Document:

news-ex41_12.htm

 

Exhibit 4.1

EXECUTION VERSION

SECOND AMENDMENT TO
SIXTH AMENDED AND RESTATED LOAN AND SERVICING AGREEMENT
(NewStar CP Funding LLC)

THIS SECOND AMENDMENT TO SIXTH AMENDED AND RESTATED LOAN AND SERVICING AGREEMENT, dated as of April 4, 2017 (this “Amendment”), is entered into by and among NEWSTAR CP Funding LLC, as the Borrower (the “Borrower”), NEWSTAR FINANCIAL, INC., as the Originator and the Servicer, the Lenders identified on the signature pages hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Administrative Agent (in such capacity, the “Administrative Agent”). 

R E C I T A L S

WHEREAS, the above-named parties have entered into that certain Sixth Amended and Restated Loan and Servicing Agreement, dated as of August 10, 2015 (as amended, the “Agreement”), by and among the Borrower, the Originator, the Servicer, each of the Conduit Lenders and Institutional Lenders from time to time party thereto, Wells Fargo Bank, National Association, as the Swingline Lender, the Administrative Agent and U.S. Bank National Association, as the Trustee;

WHEREAS, pursuant to and in accordance with Section 13.1 of the Agreement, the parties hereto desire to amend the Agreement in certain respects as provided herein;

NOW, THEREFORE, based upon the above Recitals, the mutual premises and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, intending to be legally bound, hereby agree as follows:

SECTION 1.Definitions.

Each capitalized term used but not defined herein has the meaning ascribed thereto in the Agreement.

SECTION 2.Amendments.

2.1Clause (c) of the definition of “ERISA Affiliate” is hereby amended by deleting the phrase “a member of the same affiliated service group” in its entirety and inserting in lieu thereof “for purposes of Section 302 of ERISA and Section 412 of the Code, a member of the same affiliated service group”.

2.2The definition of “Loan Tape” in Section 1.1 of the Agreement is hereby amended by (a) deleting the phrase “what type); and” in clause (aa) thereof in its entirety and inserting in lieu thereof “what type);”, (b) deleting the phrase “Material Modification.” in clause (bb) thereof in its entirety and inserting in lieu thereof “Material Modification;” and (c) adding the following as new clauses (cc), (dd), (ee), (ff), (gg) and (hh):

	
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(cc)cash used in the Senior Net Leverage Ratio and Total Net Leverage Ratio calculations;

(dd)gross total debt for the most recent Relevant Test Period; 

(ee)most recent Relevant Test Period;

(ff)Cash Taxes;

(gg)Maintenance Capital Expenditures; and

(hh)most recent fiscal year-end.

2.3Clause (a) of the definition of “Required Loan Documents” in Section 1.1 of the Agreement is hereby amended and restated in its entirety as follows:

(a) (i) other than in the case of a Noteless Loan, the original or, if accompanied by a “lost note” affidavit and indemnity, a copy of, the underlying promissory note, endorsed by the Borrower or the prior holder of record in blank for the benefit of the Secured Parties and (ii) in the case of a Noteless Loan, (x) a copy of each Transfer Document evidencing the assignment of such Noteless Loan from the prior third party owner thereof (if any) to the Borrower and from the Borrower in blank, and (y) a copy of the related credit agreement, note purchase agreement or sale and servicing agreement (or equivalent agreement as identified on the Loan Checklist), as applicable, together with, to the extent in the possession of the Originator or reasonably available to the Originator, copies of all other documents and instruments described in clauses (b) and (c) hereof with respect to such Noteless Loan;

2.4Clause (i) of the definition of “Restricted Junior Payment” in Section 1.1 of the Agreement is hereby amended by deleting the phrase “except a dividend paid solely in interests of that class of membership interests” in its entirety and inserting in lieu thereof “except a dividend or distribution paid solely in interests of that class of membership interests”.

2.5The following new definitions are added to Section 1.1 of the Agreement as alphabetically appropriate as follows:

“Anti-Corruption Laws”:  All laws, rules, and regulations of any jurisdiction applicable to the Borrower, the Originator or their respective Subsidiaries from time to time concerning or relating to bribery or corruption, including the Foreign Corrupt Practices Act of 1977 and any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

“Anti–Terrorism Laws”:  Any Applicable Law relating to money laundering or terrorism, including, without limitation, Executive Order 13224, the OFAC Regulations, the Bank Secrecy Act, the USA Patriot Act, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any executive orders or regulations promulgated thereunder.

	
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“Cash Taxes”:  Cash taxes paid by the related Obligor (as of most recent fiscal year-end) as calculated by the Borrower and the Servicer in good faith using information from and calculations consistent with the relevant compliance statements and financial reporting packages provided by the relevant Obligor as per the requirements of the Underlying Instruments.

