provision hereof, the Collateral Manager hereby irrevocably waives all Servicing Fees provided for in this Agreement.
(e)    The Collateral Manager may elect to defer payment of any or all of its Senior Servicing Fee or Subordinated Servicing Fee that it would otherwise have received in accordance with the Priority of Payments on any Payment Date (respectively, the “Current Deferred Senior Servicing Fee” and the “Current Deferred Subordinated Servicing Fee” and, collectively, the “Current Deferred Servicing Fee”).  Any Current Deferred Servicing Fee for such Payment Date will be distributed as Interest Proceeds or, at the option of the Collateral Manager, as Principal Proceeds.  After such Payment Date, any Current Deferred Servicing Fee will be added to the cumulative amount of the Senior Servicing Fee or the Subordinated Servicing Fee, as applicable, which the Collateral Manager has elected to defer on prior Payment Dates and which has not been repaid (respectively, the “Cumulative Deferred Senior Servicing Fee” and the “Cumulative Deferred Subordinated Servicing Fee”). Any Cumulative Deferred Senior Servicing Fee or any Cumulative Deferred Subordinated Servicing Fee will be payable, without interest, on any subsequent Payment Date at the election of the Collateral Manager to the extent funds are available for such purpose in accordance with the Priority of Payments and, in the case of the Cumulative Deferred Senior Servicing Fee, subject to the additional requirement that the payment of such amount does not cause the non-payment or deferral of interest on any Class of Secured Notes.  Any election to defer the Servicing Fee may also take the place of written standing instructions to the Trustee; provided that such standing instructions may be rescinded by the Collateral Manager at any time except during the period between a Determination Date and Payment Date.
(f)    Except as otherwise set forth herein and in the Indenture, the Collateral Manager will continue to serve as Collateral Manager under this Agreement notwithstanding that the Collateral Manager will not have received amounts due it under this Agreement because sufficient funds were not then available hereunder to pay such amounts in accordance with the Priority of Payments.
(g)    If this Agreement is terminated or Barings BDC has resigned or is removed as the Collateral Manager, each of the Senior Servicing Fee and the Subordinated Servicing Fee will be prorated for any partial period elapsing from the prior Payment Date to the date of such termination, resignation or removal and shall be due and payable on the first Payment Date following the date of termination, resignation or removal, subject to the Priority of Payments and, for the avoidance of doubt, to the extent that, by operation of the Priority of Payments on such Payment Date, there are insufficient funds available to pay such prorated amount in full, the unpaid portion of such prorated amount shall be payable on each subsequent Payment Date, subject to the Priority of Payments, until paid in full.

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Section 9.    Benefit of the Agreement.
The Collateral Manager shall perform its obligations hereunder in accordance with the terms of this Agreement and the terms of the Indenture applicable to it.

Section 10.    Limits of Collateral Manager Responsibility and Liability.
(a)    The Collateral Manager assumes no responsibility under this Agreement other than to render in good faith the services called for hereunder and under the terms of the Indenture applicable to the Collateral Manager in accordance with the Collateral Manager Standard and, subject to such standard of liability described in the next succeeding sentence, shall not be liable for any action of the Issuer or the Trustee in following or declining to follow any direction of the Collateral Manager, including as set forth in Section 7 hereof.  The Collateral Manager, its Affiliates and their respective partners, members, stockholders, directors, managers, officers, employees or agents (collectively, the “Collateral Manager Parties”) shall not be liable to the Issuer, the Trustee, the Holders or any other Person for any acts or omissions by the Collateral Manager Parties under or in connection with this Agreement or the terms of the Indenture, or for any decrease in the value of the Assets, or for any act or omission of the Issuer, the Trustee, the Holders or any other Person in following or declining to follow any advice, recommendation or direction of the Collateral Manager except that the Collateral Manager shall be liable to such persons solely for any losses incurred as a result of (i) acts or omissions determined in a final, non-appealable judgment by a court of competent jurisdiction to constitute bad faith, fraud, willful misconduct or gross negligence in the performance of the duties of the Collateral Manager hereunder and under the terms of the Indenture applicable to the duties to be performed by the Collateral Manager on behalf of the Issuer and (ii) any untrue statement or alleged untrue statement of a material fact contained in the Collateral Manager Information or any omission or alleged omission to state therein a material fact, in each case, necessary to make the statements therein, in light of the circumstances in which they were made, not misleading in the Final Offering Circular as of its date or as of the Closing Date, including any amendment or supplement to such information approved by the Collateral Manager that is contained in any amendment or supplement to the Final Offering Circular. The matters described in clauses (i) and (ii) above are collectively referred to herein as “Collateral Manager Breaches.”  In addition, the Collateral Manager will not intentionally or knowingly take any action that would cause the Issuer to be treated as subject to U.S. income tax on a net basis.
(b)    It is understood that certain provisions of this Agreement may serve to limit the potential liability of the Collateral Manager.  The Issuer has had the opportunity to consult with the Collateral Manager as well as, if desired, its professional advisors and legal counsel as to the effect of these provisions.  It is further understood that certain applicable laws, including applicable federal or state securities laws, may impose liability or allow for legal remedies even where the Collateral Manager has acted in good faith and the rights under those laws may be non-waivable.  Nothing in this Agreement shall, in any way, constitute a waiver or limitation of any rights which may not be so limited or waived in accordance with applicable law.
(c)    Subject to Section 17 hereof, the Issuer shall indemnify and hold harmless (the Issuer in such case, the “Indemnifying Party”) the Collateral Manager Parties (each such party being, in such case, an “Indemnified Party”), from and against any and all Expenses incurred in investigating, 

