Document:

Document

Execution Version

THIRD AMENDMENT
TO
CREDIT AGREEMENT
DATED AS OF AUGUST 16, 2019
AMONG
OASIS MIDSTREAM PARTNERS LP,  
AS PARENT,
OMP OPERATING LLC,  
AS BORROWER,
THE GUARANTORS,
WELLS FARGO BANK, N.A., 
AS ADMINISTRATIVE AGENT AND ISSUING BANK,
AND
THE LENDERS PARTY HERETO

THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Third Amendment”) dated as of August 16, 2019, is among OASIS MIDSTREAM PARTNERS LP, a Delaware limited partnership (the “Parent”); OMP OPERATING LLC, a Delaware limited liability company (the “Borrower”); the other Guarantors listed on the signature pages hereto; each of the Lenders party hereto; and WELLS FARGO BANK, N.A. (individually, “Wells Fargo Bank”), as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”) and as the issuing bank (in such capacity, the “Issuing Bank”).  
R E C I T A L S:
A.The Parent, the Borrower, the Administrative Agent, the Issuing Bank and the Lenders are parties to that certain Credit Agreement dated as of September 25, 2017 (as amended prior to the date hereof, the “Credit Agreement”), pursuant to which the Lenders have made certain extensions of credit available to and on behalf of the Borrower. 
B. The Parent, the Borrower, the other Guarantors, the Administrative Agent, the Issuing Bank and the Lenders party hereto desire to amend certain provisions of the Credit Agreement as set forth herein effective as of the Third Amendment Effective Date (as defined below), including providing for an increase in the aggregate amount of the Commitments to $575,000,000 on the Third Amendment Effective Date, subject to the terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1.Defined Terms.  Each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement, as amended by this Third Amendment.  Unless otherwise indicated, all section references in this Third Amendment refer to sections of the Credit Agreement.
Section 2. Amendments to Credit Agreement.  In reliance on the representations, warranties, covenants and agreements contained in this Third Amendment, and subject to the conditions precedent contained in Section 3 hereof, the Credit Agreement shall be amended effective as of the date hereof in the manner provided in this Section 2.
2.1 Amendments to Section 1.02 (Certain Defined Terms).  
(a) The following definitions contained in Section 1.02 of the Credit Agreement are hereby amended and restated as follows:
 “Agreement” means this Credit Agreement, as amended by the First Amendment, Second Amendment and Third Amendment and as the 
1

same may from time to time be further amended, modified, supplemented or restated.
“Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) modified from time to time pursuant to Section 2.06 and (b) modified from time to time pursuant to assignments by or to such Lender pursuant to Section 12.04(b).  The initial amount of each Lender’s Commitment is set forth on Annex I hereto, in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment or in the Additional Lender Certificate pursuant to which any Additional Lender shall have provided any additional Commitment, as applicable.  The aggregate amount of the Lenders’ Commitments on the Third Amendment Effective Date is $575,000,000.
“LIBO Rate” means, subject to the implementation of a Benchmark Replacement in accordance with Section 3.03(b), with respect to any Eurodollar Borrowing for any Interest Period, the rate as published by the ICE Benchmark Administration Limited, a United Kingdom company (or any successor to or substitute for such service, providing rate quotations comparable to such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate (rounded upwards, if necessary, to the next 1/100 of 1%) at which dollar deposits of an amount comparable to such Eurodollar Borrowing and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent (or any Affiliate of the Administrative Agent) in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.  Notwithstanding anything in this definition to the contrary, the “LIBO Rate” shall be deemed not to be less than zero at any time.  Unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 3.03(b), in the event that a Benchmark Replacement with respect to the LIBO Rate is implemented, then all references herein to the LIBO Rate shall be deemed references to such Benchmark Replacement.

2

(b) The following definitions are hereby added to Section 1.02 of the Credit Agreement where alphabetically appropriate to read as follows: 
“Benchmark Replacement” shall mean the sum of: (a) the alternate benchmark rate (which may include Term SOFR) that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the LIBO Rate for U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.
“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the LIBO Rate with an Unadjusted Benchmark Replacement for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBO Rate with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBO Rate with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time.
“Benchmark Replacement Conforming Changes” shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is 
3

reasonably necessary in connection with the administration of this Agreement).
“Benchmark Replacement Date” shall mean the earlier to occur of the following events with respect to the LIBO Rate:
(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of the LIBO Rate permanently or indefinitely ceases to provide the LIBO Rate; and
(b) in the case of clause (c) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the LIBO Rate:
(a) a public statement or publication of information by or on behalf of the administrator of the LIBO Rate announcing that such administrator has ceased or will cease to provide the LIBO Rate, permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBO Rate;
(b) a public statement or publication of information by the regulatory supervisor for the administrator of the LIBO Rate, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for the LIBO Rate, a resolution authority with jurisdiction over the administrator for the LIBO Rate or a court or an entity with similar insolvency or resolution authority over the administrator for the LIBO Rate, which states that the administrator of the LIBO Rate has ceased or will cease to provide the LIBO Rate permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBO Rate; or
(c) a public statement or publication of information by the regulatory supervisor for the administrator of the LIBO Rate announcing that the LIBO Rate is no longer representative.
“Benchmark Transition Start Date” shall mean (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or 
4

publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified by the Administrative Agent or the Required Lenders, as applicable, by notice to the Borrower, the Administrative Agent (in the case of such notice by the Required Lenders) and the Lenders.
“Benchmark Unavailability Period” shall mean, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the LIBO Rate and solely to the extent that the LIBO Rate has not been replaced with a Benchmark Replacement, the period (a) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the LIBO Rate for all purposes hereunder in accordance with Section 3.03(b) and (b) ending at the time that a Benchmark Replacement has replaced the LIBO Rate for all purposes hereunder pursuant to Section 3.03(b).
“Early Opt-in Election” shall mean the occurrence of:
(a) (i) a determination by the Administrative Agent or (ii) a notification by the Required Lenders to the Administrative Agent (with a copy to the Borrower) that the Required Lenders have determined that U.S. dollar-denominated syndicated credit facilities being executed at such time, or that include language similar to that contained in Section 3.03(b) are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace the LIBO Rate, and
(b) (i) the election by the Administrative Agent or (ii) the election by the Required Lenders to declare that an Early Opt-in Election has occurred and the provision, as applicable, by the Administrative Agent of written notice of such election to the Borrower and the Lenders or by the Required Lenders of written notice of such election to the Administrative Agent.
“Panther” means Panther DevCo LLC, a Delaware limited liability company.
“Relevant Governmental Body” shall mean the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“SOFR” with respect to any day shall mean the secured overnight financing rate published for such day by the Federal Reserve Bank of New 
5

York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.
“Term SOFR” shall mean the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Third Amendment” means that certain Third Amendment to Credit Agreement, dated as of August 16, 2019 among the Parent, the Borrower, the other Guarantors, the Administrative Agent, the Issuing Bank and the Lenders party thereto.
“Third Amendment Effective Date” means August 16, 2019.
“Unadjusted Benchmark Replacement” shall mean the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
(c) The definition of “Change in Control” is hereby amended by replacing the reference to “Section 9.12” in clause (d) thereof with “Section 9.12(d)”. 
2.2 Amendment to Article I.  Article I of the Credit Agreement is hereby amended by adding the new Section 1.06  and Section 1.07 at the end thereof to read as follows:
Section 1.06.  Rates.  The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBO Rate” or with respect to any rate that is an alternative or replacement for or successor to any such rate (including, without limitation, any Benchmark Replacement) or the effect of any of the foregoing, or of any Benchmark Replacement Conforming Changes.  
Section 1.07 Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.
2.3 Amendment to Section 2.06(c)(ii)(A).  Section 2.06(c)(ii)(A) of the Credit Agreement is hereby amended and restated to read as follows: 
(A) such increase shall not be less than $25,000,000 unless the Administrative Agent otherwise consents, and no such increase shall be permitted if after giving effect thereto the aggregate Commitments would exceed $775,000,000;

6

2.4 Amendment to Section 3.03  Section 3.03 of the Credit Agreement is amended and restated to read as follows:
Section 3.03.  Alternative Rate of Interest. 
(a) Subject to Section 3.03(b) below, if prior to the commencement of any Interest Period for a Eurodollar Borrowing: 
(i) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate for such Interest Period; or 
(ii) the Administrative Agent is advised by the Majority Lenders that the Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.
(b) Effect of Benchmark Transition Event.  
(i) Benchmark Replacement.  Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace the LIBO Rate with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. on the fifth (5th) Business Day after the Administrative Agent has posted such proposed amendment to all Lenders and the Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Required Lenders. Any such amendment with respect to an Early Opt-in Election will become effective on the date that Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders accept such amendment. No replacement of the LIBO Rate with a Benchmark Replacement 
7

pursuant to this Section 3.03(b) will occur prior to the applicable Benchmark Transition Start Date.
(ii) Benchmark Replacement Conforming Changes.  In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement.
(iii) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (A) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (B) the implementation of any Benchmark Replacement, (C) the effectiveness of any Benchmark Replacement Conforming Changes and (D) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or Lenders pursuant to this Section 3.03(b), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 3.03(b).
(iv) Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a Eurodollar Loan of, conversion to or continuation of Eurodollar Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to ABR Loans. During any Benchmark Unavailability Period, the component of the Alternate Base Rate based upon the LIBO Rate will not be used in any determination of the Alternate Base Rate.
2.5 Amendment to Section 9.11.  Section 9.11 of the Credit Agreement is hereby amended and restated to read as follows:
Section 9.11.  Mergers, Etc.  The Parent and the Borrower will not, and will not permit any of the Restricted Subsidiaries to, merge into or with or consolidate with any other Person, or sell, lease or otherwise dispose of (whether in one 
8

transaction or in a series of transactions and including by division of such Person) all or substantially all of its Property to any other Person, except that (a)(i) any Restricted Subsidiary may merge with any other Wholly-Owned Subsidiary so long as the surviving Person is a Restricted Subsidiary and (ii) any Restricted Subsidiary may divide so long as each Person created as a result of such division becomes (x) a Restricted Subsidiary and (y) a Guarantor in accordance with Section 8.14 if such Wholly-Owned Subsidiary was a Guarantor at the time of such division and (b) the Borrower may merge with any Wholly-Owned Subsidiary so long as the Borrower is the survivor.  In furtherance of and without limiting the forgoing, in no event shall the Borrower divide itself pursuant to Section 18-217 of the Delaware Limited Liability Company Act (or any corresponding provision of any successor statute thereof).  
2.6 Amendment to Section 12.02(b).  Section 12.02(b) of the Credit Agreement is hereby amended by deleting “or” before clause (vii) thereof and inserting the following immediately after clause (vii):
or (viii) the Administrative Agent and the Borrower may enter into amendments or modifications to this Agreement or any of the other Loan Documents or to enter into additional Loan Documents as the Administrative Agent reasonably deems appropriate in order to implement any Benchmark Replacement or any Benchmark Replacement Conforming Changes or otherwise effectuate the terms of Section 3.03(b), in each case in accordance with the terms of Section 3.03(b).  
2.7 Amendment to Article XII.  Article XII of the Credit Agreement is hereby amended by adding a new Section 12.19 at the end thereof to read as follows:
Section 12.19 Acknowledgement Regarding Any Supported QFCs.  To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Swap Agreement or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
(a) In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and 
9

the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
(b) As used in this Section 12.19, the following terms have the following meanings:
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Covered Entity” means any of the following:  (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
2.8 Replacement of Annex I.  Annex I to the Credit Agreement is hereby replaced in its entirety with Annex I attached hereto and Annex I attached hereto shall be deemed to be attached as Annex I to the Credit Agreement.  After giving effect to this Third Amendment 
10

and any Borrowings made on the Third Amendment Effective Date, (a) each Lender who holds Loans in an aggregate amount less than its Applicable Percentage (after giving effect to this Third Amendment) of all Loans shall advance new Loans which shall be disbursed to the Administrative Agent and used to repay Loans outstanding to each Lender who holds Loans in an aggregate amount greater than its Applicable Percentage of all Loans, (b) each Lender’s participation in each Letter of Credit, if any, and each Swingline Loan, if any, shall be automatically adjusted to equal its Applicable Percentage (after giving effect to this Third Amendment), (c) such other adjustments shall be made as the Administrative Agent shall specify so that the Revolving Credit Exposure applicable to each Lender equals its Applicable Percentage (after giving effect to this Third Amendment) of the aggregate Revolving Credit Exposures of all Lenders and (d) upon request by each applicable Lender, the Borrower shall be required to make any break funding payments owing to such Lender that are required under Section 5.02 of the Credit Agreement as a result of the Loans and adjustments described in this Section 2.4.  For the avoidance of doubt, the increase in the aggregate Commitments of the Lenders effected by this Third Amendment shall not be deemed to be an exercise by the Borrower of Section 2.06(c) of the Credit Agreement, and immediately after giving effect to this Third Amendment, the Borrower may optionally increase the Commitments under Section 2.06(c) of the Credit Agreement during the remainder of the Availability Period (subject to the conditions set forth in Section 2.06(c)(ii) of the Credit Agreement) up to the aggregate amounts set forth in Section 2.06(c)(ii)(A) of the Credit Agreement. 
Section 3. Conditions Precedent.  This Third Amendment shall become effective as of the date when each of the following conditions is satisfied (or waived in accordance with Section 12.02 of the Credit Agreement) (the “Third Amendment Effective Date”):
3.1 Executed Counterparts of Third Amendment.  The Administrative Agent shall have received from the Borrower, each Guarantor, each DevCo and the Lenders executed counterparts (in such number as may be requested by the Administrative Agent) of this Third Amendment signed on behalf of such Person.
3.2 Assumption Agreement. The Administrative Agent shall have received from Panther an executed counterpart (in such number as may be requested by the Administrative Agent) of an Assumption Agreement (in the form included in Annex I to the Guaranty and Security Agreement) from Panther in favor of the Administrative Agent.
3.3 Supplement to the Guaranty and Security Agreement.  The Administrative Agent shall have received from Borrower an executed counterpart (in such number as may be requested by the Administrative Agent) of a supplement to the Guaranty and Security Agreement (in the form included in Annex II to the Guaranty and Security Agreement, as revised, such revisions being agreed by and among the Administrative Agent, the Borrower, and each Guarantor) from Borrower in favor of the Administrative Agent.
3.4 Amendment and Supplement to Bobcat Mortgage.  The Administrative Agent shall have received from Bobcat executed counterparts of an amendment and supplement to the existing Bobcat Mortgage (in the form agreed to by and among the Administrative Agent and Bobcat).

11

3.5 Amendment to Beartooth and Bighorn Mortgages.  The Administrative Agent shall have received from each of Beartooth and Bighorn executed counterparts of an amendment to the existing Beartooth and Bighorn Mortgages (in the form agreed to by and among the Administrative Agent and each of Beartooth and Bighorn).
3.6 Notes. The Administrative Agent shall have received duly executed Notes payable to each Lender that has requested a Note on or prior to the Third Amendment Effective Date in a principal amount equal to its Commitment (as amended hereby) dated as of the Third Amendment Effective Date.
3.7 Secretary’s Certificates and Resolutions.  The Administrative Agent shall have received a certificate of a Responsible Officer of the Parent, the Borrower, each Guarantor and each DevCo setting forth (a) resolutions of its board of directors or other appropriate governing body with respect to the authorization of the Parent, the Borrower, such Guarantor or such DevCo to execute and deliver this Third Amendment and the related Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (a) the officers of the Parent, the Borrower, such Guarantor or such DevCo  who are authorized to sign the Loan Documents to which the Parent, the Borrower, such Guarantor or such DevCo is a party and  who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Third Amendment and the Credit Agreement and the transactions contemplated hereby and thereby, (a) specimen signatures of such authorized officers, and (a) the articles or certificate of incorporation and by-laws or other applicable organizational documents of the Parent, the Borrower, such Guarantor and such DevCo, certified as being true and complete.  The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary.
3.8 Good Standings.  The Administrative Agent shall have received certificates of the appropriate state agencies with respect to the existence, qualification and good standing of the Parent, the General Partner, the Borrower, each Guarantor and each DevCo.
3.9 KYC and Beneficial Ownership. 
(a) Upon the reasonable request of any Lender prior to the Third Amendment Effective Date, the Borrower shall have provided to such Lender, and such Lender shall be reasonably satisfied with, the documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the USA PATRIOT Act.  
(b) To extent that the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, the Borrower shall deliver, to each Lender that so requests, a Beneficial Ownership Certification in relation to the Borrower.