“Maintenance Capital Expenditures”:  Maintenance capital expenditures of the related Obligor (as of most recent fiscal year-end) as calculated by the Borrower and the Servicer in good faith using information from and calculations consistent with the relevant compliance statements and financial reporting packages provided by the relevant Obligor as per the requirements of the Underlying Instruments.

2.6The definition of “FDIC” in Section 1.1 of the Agreement is hereby deleted in its entirety.

2.7Section 4.1(hh) of the Agreement is hereby amended and restated in its entirety as follows:

(hh)USA PATRIOT Act.  The Borrower is not (i) a country, territory, organization, person or entity named on an Office of Foreign Asset Control (OFAC) list; (ii) a Person that resides or has a place of business in a country or territory named on such lists or which is designated as a “Non-Cooperative Jurisdiction” by the Financial Action Task Force on Money Laundering, or whose subscription funds are transferred from or through such a jurisdiction; (iii) a “Foreign Shell Bank” within the meaning of the USA PATRIOT Act, i.e., a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision; (iv) a person or entity that resides in or is organized under the laws of a jurisdiction designated by the United States Secretary of the Treasury under Sections 311 or 312 of the USA PATRIOT Act as warranting special measures due to money laundering concerns; or (v) in violation of any Anti-Corruption Laws.

2.8Section 4.3(r) of the Agreement is hereby amended and restated in its entirety as follows:

(r)USA PATRIOT Act.  The Servicer is not (i) a country, territory, organization, person or entity named on an OFAC list; (ii) a Person that resides or has a place of business in a country or territory named on such lists or which is designated as a “Non-Cooperative Jurisdiction” by the Financial Action Task Force on Money Laundering, or whose subscription funds are transferred from or through such a jurisdiction; (iii) a “Foreign Shell Bank” within the meaning of the USA PATRIOT Act, i.e., a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision; (iv) a person or entity that resides in or is organized under the laws of a jurisdiction designated by the United States Secretary of the Treasury under Sections 311 or 312 of the USA PATRIOT Act as warranting special measures due to money laundering concerns; or (v) in violation of any Anti-Corruption Laws.

	
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2.9Section 5.1(k) of the Agreement is hereby amended by adding the following immediately following clause (iv) thereof:

The Borrower shall not use the proceeds of any Advance in violation of Anti-Corruption Laws.

2.10Section 5.1 of the Agreement is hereby amended by adding the following as new clause (r):

(r)Compliance with Anti-Terrorism Laws and Anti-Corruption Laws.  The Borrower shall comply with all applicable Anti–Terrorism Laws and Anti-Corruption Laws. The Borrower (or the Servicer on behalf of the Borrower) shall conduct the requisite due diligence in connection with the transactions contemplated herein for purposes of complying with the Anti–Terrorism Laws.  Policies and procedures will be maintained and enforced by or on behalf of the Borrower that are designed in good faith and in a commercially reasonable manner to promote and achieve compliance, in the reasonable judgment of the Borrower, by the Borrower with Anti-Corruption Laws. The Borrower shall, upon the request of the Administrative Agent from time to time, provide certification and other evidence of the Borrower’s compliance with this clause.

2.11Section 5.5(b)(iv) of the Agreement is hereby amended and restated in its entirety as follows:

(iv)so long as Wells Fargo Bank, National Association is the Administrative Agent, Wells Fargo Bank, National Association has consented in writing to such consolidation, merger, conveyance or sale.

2.12Section 6.18(o) of the Agreement is hereby amended by deleting the phrase “Peter Schmidt-Fellner” in its entirety and inserting in lieu thereof “Pat McAuliffe”.

2.13Section 8.2(b)(i) of the Agreement is hereby amended and restated in its entirety as follows:

(i)The Trustee, as custodian hereunder, shall take and retain custody of the Required Loan Documents delivered by the Borrower pursuant to Sections 3.2 and 3.3 hereof in accordance with the terms and conditions of this Agreement, all for the benefit of the Secured Parties.  Within five Business Days of its receipt (excluding, for the avoidance of doubt, any Required Loan Documents in the custody of the Trustee as of the Sixth Amended and Restated Closing Date) of any Required Loan Documents, the Trustee shall review the related Required Loan Documents (as identified on the related Loan Checklist) to confirm that (A) such documents have been properly executed and have no missing or mutilated pages, (B) as identified on the Loan Checklist, there is evidence in the file that UCC and other filings (required by the Required Loan Documents) have been made, (C) each item listed on the Loan Checklist is included and verify it has been provided to the Trustee without any missing pages or sections, and (D) the original principal balance of such Loan, Loan number and Obligor name with respect to such Loan is referenced on the related electronic file delivered with such loan documents as specified below and is not a duplicate Loan (such items (A) through (D) collectively, the 