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preparing, pursuing or defending any Actions, caused by, or arising out of or in connection with, and/or any action taken by, or any failure to act by, such Indemnified Party in connection with the issuance of the Notes, the transactions contemplated by the Final Offering Circular, the Indenture or this Agreement; provided that no such Indemnified Party shall be indemnified for any Expenses it incurs as a result of any acts or omissions by any such Indemnified Party constituting a Collateral Manager Breach.  Notwithstanding anything contained herein to the contrary, the obligations of the Issuer under this Section 10 shall be payable solely out of the Assets in accordance with the Priority of Payments.
(d)    An Indemnified Party shall (or, with respect to the members, managers, officers and employees and controlling persons of the Collateral Manager, the Collateral Manager shall cause such Indemnified Party to) promptly notify the Indemnifying Party if the Indemnified Party receives a complaint, claim, compulsory process or other notice of any loss, claim, damage or liability giving rise to a claim for indemnification under this Section 10, but failure so to notify the Indemnifying Party or to comply with paragraph (e) below shall not relieve such Indemnifying Party from its obligations under this Section 10 unless and to the extent that such Indemnifying Party did not otherwise learn of such action or proceeding and to the extent such failure results in the forfeiture by the Indemnifying Party of material rights and defenses or other material prejudice to the Indemnifying Party.
(e)    With respect to any claim made or threatened against an Indemnified Party, or compulsory process or request served upon such Indemnified Party for which such Indemnified Party is or may be entitled to indemnification under this Section 10, such Indemnified Party shall (or the Collateral Manager shall cause such Indemnified Party to):
(i)    at the Indemnifying Party’s expense, provide the Indemnifying Party such information and cooperation with respect to such claim as the Indemnifying Party may reasonably require, including, but not limited to, making appropriate personnel available to the Indemnifying Party at such reasonable times as the Indemnifying Party may request;
(ii)    at the Indemnifying Party’s expense, cooperate and take all such steps as the Indemnifying Party may reasonably request to preserve and protect any defense to such claim;
(iii)    in the event suit is brought with respect to such claim, upon reasonable prior notice, afford to the Indemnifying Party the right, which the Indemnifying Party may exercise in its sole discretion and at its expense, (A) to participate in the investigation, defense and settlement of such claim, and (B) to the extent that it shall wish, to assume the defense thereof, with counsel satisfactory to such Indemnified Party (who shall not, except with the consent of the Indemnified Party, be counsel to the Indemnifying Party), and, after notice from the Indemnifying Party to such Indemnified Party of its election so to assume the defense thereof, the Indemnifying Party shall not be liable to such Indemnified Party for any legal fees and expenses of other counsel or any other expenses, in each case subsequently incurred by such Indemnified Party, in connection with the defense thereof other than reasonable costs of investigation, except that, if such Indemnified Party reasonably determines that counsel selected by the Indemnifying Party has a conflict of interest, such 

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Indemnifying Party shall pay the reasonable fees and disbursements of one additional counsel selected by the Indemnified Party (in addition to any local counsel) separate from its own counsel for all Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; and
(iv)    neither incur any material expense to defend against nor make any admission with respect thereto (other than routine or incontestable admission or factual admissions the failure to make which could expose such Indemnified Party to (A) unindemnified liability, or (B) any liability in respect of which, in the good faith determination of such Indemnified Party made in a commercially reasonable manner, the Indemnifying Party is unlikely to have sufficient funds available to indemnify the Indemnified Party in full, taking into account the Priority of Payments), nor permit a default or consent to the entry of any judgment in respect thereof, in each case without the prior written consent of the Indemnifying Party; provided that the Indemnifying Party shall have advised such Indemnified Party that such Indemnified Party is entitled to be indemnified hereunder with respect to such claim.
(f)    No Indemnified Party shall, without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, settle, release or compromise any claim giving rise to a claim for indemnity hereunder, or permit a default or consent to the entry of any judgment in respect thereof; provided, however, that such Indemnified Party shall not be required to seek or obtain such consent if it determines in good faith and in a commercially reasonable manner that the Indemnifying Party is unlikely to have sufficient funds available to indemnify it in full, taking into account the Priority of Payments.
(g)    No Indemnifying Party shall, without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld, settle or compromise or consent to the entry of any judgment with respect to any claim giving rise to a claim for indemnity hereunder if such settlement includes a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.
(h)    If any Indemnified Party waives its right to indemnification hereunder, the Indemnifying Party shall not be entitled to appoint counsel to represent such Indemnified Party nor shall the Indemnifying Party reimburse such Indemnified Party for any costs of counsel to such Indemnified Party.
(i)    The compliance of the Collateral Manager’s actions with the provisions of the Indenture and this Agreement shall be determined on the date of action only, based upon the prices and characteristics of the Assets on the date of such action (or on the most recent date practicable, in the case of Collateral Obligations not acquired or disposed of on such date); the provisions of the Indenture and this Agreement shall not be deemed breached as a result of changes in value or status of an investment following acquisition.
(j)    The Assets shall be held by the Trustee appointed by the Issuer pursuant to the Indenture.  The Collateral Manager and its Affiliates shall at no time have custody or physical control of the Assets.  The Collateral Manager shall not be liable for any act or omission of the Trustee, the 

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Collateral Administrator, or any sub-custodian or prime broker appointed by the Issuer or the Trustee.  Any compensation to the Trustee or the Collateral Administrator for their services to the Issuer shall be the obligation of the Issuer and not the Collateral Manager. 