12

3.10 Opinion of Counsel. The Administrative Agent shall have received an opinion of DLA Piper LLP (US), special counsel to the Borrower, in form and of substance reasonably acceptable to the Administrative Agent.
3.11 Fees.  The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Third Amendment Effective Date including, without limitation, the any fees described in that certain fee letter, dated as of the date hereof, between the Borrower and the Administrative Agent.
3.12 No Default.  No Default shall have occurred and be continuing as of the date hereof prior to and after giving effect to the terms of this Third Amendment.
3.13 Further Assurances.  The Administrative Agent shall have received such other documents as the Administrative Agent or its special counsel may reasonably require.
The Administrative Agent is hereby authorized and directed to declare this Third Amendment to be effective when it has received documents confirming or certifying, to the satisfaction of the Administrative Agent, compliance with the conditions set forth in this Section 3 or the waiver of such conditions as permitted hereby. Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.
Section 4. Miscellaneous.
4.1 Confirmation and Effect.  The provisions of the Credit Agreement, as amended by this Third Amendment, shall remain in full force and effect following the effectiveness of this Third Amendment.  Each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or any other word or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference in any other Loan Document to the Credit Agreement or any word or words of similar import shall be and mean a reference to the Credit Agreement as amended hereby.
4.2 No Waiver.  Neither the execution by the Administrative Agent or the Lenders of this Third Amendment, nor any other act or omission by the Administrative Agent or the Lenders or their officers in connection herewith, shall be deemed a waiver by the Administrative Agent or the Lenders of any Defaults or Events of Default which may exist, which may have occurred prior to the date of the effectiveness of the Third Amendment or which may occur in the future under the Credit Agreement and/or the other Loan Documents.  Similarly, nothing contained in this Third Amendment shall directly or indirectly in any way whatsoever either: (a) impair, prejudice or otherwise adversely affect the Administrative Agent’s or the Lenders’ right at any time to exercise any right, privilege or remedy in connection with the Loan Documents with respect to any Default or Event of Default, (b) except as expressly provided herein, amend or alter any provision of the Credit Agreement, the other Loan Documents, or any other contract or instrument, or (c) constitute any course of dealing or other basis for altering any obligation of the Borrower or any right, privilege or remedy of the Administrative Agent or the Lenders under the Credit Agreement, the other Loan Documents, or any other contract or instrument.  

13

4.3 Ratification and Affirmation; Representations and Warranties.  Each Credit Party hereby (a) acknowledges the terms of this Third Amendment; (b) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect as expressly amended hereby and (c) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Third Amendment:  (i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct in all material respects (or, if already qualified by materiality, Material Adverse Effect or a similar qualification, true and correct in all respects), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct in all material respects (or, if already qualified by materiality, Material Adverse Effect or a similar qualification, true and correct in all respects) as of such specified earlier date, (ii) no Default or Event of Default has occurred and is continuing and (iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.
4.4 Counterparts.  This Third Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of this Third Amendment by facsimile or email transmission shall be effective as delivery of a manually executed counterpart hereof.
4.5 No Oral Agreement.  This Third Amendment, the Credit Agreement and the other Loan Documents executed in connection herewith and therewith represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or unwritten oral agreements of the parties.  There are no subsequent oral agreements between the parties.
4.6 GOVERNING LAW.  THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
4.7 Payment of Expenses.  In accordance with Section 12.03 of the Credit Agreement, the Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and reasonable expenses incurred in connection with this Third Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.
4.8 Severability.  Any provision of this Third Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

14

4.9 Successors and Assigns.  This Third Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
4.10 Loan Document.  This Third Amendment shall constitute a “Loan Document” under and as defined in Section 1.02 of the Credit Agreement.
4.11 No Novation.  The parties hereto agree that this Third Amendment does not in any way constitute a novation of the existing Credit Agreement, but is an amendment of the Credit Agreement.

 [Signatures Begin Next Page]

15

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed as of the date first written above.
BORROWER: OMP OPERATING LLC

By: /s/ Richard Robuck 
Name: Richard Robuck
Title:   Senior Vice President and Chief 
            Financial Officer

GUARANTORS: OASIS MIDSTREAM PARTNERS LP

By: /s/ Richard Robuck 
Name: Richard Robuck
Title:   Senior Vice President and Chief 
            Financial Officer

BIGHORN DEVCO LLC

By: /s/ Richard Robuck 
Name: Richard Robuck
Title:   Senior Vice President and Chief 
            Financial Officer

PANTHER DEVCO LLC

By: /s/ Richard Robuck 
Name: Richard Robuck
Title:   Senior Vice President and Chief 
            Financial Officer

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

ADMINISTRATIVE AGENT,
ISSUING BANK AND LENDER: WELLS FARGO BANK, N.A.,
as Administrative Agent, Issuing Bank, Swingline Lender and as a Lender 

By: /s/ Andrew Ostrov 
Name: Andrew Ostrov
Title: Director

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

LENDERS: CITIBANK, N.A., as a Lender

By: /s/ Peter Kardos 
Name: Peter Kardos
Title: Vice President

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

JPMORGAN CHASE BANK, N.A., 
as a Lender and a Swingline Lender

By: /s/ Robert Mendoza 
Name: Robert Mendoza
Title: Authorized Officer

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

LENDERS: ROYAL BANK OF CANADA, as a Lender

By: /s/ Jay T. Sartain 
Name: Jay T. Sartain
Title: Authorized Signatory

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH, as a Lender 

By: /s/ Trudy Nelson 
Name: Trudy Nelson
Title: Authorized Signatory

By: /s/ Scott W. Danvers 
Name: Scott W. Danvers
Title: Authorized Signatory

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender 

By: /s/ Monica Pantea 
Name: Monica Pantea
Title: Vice President

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

BBVA USA, as a Lender

By: /s/ Mark H. Wolf 
Name: Mark H. Wolf
Title: Senior Vice President

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

CITIZENS BANK, N.A., as a Lender 

By: /s/ Rick Hawthorne 
Name: Rick Hawthorne
Title: Senior Vice President

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

ING CAPITAL LLC, as a Lender 

By: /s/ Scott Lamoreaux 
Name: Scott Lamoreaux
Title: Director

By: /s/ Michael Price 
Name: Michael Price
Title: Managing Director

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

BOKF, NA dba BANK OF TEXAS,
as a Lender

By: /s/ Mari Salazar 
Name: Mari Salazar
Title: Senior Vice President

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

BRANCH BANK & TRUST, as a Lender 

By: /s/ Ryan K. Michael 
Name: Ryan K. Michael
Title: Senior Vice President

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

COMERICA BANK, as a Lender 

By: /s/ Britney P. Geidel 
Name: Britney P. Geidel
Title: Portfolio Manager, AVP

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender

By: /s/ Nupur Kumar 
Name: Nupur Kumar
Title: Authorized Signatory

By: /s/ Christopher Zybrick 
Name: Christopher Zybrick
Title: Authorized Signatory

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

GOLDMAN SACHS BANK USA, as a Lender 

By: /s/ Ryan Durkin 
Name: Ryan Durkin
Title: Authorized Signatory

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

IBERIA BANK, as a Lender 

By: /s/ Stacey Goldstein 
Name: Stacey Goldstein
Title: Senior Vice President

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

MORGAN STANLEY BANK, N.A., as a Lender

By: /s/ Michael King 
Name: Michael King
Title: Authorized Signatory

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

REGIONS BANK, as a Lender

By: /s/ Iris Zhang 
Name: Iris Zhang
Title: Director

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

 ZB, N.A. dba AMEGY BANK, as a Lender

By: /s/ Brad Ellis 
Name: Brad Ellis
Title: Senior Vice President

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

MIZUHO BANK, LTD., as a Lender

By: /s/ Edward Sacks 
Name: Edward Sacks
Title: Authorized Signatory

Signature Page to Third Amendment to Credit Agreement
(OMP Operating LLC) 

ACKNOWLEDGEMENT AND RATIFICATION: Each DevCo hereby (a) acknowledges the terms of this Third Amendment; (b) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Loan Document (including each DevCo Guaranty) to which it is a party and agrees that each Loan Document (including each DevCo Guaranty) to which it is a party remains in full force and effect as expressly amended hereby and (c) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Third Amendment:  (i) all of the representations and warranties contained in each Loan Document (including each DevCo Guaranty) to which it is a party are true and correct in all material respects (or, if already qualified by materiality, Material Adverse Effect or a similar qualification, true and correct in all respects), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct in all material respects (or, if already qualified by materiality, Material Adverse Effect or a similar qualification, true and correct in all respects) as of such specified earlier date, (ii) no Default or Event of Default has occurred and is continuing and (iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

ACKNOWLEDGED AND RATIFIED:

BEARTOOTH DEVCO LLC

By: /s/ Richard Robuck 
Name: Richard Robuck
Title:   Senior Vice President and Chief 
            Financial Officer

BOBCAT DEVCO LLC

By: /s/ Richard Robuck 
Name: Richard Robuck
Title:   Senior Vice President and Chief 
            Financial Officer

Acknowledgement and Ratification of Third Amendment to Credit Agreement
(OMP Operating LLC) 

ANNEX I 
LIST OF COMMITMENTS

									
	Name of Lender	Applicable Percentage	Commitments
	Wells Fargo Bank, N.A.	9.2347826090% 	 	$53,100,000.00 
	Citibank, N.A.	8.0347826090% 	 	$46,200,000.00 
	JPMorgan Chase Bank, N.A.	8.0347826090% 	 	$46,200,000.00 
	Royal Bank of Canada	8.0347826090% 	 	$46,200,000.00 
	Canadian Imperial Bank of Commerce, New York Branch	5.0608695650% 	 	$29,100,000.00 
	Capital One, National Association	5.0608695650% 	 	$29,100,000.00 
	Compass Bank	5.0608695650% 	 	$29,100,000.00 
	Citizens Bank, N.A.	5.0608695650% 	 	$29,100,000.00 
	ING Capital LLC	5.0608695650% 	 	$29,100,000.00 
	BOKF, NA dba Bank of Texas	4.2086956520% 	 	$24,200,000.00 
	Branch Bank & Trust	4.2086956520% 	 	$24,200,000.00 
	Comerica Bank	4.2086956520% 	 	$24,200,000.00 
	Credit Suisse AG, Cayman Islands Branch	4.2086956520% 	 	$24,200,000.00 
	Goldman Sachs Bank USA	4.2086956520% 	 	$24,200,000.00 
	Mizuho Bank, Ltd.	4.2086956520% 	 	$24,200,000.00 
	Regions Bank	4.2086956520% 	 	$24,200,000.00 
	Morgan Stanley Bank, N.A.	4.2086956520% 	 	$24,200,000.00 
	Iberia Bank	4.2086956520% 	 	$24,200,000.00 
	Zions Bancorporation, N.A. dba Amegy Bank	3.4782608700% 	 	$20,000,000.00 
	         TOTAL	100.000000000% 	 	$575,000,000.00cswcformofamendedandrest

                                                                            Exhibit 10.1                                 Capital Southwest Corporation                                       Up to $50,000,000                                   Shares of Common Stock                                   (par value $0.25 per share)              AMENDED AND RESTATED EQUITY DISTRIBUTION AGREEMENT                                                                            August 20, 2019   [•]   [•]  [•]          Ladies and Gentlemen:         Capital Southwest Corporation, a Texas corporation (the “Company”), and [•] (the “Manager”),  confirm their agreement to amend and restate that certain Equity Distribution Agreement, dated March 4,  2019, by and between the Company and the Manager (the “Initial Agreement”) on the terms and conditions  described  below  in  this  Amended  and  Restated  Equity  Distribution  Agreement  (this  “Agreement”),  as  follows:          Section 1.   Description of Securities. The Company proposes to issue and sell through or to  the Manager (or any Alternative Manager (as defined below)), as sales agent and/or principal, shares of the  Company’s common stock, par value $0.25 per share (the “Common Stock”), having an aggregate offering  price of up to $50,000,000 (the “Maximum Amount”), on the terms set forth in Section 3 of this Agreement;  provided, however, that the Maximum Amount shall be reduced on a dollar-for-dollar basis by the aggregate  gross sales proceeds received by the Company from the sale of Common Stock prior to the date hereof  pursuant to the Initial Agreement and the Prior Alternative Distribution Agreements (as defined below).  The shares of Common Stock to be sold through or to the Manager pursuant hereto or pursuant to a Terms  Agreement (as defined below) or through or to an Alternative Manager pursuant to an Alternative Equity  Distribution Agreement or Alternative Terms Agreement (each term as defined below) are referred to herein  as the “Shares.”          The Company has also entered into separate amended and restated equity distribution agreements  (each,  an  “Alternative  Equity  Distribution  Agreement”  and  collectively,  the  “Alternative  Equity  Distribution Agreements”), dated of even date herewith, with each of the entities listed on Schedule A  hereto, as sales agent and/or principal (each, an “Alternative Manager” and collectively, the “Alternative  Managers”),  which  Alternative  Equity  Distribution  Agreements  amend  and  restate  the  initial  equity  distribution agreements by and among the Company and the Alternative Managers (collectively, the “Prior  Alternative Equity Distribution Agreements”). The Company agrees that whenever it determines to sell the  Shares directly to the Manager or an Alternative Manager as principal, it will enter into a separate agreement  (each, a “Terms Agreement” or “Alternative Terms Agreement”, respectively) in substantially the form of  Annex I hereto, relating to such sale in accordance with Section 3 of this Agreement. This Agreement and  the Alternative Equity Distribution Agreements are sometimes hereinafter referred to as the “Distribution  Agreements.”  The  Manager  and  the  Alternative  Managers  are  sometimes  hereinafter  referred  to  as  the  “Distribution Managers.”          The  aggregate  number  of  Shares  that  may  be  sold  pursuant  to  this  Agreement,  the  Alternative  Equity Distribution Agreements, any Terms Agreement and any Alternative Terms Agreement shall not  exceed  the  Maximum  Amount.  Notwithstanding  anything  to  the  contrary  contained  herein,  the  parties    25962800.2.BUSINESS   