	
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“Review Criteria”).  In order to facilitate the foregoing review by the Trustee, in connection with each delivery of Required Loan Documents hereunder to the Trustee, the Servicer shall provide to the Trustee an electronic file (in EXCEL or a comparable format) that contains the related Loan Checklist or that otherwise contains the Loan identification number, the original principal balance of such Loan and the name of the Obligor with respect to each related Loan.  If, at the conclusion of such review, the Trustee shall determine that (i) the original principal balance of each Loan for which it has received Required Loan Documents is less than as set forth on the electronic file, the Trustee shall immediately notify the Administrative Agent and the Servicer of such discrepancy, and (ii) any Review Criteria are not satisfied, the Trustee shall within one Business Day notify the Servicer of such determination and provide the Servicer with a list of the non-complying Loans and the applicable Review Criteria that they fail to satisfy.  The Servicer shall have five Business Days to correct any non-compliance with any Review Criteria.  To the extent such non-compliance has not been cured within such time period, such Loan shall be deemed to be a Warranty Loan and shall not be included in the calculation of any Borrowing Base hereunder until such deficiency is cured.  In addition, if the Servicer does not cure any such non-compliance, it shall provide a written request to the Trustee (such request subject to the approval of the Administrative Agent) for the return by the Trustee to the Borrower of any Loan which fails to satisfy any Review Criteria.  Other than the foregoing, the Trustee shall not have any responsibility for reviewing any Required Loan Documents.

2.14Annex A of the Agreement is hereby amended by amending and restating the contact information for Wells Fargo Bank, National Association, in its capacity as a Lender, as follows:

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Lender

Duke Energy Center

550 South Tryon Street, 5th Floor

MAC D1086-051 

Charlotte, NC 28202

Attention: Matthew Jensen 

Facsimile:  (704) 715-0089
Confirmation:  (704) 410-2450

[All electronic dissemination of Notices should be sent to 

scp.mmloans@wellsfargo.com]

SECTION 3.Successor Administrative Agent.

By acknowledging and agreeing to this Amendment, the parties hereto agree that (a) Wells Fargo Securities, LLC shall resign, effective as of the date hereof, as Administrative Agent, (b) the requirement of the delivery of five days’ prior written notice of such resignation pursuant to Section 12.1(j) of the Agreement shall be waived and (c) after giving effect to this Amendment, the Lenders shall have appointed Wells Fargo Bank, National Association as the successor Administrative Agent.  From and after the date hereof, (x) all references in the Agreement and the other Transaction Documents to “Administrative Agent” shall be deemed to 

	
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be a reference to Wells Fargo Bank, National Association, in its capacity as Administrative Agent, (y) all references in the Agreement and the other Transaction Documents to “WFS” shall be deemed to be a reference to “Wells Fargo” and (z) Wells Fargo Bank, National Association shall become a party to the Agreement and the other Transaction Documents as “Administrative Agent” thereunder with the following notice address:

WELLS FARGO BANK, NATIONAL ASSOCIATION
as Administrative Agent

Duke Energy Center
550 South Tryon Street, 5th Floor
MAC D1086-051
Charlotte, NC 28202
Attention: Matthew Jensen 

Facsimile:  (704) 715-0089
Confirmation:  (704) 410-2450
[All electronic dissemination of Notices should be sent to scp.mmloans@wellsfargo.com]  

and shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Agreement and the other Transaction Documents.  After the retiring Administrative Agent’s resignation as Administrative Agent, the provisions of Article XII of the Agreement shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under the Agreement.

SECTION 4.Agreement in Full Force and Effect as Amended.

Except as specifically amended hereby, all provisions of the Agreement shall remain in full force and effect. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as expressly set forth herein and shall not constitute a novation of the Agreement.

SECTION 5.Representations and Warranties.

The Borrower hereby represents and warrants as of the date of this Amendment as follows:

(a)this Amendment has been duly executed and delivered by it;

(b)this Amendment constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity; and

(c)there is no Termination Event, Unmatured Termination Event, or Servicer Default that is continuing or would result from entering into this Amendment.

	
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SECTION 6.Conditions to Effectiveness.

The effectiveness of this Amendment is subject to receipt by the Administrative Agent of executed counterparts (or other evidence of execution, including facsimile signatures, satisfactory to the Administrative Agent) of this Amendment.

SECTION 7.Miscellaneous.

(a)This Amendment may be executed in any number of counterparts (including by facsimile), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement.

(b)The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

(c)This Amendment may not be amended or otherwise modified except as provided in the Agreement.

(d)The failure or unenforceability of any provision hereof shall not affect the other provisions of this Amendment.

(e)Whenever the context and construction so require, all words used in the singular number herein shall be deemed to have been used in the plural, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the masculine and feminine.