Section 11.    No Joint Venture.
The Issuer and the Collateral Manager are not partners or joint venturers with each other and nothing herein shall be construed to make them such partners or joint venturers or impose any liability as such on either of them.  The Collateral Manager shall be deemed, for all purposes herein, an independent contractor and shall, except as otherwise expressly provided herein or in the Indenture or authorized by the Issuer from time to time, have no authority to act for or represent the Issuer in any way or otherwise be deemed an agent of the Issuer.

Section 12.    Term; Termination.
(a)    This Agreement shall commence as of the date first set forth above and shall continue in force until the first of the following occurs: (i) the final liquidation of the Assets and the final distribution of the proceeds of such liquidation to the Holders, (ii) the payment in full of the Notes, and the satisfaction and discharge of the Indenture in accordance with its respective terms or (iii) the early termination of this Agreement in accordance with Section 12(b), (c) or (d) or Section 14 hereof (subject, in all cases, to Section 12(f)).
(b)    Subject only to clause (c) below, the Collateral Manager may resign, upon 90 days’ prior written notice (or such shorter notice as to which the Issuer agrees) to the Issuer, the Trustee and each Applicable Rating Agency; provided, however, that the Collateral Manager shall have the right to resign immediately upon the effectiveness of any material change in applicable law or regulation which renders the performance by the Collateral Manager of its duties hereunder or under the Indenture to be a violation of such law or regulation.  
(c)    Notwithstanding the provisions of clause (b) above, no resignation or removal of the Collateral Manager, for cause or without cause, shall be effective until the date as of which a successor Collateral Manager shall have been appointed and approved and has accepted all of the Collateral Manager’s duties and obligations pursuant to this Agreement in writing (an “Instrument of Acceptance”).
(d)    Upon any resignation of the Collateral Manager or any removal under Section 14 that is to take place while any of the Notes are Outstanding, the Issuer at the direction of a Majority of the Subordinated Notes (or in the case of removal for Cause of the Collateral Manager, if all of the Subordinated Notes consist of Collateral Manager Notes, a Majority of the most senior Class of Notes that is not comprised entirely of Collateral Manager Notes) will, with notice to each Applicable Rating Agency (with a copy to the outgoing Collateral Manager), appoint as a replacement Collateral Manager an institution that (i) has demonstrated an ability to professionally and competently perform duties similar to those imposed upon the Collateral Manager hereunder, (ii) is legally qualified and has the capacity to act as Collateral Manager hereunder, as successor to the Collateral Manager under this Agreement in the assumption of all of the responsibilities, duties and obligations of the Collateral Manager hereunder and under the applicable terms of the Indenture, 

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(iii) does not result in either of the Co-Issuers becoming, or require the pool of collateral to be registered as, an investment company under the Investment Company Act and (iv) does not cause the Issuer to be subject to U.S. federal income tax with respect to its net income.  No compensation payable to such a successor from payments on the Assets shall be greater than that permitted to the Collateral Manager under this Agreement without the prior written consent of a Majority of each Class of Notes, voting separately by Class.  Upon expiration of the applicable notice periods with respect to termination specified herein, all authority and power of the Collateral Manager hereunder, whether with respect to the Assets or otherwise, shall automatically and without action by any person or entity pass to and be vested in the successor institution upon the acceptance by such institution of its appointment hereunder.  The Issuer, the Trustee, the outgoing Collateral Manager and the successor collateral manager shall take such action consistent with this Agreement and the terms of the Indenture as shall be necessary to effect any such succession.  If no successor Collateral Manager is appointed within 90 days (or, in the event of a change in applicable law or regulation which renders the performance by the Collateral Manager of its duties under this Agreement or the Indenture to be a violation of any law or regulation, within 30 days) following the termination or resignation of the Collateral Manager, the Collateral Manager shall have the right to petition a court of competent jurisdiction to appoint a successor Collateral Manager, in either such case whose appointment shall become effective after such successor has accepted its appointment, notice of such appointment is provided to each Applicable Rating Agency and without the consent of any Holder.
(e)    If this Agreement is terminated pursuant to this Section 12, such termination shall be without any further liability or obligation of either party to the other, except as provided in clause (g) below.  
(f)    If Barings BDC resigns or is removed as Collateral Manager hereunder, within 30 days after the date on which a successor Collateral Manager (so long as such successor Collateral Manager is not an Affiliate of Barings BDC) has assumed the duties and obligations of the Collateral Manager hereunder, the Issuer will, and will cause the Co-Issuer to, change its name to remove any reference to “Barings.”
(g)    Collateral Manager Notes will be disregarded and deemed not to be Outstanding with respect to a vote to (i) terminate this Agreement, (ii) remove or replace the Collateral Manager, (iii) approve a successor collateral manager, if the Collateral Manager is being terminated for Cause pursuant to Section 14 or (iv) waive an event constituting 
 
Cause under Section 14 as a basis for termination of the Collateral Management Agreement or removal of the Collateral Manager.  For all other purposes, the voting rights of the Collateral Manager Notes will not be restricted.
(h)    Sections 6, 8(d), 10, 21, 22, 23 and 28, insofar as they relate to the period ending with the termination of this Agreement, and Sections 8(e), 12(h), 15, 17, 24 and 25 shall survive any termination of this Agreement pursuant to this Section 12 or Section 14.  