 

hereto agree that compliance with the limitations set forth in this Section 1 regarding the Maximum Amount  of Shares issued and sold pursuant to this Agreement, the Alternative Equity Distribution Agreements, any  Terms Agreement and any Alternative Terms Agreement shall be the sole responsibility of the Company,  and the Manager shall have no obligation in connection with such compliance.          As  used  herein,  “Registration  Statement”  shall  mean  the  registration  statement  referred  to  in  Section 2(a) below, including all exhibits, financial statements and schedules thereto and all documents  incorporated  or  deemed  to  be  incorporated  therein  by  reference pursuant  to  the  Small  Business  Credit  Availability  Act  (the  “SBCAA”)  or  the  rules  of  the  Securities  and  Exchange  Commission  (the  “Commission”) promulgated thereunder or otherwise, and any prospectus supplement relating to the Shares  that  is  filed  with  the  Commission  pursuant  to  Rule 497  under  the  Securities  Act  of  1933,  as  amended  (collectively with the rules and regulations of the Commission thereunder, the “1933 Act”), or such other  1933 Act rule as may be applicable to the Company, and deemed part of such registration statement pursuant  to Rule 430B or 430C under the 1933 Act, as amended on each Effective Date (as defined below) and, in  the  event  any  post-effective  amendment  thereto  becomes  effective,  shall  also  mean  such  registration  statement as so amended, and shall also mean any new registration statement or post-effective amendment  as may have been filed pursuant to Section 4(e) of this Agreement. “Effective Date” shall mean each date  and time that the Registration Statement, any post-effective amendment or amendments thereto became or  become effective. “Basic Prospectus” shall mean the prospectus referred to in Section 2(a) below contained  in the Registration Statement at the Effective Date. “Prospectus” shall mean any Prospectus Supplement  filed with the Commission pursuant to Rule 497 under the 1933 Act, or such other 1933 Act rule as may be  applicable  to  the  Company,  relating  to  the  Shares,  including  documents  incorporated  or  deemed  to  be  incorporated therein by reference pursuant to the SBCAA or the rules of the Commission promulgated  thereunder or otherwise, together with the Basic Prospectus.          All references in this Agreement to financial statements and schedules and other information which  is “contained,” “included” or “stated” in, or “a part of”, the Registration Statement or the Prospectus (and  all other references of like import) shall be deemed to mean and include all such financial statements and  schedules and other information which is or is deemed to be incorporated by reference in or otherwise  deemed under the SBCAA or the rules of the Commission promulgated thereunder or otherwise to be a part  of or included in the Registration Statement or the Prospectus, as the case may be, as of any specified date;  and all references in this Agreement to amendments or supplements to the Registration Statement or the  Prospectus, including those made pursuant to Rule 497 under the 1933 Act or such other 1933 Act rule as  may be applicable to the Company, shall be deemed to mean and include, without limitation, the filing of  any document under the Exchange Act (as defined below) which is or is deemed to be incorporated by  reference in or otherwise deemed under the SBCAA or the rules of the Commission promulgated thereunder  or otherwise to be a part of or included in the Registration Statement or the Prospectus, as the case may be,  as of any specified date.           The Company owns (i) 100% of the equity interests in Capital Southwest Management Corporation  (“CSMC”) and (ii) 100% of the equity interests in Capital Southwest Equity Investments, Inc. (“CSEI”),  each of which are the Company’s only consolidated subsidiaries. The Company, CSMC, and CSEI are  collectively referred to as the “Capital Southwest Entities”.          A  Form N-54A  —  Notification  of  Election  to  be  Subject  to  Sections  55  through  65  of  the  Investment Company Act of 1940 Filed Pursuant to Section 54(a) of the 1940 Act (File No. 814-00061)  (the “BDC Election”) was filed by the Company with the Commission under the Investment Company Act  of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively called the  “1940 Act”) pursuant to which, the Company elected to be regulated as a business development company  (“BDC”) under the 1940 Act. The Company has elected to be treated for federal income tax purposes as a   25962800.2.BUSINESS                                             2    

 

regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as  amended (the “Code”).         Section 2.    Representations and Warranties of the Company. The Company represents and  warrants to and agrees with the Manager that:          (a)   Compliance with Registration Requirements. The Company has prepared and filed with  the Commission a registration statement (File No. 333-232492) on Form N-2, including a related basic  prospectus, for registration under the 1933 Act of the offering and sale of the Shares (the “Registration  Statement”). Such Registration Statement, including any post-effective amendments thereto filed prior to  the  date  and  time  that  this  Agreement  is  executed  and  delivered  by  the  parties  hereto  (the  “Execution  Time”), has become effective, and no stop order suspending the effectiveness of the Registration Statement  has been issued, and no proceedings for any such purpose, have been instituted or are pending or, to the  knowledge of the Company, have been threatened by the Commission, and any request on the part of the  Commission for additional information with respect thereto has been complied with. The Company may  have filed, as part of an amendment to the Registration Statement or pursuant to Rule 497 under the 1933  Act or such other 1933 Act rule as may be applicable to the Company, one or more amendments thereto,  each of which has previously been furnished to you. The Company will file with the Commission one or  more  prospectus  supplements  (collectively,  the  “Prospectus  Supplement”)  related  to  the  Shares  in  accordance with Rule 497 under the 1933 Act or such other 1933 Act rule as may be applicable to the  Company, including all documents incorporated or deemed to be incorporated therein by reference pursuant  to  the  SBCAA  or  the  rules  of  the  Commission  promulgated  thereunder  or  otherwise.  As  filed,  such  Prospectus Supplement, together with the Basic Prospectus, shall contain all information required by the  1933 Act and the 1940 Act and, except to the extent the Manager shall agree in writing to a modification,  shall be in all substantive respects in the form furnished to you prior to the Execution Time or prior to any  such time this representation is repeated or deemed to be made. The Registration Statement, at the Execution  Time, as of the time of each sale of Shares pursuant to this Agreement (each, a “Time of Sale”), at each  Settlement  Date  (as  defined  in  Section  3(a)(vi)  hereof),  and  at  all  times  during  which  a  prospectus  is  required by the 1933 Act to be delivered in connection with any sale of Shares, meets or will meet the  requirements set forth in Rule 415(a)(1)(x) under the 1933 Act.          On the Effective Date, the Registration Statement did, and when the Prospectus is first filed in  accordance with Rule 497 under the 1933 Act, as of the date that it is filed with the Commission, the date  of the Prospectus Supplement, as of each Time of Sale, at each Settlement Date, and at all times during  which a prospectus is required by the 1933 Act to be delivered in connection with any sale of Shares, the  Prospectus  (and  any  supplements  thereto)  will,  comply  in  all  material  respects  with  the  applicable  requirements of the 1933 Act and the  1940 Act; on the Effective Date, at the Execution Time and, as  amended or supplemented, as of each Time of Sale, at each Settlement Date and at all times during which  a  prospectus  is  required  by  the  1933  Act  to  be  delivered  in  connection  with  any  sale  of  Shares,  the  Registration Statement did not and will not contain any untrue statement of a material fact or omit to state  any material fact required to be stated therein or necessary in order to make the statements therein not  misleading; and at no time during the period that begins on the date of the Prospectus Supplement and ends  at the later of each Settlement Date and the end of the period during which a prospectus is required by the  1933 Act to be delivered in connection with any sale of Shares did or will the Prospectus, as then amended  or supplemented, include 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;  provided,  however,  that  the  Company  makes  no  representations  or  warranties  as  to  the  information contained in or omitted from the Registration Statement, or the Prospectus (or any supplement  thereto), in reliance upon and in conformity with information furnished in writing to the Company by or on  behalf of the Manager specifically for inclusion in the Registration Statement or the Prospectus (or any  supplement  thereto),  it  being  understood  and  agreed  that  the  only  such  information  furnished  by  the  25962800.2.BUSINESS                                             3    

 

Manager consists of the last paragraph under the heading “Plan of Distribution” in the Prospectus. The  Commission has not issued any order preventing or suspending the use of the Prospectus.          (b)   Expense Summary. The information set forth in the Prospectus under the caption “Fees and  Expenses” has been prepared in accordance with the requirements of Form N-2 and to the extent estimated  or projected, such estimates or projections are believed to be reasonably based.          (c)   Preparation of the Financial Statements. The consolidated financial statements, together  with  the  related  schedules  and  notes  thereto,  filed  with  the  Commission  as  a  part  of  the  Registration  Statement and included in the Prospectus present fairly the consolidated financial position of the Capital  Southwest Entities as of and at the dates indicated and the results of their operations and cash flows for the  periods specified. Such financial statements have been prepared in conformity with accounting principles  generally accepted in the United States (“GAAP”) applied on a consistent basis throughout the periods  involved, except as may be expressly stated in the related notes thereto. Other than the financial statements  included in the Registration Statement, no other financial statements or supporting schedules are required  to be included therein. The financial data and financial information included in the Prospectus under the  caption “Selected Financial Data” present fairly in all material respects the information shown therein and  have  been  compiled  on  a  basis  consistent  with  the  financial  statements  included  in  the  Registration  Statement. All disclosures contained in the Registration Statement or the Prospectus regarding “non-GAAP  financial measures” (as such term is defined by the rules and regulations of the Commission) comply with  Regulation G under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the  Commission thereunder (collectively, the “Exchange Act”), and Item 10 of Regulation S-K of the 1933  Act,  to  the  extent  applicable.  The  selected  financial  information  and  data  included in  the  Registration  Statement and the Prospectus have been prepared on a basis consistent with that of the books and records  of the Company, I-45 SLF LLC (“I-45”) and Media Recovery, Inc. (“MRI”, and collectively with I-45, the  “Controlled Portfolio Companies”), as applicable.         (d)    Internal Control Over Financial Reporting; Independent Accountants.  The  Company  maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f)  and 15d-15(f) under the Exchange Act). The Company’s auditors and the audit committee of the Company’s  board of directors have been advised of (1) any known significant deficiencies in the design or operation of  internal control over financial reporting that could adversely affect the ability to record, process, summarize,  and report financial data and (2) any known fraud, whether or not material, that involves management or  other employees who have a role in the Company’s internal control over financial reporting; and any such  deficiencies  or  fraud  will  not  result  in  a  Material  Adverse  Effect  (as  defined  below).  The  Company’s  internal control over financial reporting is effective and the Company is not aware of any material weakness  in  its  internal  control  over  financial  reporting.  RSM  (US)  LLP,  the  Company’s  and  I-45’s  current  independent accountant, which audited certain financial statements of the Company and I-45 and whose  reports with respect to the financial statements of each of the Company and I-45 appear in the Registration  Statement and the Prospectus, is an independent registered public accounting firm as required by the 1933  Act, the 1940 Act, the Exchange Act and, with respect to the Company, the rules of the Public Company  Accounting Oversight Board (the “PCAOB”) and, with respect to I-45, the American Institute of Certified  Public Accountants (the “AICPA”). Grant Thornton LLP, the Company’s former independent accountant,  which audited certain financial statements of the Company and whose reports with respect to the financial  statements of the Company appear in the Registration Statement and the Prospectus, is an independent  registered public accounting firm as required by the 1933 Act, the 1940 Act, the Exchange Act and the rules  of the PCAOB. Whitley Penn LLP, which audited certain financial statements of MRI and whose report  appears in the Registration Statement and the Prospectus is an independent registered public accounting  firm as required by the 1933 Act, the 1940 Act, the Exchange Act and the rules of the AICPA.    25962800.2.BUSINESS                                             4    

 

      (e)    Disclosure Controls. The Company has established and maintains disclosure controls and  procedures (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) that (i) are designed  to ensure that material information relating to the Company, including its consolidated subsidiaries, is made  known to the Company’s principal executive officer and its principal financial officer by others within those  entities, particularly during the periods in which the periodic reports required under the Exchange Act are  being prepared, (ii) will be evaluated for effectiveness as of the end of each fiscal quarter and fiscal year of  the Company, and (iii) are effective to perform the functions for which they were established.         (f)    No Material Adverse Change. Except as otherwise disclosed in the Prospectus, subsequent  to the respective dates as of which information is given in the Prospectus: (i) there has been no material  adverse  change,  or  any  development  that  could  reasonably  be  expected,  either  individually  or  in  the  aggregate, to result in a material adverse change, in the condition, financial or otherwise, or in the earnings,  net asset value, prospects, business or operations, whether or not arising from transactions in the ordinary  course of business, of the Capital Southwest Entities, considered as one entity, or either of the Controlled  Portfolio Companies (any such change or effect, where the context so requires is called a “Material Adverse  Change” or a “Material Adverse Effect”); (ii) the Capital Southwest Entities, considered as one entity, I-45  and, to the knowledge of the Company, MRI, have not incurred any material liability or obligation, indirect,  direct  or  contingent,  not  in  the  ordinary  course  of  business  or  entered  into  any  material  transaction  or  agreement not in the ordinary course of business; and (iii) except for regular distributions paid or declared  by the Company to its stockholders consistent with past practice or any other distributions described in the  Prospectus, there has been no dividend or distribution of any kind declared, paid or made by the Company.          (g)   Good Standing of the Company and its Subsidiaries. Each  of  the  Capital  Southwest  Entities, I-45 and, to the knowledge of the Company, MRI, has been duly organized, is validly existing and  in good standing under the laws of the state of the jurisdiction of its incorporation or organization and has  the corporate power and authority to own, lease and operate its properties and to conduct the business in  which it is engaged and to enter into and perform its obligations, as applicable, under this Agreement. Each  of the Capital Southwest Entities, I-45 and, to the knowledge of the Company, MRI, is duly qualified to do  business and in good standing as a foreign corporation in each jurisdiction in which its ownership or lease  of property or the conduct of its businesses requires such qualification, except for such jurisdictions where  the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material  Adverse Effect.          (h)   Subsidiaries of the Company. The Company does not own, directly or indirectly, any shares  of stock or any other equity or long-term debt securities of any corporation or other entity other than (i) its  interests  in  CSMC  and  CSEI  and  (ii) those  corporations  or  other  entities  accounted  for  as  portfolio  investments in accordance with the Commission’s rules and regulations (each a “Portfolio Company” and  collectively, the “Portfolio Companies”).         (i)    Portfolio Companies. The Company, either directly or indirectly through one or more tax  blocker subsidiaries, have duly authorized, executed and delivered agreements (each a “Portfolio Company  Agreement”) required to make the investments in the Portfolio Companies. Except as otherwise disclosed  in the Prospectus, there has been no material change in the total fair value dollar amount of the Portfolio  Company investments on non-accrual status.          (j)   Officers and Directors. Except as disclosed in the Prospectus, no person is serving or acting  as an officer or director of the Company except in accordance with the applicable provisions of the 1940  Act. Except as disclosed in the Registration Statement and the Prospectus, no director of the Company is  (i) an “interested person” (as defined in the 1940 Act) of the Company or (ii) an “affiliated person” (as  defined in the 1940 Act) of the Manager. For purposes of this Section 2(j), the Company shall be entitled  to reasonably rely on representations from such officers and directors.  25962800.2.BUSINESS                                             5    

 

      (k)    Business Development Company Election. The Company has filed the BDC Election and,  accordingly, has duly elected to be subject to the provisions of Sections 55 through 65 of the 1940 Act. At  the time the BDC Election was filed with the Commission, it (i) contained all statements required to be  stated therein in accordance with, and complied in all material respects with the requirements of, the 1940  Act and (ii) did not include any untrue statement of material fact or omit to state a material fact necessary  to make the statements therein not misleading. The Company has not filed with the Commission any notice  of withdrawal of the BDC Election pursuant to Section 54(c) of the 1940 Act, the BDC Election remains  in full force and effect, and, to the Company’s knowledge, no order of suspension or revocation of the BDC  Election  under  the  1940  Act  has  been  issued  or  proceedings  therefore  initiated  or  threatened  by  the  Commission. The operations of the Company are in compliance in all material respects with all applicable  provisions  of  the  1940  Act  and  the  rules and  regulations  of  the  Commission  thereunder,  including  the  provisions applicable to BDCs.         (l)    Authorization and Description of Common Stock. The authorized, issued and outstanding  capital stock of the Company is as set forth in the Prospectus as of the date thereof under the caption  “Capitalization.”  The  Common  Stock  (including  the  Shares)  conforms  in  all  material  respects  to  the  description thereof contained in the Prospectus. All issued and outstanding Common Stock of the Company  have been duly authorized and validly issued and are fully paid and non-assessable, and have been offered  and  sold  or  exchanged  by  the  Company  in  compliance  with  all  applicable  laws  (including,  without  limitation, federal and state securities laws). None of the outstanding Common Stock of the Company was  issued in violation of the preemptive or other similar rights of any security holder of the Company, nor does  any person have any preemptive right of first refusal or other right to acquire any of the Shares covered by  this Agreement. The Company currently does not have any shares of preferred stock authorized for issuance  under its articles of incorporation. The description of the Company’s stock option, stock bonus and other  stock plans or arrangements, and the options, restricted stock or other rights granted thereunder, set forth  in the Prospectus accurately and fairly presents the information required to be shown with respect to such  plans, arrangements, options, awards and rights. The Shares to be sold pursuant to this Agreement have  been duly authorized by the board of directors of the Company for issuance and sale to the Manager and,  when  issued  and  delivered  by  the Company  pursuant  to  this  Agreement  against  payment  of  the  consideration set forth herein, will be validly issued, fully paid and non-assessable.         (m)    Non-Contravention of Existing Instruments. No Further Authorizations or Approvals  Required. None of the Capital Southwest Entities, I-45 nor, to the knowledge of the Company, MRI, are in  violation  of or  default  under  (i) its  respective  charter,  bylaws,  or  any  similar  organizational  document;  (ii) any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other agreement  or instrument , and any supplements or amendments thereto, to which it is a party or bound or to which any  of  its  properties  or  assets  is  subject,  including,  in  the  case of  the  Company,  any  Portfolio  Company  Agreement; and (iii) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory  body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over it or  any of its properties, as applicable, except with respect to clauses (ii) and (iii) herein, for such violations or  defaults as would not, individually or in the aggregate, have a Material Adverse Effect. No person has the  right to act as an underwriter, sales agent or financial advisor to the Company in connection with or by  reason of the offer and sale of the Shares contemplated hereby other than the Manager and any Alternative  Manager  pursuant  to  this  Agreement  and  the  respective  Alternative  Equity  Distribution  Agreement,  respectively.         The  execution,  delivery  and  performance  of  this  Agreement  by  the  Company  and  the  consummation of the transactions contemplated hereby and by the Prospectus (i) have been duly authorized  by all necessary corporate action, have been effected in accordance with the 1940 Act and will not result in  any violation of the provisions of the articles of incorporation or bylaws of the Company, (ii) will not  conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien,  25962800.2.BUSINESS                                             6    