(f)This Amendment represents the final agreement between the parties only with respect to the subject matter expressly covered hereby and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties. There are no unwritten oral agreements between the parties.

(g)THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[Remainder of Page Intentionally Left Blank]

 

 

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

 

	
BORROWER:
	
 
	
NEWSTAR CP FUNDING LLC

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By: NewStar Financial, Inc., its Designated Manager

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ JOHN KIRBY BRAY

	
 
	
 
	
Name:
	
 
	
John Kirby Bray

	
 
	
 
	
Title:
	
 
	
Chief Financial Officer

	
 
	
 
	
 
	
 
	
 

	
THE ORIGINATOR AND SERVICER:
	
 
	
NEWSTAR FINANCIAL, INC.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ JOHN KIRBY BRAY

	
 
	
 
	
Name:
	
 
	
John Kirby Bray

	
 
	
 
	
Title:
	
 
	
Chief Financial Officer

 

 

[Signatures Continue on the Following Page]

 

 

	
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Second Amendment to Sixth Amended and Restated LSA

 

 

 

	
ADMINISTRATIVE AGENT:
	
 
	
WELLS FARGO BANK, NATIONAL ASSOCIATION-

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ MATT JENSEN

	
 
	
 
	
Name:
	
 
	
Matt Jensen

	
 
	
 
	
Title:
	
 
	
Director

	
 
	
 
	
 
	
 
	
 

	
REVOLVING AND SWINGLINE LENDER:
	
 
	
WELLS FARGO BANK, NATIONAL ASSOCIATION

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ RAH SHAH

	
 
	
 
	
Name:
	
 
	
Raj Shah

	
 
	
 
	
Title:
	
 
	
Managing Director

	
 
	
 
	
 
	
 
	
 

	
REVOLVING LENDER:
	
 
	
CAPITAL ONE, NATIONAL ASSOCIATION

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ JOHN SWANSON

	
 
	
 
	
Name:
	
 
	
John Swanson

	
 
	
 
	
Title:
	
 
	
Director

	
 
	
 
	
 
	
 
	
 

 

 

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REVOLVING LENDER:
	
 
	
BANC OF CALIFORNIA, NATIONAL ASSOCIATION

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ANDREW BORDEN

	
 
	
 
	
Name:
	
 
	
Andrew Borden

	
 
	
 
	
Title:
	
 
	
SVP, Portfolio Manager

	
 
	
 
	
 
	
 
	
 

 

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REVOLVING LENDER:
	
 
	
CALIFORNIA BANK & TRUST

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ CHRISTOPHER J. EDMUNDS

	
 
	
 
	
Name:
	
 
	
Christopher J. Edmunds

	
 
	
 
	
Title:
	
 
	
Executive Vice President

 

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REVOLVING LENDER:
	
 
	
CITY NATIONAL BANK

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ BRANDON L. FEITELSON

	
 
	
 
	
Name:
	
 
	
Brandon L. Feitelson, C.F.A.

	
 
	
 
	
Title:
	
 
	
Senior Vice President

 

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ACKNOWLEDGED AND AGREED:

	
 

	
WELLS FARGO SECURITIES, LLC,

as resigning Administrative Agent

	
 

	
By:
	
 
	
/s/ R. BEALE POPE

	
Name:
	
 
	
Beale Pope

	
Title:
	
 
	
Vice President

 

	
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Exhibit 4.2

Execution Version

SECOND AMENDMENT TO

LOAN AND SERVICING AGREEMENT

(NewStar Warehouse Funding I LLC)

THIS SECOND AMENDMENT TO LOAN AND SERVICING AGREEMENT, dated as of April 14, 2017 (this “Amendment”), is entered into by and among NEWSTAR WAREHOUSE FUNDING I LLC, as the Borrower (the “Borrower”), NEWSTAR FINANCIAL, INC., as the Originator and the Collateral Manager, the Lenders identified on the signature pages hereto and CITIBANK, N.A., as the Administrative Agent (in such capacity, the “Administrative Agent”).

R E C I T A L S

WHEREAS, the above-named parties have entered into that certain Loan and Servicing Agreement, dated as of May 5, 2015 (as amended, the “Agreement”), by and among the Borrower, the Originator, the Collateral Manager, each of the Lenders from time to time party thereto, the Administrative Agent and U.S. Bank National Association, as the Trustee and the Custodian;

WHEREAS, pursuant to and in accordance with Section 13.1 of the Agreement, the parties hereto desire to amend the Agreement in certain respects as provided herein;

NOW, THEREFORE, based upon the above Recitals, the mutual premises and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, intending to be legally bound, hereby agree as follows:

SECTION 1. Definitions.

Each capitalized term used but not defined herein has the meaning ascribed thereto in the Agreement.

