Document:

arrevolvingcreditagreeme

                                                               Execution Version                     AMENDED AND RESTATED SENIOR SECURED                        REVOLVING CREDIT AGREEMENT                                     dated as of                                  December 21, 2018                                       among                        CAPITAL SOUTHWEST CORPORATION                                    as Borrower                              The LENDERS Party Hereto                                 ING CAPITAL LLC                              as Administrative Agent,                               Arranger and Bookrunner                                        and                            TEXAS CAPITAL BANK, N.A.                               as Documentation Agent    25272637.12.BUSINESS 

 

                            TABLE OF CONTENTS                                                                             Page   ARTICLE I   DEFINITIONS  SECTION 1.01.  Defined Terms ...................................................................................................1 SECTION 1.02.  Classification of Loans and Borrowings ..........................................................33 SECTION 1.03.  Terms Generally...............................................................................................33 SECTION 1.04.  Accounting Terms; GAAP ...............................................................................34 SECTION 1.05.  Interest Rates ....................................................................................................35  ARTICLE II   THE CREDITS  SECTION 2.01.  The Commitments ............................................................................................35 SECTION 2.02.  Loans and Borrowings .....................................................................................35 SECTION 2.03.  Requests for Borrowings..................................................................................36 SECTION 2.04.  Letters of Credit. ..............................................................................................37 SECTION 2.05.  Funding of Borrowings ....................................................................................42 SECTION 2.06.  Interest Elections ..............................................................................................42 SECTION 2.07.  Termination, Reduction or Increase of the Commitments ...............................44 SECTION 2.08.  Repayment of Loans; Evidence of Debt ..........................................................47 SECTION 2.09.  Prepayment of Loans .......................................................................................48 SECTION 2.10.  Fees ..................................................................................................................50 SECTION 2.11.  Interest..............................................................................................................51 SECTION 2.12.  Eurocurrency Borrowing Provisions................................................................52 SECTION 2.13.  Increased Costs ................................................................................................54 SECTION 2.14.  Break Funding Payments .................................................................................55 SECTION 2.15.  Taxes ................................................................................................................56 SECTION 2.16.  Payments Generally; Pro Rata Treatment: Sharing of Set-offs .......................60 SECTION 2.17.  Defaulting Lenders...........................................................................................62 SECTION 2.18.  Mitigation Obligations; Replacement of Lenders ............................................64  ARTICLE III   REPRESENTATIONS AND WARRANTIES  SECTION 3.01.  Organization; Powers .......................................................................................65 SECTION 3.02.  Authorization; Enforceability ..........................................................................65 SECTION 3.03.  Governmental Approvals; No Conflicts ..........................................................66 SECTION 3.04.  Financial Condition; No Material Adverse Effect ...........................................66 SECTION 3.05.  Litigation. .........................................................................................................67 SECTION 3.06.  Compliance with Laws and Agreements. ........................................................67   25272637.12.BUSINESS 

 