 

charge or encumbrance upon any property or assets of the Company pursuant to, or require the consent of  any other party to, any existing instrument, except for such conflicts, breaches, defaults, liens, charges or  encumbrances  as  would  not,  individually  or  in  the  aggregate,  result  in  a  Material  Adverse  Effect  and  (iii) will not result in any violation of any law, administrative regulation or administrative or court decree  applicable to the Company. No consent, approval, authorization or other order of, or registration or filing  with,  any  court,  regulatory  authority,  governmental  agency  or  other  body  having  jurisdiction  over  the  Capital  Southwest  Entities,  the  Controlled  Portfolio  Companies or  any  of  their  properties  or  assets  is  required for the execution, delivery and performance of this Agreement by the Company or consummation  of the transactions contemplated hereby and by the Prospectus, except such as have already been obtained  or made under the 1933 Act and the 1940 Act and such as may be required under any applicable state  securities or blue sky laws, from the Financial Industry Regulatory Authority, Inc. (“FINRA”) or under the  rules and regulations of the Nasdaq Stock Market  (“NASDAQ”).         (n)    Material Agreements. Each  material  agreement  described  in  the  Prospectus  (each  such  agreement, a “Material Agreement” and collectively, the “Material Agreements”) has been accurately and  fully  described  in  all  material  respects.  The  Company  has  not  sent  or  received  notice  of,  or  otherwise  communicated or received communication with respect to, termination of any Material Agreement, nor has  any such termination been threatened by any person.          (o)   Intellectual Property Rights. Each  of  the  Capital  Southwest  Entities,  I-45  and,  to  the  knowledge of the Company, MRI, owns or possesses sufficient trademarks, trade names, patent rights,  copyrights,  domain  names,  licenses,  approvals,  trade  secrets  and  other  similar  rights  (collectively,  “Intellectual  Property  Rights”)  reasonably  necessary  to  conduct  its  businesses  as  described  in  the  Prospectus; and the expected expiration of any of such Intellectual Property Rights would not result in a  Material  Adverse  Effect.  None  of  the  Capital  Southwest  Entities,  I-45  nor,  to  the  knowledge  of  the  Company, MRI, has received any notice of infringement or conflict with asserted intellectual property rights  of  others,  which  infringement  or  conflict,  if  the  subject  of  an  unfavorable  decision,  would  result  in  a  Material Adverse Effect. To the Company’s knowledge, none of the technology employed by the Capital  Southwest Entities and/or the Controlled Portfolio Companies have been obtained or is being used by them  in violation of any contractual obligation binding on them or any of their officers, directors or employees  or otherwise in violation of the rights of any persons.          (p)   All Necessary Permits, etc. Each  of  the  Capital  Southwest  Entities,  I-45  and,  to  the  knowledge of the Company, MRI, possesses such valid and current certificates, authorizations or permits  issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct its  business, and the Company has neither received nor is aware of any notice of proceedings relating to the  revocation or modification of, or non-compliance with, any such certificate, authorization or permit which,  singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could result in a  Material Adverse Effect.          (q)   Absence of Proceedings. There  is  no  action,  suit,  proceeding,  inquiry  or  investigation  before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to  the knowledge of the Company, threatened, against any of the Capital Southwest Entities, I-45 or, to the  knowledge of the Company, MRI, which is required to be disclosed in the Registration Statement or the  Prospectus (other than as disclosed therein), or which might reasonably be expected to result in a Material  Adverse  Effect,  or  which  might  reasonably  be  expected  to  materially  and  adversely  affect  the  consummation of the transactions contemplated in this Agreement or the performance by the Company of  its obligations hereunder. All pending legal or governmental proceedings to which any Capital Southwest  Entity or Controlled Portfolio Company is a party, or of which any of such Capital Southwest Entity’s or  Controlled  Portfolio  Company’s  properties  or  assets  is  the  subject  which  are  not  described  in  the  Registration Statement or the Prospectus, including ordinary routine litigation incidental to the business,  25962800.2.BUSINESS                                             7    

 

could not, individually or in the aggregate, in the case of any Capital Southwest Entity and I-45, reasonably  be expected to have a Material Adverse Effect, and in the case of MRI, to the knowledge of the Company,  reasonably be expected to have a Material Adverse Effect.         (r)    Accuracy of Exhibits. There are no contracts or documents that are required to be described  in the Registration Statement or the Prospectus or to be filed as exhibits thereto that have not been so  described and filed as required; provided, however, that the Company will file a form of this Agreement  under cover of a Current Report on Form 8-K under the Exchange Act.          (s)   Regulated Investment Company. The Company has been and is in compliance with the  requirements of Subchapter M of the Code to qualify as a RIC under the Code. The Company will direct  the investment of the net proceeds of the offering of the Shares and continue to conduct its activities in such  a manner as to comply with the requirements of Subchapter M of the Code.          (t)   Registered Management Investment Company Status.  None  of  the  Capital  Southwest  Entities or the Controlled Portfolio Companies is, or after giving effect to the offering and sale of the Shares,  will  be  a  “registered  management  investment  company”  or  an  entity  “controlled”  by  a  “registered  management investment company,” as such terms are used under the 1940 Act.         (u)    Insurance. The  Capital  Southwest  Entities  and  I-45  maintain  insurance  covering  their  properties, operations, personnel and business as they deem adequate; such insurance insures against such  losses and risks to an extent which is adequate in accordance with customary industry practice to protect  the Capital Southwest Entities and I-45, as applicable, and their business; all such insurance is fully in force  on the date hereof and will be fully in force at the time of purchase of the Shares.          (v)   Statistical, Demographic or Market-Related Data. All statistical, demographic or market- related data included in the Registration Statement or the Prospectus are based on or derived from sources  that  the  Company  believes  to  be  reliable  and  accurate  and  all  such  data  included  in  the  Registration  Statement or the Prospectus accurately reflects the materials upon which it is based or from which it was  derived.         (w)    Investments. Save for those provided in the 1940 Act and the Code and the regulations  promulgated thereunder, there are no material restrictions, limitations or regulations with respect to the  ability of the Company to invest its assets as described in the Prospectus.         (x)    Tax Law Compliance. Each of the Capital Southwest Entities, I-45 and, to the knowledge  of the Company, MRI, has filed all necessary material federal, state, local and foreign tax returns and have  paid all material taxes required to be paid by any of them and, if due and payable, any related or similar  assessment, fine or penalty levied against any of them. The Company has made adequate charges, accruals  and reserves in the applicable financial statements referred to in the Prospectus in respect of all material  federal, state, local and foreign taxes for all periods as to which the tax liability of the Capital Southwest  Entities have not been finally determined. The Company is not aware of any tax deficiency that has been  or might be asserted or threatened against any of the Capital Southwest Entities or the Controlled Portfolio  Companies that could result in a Material Adverse Effect.          (y)   Distribution of Offering Materials. The Company has not distributed and will not distribute  material in connection with the offering and sale of the Shares other than the Registration Statement, the  Prospectus and the Additional Disclosure Items (as defined below).    25962800.2.BUSINESS                                             8    

 

      (z)    Absence of Registration Rights. Except as disclosed in the Prospectus, there are no persons  with registration rights or other similar rights to have any securities registered pursuant to the Registration  Statement or otherwise registered by the Company under the 1933 Act.          (aa)  NASDAQ Stock Market. The Common Stock is registered pursuant to Section 12(b) of the  Exchange Act and has been approved for listing on the Nasdaq Global Select Market and the Company has  taken no action designed to, or likely to have the effect of, terminating the registration of the Common  Stock under the Exchange Act or delisting the Common Stock from the Nasdaq Global Select Market, nor  has the Company received any notification that the Commission or the Nasdaq Global Select Market is  contemplating terminating such registration or listing. The Company has continued to satisfy, in all material  respects, all requirements for listing the Common Stock for trading on the Nasdaq Global Select Market.           (bb)  No Price Stabilization or Manipulation. The Company has not taken and will not take,  directly or indirectly, any action designed to or that might be reasonably expected to cause or result in  stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of  the Shares.          (cc)  Material Relationship with the Manager. Except as disclosed in the Prospectus, none of  the Capital Southwest Entities, I-45 and, to the knowledge of the Company, MRI, have any material lending  or other relationship with a bank or lending institution affiliated with the Manager.          (dd)  No Unlawful Contributions or Other Payments. Neither the Capital Southwest Entities, I- 45 nor, to the knowledge of the Company, MRI, nor, to the Company’s knowledge, any employee or agent  of the Capital Southwest Entities or the Controlled Portfolio Companies, has made any contribution or other  payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of  the character required to be disclosed in the Prospectus.          (ee)  No Outstanding Loans or Other Indebtedness. There are no outstanding loans, advances  (except  normal  advances  for  business  expenses  in  the  ordinary  course  of  business)  or  guarantees  of  indebtedness by the Company to or for the benefit of any of the officers or directors of the Company.         (ff)   Compliance with Laws. Each of the Capital Southwest Entities, I-45 and, to the knowledge  of  the  Company,  MRI,  (i) is  conducting  its  business  in  compliance  with  all  laws,  rules,  regulations,  decisions, directives and orders except for such failure to comply which would not reasonably be expected  to  result  in  a  Material  Adverse  Effect  and  (ii) is  conducting  its  business  in  compliance  in  all  material  respects with the applicable requirements of the 1940 Act, as applicable.          (gg)  Compliance with the Sarbanes-Oxley Act of 2002. The Company and, to its knowledge, its  officers and directors (in such capacity) are in compliance with the provisions of the Sarbanes-Oxley Act  of 2002 and the Commission’s published rules promulgated thereunder that are applicable to the Company  as of the date hereof.          (hh)  Anti-Money Laundering, Foreign Corrupt Practices Act Compliance. The operations of  the  Capital  Southwest  Entities,  I-45  and,  to  the  knowledge  of  the Company, MRI, are and have been  conducted at all times in compliance in all material respects with applicable financial recordkeeping and  reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, also  known  as  the  Bank  Secrecy  Act,  the  USA  Patriot  Act,  the  money  laundering  statues  of  all  applicable  jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines,  issued, administered or enforced by any governmental entity having jurisdiction over the Capital Southwest  Entities, I-45 and/or MRI, as applicable (collectively, the “Money Laundering Laws”), and no proceeding  by or before any court or governmental or regulatory agency, authority or body or any arbitrator involving   25962800.2.BUSINESS                                             9    

 

the Capital Southwest Entities, I-45 and, to the knowledge of the Company, MRI, with respect to the Money  Laundering  Laws  is  pending  or,  to  the  knowledge  of  the  Company,  threatened.  Neither  the  Capital  Southwest  Entities  or  I-45  nor,  to  the  knowledge of  the  Company,  MRI, nor,  to  the  knowledge  of  the  Company, any director, officer, partner, manager, agent, employee or other person acting on behalf of the  Capital Southwest Entities or I-45, has (i) used any corporate funds for any unlawful contribution, gift,  entertainment  or  other  unlawful  expenses  relating  to  political activity;  (ii) made  any  direct  or  indirect  unlawful  payment  to  any  foreign  or  domestic  government  official  or  employee;  (iii) violated  or  is  in  violation of any provision of the Foreign Corrupt Practices Act of 1977; (iv) made any bribe, rebate, payoff,  influence payment, kickback or other unlawful payment; or (v) made any payment of funds or received or  retained funds in violation of any such law, rule or regulation.         (ii)   No Sanctions by the Office of Foreign Assets Control. Neither  the  Capital  Southwest  Entities or I-45 nor, to the knowledge of the Company, MRI, nor, to the knowledge of the Company, any  director,  officer,  partner,  manager,  agent,  employee  or  other  person  acting  on  behalf  of  the  Capital  Southwest Entities or I-45, or, to the knowledge of the Company, MRI, is currently the subject of any U.S.  sanctions,  including  those  administered  by  the  Office  of  Foreign  Assets  Control  of  the  U.S.  Treasury  Department (“OFAC”); and the Company will not directly, or indirectly knowingly, use the proceeds of the  offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture  partner or other person or entity, for the purpose of financing any activities of or with any person currently  the subject of any U.S. sanctions, including those administered by OFAC.         (jj)   No Discrimination. Neither the Capital Southwest Entities nor, to the knowledge of the  Company, MRI, is in violation of or has received notice of any violation with respect to any federal or state  law relating to discrimination in the hiring, promotion or pay of employees, nor any applicable federal or  state wage and hour laws, nor any state law precluding the denial of credit due to the neighborhood in which  a  property  is  situated,  the  violation  of  any  of  which  would  reasonably  be  expected  to  have  a  Material  Adverse Effect.          (kk)  Exchange Act Compliance.  The documents deemed to be incorporated by reference in the  Prospectus, at the time they are filed with the Commission, comply and will comply, as applicable, in all  material  respects  with  the  requirements  of  the  Exchange  Act,  and,  when  read  together  with  the  other  information  in  the  Prospectus,  at  the  Effective  Date  and  each  Time  of  Sale,  Settlement  Date  and  Representation Date, do not and will not, as applicable, contain an untrue statement of a material fact or  omit to state a material fact required to be stated therein or necessary to make the fact required to be stated  therein or necessary to make the statements therein, in the light of the circumstances under which they were  made, not misleading.          (ll)  ERISA.   Each employee benefit plan, within the meaning of Section 3(3) of the Employee  Retirement Income Security Act of 1974, as amended (“ERISA”), and all stock purchase, stock option,  stock-based  severance,  employment,  change-in-control,  medical, disability,  fringe  benefit,  bonus,  incentive,  deferred  compensation,  employee  loan  and  all  other  employee  benefit  plans,  agreements,  programs, policies or other arrangements, whether or not subject to ERISA, that is maintained, administered  or contributed to by any of the Capital Southwest Entities or MRI for employees or former employees,  directors or independent contractors of the Capital Southwest Entities or MRI, as applicable, or under which  any of the Capital Southwest Entities or MRI has had or has any present or future obligation or liability,  has been maintained, or in the case of MRI, has been maintained to the Company’s knowledge, in material  compliance with its terms and the requirements of any applicable federal, state, local and foreign laws,  statutes, orders, rules and regulations, including but not limited to ERISA and the Code; no prohibited  transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred which  would result in a material liability to the Company with respect to any such plan excluding transactions  effected pursuant to a statutory or administrative exemption; no event has occurred (including a “reportable  25962800.2.BUSINESS                                            10    