SECTION 2. Amendments.

(a)Clauses (a)(i) and (b)(i) of the definition of “Asset Value” in Section 1.1 of the Agreement are each amended by inserting the phrase “or is otherwise a MTM Broadly Syndicated Loan” immediately after the phrase “for any Loan that is a Broadly Syndicated Loan that has bid-side quotes meeting the Minimum Depth” where it appears therein.

(b)Clause (aa) of the definition of “Eligible Loan” in Section 1.1 of the Agreement is amended and restated as follows:

“(aa) except in the case of any Broadly Syndicated Loan, such Loan (i) was originated and underwritten, or purchased and re-underwritten, by the Originator including, without limitation, the completion of a due diligence audit and collateral assessment, (ii) is fully documented, and (iii) is being serviced by the Collateral Manager, in each case in accordance with the Credit and Collection Policy and the Collateral Management Standard;”

 

 

(c)Clauses (b), (c), (d), (e) and (v) of the definition of “Loan Tape” in Section 1.1 of the Agreement are each amended and restated in their entirety as follows:

“(b) except in the case of any Broadly Syndicated Loan which is included in the Collateral for fewer than 90 days (or otherwise if requested by the Administrative Agent due to a Lender’s compliance, regulatory or other internal requirements), calculation of the Senior Net Leverage Ratio as of the applicable Cut-Off Date for such Loan and for the most recent Relevant Test Period;”

“(c) except in the case of any Broadly Syndicated Loan which is included in the Collateral for fewer than 90 days (or otherwise if requested by the Administrative Agent due to a Lender’s compliance, regulatory or other internal requirements), calculation of the Total Net Leverage Ratio as of the applicable Cut-Off Date for such Loan and for the most recent Relevant Test Period;”

“(d) except in the case of any Broadly Syndicated Loan which is included in the Collateral for fewer than 90 days (or otherwise if requested by the Administrative Agent due to a Lender’s compliance, regulatory or other internal requirements), calculation of the Interest Coverage Ratio as of the applicable Cut-Off Date for such Loan and for the most recent Relevant Test Period;”

“(e) except in the case of any Broadly Syndicated Loan which is included in the Collateral for fewer than 90 days (or otherwise if requested by the Administrative Agent due to a Lender’s compliance, regulatory or other internal requirements), trailing twelve month EBITDA;”

“(v) except in the case of any Broadly Syndicated Loan which is included in the Collateral for fewer than 90 days (or otherwise if requested by the Administrative Agent due to a Lender’s compliance, regulatory or other internal requirements), NewStar risk rating;”

(d)The  definition  of  “Required  Loan  Documents”  in  Section  1.1  of  the  Agreement  is amended and restated in its entirety as follows:

““Required Loan Documents”: For each Loan, originals (except as otherwise indicated) of the following documents or instruments:

(a)(i) other than in the case of a Noteless Loan, the original or, if accompanied by a “lost note” affidavit and indemnity, a copy of, the underlying promissory note, endorsed by the Borrower or the prior holder of record either in blank or to the Trustee for the benefit of the Secured Parties (and evidencing an unbroken chain of endorsements from the prior holder thereof evidenced in the chain of endorsements to the Trustee for the benefit of the Secured Parties), with any such endorsement to the Trustee to be in the following form: “U.S. Bank National Association, as Trustee”, and (ii) in the case of a Noteless Loan, (x) a copy of each Transfer Document, and (y) a copy of the related credit agreement, note purchase agreement or sale and servicing agreement (or equivalent agreement as identified on the Loan Checklist), as applicable, together with (except in the case of any Broadly Syndicated Loan), to the extent in the possession of the Originator or reasonably available to the Originator, copies of all other documents and instruments described in clauses (b) and (c) hereof with respect to such Noteless Loan;

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(b)except in the case of any Broadly Syndicated Loan, originals or copies of each of the following, to the extent applicable to the related Loan: any related loan agreement, credit agreement, note purchase agreement, security agreement, mortgage, sale and servicing agreement, acquisition agreement, subordination agreement, intercreditor agreement or similar instruments, guarantee, Insurance Policy, assumption or substitution agreement or similar material operative document, in each case together with any amendment or modification thereto, as set forth on the Loan Checklist;

(c)with respect to any Loan originated by the Originator (other than any Broadly Syndicated Loan), either (i) copies of the UCC-1 Financing Statements, if any, and any related continuation statements, each showing the Obligor as debtor and the Trustee as total assignee or showing the Obligor, as debtor and the Originator as secured party and each with evidence of filing thereon, together with (except for Agented Loans) a copy of each intervening UCC-2 or UCC-3 financing statement showing a complete chain of assignment from the secured party named in such UCC-1 Financing Statement to the Trustee with evidence of filing thereon disclosing the assignment to the Trustee or the Originator of the security interest in the personal property securing the Loan or (ii) copies of any such financing statements certified by the Collateral Manager to be true and complete copies thereof in instances where the original financing statements have been sent to the appropriate public filing office for filing; and

(d)in the case of any Broadly Syndicated Loan, a trade confirmation and funding memorandum.”