SECTION 3.07.  Taxes. ...............................................................................................................67 SECTION 3.08.  ERISA. .............................................................................................................68 SECTION 3.09.  Disclosure. .......................................................................................................69 SECTION 3.10.  Investment Company Act; Margin Regulations. .............................................69 SECTION 3.11.  Material Agreements and Liens .......................................................................70 SECTION 3.12.  Subsidiaries and Investments. ..........................................................................70 SECTION 3.13.  Properties .........................................................................................................71 SECTION 3.14.  Solvency ...........................................................................................................71 SECTION 3.15.  No Default. .......................................................................................................71 SECTION 3.16.  Use of Proceeds................................................................................................71 SECTION 3.17.  Security Documents. ........................................................................................71 SECTION 3.18.  Compliance with Sanctions..............................................................................72 SECTION 3.19.  Anti-Money Laundering Program ....................................................................72 SECTION 3.20.  Foreign Corrupt Practices Act. ........................................................................72 SECTION 3.21.  Beneficial Ownership Certification. ................................................................73  ARTICLE IV   CONDITIONS  SECTION 4.01.  Restatement Effective Date..............................................................................73 SECTION 4.02.  Conditions to Each Credit Event......................................................................76  ARTICLE V   AFFIRMATIVE COVENANTS  SECTION 5.01.  Financial Statements and Other Information ...................................................77 SECTION 5.02.  Notices of Material Events...............................................................................81 SECTION 5.03.  Existence; Conduct of Business .......................................................................82 SECTION 5.04.  Payment of Obligations....................................................................................82 SECTION 5.05.  Maintenance of Properties; Insurance ..............................................................82 SECTION 5.06.  Books and Records; Inspection and Audit Rights ...........................................82 SECTION 5.07.  Compliance with Laws and Agreements .........................................................83 SECTION 5.08.  Certain Obligations Respecting Subsidiaries; Further Assurances ..................83 SECTION 5.09.  Use of Proceeds................................................................................................86 SECTION 5.10.  Status of RIC and BDC ....................................................................................87 SECTION 5.11.  Investment Policies ..........................................................................................87 SECTION 5.12.  Portfolio Valuation and Diversification Etc. ...................................................87 SECTION 5.13.  Calculation of Borrowing Base ........................................................................93 SECTION 5.14.  Taxes ..............................................................................................................105 SECTION 5.15.  Anti-Hoarding of Assets at Non-Pledged SBIC Subsidiaries ........................106                                        (ii)    25272637.12.BUSINESS 

 

ARTICLE VI   NEGATIVE COVENANTS  SECTION 6.01.  Indebtedness ...................................................................................................106 SECTION 6.02.  Liens ...............................................................................................................108 SECTION 6.03.  Fundamental Changes ....................................................................................109 SECTION 6.04.  Investments ....................................................................................................110 SECTION 6.05.  Restricted Payments .......................................................................................112 SECTION 6.06.  Certain Restrictions on Subsidiaries ..............................................................113 SECTION 6.07.  Certain Financial Covenants ..........................................................................114 SECTION 6.08.  Transactions with Affiliates ...........................................................................114 SECTION 6.09.  Lines of Business ...........................................................................................115 SECTION 6.10.  No Further Negative Pledge ...........................................................................115 SECTION 6.11.  Modifications of Indebtedness .......................................................................116 SECTION 6.12.  Payments of Indebtedness ..............................................................................116 SECTION 6.13.  Modification of Investment Policies ..............................................................117 SECTION 6.14.  SBIC Guarantee. ............................................................................................117 SECTION 6.15.  Derivative Transactions .................................................................................117  ARTICLE VII   EVENTS OF DEFAULT  ARTICLE VIII   THE ADMINISTRATIVE AGENT  SECTION 8.01.  Appointment ..................................................................................................121 SECTION 8.02.  Capacity as Lender .........................................................................................121 SECTION 8.03.  Limitation of Duties; Exculpation .................................................................122 SECTION 8.04.  Reliance..........................................................................................................122 SECTION 8.05.  Sub-Agents .....................................................................................................123 SECTION 8.06.  Resignation; Successor Administrative Agent ...............................................123 SECTION 8.07.  Reliance by Lenders .......................................................................................123 SECTION 8.08.  Modifications to Loan Documents.................................................................123 SECTION 8.09.  Certain ERISA Matters. .................................................................................124 SECTION 8.10.  Collateral Matters...........................................................................................126 SECTION 8.11.  Credit Bidding ................................................................................................127  ARTICLE IX   MISCELLANEOUS  SECTION 9.01.  Notices; Electronic Communications ............................................................128                                       (iii)    25272637.12.BUSINESS 

 