 

event” as such term is defined in Section 4043 of ERISA) and no condition exists that would subject the  Company  to  any  material  tax,  fine,  lien,  penalty,  or  liability imposed  by  ERISA,  the  Code  or  other  applicable law; and for each such plan that is subject to the funding rules of Section 412 of the Code or  Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has  been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding  for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under  such plan determined using reasonable actuarial assumptions.          (mm)  Additional Disclosure Items.  The Company represents and agrees that, without the prior  consent of the Manager, (i) it will not distribute any offering material other than the Registration Statement,  the Prospectus and the Additional Disclosure Items, and (ii) it has not made and will not make any offer  relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 under the  1933 Act and which the parties agree, for the purposes of this Agreement, includes (x) any “advertisement”  as defined in Rule 482 under the 1933 Act; and (y) any sales literature, materials or information provided  to investors by, or with the approval of, the Company in connection with the offering of the Shares (the  materials  and  information  referred  to  in  this  Section 2(mm) are  herein  referred  to  as  an  “Additional  Disclosure Item”); any Additional Disclosure Item the use of which has been consented to by the Manager  is listed on Schedule B hereto.         (nn)   Related Party Transactions.   There  are  no  business  relationships  or  related-party  transactions involving the Capital Southwest Entities or any other person required to be described in the  Prospectus which have not been described as required.         (oo)   FINRA Matters.  To the Company’s knowledge, there are no affiliations or associations  between  any  member  of  FINRA  and  any  of  the  Company’s  officers, directors  or  5%  or  greater  securityholders, except as set forth in the Registration Statement and the Prospectus.          Any certificate signed by any officer of the Company and delivered to the Manager or counsel for  the Manager in connection with the offering of the Shares shall be deemed a representation and warranty  by the Company, as to matters covered therein, to the Manager.          Section 3.   Sale and Delivery of Shares.         (a)    On the basis of the representations, warranties and agreements herein contained, but subject  to the terms and conditions herein set forth, the Company agrees to issue and sell through the Manager, as  sales agent, and the Manager agrees to use its commercially reasonable efforts to sell, as sales agent for the  Company, the Shares on the following terms.                (i)    Each time that the Company wishes to issue and sell Shares on any day that is a         trading day for the Nasdaq Global Select Market (a “Trading Day”) (other than a Trading Day on        which the Nasdaq Global Select Market is scheduled to close prior to its regular weekday closing        time) pursuant to this Agreement (each, a “Placement”), it will instruct the Manager by telephone        of the parameters in accordance with which it desires Shares to be sold, which shall at a minimum        include the number of Shares to be offered, the time period during which sales are requested to be        made, the minimum price below which sales may not be made and any limitation on the number of        Shares that may be sold in any one day (a “Placement Notice”). The Manager will, prior to 4:30        p.m. (New York City time) or, if later, within three hours after receipt of the Placement Notice, on        the  same  business  day  (as  defined  below)  on  which  such  Placement  Notice  is  delivered  to  the        Manager, issue to the Company a notice by email addressed to all of the authorized representatives        of the Company on Schedule C hereto (the “Authorized Company Representatives”) confirming all        of the parameters of the Placement. The Placement Notice shall be effective upon receipt by any of  25962800.2.BUSINESS                                            11    

 

      the Authorized Company Representatives of the email notice from the Manager, unless and until        (i) the  entire  amount  of  the  Shares  covered  by  the  Placement  Notice  have  been  sold,  (ii) in        accordance with Section 3(a)(ii) hereof, the Company suspends or terminates the Placement Notice,         (iii) the Company issues a subsequent Placement Notice with parameters superseding those on the         earlier dated Placement Notice, or (iv) this Agreement has been terminated under the provisions of         Section  9.  Subject  to  the  terms  and  conditions  hereof,  the  Manager  shall  use  its  commercially         reasonable efforts to offer and sell all of the Shares designated in the Placement Notice; provided,        however, that the Manager shall have no obligation to offer or sell any Shares, and the Company        acknowledges and agrees that the Manager shall have no such obligation in the event an offer or        sale of the Shares on behalf of the Company may in the judgment of the Manager constitute the        sale of a “block” under Rule 10b-18(a)(5) under the Exchange Act or a “distribution” within the        meaning of Rule 100 of Regulation M under the Exchange Act or the Manager reasonably believes        it may be deemed an “underwriter” under the 1933 Act in a transaction that is other than (A) by         means  of  ordinary  brokers’  transactions  between  members  of  the NASDAQ  that  qualify  for         delivery  of  a  Prospectus  to  the  NASDAQ  in  accordance  with  Rule 153  under  the  1933  Act  or         (B) directly  on  or  through  an  electronic  communication  network,  a  “dark  pool”  or  any  similar         market venue (the transactions described in (A) and (B) are hereinafter referred to as “At the Market        Offerings”).                (ii)   Notwithstanding the foregoing, the Company or the Manager may, upon notice to        the other party by telephone (confirmed promptly by electronic mail from such party), suspend the        offering  of  the  Shares  pursuant  to  this  Agreement  or  suspend  or terminate a previously issued        Placement Notice; provided, however, that such suspension or termination shall not affect or impair        the parties’ respective obligations with respect to the Shares sold hereunder prior to the giving of        such notice.                (iii)  The Manager hereby covenants and agrees not to make any sales of the Shares on        behalf of the Company, pursuant to this Section 3(a), other than (A) by means of At the Market        Offerings and (B) such other sales of the Shares on behalf of the Company in its capacity as agent        of the Company as shall be agreed by the Company and the Manager.                (iv)   The compensation to the Manager, as an agent of the Company, for sales of the        Shares shall be 2.0% of the gross sales price of the Shares sold pursuant to this Section 3(a). The        foregoing rate of compensation shall not apply when the Manager acts as principal, in which case        the Company may sell Shares to the Manager as principal at a price agreed upon at the relevant        applicable time pursuant to a Terms Agreement. The remaining proceeds, after further deduction        for any transaction fees imposed by any governmental or self-regulatory organization in connection        with  such  sales,  shall  constitute  the  net  proceeds  to  the  Company  for  such  Shares  (the  “Net        Proceeds”).                (v)    The  Manager  shall  provide  written  confirmation  to  the  Company  as  soon  as        practicable following the close of trading on the Nasdaq Global Select Market each day in which        the Shares are sold under this Section 3(a) setting forth the aggregate amount of the Shares sold on        such day, the aggregate Net Proceeds to the Company, and the aggregate compensation payable by        the Company to the Manager with respect to such sales.                (vi)   Settlement for sales of the Shares pursuant to this Section 3(a) will occur on the        second Trading Day following the date on which such sales are made, unless another date shall be        agreed upon by the Company and the Manager (provided that, if such Trading Day is not a business        day, then settlement will occur on the next succeeding Trading Day that is also a business day)        (each such date, a “Settlement Date”). As used herein, the term “business day” means any day other  25962800.2.BUSINESS                                            12    

 

      than a Saturday, Sunday or other day on which commercial banks in The City of New York are        authorized or required by law, regulation or executive order to close. On each Settlement Date, the        Shares sold through the Manager for settlement on such date shall be issued and delivered by the        Company  to  the  Manager  against  payment  of  the  Net  Proceeds  for the  sale  of  such  Shares.        Settlement for all such Shares shall be effected by electronically transferring the Shares by the        Company  or  its  transfer  agent  to  the  Manager’s  account,  or  to  the  account  of  the  Manager’s        designee,  at  The  Depository  Trust  Company  (“DTC”)  through  its  Deposit  and  Withdrawal  at        Custodian System (“DWAC”) or by such other means of delivery as may be mutually agreed upon        by the Company and the Manager, which in all cases shall be freely tradable, transferable, registered        shares eligible for delivery through DTC, in return for payments in same day funds delivered to the        account designated by the Company. If the Company, or its transfer agent (if applicable), shall        default  on  its  obligation  to  deliver  the  Shares  on  any  Settlement Date, the Company shall        (A) indemnify and hold the Manager harmless against any loss, claim or damage arising from or as        a result of such default by the Company and (B) pay the Manager any commission to which it        would otherwise be entitled absent such default. The Authorized Company Representatives, or any        designees  thereof  as  notified  to  the  Manager  in  writing,  shall be  the  contact  persons  for  the        Company for all matters related to the settlement of the transfer of the Shares through DWAC for        purposes of this Section 3(a)(vi).                (vii)  At  each  Time  of  Sale,  Settlement  Date  and  Representation  Date (as  defined  in        Section  4(q)  hereof),  the  Company  shall  be  deemed  to  have  affirmed  its  representations  and        warranties contained in this Agreement. Any obligation of the Manager to use its commercially        reasonable efforts to sell the Shares on behalf of the Company shall be subject to the continuing        accuracy of the representations and warranties of the Company, to the performance by the Company        of its obligations hereunder and to the continuing satisfaction of the additional conditions specified        in Section 5 of this Agreement.         (b)    (i) If the Company wishes to issue and sell the Shares other than as set forth in Section 3(a)  of this Agreement or as set forth in Section 3(a) of any Alternative Equity Distribution Agreement, it may  elect, in its sole discretion, to notify the Manager of the proposed terms of such sale. If the Manager, acting  as principal, wishes to accept such proposed terms (which it may decline to do for any reason in its sole  discretion) or, following discussions with the Company, wishes to accept amended terms, the Manager, the  Company and, if applicable, the Alternative Managers will enter into a Terms Agreement setting forth the  terms of such Placement. In the event of a conflict between the terms of this Agreement and the terms of  any Terms Agreement, the terms of such Terms Agreement will control. For avoidance of doubt, nothing  contained in this Agreement shall be construed to require the Company to engage the Manager or any  Alternative Managers in connection with the offer and sale of any of the Company’s securities, including  shares of the Common Stock, whether in connection with an underwriting offering or otherwise.          (c)   In the event the Company engages the Manager for a sale of Shares that would constitute  the  sale  of  a  “block”  under  Rule 10b-18(a)(5)  under  the  Exchange  Act  or  a  “distribution,”  within  the  meaning of Rule 100 of Regulation M under the Exchange Act, the Company and the Manager will agree  to compensation that is customary for the Manager with respect to such transactions.          (d)   (i) Under no circumstances shall the Company cause or request the offer or sale of any  Shares if, after giving effect to the sale of such Shares, the aggregate gross sales proceeds or the aggregate  number of the Shares sold pursuant to this Agreement and any Alternative Equity Distribution Agreement  would exceed the lesser of (A) the Maximum Amount, (B) the amount available for offer and sale under  the currently effective Registration Statement and (C) the amount authorized from time to time to be issued  and sold under this Agreement and any Alternative Equity Distribution Agreement by the Company’s board  of directors, or a duly authorized committee thereof, and notified to the Manager in writing. Under no  25962800.2.BUSINESS                                            13    

 

circumstances shall the Company cause or request the offer or sale of any Shares (i) at a price lower than  the minimum price authorized from time to time by the Company’s board of directors or a duly authorized  committee  thereof,  and  notified  to  the  Manager  in  writing  and  (ii) at  a  price  (net  of  the  Manager’s  commission,  discount  or  other  compensation  for  such  sales  payable  by  the  Company  pursuant  to  this  Section 3) lower than the Company’s then current net asset value per share (as calculated pursuant to the  1940 Act), unless the Company has received the requisite stockholder approval under the 1940 Act and  notifies the Manager in writing.                (ii)   If  any  party  has  reason  to  believe  that  the  exemptive  provisions  set  forth  in  Rule 101(c)(1) of Regulation M under the Exchange Act are not satisfied with respect to the Shares, it shall  promptly notify the other parties and sales of the Shares under this Agreement and any Alternative Equity  Distribution Agreement shall be suspended until that or other exemptive provisions have been satisfied in  the judgment of each party. Upon the reasonable request of the Company in writing to the Manager (which  such request may be by electronic mail), the Manager shall promptly calculate and provide in writing to the  Company a report setting forth, for the prior week, the average daily trading volume (as defined in Rule 100  of Regulation M under the Exchange Act) of the Common Stock.         (e)    Each  sale  of  the  Shares  to  or  through  the  Manager  or  any  Alternative  Manager,  as  applicable,  shall  be  made  in  accordance  with  the  terms  of  this Agreement  or,  if  applicable,  a  Terms  Agreement, or the respective Alternative Equity Distribution Agreement or, if applicable, an Alternative  Terms Agreement, as applicable. The commitment of the Manager to purchase the Shares pursuant to any  Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of  the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Terms  Agreement shall specify the number of the Shares to be purchased by the Manager pursuant thereto, the  price  to  be  paid  to  the  Company for  such  Shares,  any  provisions  relating  to  rights  of,  and  default  by,  underwriters acting together with the Manager in the reoffering of the Shares, any provisions relating to the  granting of an option to purchase additional Shares for the purpose of covering over-allotments, and the  time and date (each such time and date being referred to herein as a “Time of Delivery”) and place of  delivery of and payment for such Shares. Such Terms Agreement shall also specify any requirements for  opinions of counsel, accountants’ letters and officers’ certificates pursuant to Section 5 hereof and any other  information or documents required by the Manager.          (f)   Subject to such further limitations on offers and sales of Shares or delivery of instructions  to offer and sell Shares as are set forth herein, or in any Alternative Equity Distribution Agreement, and as  may be mutually agreed upon by the Company and the Manager or any Alternative Manager, as applicable,  offers and sales of Shares pursuant to this Agreement or any Alternative Equity Distribution Agreement, as  applicable, shall not be requested by the Company and need not be made by the Manager or any Alternative  Manager, as applicable, at any time when or during any period in which the Company is or could be deemed  to be in possession of material non-public information.          (g)   The  Company  acknowledges  and  agrees  that  (A) there  can  be  no  assurance  that  the  Manager or any Alternative Manager will be successful in selling the Shares, (B) neither the Manager nor  any Alternative Manager will incur liability or obligation to the Company or any other person or entity if  such Manager does not sell Shares for any reason other than a failure by the Manager or any Alternative  Manager to use its commercially reasonable efforts consistent with its normal trading and sales practices  and applicable law and regulations to sell such Shares in accordance with the terms of this Agreement or  any  Alternative  Equity  Distribution  Agreement,  as  applicable,  and  (C) neither  the  Manager  nor  any  Alternative Manager shall be under any obligation to purchase Shares on a principal basis pursuant to this  Agreement  or  any  Alternative  Equity  Distribution  Agreement,  as applicable,  except  as  otherwise  specifically  agreed  in  writing  by  the  Manager  and  the  Company  or  any  Alternative  Manager  and  the  Company, as applicable. For purposes of clarification, the Manager shall only be deemed to be acting as a  25962800.2.BUSINESS                                            14    