(e)Section  1.1  of  the  Agreement  is  amended  by  inserting  the  following  definition  in appropriate alphabetical order:

““MTM Broadly Syndicated Loan” means a Broadly Syndicated Loan that the Administrative Agent determines, in its discretion, at the time of its acquisition by the Borrower, to have sufficient bid-depth or other characteristics to be treated the same as a Broadly Syndicated Loan with a Minimum Depth for purposes of the definition of Asset Value.”

(f)Section 6.13(g) of the Agreement is amended and restated in its entirety as follows:

“(g) Obligor Financial Statements; Valuation Reports; Other Reports. The Collateral Manager will deliver to the Administrative Agent with respect to each Obligor, except in the case of any Broadly Syndicated Loan which is included in the Collateral for fewer than 90 days (unless otherwise requested by the Administrative Agent due to a Lender’s compliance, regulatory or other internal requirements), and otherwise if requested by the Administrative Agent and to the extent available to the Collateral Manager (on behalf of the Borrower) (either pursuant to the Underlying Instruments or using commercially reasonable efforts to obtain the same), to the extent received by the Borrower and/or the Collateral Manager pursuant to the Underlying Instruments, (i) the complete financial reporting package with respect to such Obligor and with respect to each Loan for such Obligor (including (x) any covenant compliance certificates with respect to such Obligor and with respect to each Loan for such Obligor and (y) the annual audited financial statements with respect to each Obligor, which delivery shall be made within 45 days (or such longer period as specified in the Underlying Instruments) after the end of each such month or such Obligor’s fiscal quarters, as applicable (excluding the last month or fiscal quarter, as applicable, of each such Obligor’s fiscal year), and within 90 days (or such longer period as specified in the 

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Underlying Instruments) after the end of each such Obligor’s fiscal year, (ii) to the extent available to the Borrower and/or the Collateral Manager pursuant to the Underlying Instruments, promptly following the date the Borrower acquires an Eligible Loan, audited financial statements of the related Obligor for the three year period most recently ended with respect to the related Obligor and (iii) a quarterly “tear sheet” prepared by the Collateral Manager with respect to such Obligor and with respect to each Loan for such Obligor, which delivery shall be made within ten (10) Business Days following the Collateral Manager’s completion of such update. The Collateral Manager will promptly deliver to the Administrative Agent, upon reasonable request and to the extent received by the Borrower and/or the Collateral Manager, all other documents and information required to be delivered by Obligors to the Borrower with respect to any Loan included in the Collateral.”

(g)Section  6.18(p)  of  the  Agreement  is  amended  by  replacing  the  reference  to  “Peter Schmidt-Fellner” where it appears therein with “Pat McAuliffe”.

(h)Schedule VII to the Agreement is amended and restated in its entirety in the form attached hereto as Annex A.

(i)Schedule VIII to the Agreement is amended and restated in its entirety in the form attached hereto as Annex B.

SECTION 3. Agreement in Full Force and Effect as Amended.

Except as specifically amended hereby, all provisions of the Agreement shall remain in full force and effect. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as expressly set forth herein and shall not constitute a novation of the Agreement. All references in the Transaction Documents to the Agreement shall be deemed to be references to the Agreement as amended hereby.

SECTION 4. Representations and Warranties.

Each of the Borrower and the Collateral Manager hereby represents and warrants as of the date of this Amendment as follows:

(a)this Amendment has been duly executed and delivered by it;

(b)this Amendment constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity;

(c)there is no Event of Default, Unmatured Event of Default, or Collateral Manager Default that is continuing or would result from entering into this Amendment; and

(d)in the case of the Borrower, the representations and warranties of the Borrower set forth in Sections 4.1 and 4.2 of the Agreement, and in the case of the Collateral Manager, the representations and warranties of the Collateral Manager set forth in Section 4.3 of the Agreement, are true and correct in all material respects as of the date hereof (except those that expressly relate to an earlier date).

4

Second Amendment to Loan and Servicing Agreement

 

SECTION 5. Conditions to Effectiveness.

The effectiveness of this Amendment is subject to receipt by the Administrative Agent of executed counterparts (or other evidence of execution, including facsimile signatures, satisfactory to the Administrative Agent) of this (i) Amendment and (ii) an amendment to the Fee Letter, in form and substance satisfactory to the Administrative Agent.

SECTION 6. Miscellaneous.