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Section 13.    Assignments.
(a)    The Collateral Manager shall not assign this Agreement, in whole or in part, to any Person other than a Qualifying Affiliate of the Collateral Manager that has comparable personnel and expertise to the Collateral Manager without (i) the prior written consent of a Majority of the Subordinated Notes and a Majority of the Controlling Class and (ii) notice to the Applicable Rating Agencies.  No consent or other action under either of the preceding sentences shall be required, however, if a Change-in-Control of the Collateral Manager occurs or the Collateral Manager enters into any consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all of its assets to, another entity and, at the time of such consolidation, merger, amalgamation or transfer the resulting, surviving or transferee entity assumes all the obligations of the Collateral Manager and generally and the other entity is solely a continuation of the Collateral Manager in another corporate or similar form; provided that (x) the Collateral Manager shall give written notice to the holders of the Subordinated Notes and the Controlling Class of the occurrence of a Change-in-Control or any such consolidation, merger, amalgamation or transfer and (y) the Issuer will remove the Collateral Manager if a Majority of the Controlling Class or a Majority of the Subordinated Notes so direct by written notice within 15 days of delivery of such notice.  Notice will be provided to the Applicable Rating Agencies of any assignment, in whole or in part, of this Agreement.  Any assignment consented to by the Issuer and such Holders shall bind the assignee hereunder in the same manner as the Collateral Manager is bound.  In addition, the assignee shall execute and deliver to the Issuer and the Trustee a counterpart of this Agreement naming such assignee as Collateral Manager.  Upon the execution and delivery of such counterpart by the assignee, the Collateral Manager shall be released from further obligations pursuant to this Agreement, except with respect to its obligations under Section 10 of this Agreement relating to any Collateral Manager Breach that occurred prior to such assignment and except with respect to its obligations under Section 6 (other than the first sentence thereof), Section 15, Section 17, Section 22 and Section 23.
(b)    This Agreement shall not be assigned by the Issuer without (i) the prior written consent of (A) the Collateral Manager and (B) a Majority of the Subordinated Notes, and (ii) notice having been provided to the Applicable Rating Agencies, except in the case of assignment by the Issuer (1) to an entity which is a successor to the Issuer permitted under the Indenture, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Issuer is bound thereunder or (2) to the Trustee as contemplated by the granting clause of the Indenture.  The Issuer may assign its rights, title and interest in (but not its obligations under) this Agreement to the Trustee pursuant to the Indenture; and the Collateral Manager by its signature below agrees to, and acknowledges, such assignment.  In the event of any assignment by the Issuer, the Issuer shall use reasonable efforts to cause such assignee to execute and deliver to the Collateral Manager such documents as the Collateral Manager shall consider reasonably necessary to effect fully such assignment.

Section 14.    Removal for Cause.
(a)    The Collateral Manager may be removed for Cause upon 30 days’ prior written notice to the Collateral Manager (with a copy to the Trustee which will be forwarded to the Holders of Notes) by the Issuer, at the direction of either (x) a Majority of the Subordinated Notes (or, if all of 

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the Subordinated Notes are Collateral Manager Notes, a Majority of the most senior Class of Notes that is not comprised entirely of Collateral Manager Notes) or (y) a Supermajority of the Controlling Class (or, if all of the Controlling Class consists of Collateral Manager Notes, a Supermajority of the most senior Class of Notes that is not comprised entirely of Collateral Manager Notes). Voting of any Collateral Manager Notes will be subject to Section 12(g).  No such removal shall be effective until the date as of which a successor Collateral Manager satisfying the criteria set forth in Section 12(d) above shall have been appointed and delivered an Instrument of Acceptance to the Issuer and the removed Collateral Manager. For purposes of determining “Cause” with respect to removal of the Collateral Manager by the Issuer, such term shall mean any one of the following events:
(i)    the Collateral Manager willfully and intentionally violated or willfully and intentionally breached any material provision of this Agreement or the Indenture applicable to it (not including a willful and intentional breach that results from a good faith dispute regarding reasonable alternative courses of action or interpretation of instructions);
(ii)    the Collateral Manager breaches any provision of this Agreement or any terms of the Indenture applicable to it (other than as covered by clause (i) and it being understood that failure to meet any Coverage Test is not a breach for purposes of this clause (ii)), which breach would reasonably be expected to have a material adverse effect on any Class of Notes and has not cured such breach (if capable of being cured) within 30 days of its becoming aware of, or its receipt of notice from the Issuer or the Trustee of, such breach (it being understood that the Trustee will not provide such notice unless it receives a written direction from the Holders of at least 25% of the Aggregate Outstanding Amount of the Controlling Class), unless, if such breach is remediable, the Collateral Manager has taken action that the Collateral Manager in good faith believes will remedy, and that does in fact remedy, such breach within 60 days of its becoming aware, or its receipt of notice from the Issuer or the Trustee, of such breach;
(iii)    the failure of any representation, warranty, certification or statement made or delivered by the Collateral Manager in or pursuant to this Agreement or the Indenture to be correct in any material respect when made which failure (A) could reasonably be expected to have a material adverse effect on any Class of Notes and (B) is not corrected by the Collateral Manager within 30 days after its becoming aware of, or its receipt of notice from the Issuer or the Trustee (it being understood that the Trustee will not provide such notice unless it receives a written direction from (x) the holders of at least 25% of the Aggregate Outstanding Amount of the Controlling Class (or, if all of the Controlling Class consists of Collateral Manager Notes, the highest Priority Class of Notes that is not comprised entirely of Collateral Manager Notes) or (y) the holders of at least 25% of the Aggregate Outstanding Amount of the Subordinated Notes (or, if all of the Subordinated Notes are Collateral Manager Notes, the lowest Priority Class of Notes that is not comprised entirely of Collateral Manager Notes)) of such failure, unless, if such failure is remediable, the Collateral Manager has taken action that the Collateral Manager in good faith believes will remedy, and that does in fact remedy, such failure within 60 days of its becoming aware, or its receipt of notice from the Issuer or the Trustee, of such failure; provided that the delivery of a certificate or other report which corrects any inaccuracy contained in a previous report or certification 