 

sales agent under this Agreement during the period beginning with the delivery of a Placement Notice from  the Company to the Manager and ending upon the suspension or termination of such Placement Notice.          (h)   The  Company  agrees  that,  during  the  term  of  this  Agreement,  any  offer  to  sell,  any  solicitation of an offer to buy, or any sales of Shares or sales of Common Stock pursuant to any At the  Market Offering (as defined herein and within the meaning of Rule 415(a)(4) under the 1933 Act) shall  only be effected by or through the Manager or an Alternative Manager, but in no event may more than one  Distribution  Manager  be  selling  Shares  under  the  Distribution  Agreements  at  any  given  time,  and  the  Company shall in no event request that more than one Distribution Manager sell Shares at the same time.  Notwithstanding the foregoing or anything else herein to the contrary, nothing contained in this Agreement  shall be construed to limit the Company’s ability to engage additional Distribution Managers subsequent to  the date hereof. The Company will notify the Manager and the Alternative Managers in the event that it  engages one or more additional Distribution Managers subsequent to the date hereof and Schedule A hereto  shall be deemed to incorporate by reference the names of each of the Distribution Managers (other than the  Manager) listed on Schedule A of the Distribution Agreements subsequently entered into by the Company  and such additional Distribution Managers.          Section 4.   Covenants of the Company. The Company agrees with the Manager:         (a)    During any period that a prospectus relating to the Shares is required to be delivered under  the  1933  Act,  the  Company,  subject  to  Section  4(b),  will  comply  with  the  requirements  of  Rule 415,  Rule 430B  or  Rule  430C,  as  applicable,  and  Rule 497  or  Rule  424,  as  applicable,  and  will  notify  the  Manager immediately, and confirm the notice in writing, (i) when any post-effective amendment to the  Registration  Statement  shall  become  effective,  or  any  supplement  to  the  Prospectus  or  any  amended  Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission relating to the  Registration  Statement,  (iii) of  any  request  by  the  Commission for  any  amendment  to  the  Registration  Statement or any amendment or supplement to the Prospectus or for additional information, and (iv) of the  issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement  or of any order preventing or suspending the use of any prospectus, or of the suspension of the qualification  of the Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings  for any of such purposes. The Company will promptly effect the filings necessary pursuant to Rule 497 or  Rule 424, as applicable, and will take such steps as it deems necessary to ascertain promptly whether the  form of prospectus transmitted for filing under Rule 497 or Rule 424, as applicable, was received for filing  by the Commission and, in the event that it was not, it will promptly file such prospectus. During any period  that a prospectus relating to the Shares is required to be delivered under the 1933 Act, the Company will  use its reasonable efforts to prevent the issuance of any stop order and, if any stop order is issued, to obtain  the lifting thereof at the earliest possible moment.          (b)   The Company shall notify the Manager promptly of the time on or after the date of this  Agreement when any amendment to the Registration Statement has been filed or becomes effective or when  the Basic Prospectus or the Prospectus or any supplement to any of the foregoing has been filed; and the  Company  shall  cause  the  Basic  Prospectus,  the  Prospectus  Supplement  and  the  Prospectus  and  each  amendment or supplement to the Basic Prospectus, the Prospectus Supplement or the Prospectus to be filed  with the Commission as required pursuant to Rule 497 or Rule 424 under the 1933 Act, as applicable, within  the time period prescribed.          (c)   The Company has furnished or will deliver to the Manager and counsel for the Manager,  without charge, conformed copies of the Registration Statement as originally filed, and of each amendment  thereto (including exhibits filed therewith or incorporated by reference therein) and conformed copies of  all consents and certificates of experts, and, upon the Manager’s request, will also deliver to the Manager,  without charge, a conformed copy of the Registration Statement as originally filed and of each amendment  25962800.2.BUSINESS                                            15    

 

thereto (without exhibits). The copies of the Registration Statement and each amendment thereto furnished  to the Manager will be identical to the electronically transmitted copies thereof filed with the Commission  pursuant to EDGAR, except to the extent permitted by Regulation S-T, or as filed with the Commission in  paper form as permitted by Regulation S-T.          (d)   The  Company  shall  make  available  to  the  Manager,  as  soon  as  practicable  after  this  Agreement becomes effective, and thereafter from time to time shall furnish to the Manager, as many copies  of the Prospectus (or of the Prospectus as amended or supplemented if the Company shall have made any  amendments or supplements thereto after the effective date of the Registration Statement) as the Manager  may reasonably request for the purposes contemplated by the 1933 Act; in case the Manager is required to  deliver (whether physically, deemed to be delivered pursuant to Rule 153 or any similar rule), in connection  with the sale of the Shares, a prospectus after the nine-month period referred to in Section 10(a)(3) of the  1933 Act, or after the time a post-effective amendment to the Registration Statement is required pursuant  to  Item 512(a)  of  Regulation  S-K  under  the  1933  Act,  the  Company  will  prepare,  at  its  expense,  such  amendment or amendments to the Registration Statement and the Prospectus as may be necessary to permit  compliance with the requirements of Section 10(a)(3) of the 1933 Act or Item 512(a) of Regulation S-K  under the 1933 Act, as the case may be.          (e)   The Company will use its commercially reasonable efforts to comply with the 1933 Act so  as to permit the distribution of the Shares as contemplated in this Agreement and in the Prospectus. If at  any time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the  Shares, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of  counsel for the Manager or for the Company, to amend the Registration Statement or amend or supplement  the Prospectus in order that the Prospectus will not include any untrue statements of a material fact or omit  to state a material fact necessary in order to make the statements therein not misleading in the light of the  circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of  such counsel, at any such time to amend the Registration Statement or amend or supplement the Prospectus  in order to comply with the requirements of the 1933 Act, the Company will promptly prepare and file with  the Commission, subject to Section 4(b), such amendment or supplement as may be necessary to correct  such statement or omission or to make the Registration Statement or the Prospectus comply with such  requirements, and the Company will furnish to the Manager such number of copies of such amendment or  supplement as the Manager may reasonably request.          (f)   The  Company  will  use  its  commercially  reasonable  efforts,  in  cooperation  with  the  Manager, to qualify the Shares for offering and sale under the applicable securities laws of such states and  other jurisdictions (domestic or foreign) as the Manager may designate and to maintain such qualifications  in effect for as long as the Manager reasonably requests; provided, however, that the Company shall not be  obligated to file any general consent to service of process or to qualify as a foreign corporation or as a  dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect  of doing business in any jurisdiction in which it is not otherwise so subject.         (g)    The Company will timely file such reports pursuant to the Exchange Act as are necessary  in order to make generally available to its securityholders as soon as reasonably practicable an earnings  statement of the Company and, to the extent required by the Commission, of each of the Controlled Portfolio  Companies (which need not be audited), for the purposes of, and to provide the benefits contemplated by,  the last paragraph of Section 11(a) of the 1933 Act.         (h)    The Company will use the Net Proceeds received by it from the sale of the Shares in the  manner specified in the Prospectus under the caption “Use of Proceeds”.    25962800.2.BUSINESS                                            16    

 

      (i)    The  Company  will  use  its  commercially  reasonable  efforts  to  list,  subject  to  notice  of  issuance, the Shares and to effect and maintain the quotation of the Common Stock on the Nasdaq Global  Select Market.         (j)    At any time during the pendency of a Placement Notice, the Company shall not sell, offer  to sell, contract or agree to sell, hypothecate, pledge, grant any option to sell or otherwise dispose of or  agree to dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into  or exchangeable or exercisable for Common Stock (including without limitation, any options, warrants or  other rights to purchase Common Stock), in each case without giving the Manager at least two (2) Trading  Days’ prior written notice specifying the nature of the proposed sale and the date of such proposed sale.  The  foregoing  sentence  shall  not  apply  to  (i) the  Shares  to  be offered  and  sold  to  the  Manager  or  any  Alternative Manager pursuant to this Agreement or any Terms Agreement, Alternative Equity Distribution  Agreement or Alternative Terms Agreement, as applicable, (ii) the issuance of any shares of Common Stock  issued by the Company upon the exercise of an option or the conversion of a security outstanding on the  date hereof and referred to in the Prospectus, (iii) any shares of Common Stock issued or options to purchase  shares of Common Stock granted pursuant to existing dividend reinvestment plans, direct stock purchase  plans or employee benefit plans of the Company referred to in the Prospectus, and any registration related  thereto,  (iv) any  shares  of  Common  Stock  issued  pursuant  to  any  non-employee  director  stock  plan  or  dividend reinvestment plan, and any registration related thereto, (v) any shares of Common Stock issued to  employees and directors pursuant to deferred compensation programs referred to in the Prospectus, and any  registration  related  thereto  or  (vi) the  issuance  by  the  Company  of  any  shares  of  Common  Stock  as  consideration for any strategic acquisitions. In the event that notice of a proposed sale is provided by the  Company pursuant to this subsection (j), the Manager will suspend activity under this Agreement for such  period of time as requested by the Company or as may be deemed appropriate by the Manager.         (k)    The Company, during the term of this Agreement, will use its commercially reasonable  efforts to maintain its status as a business development company; provided, however, the Company may  cease to be, or withdraw its election as, a business development company, with the approval of the board  of directors and a vote of stockholders as required by Section 58 of the 1940 Act or any successor provision.          (l)   The Company has qualified to be taxed as a RIC under Subchapter M of the Code for its  taxable  years  ended  December  31, 1988  through  December  31,  2017,  and  will  use  its  commercially  reasonable efforts to maintain qualification as a RIC under Subchapter M of the Code for its taxable year  ending December 31, 2018 and thereafter.          (m)   The Company shall pay all expenses incident to the performance of its obligations under  this Agreement, whether or not the transactions contemplated hereby are consummated or this Agreement  is terminated, including (i) the preparation and filing of the Registration Statement, the Basic Prospectus,  the Prospectus Supplement, the Prospectus and any amendments or supplements thereto, and the printing  and furnishing of copies of each thereof to the Manager (including costs of mailing and shipment), (ii) the  printing and delivery to the Manager of this Agreement and such other documents as may be required in  connection  with  the  offering,  purchase,  sale,  issuance  or  delivery  of  the  Shares,  (iii) the  issuance  and  delivery of the Shares to the Manager, including any stock or other transfer taxes and any stamp or other  duties  payable  upon  the  sale,  issuance  or  delivery  of  the  Shares  to  the  Manager,  (iv) the  fees  and  disbursements of the Company’s counsel, accountants and other advisors, (v) the qualification of the Shares  under securities laws in accordance with the provisions of Section 4(f) hereof, including filing fees and the  reasonable fees and disbursements of counsel for the Manager in connection therewith and in connection  with the preparation of Blue Sky surveys (the “Blue Sky Surveys”) and any supplement thereto, (vi) the  printing and delivery to the Manager of copies of the Prospectus and any amendments or supplements  thereto, (vii) the preparation, printing and delivery to the Manager of copies of the Blue Sky Survey and  any supplement thereto, (viii) the fees and expenses of any transfer agent or registrar for the Shares, (ix) the  25962800.2.BUSINESS                                            17    

 

reasonable legal fees and expenses of counsel to the Manager and any Alternative Managers in an amount  not to exceed (A) an aggregate amount of $90,000 in connection with due diligence and the preparation of  this Agreement and any Alternative Equity Distribution Agreement in connection with the initial launch of  the offering of the Shares, which amount shall include legal fees and expenses relating to the review by  FINRA of the terms of the sale of the Shares, and thereafter, (B) $7,500 on the first day of each calendar  quarter that this Agreement is in effect in connection with the maintenance of the offering of Shares and  the  Manager’s  and  any  Alternative  Manager’s  performance  under  this  Agreement  and  the  respective  Alternative Equity Distribution Agreements, commencing on April 1, 2019, and (x) the fees and expenses  incurred in connection with the inclusion of the Shares in the Nasdaq Global Select Market, and (xi) the  filing fees incident to the review by FINRA of the terms of the sale of the Shares. Except as set forth herein,  the Manager will pay all of its other out-of-pocket costs and expenses incurred in connection with entering  into this Agreement and the transactions contemplated by this Agreement, including, without limitation,  travel and similar expenses, whether or not the transactions contemplated hereby are consummated or this  Agreement is terminated.          (n)   The Company shall not, at any time at or after the execution of this Agreement, offer or  sell any Shares by means of any “prospectus” (within the meaning of the 1933 Act), or use any “prospectus”  (within the meaning of the 1933 Act) in connection with the offer or sale of the Shares, in each case other  than the Prospectus and the Additional Disclosure Items.          (o)   Neither the Company nor any affiliate of the Company will take, directly or indirectly, any  action designed, or which will constitute, or has constituted, or might reasonably be expected to cause or  result in (i) the stabilization or manipulation of the price of any security of the Company to facilitate the  sale or resale of the Shares or (ii) a violation of Regulation M. The Company shall notify the Manager of  any violation of Regulation M by the Company, any of its affiliates or any of their respective officers or  directors promptly after the Company has received notice or obtained knowledge of any such violation.          (p)   The Company shall advise the Manager promptly after it shall have received notice or  obtain knowledge thereof, of any information or fact that would materially alter or affect any opinion,  certificate, letter and other document provided to the Manager pursuant to Section 5 herein.          (q)   Upon commencement of the offering of the Shares under this Agreement (and upon the  recommencement  of  the  offering  of  the  Shares  under  this  Agreement  following  the  termination  of  a  Suspension Period (as defined below)), and each time that (i) the Registration Statement or the Prospectus  shall be amended or supplemented (other than (A) by an amendment or supplement that is filed solely to  report sales of the Shares pursuant to this Agreement or any Alternative Equity Distribution Agreement,  (B) in connection with the filing of any Current Reports on Form 8-K (other than any Current Reports on  Form 8-K which contain capsule financial information, financial statements, supporting schedules or other  financial data) or the incorporation of other documents by reference into the Registration Statement or  Prospectus except as set forth in clauses (ii) and (iii) below, or (C) by a prospectus supplement relating  solely to the offering of other securities, including, without limitation, other shares of Common Stock and  any debt securities of the Company), (ii) the Company files an annual report on Form 10-K under the  Exchange  Act,  or  an  amendment  thereto  containing  financial  information,  (iii)  the  Company  files  a  quarterly  report  on  Form  10-Q  under  the  Exchange  Act,  (iv)  the Shares  are  delivered  to  the  Manager  pursuant to a Terms Agreement, or (v) the Manager may reasonably request (the date of commencement of  the offering of the Shares under this Agreement, the date of commencement of the offering of the Shares  under  this  Agreement  following  the  termination  of  a  Suspension Period  and  each  date  referred  to  in  subclauses (i) through (v) above, each a “Representation Date”), the Company shall furnish or cause to be  furnished to the Manager forthwith certificates signed by the chief executive officer or president and of the  chief financial or chief accounting officer of the Company, dated and delivered the Representation Date, in  form satisfactory to the Manager, to the effect that the statements contained in the certificate referred to in  25962800.2.BUSINESS                                            18    

 

Error! Reference source not found. of this Agreement which was last furnished to the Manager are true  and  correct  as  of  such  Representation  Date  as  though  made  at  and  as  of  such  date  (except  that  such  certificates shall state that such statements shall be deemed to relate to the Registration Statement and the  Prospectus,  in  each  case  as  amended  and  supplemented  to  such  date)  or,  in  lieu  of  such  certificates,  certificates of the same tenor as the certificates referred to in said Error! Reference source not found.,  modified as necessary to relate to the Registration Statement and the Prospectus, and such other certificates  as the Manager shall reasonably request, in each case as amended and supplemented to the time of delivery  of  such  certificate;  provided  that  the  obligations  under  this  subsection  (q)  shall  be  deferred  when  no  Placement Notice is pending or for any period that the Company has suspended the offering of Shares  pursuant  to  Section  3(a)(ii)  hereof  (each,  a  “Suspension  Period”)  and  shall  recommence  upon  the  termination of such Suspension Period and/or the Company’s submission of a Placement Notice to the  Manager.         (r)    At or promptly after each Representation Date, the Company shall furnish or cause to be  furnished forthwith to the Manager written opinions of Eversheds Sutherland (US) LLP, counsel to the  Company (“Company Counsel”), dated and delivered as of or promptly after such Representation Date, in  form and substance reasonably satisfactory to the Manager, of the same tenor as the opinions referred to in  Section 5(d) of this Agreement, but modified as necessary to relate to the Registration Statement and the  Prospectus, in each case as amended and supplemented to the time of delivery of such opinions; provided  that the obligation of the Company under this subsection (r) shall be deferred when no Placement Notice is  pending or for any Suspension Period and shall recommence upon the termination of such Suspension  Period and/or the Company’s submission of a Placement Notice to the Manager.          (s)   At or promptly after each Representation Date, Dechert LLP, counsel to the Manager, shall  deliver a written opinion, dated and delivered as of or promptly after such Representation Date, in form and  substance reasonably satisfactory to the Manager; provided that the obligation under this subsection (s)  shall be deferred when no Placement Notice is pending or for any Suspension Period and shall recommence  upon the termination of such Suspension Period and/or the Company’s submission of a Placement Notice  to the Manager.          (t)   Upon commencement of the offering of the Shares under this Agreement (and upon the  recommencement  of  the  offering  of  the  Shares  under  this  Agreement  following  the  termination  of  a  Suspension  Period),  and  at  or  promptly  after  each  Representation  Date,  the  Company  shall  cause  the  Company’s current independent accountant, RSM (US) LLP, and its former independent accountant, Grant  Thornton  LLP,  or  other  independent  accountants  satisfactory  to the  Manager,  forthwith  to  furnish  the  Manager  a  letter,  dated  and  delivered  as  of  or  promptly  after  such  Representation  Date,  in  form  and  substance reasonably satisfactory to the Manager, of the same tenor as the letter referred to in Section 5(f)  of this Agreement but modified to relate to the Registration Statement and the Prospectus as amended and  supplemented to the date of such letter; provided that the obligation of the Company under this subsection  (t)  shall  be  deferred  when  no  Placement  Notice  is  pending  or  for  any  Suspension  Period  and  shall  recommence  upon  the  termination  of  such  Suspension  Period  and/or  the  Company’s  submission  of  a  Placement  Notice  to  the  Manager;  provided  further  that  only  a  letter  from  RSM  (US)  LLP  (or  the  Company’s then-current independent registered public accountants) will be required in connection with  clause (iii) of Section 4(q).          (u)   At or promptly after each Representation Date, the Company shall conduct a due diligence  session, in form and substance reasonably satisfactory to the Manager, which shall include representatives  of the management and the Company’s current independent registered public accountants; provided that  the obligation of the Company under this subsection (u) shall be deferred when no Placement Notice is  pending or for any Suspension Period and shall recommence upon the termination of such Suspension  Period and/or the Company’s submission of a Placement Notice to the Manager; provided further that such  25962800.2.BUSINESS                                            19    