(a)This Amendment may be executed in any number of counterparts (including by facsimile), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement.

(b)The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

(c)This Amendment may not be amended or otherwise modified except as provided in the Agreement.

(d)The failure or unenforceability of any provision hereof shall not affect the other provisions of this Amendment.

(e)Whenever the context and construction so require, all words used in the singular number herein shall be deemed to have been used in the plural, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the masculine and feminine.

(f)This Amendment represents the final agreement between the parties only with respect to the subject matter expressly covered hereby and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties. There are no unwritten oral agreements between the parties.

(g)THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[Remainder of Page Intentionally Left Blank]

5

Second Amendment to Loan and Servicing Agreement

 

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

 

	
THE BORROWER:
	
 
	
NEWSTAR WAREHOUSE FUNDING I LLC

	
 
	
 
	
By:
	
 
	
NewStar Financial, Inc., its

Designated Manager

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ JOHN KIRBY BRAY

	
 
	
 
	
Name:
	
 
	
John Kirby Bray

	
 
	
 
	
Title:
	
 
	
Chief Financial Officer

	
 
	
 
	
 
	
 
	
 

	
THE ORIGINATOR AND

COLLATERAL MANAGER:
	
 
	
NEWSTAR FINANCIAL, INC.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ JOHN KIRBY BRAY

	
 
	
 
	
Name:
	
 
	
John Kirby Bray

	
 
	
 
	
Title
	
 
	
Chief Financial Officer

 

[Signatures Continue on the Following Page]

 

 

6

Second Amendment to Loan and Servicing Agreement

 

 

	
REVOLVING  LENDERS:
	
 
	
CITIBANK, N.A.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ WAYNE GEE

	
 
	
 
	
Name:
	
 
	
Wayne Gee

	
 
	
 
	
Title:
	
 
	
Vice President

	
 
	
 
	
 
	
 
	
 

	
THE ADMINISTRATIVE AGENT:
	
 
	
CITIBANK, N.A.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ WAYNE GEE

	
 
	
 
	
Name:
	
 
	
Wayne Gee

	
 
	
 
	
Title:
	
 
	
Vice President

 

 

 

7

Second Amendment to Loan and Servicing Agreement

 

ANNEX A

SCHEDULE VIII

To Loan and

Servicing Agreement

ASSET QUALITY MATRIX

 

	
 
	
 
	
Minimum

W.A.
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
Minimum Diversity Score
	
 
	
 
	
 

	
Spread
	
 
	
21*
	
23
	
25
	
27
	
29
	
31
	
33
	
35

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
3.50
	
 
	
2450
	
2500
	
2550
	
2600
	
2650
	
2700
	
2750
	
2800

	
3.75
	
 
	
2550
	
2600
	
2650
	
2700
	
2750
	
2800
	
2850
	
2900

	
4.00
	
 
	
2650
	
2700
	
2750
	
2800
	
2850
	
2900
	
2950
	
3000

	
4.25
	
 
	
2750
	
2800
	
2850
	
2900
	
2950
	
3000
	
3050
	
3100

	
4.50
	
 
	
2950
	
3000
	
3050
	
3100
	
3150
	
3200
	
3250
	
3300

	
4.75
	
 
	
3150
	
3200
	
3250
	
3300
	
3350
	
3400
	
3450
	
3500

	
5.00
	
 
	
3340
	
3390
	
3440
	
3490
	
3540
	
3590
	
3640
	
3690

	
5.25
	
 
	
3530
	
3580
	
3630
	
3680
	
3730
	
3780
	
3830
	
3880

	
5.50
	
 
	
3720
	
3770
	
3820
	
3870
	
3920
	
3970
	
4020
	
4070

	
 
	
 
	
 
	
Maximum Weighted Average Rating Factor
	
 
	
 
	
 

 

*

If at any time the Diversity Score is less than 21, then column 21 above shall apply.

 

 

8

Second Amendment to Loan and Servicing Agreement

 

ANNEX B

SCHEDULE VIII

To Loan and

Servicing Agreement

CONCENTRATION LIMITS

As of any date of determination, the following limitations (as applied to the aggregate Adjusted Borrowing Value of the Eligible Loans owned (or, in relation to a proposed purchase of an Eligible Loan, proposed to be owned) by the Borrower, calculated as a percentage of the then applicable Concentration Test Amount; provided that for purposes of this definition, in determining the OLB of any Delayed Draw Term Loan or Revolving Loan, any unfunded commitments in respect of such Delayed Draw Term Loan or Revolving Loan shall be assumed to have been fully funded as of such date of determination):