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shall be deemed to cure such inaccuracy as of the date of delivery of such updated report or certificate and any and all inaccuracies arising from continuation of such initial inaccurate report or certificate;
(iv)    the Collateral Manager is wound up or dissolved or there is appointed over it or a substantial part of its assets a receiver, administrator, administrative receiver, trustee or similar officer; or the Collateral Manager (A) ceases to be able to, or admits in writing its inability to, pay its debts as they become due and payable, or makes a general assignment for the benefit of, or enters into any composition or arrangement with, its creditors generally; (B) applies for or consents (by admission of material allegations of a petition or otherwise) to the appointment of a receiver, trustee, assignee, custodian, liquidator or sequestrator (or other similar official) of the Collateral Manager or of any substantial part of its properties or assets, or authorizes such an application or consent, or proceedings seeking such appointment are commenced without such authorization, consent or application against the Collateral Manager and continue undismissed for 60 days or any such appointment is ordered by a court or regulatory body having jurisdiction over the Collateral Manager; (C) authorizes or files a voluntary petition in bankruptcy, or applies for or consents (by admission of material allegations of a petition or otherwise) to the application of any bankruptcy, reorganization, arrangement, readjustment of debt, insolvency, dissolution, or similar law, or authorizes such application or consent, or proceedings to such end are instituted against the Collateral Manager without such authorization, application or consent and remain undismissed for 60 days or result in adjudication of bankruptcy or insolvency or the issuance of an order for relief; or (D) permits or suffers all or any substantial part of its properties or assets to be sequestered or attached by court order and the order (if contested in good faith) remains undismissed for 60 days;
(v)    the occurrence and continuation of an Event of Default (regardless of whether an acceleration has occurred) under the Indenture that is described in clause (a) of the definition of “Event of Default” and that directly results from any breach by the Collateral Manager of its duties hereunder or under the terms of the Indenture applicable to the duties to be performed by the Collateral Manager on behalf of the Issuer; 
(vi)    (A) the occurrence of an act by the Collateral Manager or any officer or director thereof that constitutes fraud or criminal activity in the performance of its obligations under this Agreement, the Indenture or the Collateral Administration Agreement or the Collateral Manager or any officer or director thereof being convicted of a criminal offense materially related to the primary business of the Collateral Manager, in each case pursuant to a final adjudication by a court of competent jurisdiction, or (B) any Responsible Officer of the Collateral Manager having responsibility for the performance by the Collateral Manager of its obligations hereunder is indicted for a criminal offense materially related to the primary business of the Collateral Manager and continues to have responsibility for the performance by the Collateral Manager hereunder for a period of 90 days after such indictment; or

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(vii)    it is determined by applicable regulatory authorities that the Collateral Manager is required to register as an investment adviser under the Advisers Act and such registration has not occurred within 60 days of receipt of such determination by the Collateral Manager.
(b)    If any of the events specified in clauses (a)(i) through (vi) of this Section 14 shall occur, the Collateral Manager shall promptly upon becoming aware of the occurrence of such event give written notice thereof to the Issuer, the Trustee and the Applicable Rating Agencies.  A Majority of each Class of Notes, voting separately by Class, may waive any event described in clause (i), (ii), (iii), (v) or (vi) above as a basis for termination of this Agreement and removal of the Collateral Manager under this Section 14; provided that voting of any Collateral Manager Notes will be subject to Section 12(g).
(c)    In the event of removal of the Collateral Manager pursuant to this Agreement by the Issuer, the Issuer shall have all of the rights and remedies available with respect thereto at law or equity, and, without limiting the foregoing, the Issuer may by notice in writing to the Collateral Manager as provided under this Agreement terminate all the rights and obligations of the Collateral Manager under this Agreement (except those that survive termination pursuant to Section 12(h)).  Upon the later to occur of (i) expiration of the applicable notice period with respect to termination specified in this Section 14 and (ii) acceptance of its appointment by the successor collateral manager, all authority and power of the Collateral Manager under this Agreement, whether with respect to the Assets or otherwise, shall automatically and without further action by any Person or entity pass to and be vested in the successor collateral manager.

Section 15.    Obligations of Resigning or Removed Collateral Manager.
(a)    From and after the effective date of the resignation or removal of the Collateral Manager in accordance with this Agreement, such collateral manager shall not be entitled to compensation for further services hereunder but shall be paid all compensation accrued to the effective date of resignation or removal and shall be entitled to receive any amounts owing under Sections 8 and 10 hereof.  On, or as soon as practicable after, the date any resignation or removal is effective, the Collateral Manager shall:
(i)    deliver to the Issuer or to such other Person as the Issuer shall instruct all property and documents of the Issuer or otherwise relating to the Assets then in the custody of the Collateral Manager; 
(ii)    deliver to the Trustee an accounting with respect to the books and records delivered to the Trustee or the successor Collateral Manager appointed pursuant to Section 12 hereof; and
(iii)    agree to cooperate in any proceedings, even after its resignation or removal, which arise in connection with this Agreement or the Indenture, assuming the Collateral Manager has received appropriate indemnity against the cost, expenses and liabilities that might be incurred in connection therewith.