 

due diligence session shall be requested and conducted solely by the Distribution Manager who is then  offering or selling Shares of the Company pursuant to its Distribution Agreement for such Distribution  Manager’s portion of the Maximum Amount. For the avoidance of doubt, all Distribution Managers shall  be invited by the Company to participate in any due diligence session not requested and conducted by such  Distribution Manager. The Company shall cooperate with any reasonable due diligence review conducted  by the Manager (or its counsel or other representatives) from time to time (on a Representation Date or  otherwise)  in  connection  with  the  transactions  contemplated  by this  Agreement,  including,  without  limitation, providing information and making available documents and senior corporate officers, as the  Manager may reasonably request; provided, however, that the Company shall be required to make available  documents and senior corporate officers only (i) at the Company’s or Company Counsel’s principal offices  and (ii) during the Company’s ordinary business hours.          (v)   The Company consents to the Manager trading in the Common Stock for the Manager’s  own account and for the account of its clients at the same time as sales of the Shares occur pursuant to this  Agreement.          (w)   If to the knowledge of the Company, any condition set forth in Section 5(a) or 5(j) of this  Agreement shall not have been satisfied on the applicable Settlement Date or Time of Delivery, as the case  may be, the Company shall offer to any person who has agreed to purchase the Shares from the Company  as the result of an offer to purchase solicited by the Manager the right to refuse to purchase and pay for  such Shares.         (x)    The Company agrees that on such dates as the 1933 Act shall require, the Company will  file a prospectus supplement with the Commission pursuant to Rule 497 or Rule 424 under the 1933 Act,  as applicable, or otherwise include in a filed annual report on Form 10-K or quarterly report on Form 10- Q, which prospectus supplement, Form 10-K or Form 10-Q, as applicable, will set forth the number of the  Shares sold through or to the Manager under this Agreement, the Net Proceeds to the Company and the  compensation paid by the Company with respect to sales of the Shares pursuant to this Agreement during  the relevant quarter.          (y)   The Company agrees to ensure that prior to instructing the Manager to sell Shares the  Company shall have obtained all necessary corporate authority for the offer and sale of such Shares.          (z)   Each acceptance by the Company of an offer to purchase the Shares hereunder, and each  execution and delivery by the Company of a Terms Agreement, shall be deemed to be an affirmation to the  Manager that the representations and warranties of the Company contained in or made pursuant to this  Agreement are true and correct as of the date of such acceptance or of such Terms Agreement as though  made at and as of such date, and an undertaking that such representations and warranties will be true and  correct as of the Settlement Date for the Shares relating to such acceptance or as of the Time of Delivery  relating  to  such  sale,  as  the  case  may  be,  as  though  made  at  and  as  of  such  date  (except  that  such  representations and warranties shall be deemed to relate to the Registration Statement and the Prospectus  as amended and supplemented relating to such Shares).          Section 5.   Conditions of Manager’s Obligations. The obligations of the Manager hereunder  are subject to (i) the accuracy of the representations and warranties on the part of the Company on the date  hereof, any applicable Representation Date, as of each Time of Sale and as of each Settlement Date and  Time  of  Delivery,  (ii) the  performance  by  the  Company  of  its  obligations  hereunder  and  (iii) to  the  following additional conditions precedent.          (a)   (i) No stop order suspending the effectiveness of the Registration Statement shall have been  issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and any  25962800.2.BUSINESS                                            20    

 

request on the part of the Commission for additional information shall have been complied with to the  reasonable satisfaction of counsel to the Manager. All filings related to the offering of the Shares with the  Commission required by Rule 497 or Rule 424 under the 1933 Act, as applicable, shall have been made  within the applicable time period prescribed for such filing under the 1933 Act.          (b)   The  Company  shall  deliver  to  the  Manager,  at  each  Representation  Date,  a  certificate  signed  by  the  chief  executive  officer,  president  and  the  chief financial  or  accounting  officers  of  the  Company  to  the  effect  that  (i) the  representations  and  warranties  of  the  Company  as  set  forth  in  this  Agreement  are  true  and  correct  as  of  the  Representation  Date,  (ii) the  Company  performed  such  of  its  obligations under this Agreement as are to be performed at or before such Representation Date, and (iii) the  conditions set forth in paragraphs (a) and (b) of Section 4 have been met. Each certificate shall also state  that the Shares have been duly and validly authorized by the Company, that all corporate action required to  be  taken  for  the  issuance  and  sale  of  the  Shares  has  been  validly  and  sufficiently  taken,  and  that  the  Company’s board of directors or any other body with authority has not revoked, rescinded or otherwise  modified or withdrawn such authorization or corporate action.         (c)    The  Company  shall  deliver  to  the  Manager  at  each  Representation  Date,  upon  the  Manager’s reasonable request, a certificate of the chief financial officer of the Company, dated such date.          (d)   The  Company  shall  furnish  to  the  Manager,  at  each  Representation  Date,  opinions  of  Company  Counsel,  addressed  to  the  Manager,  and  dated  as  of  such date, and in form and substance  reasonably satisfactory to the Manager, in substantially the form set forth in Exhibit A hereto or as otherwise  satisfactory to the Manager.          (e)   The Manager shall have received, at each Representation Date, the favorable opinion of  Dechert  LLP,  counsel  to  the  Manager,  dated  as  of  such  date,  and  in  form  and  substance  reasonably  satisfactory to the Manager.          (f)   At each Representation Date, the Manager shall have received from the accountants a letter  dated  the  date  of  delivery  thereof  and  addressed  to  the  Manager  in  form  and  substance  reasonably  satisfactory to the Manager.          (g)   At  each  Representation  Date  and  on  such  other  dates  as  reasonably  requested  by  the  Manager, the Company shall have conducted due diligence sessions, in form and substance reasonably  satisfactory to the Manager, which shall include the participation of representatives of the management of  the Company and the independent registered public accountants of the Company.          (h)   The  Shares  shall  have  been  approved  for  listing  on  the  Nasdaq  Global  Select  Market,  subject only to notice of issuance at or prior to the Settlement Date or the Time of Delivery, as the case may  be.          (i)   The Common Stock shall be an “actively-traded security” excepted from the requirements  of Rule 101 of Regulation M under the Exchange Act by subsection (c)(1) of such rule.          (j)   All filings with the Commission required by Rule 497 or Rule 424 under the 1933 Act, as  applicable, to have been filed by the Settlement Date or the Time of Delivery, as the case may be, shall  have been made within the applicable time period prescribed for such filing by Rule 497 or Rule 424, as  applicable.    25962800.2.BUSINESS                                            21    

 

      Section 6.    Indemnification.         (a)    Indemnification of the Manager by the Company. The Company agrees to indemnify and  hold harmless the Manager, its affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each,  an “Affiliate”), its selling agents and each person, if any, who controls the Manager within the meaning of  Section 15 of the 1933 Act or Section 20 of the Exchange Act as follows:                (i)    against  any  and  all  loss,  liability,  claim,  damage  and  expense whatsoever,  as         incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained         in the Registration Statement (or any amendment thereto), or the omission or alleged omission         therefrom of a material fact required to be stated therein or necessary to make the statements therein         not misleading or arising out of any untrue statement or alleged untrue statement of a material fact         included in the Prospectus (or any amendment or supplement thereto) or any Additional Disclosure         Item (when taken together with the Prospectus), or the omission or alleged omission therefrom of         a material fact necessary in order to make the statements therein, in the light of the circumstances         under which they were made, not misleading;                (ii)   against  any  and  all  loss,  liability,  claim,  damage  and  expense whatsoever,  as        incurred,  to  the  extent  of  the  aggregate  amount  paid  in  settlement  of  any  litigation,  or  any        investigation or proceeding by any governmental agency or body, commenced or threatened, or of        any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue        statement  or  omissions;  provided  that  (subject  to  Section  6(d) below)  any  such  settlement  is        effected with the written consent of the Company;                (iii)  against  any  and  all  expense  whatsoever,  as  incurred  (including the  fees  and         disbursements of counsel chosen by the Manager), reasonably incurred in investigating, preparing         or defending against any litigation, or any investigation or proceeding by any governmental agency         or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement         or omission, or any such alleged untrue statement or omission, to the extent that any such expense         is not paid under (i) or (ii) above;   provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or  expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission  made  in  reliance  upon  and  in  conformity  with  written  information  furnished  to  the  Company  by  such  Manager expressly for use in the Registration Statement (or any amendment thereto) or the Prospectus (or  any amendment or supplement thereto).          (b)   Indemnification of Company, Directors, Officer. The Manager agrees to indemnify and  hold harmless the Company, each of its directors, officers and Affiliates, and each person, if any, who  controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act,  against  any  and  all  loss,  liability,  claim,  damage  and  expense described  in  the  indemnity  contained  in  subsection (a)  of  this  Section,  as  incurred,  but  only  with  respect  to  untrue  statements  or  omissions,  or  alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or  the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written  information furnished to the Company by the Manager expressly for use in the Registration Statement (or  any amendment thereto), or the Prospectus (or any amendment or supplement thereto).          (c)   Actions Against Parties; Notification. Each indemnified party shall give notice as promptly  as reasonably practicable to each indemnifying party of any action commenced against it in respect of which  indemnity may be sought hereunder (an “Action”), but failure to so notify an indemnifying party shall not  relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as  25962800.2.BUSINESS                                            22    

 

a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on  account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above,  counsel to the indemnified parties shall be selected by the Manager, and, in the case of parties indemnified  pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An  indemnifying  party  may  participate  at  its  own  expense  in  the  defense  of  any  such  Action;  provided,  however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party)  also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and  expenses of more than one counsel (in addition to any local counsel) separate from their 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. No indemnifying party shall,  without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of  any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency  or  body,  commenced  or  threatened,  or  any  claim  whatsoever  in  respect  of  which  indemnification  or  contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties  are  actual  or  potential  parties  thereto),  unless  such  settlement,  compromise  or  consent  (i) includes  an  unconditional release of each indemnified party from all liability arising out of such litigation, investigation,  proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a  failure to act by or on behalf of any indemnified party. Notwithstanding anything to the contrary herein,  neither the assumption of the defense of any such Action nor the payment of any fees or expenses related  thereto shall be deemed to be an admission by the indemnifying party that it has an obligation to indemnify  any person pursuant to this Agreement.          (d)   Settlement Without Consent if Failure to Reimburse. If at any time an indemnified party  shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of  counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated  by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45  days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall  have received notice of the terms of such settlement at least 30 days prior to such settlement being entered  into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with  such request prior to the date of such settlement; provided that an indemnifying party shall not be liable for  any  such  settlement  effected  without  its  consent  if  such  indemnifying  party,  prior  to  the  date  of  such  settlement, (1) reimburses such indemnified party in accordance with such request for the amount of such  fees  and  expenses  of  counsel  as  the  indemnifying  party  believes  in  good  faith  to  be  reasonable,  and  (2) provides written notice to the indemnified party that the indemnifying party disputes in good faith the  reasonableness of the unpaid balance of such fees and expenses.          (e)   Acknowledgement by the Company. The Company also acknowledge and agree that (i) the  purchase and sale of any Shares pursuant to this Agreement, including any discounts and commissions, is  an arm’s-length commercial transaction between the Company, on the one hand, and the Manager, on the  other hand, (ii) in connection with the offering of the Shares and the process leading to such transaction the  Manager will act solely as principal and not as agents or fiduciaries of the Company or its stockholders,  creditors,  employees  or  any  other  party,  (iii) the  Manager  will  not  assume  an  advisory  or  fiduciary  responsibility in favor of the Company with respect to the offering of the Shares contemplated hereby or  the process leading thereto (irrespective of whether the Manager has advised or are currently advising the  Company on other matters) and the Manager will not have any obligation to the Company with respect to  the offering except the obligations expressly set forth herein, (iv) the Manager and its Affiliates may be  engaged in a broad range of transactions that involve interests that differ from those of the Company, and  (v) the Manager has not provided and will not provide any legal, accounting, regulatory or tax advice with  respect  to  the  offering  of  the  Shares  and  the  Company  has  consulted  and  will  consult  its  own  legal,  accounting, regulatory and tax advisors to the extent it deemed appropriate.   25962800.2.BUSINESS                                            23    

 

      Section 7.    Contribution. If the indemnification provided for in Section 6 hereof is for any  reason  unavailable  to  or  insufficient  to  hold  harmless  an  indemnified  party  in  respect  of  any  losses,  liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute  to  the  aggregate  amount  of  such  losses,  liabilities,  claims,  damages  and  expenses  incurred  by  such  indemnified  party,  as  incurred,  (i) in  such  proportion  as  is  appropriate  to  reflect  the  relative  benefits  received by the Company on the one hand and the Manager on the other hand from the offering of the  Shares  pursuant  to  this  Agreement  or  (ii) if  the  allocation  provided  by  clause  (i)  is  not  permitted  by  applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in  clause (i) above but also the relative fault of the Company on the one hand and of the Manager on the other  hand  in  connection  with  the  statements  or  omissions  which  resulted  in  such  losses,  liabilities,  claims,  damages or expenses, as well as any other relevant equitable considerations.          The relative benefits received by the Company on the one hand and the Manager on the other hand  in connection with the offering of the Shares pursuant to this Agreement shall be deemed to be in the same  respective proportions as the total net proceeds from the offering of the Shares pursuant to this Agreement  (before deducting expenses) received by the Company and the total compensation received by the Manager,  in each case as determined as of the date of such Action referred to in Section 6(a) or (b), as applicable  which  resulted  in  such  losses,  liabilities,  claims,  damages  or expenses,  as  well  as  any  other  relevant  equitable considerations.          The relative fault of the Company on the one hand and the Manager on the other hand shall be  determined by reference to, among other things, whether any such untrue or alleged untrue statement of a  material fact or omission or alleged omission to state a material fact relates to information supplied by the  Company  or  by  the  Manager  and  the  parties’  relative  intent,  knowledge,  access  to  information  and  opportunity to correct or prevent such statement or omission.          The Company and the Manager agree that it would not be just and equitable if contribution pursuant  to this Section 7 were determined by pro rata allocation (even if the Distribution Managers were treated as  one  entity  for  such  purpose)  or  by  any  other  method  of  allocation  which  does  not  take  account of  the  equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities,  claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall  be  deemed  to  include  any  legal  or  other  expenses  reasonably  incurred  by  such  indemnified  party  in  investigating,  preparing  or  defending  against  any  litigation,  or  any  investigation  or  proceeding  by  any  governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such  untrue or alleged untrue statement or omission or alleged omission.          Notwithstanding the provisions of this Section 7, the Manager shall not be required to contribute  any amount in excess of the amount by which the total price at which the Shares sold by it under this  Agreement exceeds the amount of any damages which such Manager has otherwise been required to pay  by reason of any such untrue or alleged untrue statement or omission or alleged omission.          No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933  Act)  shall  be  entitled  to  contribution  from  any  person  who  was not  guilty  of  such  fraudulent  misrepresentation.          For purposes of this Section 7, each person, if any, who controls the Manager within the meaning  of Section 15 of the 1933 Act or Section 20 of the Exchange Act and the Manager’s Affiliates and selling  agents shall have the same rights to contribution as such Manager, and each director of the Company, each  officer  of  the  Company,  and  each  person,  if  any,  who  controls  the  Company  within  the  meaning  of  Section 15 of the 1933 Act or Section 20 of the Exchange Act shall have the same rights to contribution as  the Company.  25962800.2.BUSINESS                                            24    