SECTION 9.02.  Waivers; Amendments ...................................................................................131 SECTION 9.03.  Expenses; Indemnity; Damage Waiver ..........................................................133 SECTION 9.04.  Successors and Assigns..................................................................................135 SECTION 9.05.  Survival ..........................................................................................................140 SECTION 9.06.  Counterparts; Integration; Effectiveness; Electronic Execution ....................140 SECTION 9.07.  Severability ....................................................................................................141 SECTION 9.08.  Right of Setoff................................................................................................141 SECTION 9.09.  Governing Law; Jurisdiction; Etc ..................................................................141 SECTION 9.10.  WAIVER OF JURY TRIAL ..........................................................................142 SECTION 9.11.  Judgment Currency ........................................................................................142 SECTION 9.12.  Headings ........................................................................................................143 SECTION 9.13.  Treatment of Certain Information; Confidentiality ........................................143 SECTION 9.14.  USA PATRIOT Act .......................................................................................144 SECTION 9.15.  Termination ....................................................................................................144 SECTION 9.16.  Acknowledgment and Consent to Bail-In of EEA Financial Institutions ......145 SECTION 9.17.  Interest Rate Limitation .................................................................................145 SECTION 9.18.  Amendment and Restatement ........................................................................145  SCHEDULE 1.01(a) -  Approved Dealers and Approved Pricing Services  SCHEDULE 1.01(b) -  Commitments  SCHEDULE 1.01(c) -  [Intentionally Omitted]  SCHEDULE 1.01(d) -   Eligibility Criteria  SCHEDULE 1.01(e) -  Industry Classification Groups  SCHEDULE 3.08    -  Unfunded Pension Liabilities  SCHEDULE 3.11(a) -  Material Agreements  SCHEDULE 3.11(b) -  Liens  SCHEDULE 3.12(a) -  Subsidiaries  SCHEDULE 3.12(b) -  Investments  SCHEDULE 6.08   -  Certain Affiliate Transactions   EXHIBIT A  -  Form of Assignment and Assumption  EXHIBIT B  -  Form of Borrowing Base Certificate  EXHIBIT C  -  Form of Promissory Note  EXHIBIT D    -  Form of Borrowing Request                                         (iv)    25272637.12.BUSINESS 

 

            AMENDED  AND  RESTATED  SENIOR  SECURED  REVOLVING  CREDIT  AGREEMENT  dated  as  of  December  21,  2018  (this  “Agreement”),  among  CAPITAL  SOUTHWEST  CORPORATION,  a  Texas  corporation  (the  “Borrower”),  the  LENDERS  party  hereto, solely with respect to Section 2.02(e)(ii), the DEPARTING LENDERS party hereto and  ING  CAPITAL  LLC,  as  Administrative  Agent,  and  TEXAS  CAPITAL  BANK,  N.A.,  as  documentation agent.               WHEREAS, the Borrower and the Administrative Agent entered into that certain  Senior Secured Revolving Credit Agreement dated as of August 30, 2016 (as the same has been  amended,  supplemented,  or  otherwise  modified  from  time  to  time  prior  to  the  Restatement  Effective  Date,  the  “Existing  Credit  Agreement”)  with  the  lenders  party  thereto  from  time  to  time  (the  “Existing  Lenders”),  pursuant  to  which  the  Existing  Lenders  extended  certain  commitments and made certain loans to the Borrower (the “Existing Loans”);              WHEREAS,  the  Borrower  desires  to  amend  and  restate  the  Existing  Credit  Agreement  and  to  make  certain  changes,  including  to  increase  the  size  of  the  commitments  thereunder and to extend the maturity date;              WHEREAS,  the  Borrower  wishes  to  prepay  in  full  the pro  rata  portion  of  the  Loans  and  other  obligations  owing  to  certain  Existing  Lenders  identified  in  writing  by  the  Administrative Agent to the Borrower (the “Departing Lenders” and the Existing Lenders that  are not Departing Lenders, the “Existing Continuing Lenders”) with a corresponding termination  of such Departing Lenders’ commitments (the “Prepayment”);               WHEREAS,  concurrently  with  the  Prepayment,  each  Person  identified  as  an  “Increasing Lender” on the signature pages hereto wishes to increase its commitment under the  Credit Agreement, and each Person identified as a “New Lender” on the signature pages hereto  wishes to become a Lender under the Credit Agreement; and               WHEREAS, the Existing Continuing Lenders are willing to make such changes to  the Existing Credit Agreement upon the terms and subject to the conditions set forth herein.               NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  covenants  and  agreements contained herein, the parties hereto hereby agree that, effective as of the Restatement  Effective Date, the Existing Credit Agreement is hereby amended and restated in its entirety as  follows:                                      ARTICLE I                                   DEFINITIONS               SECTION 1.01.  Defined Terms.  As used in this Agreement, the following  terms  have  the  meanings  specified  below  and  the  terms  defined  in  Section  5.13  have  the  meanings assigned thereto in such section:    25272637.12.BUSINESS 