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(b)    Notwithstanding such resignation or removal, the Collateral Manager shall remain liable for its obligations under Section 10 hereof and its acts or omissions giving rise thereto and for any expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including reasonable attorneys’ fees) in respect of or arising out of a breach of the representations and warranties made by the Collateral Manager in Section 16(b) hereof or from any failure of the Collateral Manager to comply with the provisions of this Section 15.

Section 16.    Representations and Warranties.
(a)    The Issuer hereby represents and warrants to the Collateral Manager as follows:
(i)    The Issuer has been duly incorporated and is validly existing under the laws of the Cayman Islands, has the full power and authority to own its assets and the securities proposed to be owned by it and included in the Assets and to transact the business in which it is presently engaged and is duly qualified under the laws of each jurisdiction where its ownership or lease of property, the conduct of its business or the performance of this Agreement, the Indenture and the Notes require such qualification, except for those jurisdictions in which the failure to be so qualified, authorized or licensed would not have a material adverse effect on the business, operations, assets or financial condition of the Issuer.
(ii)    The Issuer has full power and authority to execute, deliver and perform all of its obligations under this Agreement and to perform all of its obligations under the Indenture and the Notes and has taken all necessary action to authorize this Agreement and the execution and delivery of this Agreement and the performance of all obligations imposed upon it hereunder, and, as of the Closing Date, will have taken all necessary action to authorize the Indenture and the Notes and the execution, delivery and performance of this Agreement, the Indenture and the Notes and the performance of all obligations imposed upon it thereunder.  No consent of any other Person including, without limitation, shareholders and creditors of the Issuer, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing (other than any filings pursuant to the UCC required under the Indenture and necessary to perfect any security interest granted thereunder) or declaration with, any governmental authority is required by the Issuer in connection with the execution, delivery, performance, validity or enforceability of this Agreement, the Indenture or the Notes or the obligations imposed upon the Issuer hereunder and thereunder.  This Agreement has been, and each instrument and document to which the Issuer is a party required hereunder or under the Indenture or the Notes will be, executed and delivered by a duly authorized officer of the Issuer, and this Agreement constitutes, and each instrument or document required hereunder to which the Issuer is a party, when executed and delivered, will constitute, the valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms, subject, as to enforcement, (A) to the effect of bankruptcy, receivership, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Issuer and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).

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(iii)    The execution, delivery and performance of this Agreement and the documents and instruments required hereunder and under the Indenture will not violate any provision of any existing law or regulation binding on the Issuer, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Issuer, or the Organizational Instruments of, or any securities issued by, the Issuer or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Issuer is a party or by which the Issuer or any of its assets may be bound, the violation of which would have a material adverse effect on the business, operations, assets or financial condition of the Issuer, and will not result in or require the creation or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking (other than the lien of the Indenture).
(iv)    The Issuer is not in violation of its Organizational Instruments or in breach or violation of or in default under any contract or agreement to which it is a party or by which it or any of its property may be bound, or any applicable statute or any rule, regulation or order of any court, government agency or body having jurisdiction over the Issuer or its properties, the breach or violation of which or default under which would have a material adverse effect on the validity or enforceability of this Agreement or the provisions of the Indenture applicable to the Issuer, or the performance by the Issuer of its duties hereunder or thereunder.
(b)    The Collateral Manager hereby represents and warrants to the Issuer as follows:
(i)    The Collateral Manager is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland, has full power and authority to own its assets and to transact the business in which it is currently engaged, and is duly qualified to do business and is in good standing under the laws of each jurisdiction where the performance of this Agreement would require such qualification, except for those jurisdictions in which the failure to be so qualified, authorized or licensed would not have a material adverse effect on the ability of the Collateral Manager to perform its obligations under this Agreement and the provisions of the Indenture applicable to the Collateral Manager, or on the validity or enforceability of this Agreement and the provisions of the Indenture applicable to the Collateral Manager.
(ii)    The Collateral Manager has full power and authority to execute and deliver this Agreement and to perform all of its obligations hereunder and under the provisions of the Indenture applicable to the Collateral Manager, and has taken all necessary action to authorize this Agreement and the execution and delivery of this Agreement and the performance of all obligations required hereunder and under the terms of the Indenture applicable to the Collateral Manager.  No consent of any other Person, including, without limitation, members and creditors of the Collateral Manager, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the Collateral Manager or any Affiliate thereof in connection with this Agreement or the execution, delivery, performance, validity 

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or enforceability of this Agreement or the obligations imposed on the Collateral Manager hereunder or under the terms of the Indenture applicable to the Collateral Manager other than those which have been obtained or made.  This Agreement has been, and each instrument and document to which the Collateral Manager is a party required hereunder or under the terms of the Indenture will be, executed and delivered by a duly authorized officer of the Collateral Manager, and this Agreement constitutes, and each instrument and document to which the Collateral Manager is a party required hereunder or under the terms of the Indenture when executed and delivered by the Collateral Manager will constitute, the valid and binding obligation of the Collateral Manager enforceable against the Collateral Manager in accordance with its terms, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Collateral Manager and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).
(iii)    The execution, delivery and performance of this Agreement and the terms of the Indenture applicable to the Collateral Manager will not violate any provision of any existing law or regulation binding on the Collateral Manager, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Collateral Manager, or the Organizational Instruments of, or any securities issued by, the Collateral Manager or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Collateral Manager is a party or by which the Collateral Manager or any of its assets may be bound, the violation of which would have a material adverse effect on the business, operations, assets or financial condition of the Collateral Manager or which would reasonably be expected to adversely affect in a material manner its ability to perform its obligations hereunder and under the Indenture.
(iv)    There is no charge, investigation, action, suit or proceeding before or by any court pending or, to the best knowledge of the Collateral Manager, threatened, that, if determined adversely to the Collateral Manager, would have a material adverse effect upon the business, operations, assets or financial condition of the Collateral Manager, or upon the performance by the Collateral Manager of its duties under, or on the validity or enforceability of, this Agreement and the provisions of the Indenture applicable to the Collateral Manager.
(v)    The Collateral Manager is not in violation of its Organizational Instruments or in breach or violation of or in default under any contract or agreement to which it is a party or by which it or any of its property may be bound, or any applicable statute or any rule, regulation or order of any court, government agency or body having jurisdiction over the Collateral Manager or its properties, the breach or violation of which or default under which would have a material adverse effect on the validity or enforceability of this Agreement or the Indenture or the performance by the Collateral Manager of its duties hereunder or thereunder.