(a)not more than 2.75% consists of obligations of any one Obligor (and Affiliates thereof), except that the Adjusted Borrowing Value of the Eligible Loans to the five (5) Obligors with the largest OLB may constitute (x) up to 3.50% each and (y) up to 5.0% each solely for the first 90 days after the related Cut-Off Date or, solely in the case of this clause (y), 0% in the event that the aggregate OLB is less than $200,000,000 at any time after the one-year anniversary of the Closing Date (or, if a Securitization shall have occurred, after the one-year anniversary of the most recent Securitization);

(b)not more than 12.00% consists of Eligible Loans with Obligors in any one Moody’s Industry Classification, except that Eligible Loans in up to one (1) Moody’s Industry Classification may constitute up to 17.50% and two (2) Moody’s Industry Classifications may each constitute up to 15.00%;

(c)not more than 15.00% consists of Loans (other than Broadly Syndicated Loans) whose Obligors have a Senior Net Leverage Ratio (determined on the related Cut-Off Date) that is greater than 4.50 to 1.00;

(d)not more than 10.00% consists of Uni-tranche Loans (other than Broadly Syndicated Loans) whose Obligors (i)(x) have an EBITDA (determined on the related Cut-Off Date) that is less than or equal to $25,000,000 and (y) have a Total Net Leverage Ratio (determined on the related Cut-Off Date) that is greater than 5.00 to 1.00 or (ii)(x) have an EBITDA (determined on the related Cut-Off Date) that is greater than $25,000,000 and (y) have a Total Net Leverage Ratio (determined on the related Cut-Off Date) that is greater than 6.00 to 1.00;

(e)not more than (i) 10.00% consists of Loans (other than Broadly Syndicated Loans) whose Obligors (x) have an EBITDA (determined on the related Cut-Off Date) that is greater than $25,000,000 and (y) have a Total Net Leverage Ratio (determined on the related Cut-Off Date) that is greater than 6.00 to 1.00 and (ii) 5.00% consists of Loans whose Obligors (x) have an EBITDA (determined on the related Cut-Off Date) that is less than or equal to $25,000,000 and (y) have a Total Net Leverage Ratio (determined on the related Cut-Off Date) that is greater than 5.25 to 1.00;

9

Second Amendment to Loan and Servicing Agreement

 

(f)not more than 20.00% consists of Loans whose Obligors have an EBITDA (determined on the related Cut-Off Date) that is less than $15,000,000;

(g)not more than 12.50% consists of Loans whose Obligors have an EBITDA (determined on the related Cut-Off Date) that is less than $10,000,000;

(h)[reserved];

(i)not more than 10.00% consists of Second Lien Loans;

(j)not more than 15.00% consists of Caa/CCC Loans;

(k)not more than 5.00% consists of Current Pay Loans;

(l)not more than 5.00% consists of Fixed Rate Loans;

(m)not more than (i) 10.00% consists of Loans whose Obligors are organized or incorporated outside of the United States, (ii) 5.00% consists of Loans included in the Collateral whose Obligors are organized or incorporated in an Eligible Country, and (iii) 2.50% consists of Loans included in the Collateral whose Obligors are organized or incorporated in a Group II Country or Group III Country;

(n)not more than 10.00% consists of Delayed Draw Term Loans and Revolving Loans;

(o)not more than 5.00% consists of Participation Interests.

(p)not more than 15.00% consists of Loans included in the Collateral that are (x) bilateral or (y) not syndicated to lenders other than the Borrower or its Affiliates;

(q)not more than 0.00% consists of Covenant Lite Loans of Obligors whose EBITDA (determined on the Cut-Off Date) is less than $40,000,000;

(r)not more than 10.00% consists of First Lien Last Out Loans;

(s)not more than 5.00% consists of Second Lien Loans included in the Collateral that have an original term to maturity of eight (8) years;

(t)not more than (i) 15.00% consists of Loans that have a Moody’s Rating of “B3” pursuant to clause (a)(iii)(x) of the definition of Moody’s Derived Rating and (ii) 15.00% consists of Loans that have a Moody’s Rating of “Caa1” pursuant to clause (a)(iii)(y) of the definition of Moody’s Derived Rating;

(u)not more than 15.00% consists of Loans that have (x) a Moody’s Default Probability Rating derived from a credit estimate assigned by S&P pursuant to clause (a)(vi) of the definition of Moody’s Default Probability Rating or (y) a Moody’s Derived Rating (other than pursuant to clause (a)(iii) of the definition thereof);

10

Second Amendment to Loan and Servicing Agreement

 

(v)not more than 15.00% consists of Loans that have Moody’s Rating which is determined through application of Moody’s RiskCalc;

(w)not more than 5.00% consists of DIP Loans;

(x)not more than 0.00% consists of Loans included in the Collateral primarily secured by real estate; and

(y)not more than 5.00% of Loans may be acquired for a Purchase Price of less than 90% of par.

11

Second Amendment to Loan and Servicing Agreement

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