 

      Notwithstanding any other provision of Section 6 and this Section 7, no party shall be entitled to  indemnification or contribution under this Agreement in violation of Section 17(i) of the 1940 Act.         Section 8.    Representations,  Warranties  and  Agreements  to  Survive  Delivery.  All  representations, warranties and agreements contained in this Agreement or in certificates of officers of the  Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any  investigation made by or on behalf of the Manager or its Affiliates or selling agents, any person controlling  the  Manager,  its  officers  or  directors  or  any  person  controlling  the  Company  and  (ii) delivery  of  and  payment for the Shares.          Section 9.   Termination.         (a)    The Company shall have the right, by giving written notice as hereinafter specified, to  terminate the provisions of this Agreement relating to the solicitation of offers to purchase the Shares in its  sole discretion at any time. Any such termination shall be without liability of any party to any other party  except that (i) if any of the Shares have been sold through the Manager for the Company, then Section 4(z)  shall remain in full force and effect, (ii) with respect to any pending sale, through the Manager for the  Company, the obligations of the Company, including in respect of compensation of the Manager, shall  remain in full force and effect notwithstanding the termination and (iii) the provisions of Section 4(m),  Section  6,  Section  7,  Section  8,  Section  9,  Section  10,  Section  11,  Section  12  and  Section  13  of  this  Agreement shall remain in full force and effect notwithstanding such termination.          (b)   The  Manager  shall  have  the  right,  by  giving  written  notice  as  hereinafter  specified,  to  terminate the provisions of this Agreement relating to the solicitation of offers to purchase the Shares in its  sole discretion at any time. Any such termination shall be without liability of any party to any other party  except that the provisions of Section 4(m), Section 6, Section 7, Section 8, Section 9, Section 10, Section  11, Section 12 and Section 13 of this Agreement shall remain in full force and effect notwithstanding such  termination.          (c)   This Agreement shall remain in full force and effect unless terminated pursuant to Section  9(a)  or  Section  9(b)  above  or  otherwise  by  mutual  agreement  of the  parties;  provided  that  any  such  termination by mutual agreement shall in all cases be deemed to provide that the provisions of Section 4(m),  Section  6,  Section  7,  Section  8,  Section  9,  Section  10,  Section  11,  Section  12  and  Section  13  of  this  Agreement shall remain in full force and effect notwithstanding such termination.          (d)   Any termination of this Agreement shall be effective on the date specified in such notice  of termination; provided that such termination shall not be effective until the close of business on the tenth  Trading Day after the date of receipt of such notice by the Manager or the Company, as the case may be. If  such termination shall occur prior to the Settlement Date or Time of Delivery for any sale of the Shares,  such sale shall settle in accordance with the provisions of Section 3(a)(vi) of this Agreement.          Section 10.  Notices. Except as otherwise herein provided, all statements, requests, notices and  agreements under this Agreement shall be in writing and shall be deemed to have been duly given if mailed  or transmitted by any standard form of telecommunication. Notices to the Manager shall be directed to it at  [•],  Attention:  [•],  with  a  copy  to  Dechert  LLP,  1900  K  Street N.W.,  Washington,  DC  20006-1110,  Attention: Harry S. Pangas; and notices to the Company shall be directed to it at 5400 Lyndon B. Johnson  Freeway, Suite 1300, Dallas, TX 75240, Attention: Michael S. Sarner, with a copy to Eversheds Sutherland  (US) LLP, 700 Sixth Street, N.W., Washington, D.C. 20001-3980, Attention: Payam Siadatpour.          Section 11.  Parties. This Agreement shall each inure to the benefit of and be binding upon the  Manager  and  the  Company  and  their  respective  successors.  Nothing  expressed  or  mentioned  in  this   25962800.2.BUSINESS                                            25    

 

Agreement is intended or shall be construed to give any person, firm or corporation, other than the Manager  and the Company and their respective successors and the controlling persons and officers and directors  referred to in Section 6 and Section 7 and their heirs and legal representatives, any legal or equitable right,  remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement  and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Manager  and the Company and their respective successors, and said controlling persons and officers and directors  and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No  purchaser of Shares from any Manager shall be deemed to be a successor by reason merely of such purchase.          Section 12.  Governing  Law.  This  Agreement  shall  be  governed  by  and  construed  in  accordance with the laws of the State of New York, including without limitation Section 5-1401 of the New  York General Obligations Law.          Section 13.  Submission to Jurisdiction. Except as set forth below, no claim or action may be  commenced, prosecuted or continued in any court other than the courts of the State of New York located  in the City and County of New York or in the United States District Court for the Southern District of New  York, which courts shall have jurisdiction over the adjudication of such matters, and both the Manager and  the  Company  consent  to  the  jurisdiction  of  such  courts  and  personal  service  with  respect  thereto.  The  Company hereby consents to personal jurisdiction, service and venue in any court in which any claim or  action arising out of or in any way relating to this Agreement is brought by any third party against the  Manager  or  any  indemnified  party.  The  Manager  and  the  Company  (on  its  behalf  and,  to  the  extent  permitted by applicable law, on behalf of its stockholders and affiliates) waive all right to trial by jury in  any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising  out of or relating to this Agreement.          Section 14.  Counterparts. This Agreement may be executed in any number of counterparts,  each of which shall be deemed to be an original, but all such counterparts shall together constitute one and  the same Agreement.         Section 15.   Effect of Headings. The Section headings herein are for convenience only and shall  not affect the construction hereof.          Section 16.  USA  Patriot  Act.  In  accordance  with  the  requirements  of  the  USA Patriot Act  (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Manager is required to obtain, verify  and record information that identifies their respective clients, including the Company, which information  may include the name and address of their respective clients, as well as other information that will allow  the Manager to properly identify its clients.          Section 17.  Research  Independence.  In  addition,  the  Company  acknowledge  that  the  Manager’s research analysts and research departments are required to be independent from their respective  investment  banking  divisions  and  are  subject  to  certain  regulations  and  internal  policies,  and  that  the  Manager’s research analysts may hold and make statements or investment recommendations and/or publish  research  reports  with  respect  to  the  Company  and/or  the  offering  that  differ  from  the  views  of  their  investment bankers. The Company hereby waives and releases, to the fullest extent permitted by law, any  claims that the Company may have against the Manager with respect to any conflict of interest that may  arise from the fact that the views expressed by the Manager’s independent research analysts and research  departments may be different from or inconsistent with the views or advice communicated to the Company  by the Manager’s investment banking divisions. The Company acknowledges that the Manager is a full  service securities firm and as such from time to time, subject to applicable securities laws,  may effect  transactions for its own accounts or the accounts of their customers and hold long or short positions in debt   25962800.2.BUSINESS                                            26    

 

or  equity  securities  of  the  companies  that  may  be  the  subject  of  the  transactions  contemplated  by  this  Agreement and any Terms Agreement.          Section 18.  No  Fiduciary  Duty.  The  Company  hereby  acknowledges  and  agrees  that  in  connection with the sale of the Shares or any other services the Manager may be deemed to be providing  hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between the parties or any  oral representations or assurances previously or subsequently made by the Manager: (i) no fiduciary or  agency relationship between the Company and any other person, on the one hand, and the Manager, on the  other, exists; (ii) the Manager is not acting as advisor, expert or otherwise, to the Company, including,  without limitation, with respect to the determination of the sale price of the Shares, and such relationship  between the Company, on the one hand, and the Manager, on the other, is entirely and solely commercial,  based  on  arm’s-length  negotiations;  (iii) any  duties  and  obligations  that  the  Manager  may  have  to  the  Company shall be limited to those duties and obligations specifically stated herein; and (iv) the Manager  and its affiliates may have interests that differ from those of the Company. The Company hereby waives  any claims that the Company may have against the Manager with respect to any breach of fiduciary duty in  connection with the offering.                                    [Signature Pages Follow]       25962800.2.BUSINESS                                            27    

 

                                                                            Exhibit 10.1         If the foregoing correctly sets forth the understanding between the Company and the Manager,  please  so  indicate  in  the  space  provided  below  for  that  purpose,  whereupon  this  Agreement  and  your  acceptance shall constitute a binding agreement among the Company and the Manager.                                               Very truly yours,      COMPANY:                                                 CAPITAL SOUTHWEST CORPORATION         By     Name:   Michael S. Sarner                                                 Title:  Chief Financial Officer                          [Signature page to Amended and Restated Equity Distribution Agreement]  25962800.2.BUSINESS   

 

ACCEPTED as of the date first above written.   MANAGER:   [•]   By:   Name:    Title:                     [Signature page to Amended and Restated Equity Distribution Agreement]  25962800.2.BUSINESS   

 

                                                                            Exhibit 10.1                                                                                   Annex I                               [FORM OF TERMS AGREEMENT]                                 Capital Southwest Corporation                                  [    ] Shares of Common Stock                                  (par value $0.25 per share)                                    TERMS AGREEMENT                                                                                   [DATE]   [•]   [•]  [•]    Ladies and Gentlemen:          Capital Southwest Corporation, a Texas corporation (the “Company”), proposes, subject to the  terms and conditions stated herein and in the Amended and Restated Equity Distribution Agreement, dated  [DATE] (the “Equity Distribution Agreement”), by and between the Company and [•] (the “Manager”), to  issue and sell to the Manager the securities specified in Schedule I hereto (the “Purchased Securities”)[, and  solely for the purpose of covering over-allotments, to grant to the Manager the  option to purchase the  additional securities specified in Schedule I hereto (the “Additional Securities”)].         [The Manager shall have the right to purchase from the Company all or a portion of the Additional  Securities  as  may  be  necessary  to  cover  over-allotments  made  in  connection  with  the  offering  of  the  Purchased Securities, at the same purchase price per share to be paid by the Manager to the Company for  the Purchased Securities. This option may be exercised by the Manager at any time (but not more than  once) on or before the 30th day following the date hereof, by written notice to the Company. Such notice  shall set forth the aggregate number of Additional Securities as to which the option is being exercised, and  the date and time when the Additional Securities are to be delivered (such date and time being herein  referred to as the “Option Closing Date”); provided, however, that the Option Closing Date shall not be  earlier than the Time of Delivery (as set forth in Schedule I hereto) nor earlier than the second business day  after the date on which the option shall have been exercised nor later than the fifth business day after the  date  on  which  the  option  shall  have  been  exercised.  Payment  of the  purchase  price  for  the  Additional  Securities shall be made at the Option Closing Date in the same manner and at the same office as the  payment for the Purchased Securities.]          Each  of  the  provisions  of  the  Equity  Distribution  Agreement  not  specifically  related  to  the  solicitation by the Manager, as agent of the Company, of offers to purchase securities is incorporated herein  by reference in its entirety, and shall be deemed to be part of this Terms Agreement to the same extent as  if such provisions had been set forth in full herein. Each of the representations and warranties set forth  therein shall be deemed to have been made at and as of the date of this Terms Agreement [and][,] the Time  of Delivery [and any Option Closing Date], except that each representation and warranty in Section 2 of  the Equity Distribution Agreement which makes reference to the Prospectus (as therein defined) shall be  deemed to be a representation and warranty as of the date of the Equity Distribution Agreement in relation  to the Prospectus, and also a representation and warranty as of the date of this Terms Agreement [and] [,]  the  Time  of  Delivery  [and  any  Option  Closing  Date]  in  relation to  the  Prospectus  as  amended  and  supplemented to relate to the Purchased Securities.    25962800.2.BUSINESS   

 

      [An amendment to the Registration Statement (as defined in the Equity Distribution Agreement),  or  a  supplement  to  the  Prospectus,  as  the  case  may  be,  relating  to  the  Purchased  Securities  [and  the  Additional Securities], in the form heretofore delivered to the Manager is now proposed to be filed with the  Commission.]         Subject to the terms and conditions set forth herein and in the Equity Distribution Agreement which  are incorporated herein by reference, the Company agrees to issue and sell to the Manager and the latter  agrees to purchase from the Company the number of shares of the Purchased Securities at the time and  place and at the purchase price set forth in Schedule I hereto.         All capitalized terms used herein and not otherwise defined shall have the respective meanings  assigned to them in the Equity Distribution Agreement.                        [The remainder of this page is intentionally left blank]       25962800.2.BUSINESS   

 

                                                                            Exhibit 10.1         If the foregoing is in accordance with your understanding, please sign and return to us a counterpart  hereof, whereupon this Terms Agreement, including those provisions of the Equity Distribution Agreement  incorporated  herein  by  reference,  shall  constitute  a  binding  agreement  between  the  Manager  and  the  Company.                                               Very truly yours,      COMPANY:                                                 CAPITAL SOUTHWEST CORPORATION         By     Name:                                                  Title:      ACCEPTED as of the date first above written   [•]   By:   Name:    Title:        25962800.2.BUSINESS   

 

                                                                                                                      Schedule I to the Terms Agreement   Title of Purchased Securities [and Additional Securities]:   Common Stock, par value $0.25 per share   Number of Purchased Securities:   [Number of Additional Securities:]   [Price to Public:]   Purchase Price by the Manager:   Method of and Specified Funds for Payment of Purchase Price:   By wire transfer to a bank account specified by the Company in same day funds.   Method of Delivery:   Free  delivery  of  the  Shares  to  the  Manager’s  account  at  The  Depository  Trust  Company  in  return  for  payment of the Purchase Price.   Time of Delivery:   Closing Location:   Documents to be Delivered:          The following documents referred to in the Equity Distribution Agreement shall be delivered as a  condition to closing at the time of execution of this Terms Agreement:          (1)   The accountants’ letter referred to in Section 4(t).         (2)   The certificate referred to in Section 4(q).          The following documents referred to in the Equity Distribution Agreement shall be delivered as a  condition to closing at the Time of Delivery[ and on any Option Closing Date]:          (1)   The officers’ certificates referred to in Section 4(q).         (2)   The opinions referred to in Section 4(r).         (3)   The opinion referred to in Section 4(s).         (4)   The accountants’ letter referred to in Section 4(t).          (5)   Such other documents as the Manager shall reasonably request.        25962800.2.BUSINESS   

 

                                      Schedule A                                ALTERNATIVE MANAGERS   [•]         25962800.2.BUSINESS   

 

                                      Schedule B                             ADDITIONAL DISCLOSURE ITEMS        Rule 497AD filed with the Commission on February 5, 2019        Rule 497AD filed with the Commission on June 4, 2019       Rule 497AD filed with the Commission on August 6, 2019                  25962800.2.BUSINESS   

 

                                      Schedule C                         AUTHORIZED COMPANY REPRESENTATIVES   Bowen S. Diehl, President and Chief Executive Officer   Michael S. Sarner, Chief Financial Officer, Chief Compliance Officer, Secretary and Treasurer           25962800.2.BUSINESS   

 

                                       Exhibit A                  FORM OF OPINION OF EVERSHEDS SUTHERLAND (US) LLP       25962800.2.BUSINESS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00299-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00299-of-00352.parquet"}]]