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(vi)    True and complete copies of the Collateral Manager’s Organizational Instruments have been delivered to the Issuer.
(vii)    The Collateral Manager Information, as of its date, and with respect to Collateral Manager Information contained in the Final Offering Circular, as of the Closing Date, does not and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(viii)    No event constituting Cause (or event that, with the giving of notice or the passage of time or both, would constitute Cause) with respect to it has occurred and is continuing, and no event constituting Cause (or event that, with the giving of notice or the passage of time or both, would constitute Cause) will occur as a result of its entering into this Agreement.

Section 17.    Limited Recourse; No Petition.
The Collateral Manager hereby agrees that it shall not institute against, or join any other Person in instituting against, the Issuer or the Co-Issuer any bankruptcy, reorganization, arrangement, insolvency, moratorium, winding up or liquidation proceedings or other proceedings under U.S. federal or state, Cayman Islands or other bankruptcy or similar laws until at least one year (or, if longer, the applicable preference period then in effect) plus one day after payment in full of all Notes issued under the Indenture.  The Collateral Manager hereby acknowledges and agrees that the Issuer’s obligations hereunder will be solely the corporate obligations of the Issuer, and that the Collateral Manager will not have any recourse to any of the directors, officers, employees, shareholders or Affiliates of the Issuer with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any Transactions contemplated hereby.  Notwithstanding any other provisions hereof or of any other Transaction Document, recourse in respect of any obligations of the Issuer to the Collateral Manager hereunder or thereunder will be limited to the Assets as applied in accordance with the Priority of Payments pursuant to the Indenture and, on the exhaustion of the Assets, all obligations of and claims against the Issuer arising from this Agreement or any Transaction Document or any Transactions contemplated hereby or thereby shall be extinguished and shall not revive.  This Section 17 shall survive the termination of this Agreement for any reason whatsoever.

Section 18.    Notices.
Unless expressly provided otherwise herein, all notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received when delivered against receipt or upon actual receipt of registered or certified mail, postage prepaid, return receipt requested, or, in the case of telecopier or email notice, when received in legible form, addressed as set forth in Section 14.3 of the Indenture. 

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Section 19.    Binding Nature of Agreement; Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns as provided herein.

Section 20.    Entire Agreement; Amendment.
This Agreement and the Indenture contain the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersede all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.  The express terms hereof and thereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.  No amendment to this Agreement may, without the prior written consent of a Majority of the Controlling Class and a Majority of the Subordinated Notes and notice to the Applicable Rating Agencies, (i) modify the definition of the term “Cause,” (ii) modify the Senior Servicing Fee or the Subordinated Servicing Fee, including the method for calculation of any component of the Senior Servicing Fee or the Subordinated Servicing Fee or any definition in this Agreement directly related to the Senior Servicing Fee or the Subordinated Servicing Fee, (iii) modify the Class or Classes or the percentage of the Aggregate Outstanding Amount of any Class that has the right to remove the Collateral Manager, consent to any assignment of this Agreement or nominate or approve any successor Collateral Manager or (iv) amend, modify or otherwise change provisions of this Agreement so that the Notes constituting the Controlling Class are not considered to constitute “ownership interests” under the Volcker Rule.  This Agreement may be amended for any other purpose upon notice to the Applicable Rating Agencies and 10 days’ prior written notice to the Controlling Class, but without the consent of the Holders of any Notes. The Issuer shall provide the Holders with notice of any amendment to this Agreement.

Section 21.    Governing Law.
This Agreement shall be construed in accordance with, and this Agreement and all matters arising out of or relating in any way whatsoever to this Agreement (whether in contract, tort or otherwise) shall be governed by, the law of the State of New York.

Section 22.    Submission to Jurisdiction.
With respect to any suit, action or proceedings relating to this Agreement or any matter between the parties arising under or in connection with this Agreement (“Proceedings”), to the fullest extent permitted by law each party irrevocably: (i) submits to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party.  Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

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The Collateral Manager irrevocably consents to the service of any and all process in any action or proceeding by the mailing or delivery of copies of such process to it at the office of the Collateral Manager in Charlotte, North Carolina.  The Issuer hereby irrevocably designates and appoints the Process Agent appointed under the Indenture as the agent of the Issuer to receive on its behalf service of all process brought against it with respect to any such action or proceeding in any such court in the State of New York, such service being hereby acknowledged by the Issuer to be effective and binding on it in every respect.  If for any reason such agent shall cease to be available to act as such, then the Issuer shall promptly designate a new agent in the City of New York.

Section 23.    Waiver of Jury Trial.
EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING.  Each party hereby (i) certifies that no representative, agent or attorney of the other has represented, expressly or otherwise, that the other would not, in the event of a Proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this paragraph.

Section 24.    Conflict with the Indenture.
In respect of any conflict between the terms of this Agreement and the Indenture, the terms of the Indenture shall control.

Section 25.    Subordination; Assignment of Agreement.
The Collateral Manager agrees that the payment of all amounts to which it is entitled pursuant to this Agreement shall be subordinated to the extent set forth in, and the Collateral Manager agrees to be bound by the provisions of, the Priority of Payments set forth in the Indenture as if the Collateral Manager were a party to the Indenture.  The Collateral Manager hereby consents to the assignment of this Agreement as provided in Section 15.1(a) of the Indenture.

Section 26.    Indulgences Not Waivers.
Neither the failure nor any delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.  No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

Section 27.    Costs and Expenses.
Except as otherwise agreed to by the parties hereto, the documented costs and expenses (including the fees and disbursements of counsel and accountants but excluding all overhead costs 

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and employees’ salaries) of the Collateral Manager and of the Issuer incurred in connection with the negotiation and preparation of and the execution of this Agreement and any amendment thereto, and all matters incidental thereto, will be borne by the Issuer.  The Issuer will reimburse the Collateral Manager for expenses including fees and out-of-pocket expenses reasonably incurred by the Collateral Manager in connection with the services provided hereunder including, without limitation, (a) legal advisers, consultants, rating agencies, accountants, brokers and other professionals retained by the Issuer or the Collateral Manager (on behalf of the Issuer), (b) asset pricing and asset rating services, compliance services and software, and accounting, programming and data entry services directly related to the management of the Assets, (c) all taxes, regulatory and governmental charges (not based on the income of the Collateral Manager), insurance premiums or expenses, (d) any and all costs and expenses incurred in connection with the acquisition, disposition of investments on behalf of the Issuer (whether or not actually consummated) and management thereof, including attorneys’ fees and disbursements, (e) any fees, expenses or other amounts payable to the Applicable Rating Agencies, (f) preparing reports to holders of the Notes, (g) reasonable travel expenses (including without limitation airfare, meals, lodging and other transportation) undertaken in connection with the performance by the Collateral Manager of its duties pursuant this Agreement and the Indenture, (h) any broker or brokers in consideration of brokerage services provided to the Collateral Manager in connection with the sale or purchase of any Collateral Obligation, Equity Security, Eligible Investment or other assets received in respect thereof, (i) bookkeeping, accounting or recordkeeping services obtained or maintained with respect to the Issuer (including those services rendered at the behest of the Collateral Manager), (j) software programs licensed from a third party and used by the Collateral Manager in connection with servicing the Assets, (k) fees and expenses incurred in obtaining the Market Value of Collateral Obligations (including without limitation fees payable to any nationally recognized pricing service), (l) audits incurred in connection with any consolidation review, (m) any extraordinary costs and expenses incurred by the Collateral Manager in the performance of its obligations under this Agreement and the Indenture, (n) costs and expenses in connection with any amendment or supplement (including any proposed amendment or supplement) to this Agreement, the Indenture and any other agreements executed in connection therewith, (o) any out-of-pocket expenses incurred by the Collateral Manager in connection with complying with the U.S. Risk Retention Rules, other than the purchase price paid for any Notes purchased in connection therewith or any costs and expenses incurred in connection with any financing arrangements entered into for the purpose of financing the purchase price of such Notes and (p) as otherwise agreed upon by the Issuer and the Collateral Manager.  In addition, the Issuer will pay or reimburse the costs and expenses (including fees and disbursements of counsel and accountants) of the Collateral Manager and the Issuer incurred in connection with or incidental to the entering into of this Agreement or any amendment thereto. To the extent any such costs and expenses are incurred for the benefit of the Issuer and other clients advised by the Collateral Manager, the Collateral Manager will make a good faith allocation of such costs and expenses among all such clients and the Issuer.

Section 28.    Third Party Beneficiaries.
The parties hereto agree that the Trustee on behalf of the Holders shall be an express third party beneficiary of this Agreement without any act or notice of acceptance hereof or reliance hereon, 

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and shall be entitled to rely upon and enforce such provisions of this Agreement to the same extent as if each of them were a party hereto.
Except as expressly provided in this Section 28, no person or entity (including, without limitation, any Holders) is or shall be deemed to be a third party beneficiary of this Agreement or of any of the duties and obligations of any party contained in this Agreement.

Section 29.    Titles Not to Affect Interpretation.
The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

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

Section 31.    Provisions Separable.
If any term, provision, covenant or condition of this Agreement, or the application thereof to any party hereto or any circumstance, is held to be unenforceable, invalid or illegal for any reason (in any relevant jurisdiction), the remaining terms, provisions, covenants and conditions of this Agreement, modified by the deletion of the unenforceable, invalid or illegal portion (in any relevant jurisdiction), will continue in full force and effect, and such unenforceability, invalidity, or illegality will not otherwise affect the enforceability, validity or legality of the remaining terms, provisions, covenants and conditions of this Agreement, so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the deletion of such portion of this Agreement, as the case may be, will not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.

Section 32.    Gender.
Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires.
[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Collateral Management Agreement (as a deed in the case of the Issuer) as of the date first written above.
Executed as a deed by:

BARINGS BDC STATIC CLO LTD. 2019-I
By:    /s/ Yun Zheng    
Name: Yun Zheng
Title: Director
In the presence of: /s/ Jade Whitelocke    
Witness:
Name:  Jade Whitelocke

BARINGS BDC, INC.
By:    /s/ Jonathan Bock    
Name:Jonathan Bock
Title: CFO

A-2
        
25676903.5.BUSINESS

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