 

            “2022 Notes” means the Borrower’s 5.95% Unsecured Notes due December 15,  2022  in  an  aggregate  principal  amount  of  approximately  $77,136,175  outstanding  as  of  the  Restatement  Effective  Date,  as  such  aggregate  principal  amount  may  be  reduced  or  increased  from time to time pursuant to Sections 6.01(l) and 6.12(b), and without giving effect to any other  amendment, consent, waiver or modification thereto.               “ABR”, when used in reference to any Loan or Borrowing, refers to whether such  Loan,  or  the  Loans  constituting  such  Borrowing,  are  bearing  interest  at  a  rate  determined  by  reference to the Alternate Base Rate.               “Adjusted  Borrowing  Base”  means  the  Borrowing  Base  minus  the  aggregate  amount of Cash and Cash Equivalents included in the Borrowing Base.               “Adjusted  Covered  Debt  Balance”  means,  on  any  date,  the  aggregate  Covered  Debt Amount on such date minus the aggregate amount of Cash and Cash Equivalents included  in  the  Borrowing  Base  (excluding  any  Cash  held  by  the  Administrative  Agent  pursuant  to  Section 2.04(k)).               “Adjusted  LIBO  Rate”  means,  for  the  Interest  Period  for  any  Eurocurrency  Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)  equal  to  the  greater  of  (i)  (a) the  LIBO  Rate  for  such  Interest  Period  multiplied  by  (b) the  Statutory Reserve Rate for such Interest Period and (ii) zero.               “Administrative Agent” means ING, in its capacity as administrative agent for the  Lenders hereunder.               “Administrative  Agent’s  Account”  means  an  account  designated  by  the  Administrative Agent in a notice to the Borrower and the Lenders.               “Administrative Questionnaire” means an Administrative Questionnaire in a form  supplied by the Administrative Agent.               “Advance Rate” has the meaning assigned to such term in Section 5.13.               “Affiliate” means, with respect to a specified Person, another Person that directly,  or  indirectly  through  one  or  more  intermediaries,  Controls  or  is  Controlled  by  or  is  under  common Control with the Person specified.  Anything herein to the contrary notwithstanding, the  term “Affiliate” of an Obligor shall not include any Person that constitutes an Investment held by  any Obligor in the ordinary course of business.               “Affiliate Investment” means any Investment in a Person in which the Borrower  or any of its Subsidiaries owns or controls more than 25% of the Equity Interests.               “Agency Account” has the meaning assigned to such term in Section 5.08(c)(v).               “Agreement”  has  the  meaning  assigned  to  such  term  in  the  preamble  of  this  Agreement.                                         2   25272637.12.BUSINESS 

 

            “Alternate Base Rate” means, for any day, a rate per annum equal to the greatest  of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate for such day  plus 1/2 of 1%, (c) the LIBO Rate for deposits in Dollars for a period of three (3) months plus  1% and (d) zero. Any change in the Alternate Base Rate due to a change in the Prime Rate, the  Federal  Funds  Effective  Rate  or  such  LIBO  Rate  shall  be  effective  from  and  including  the  effective date of such change in the Prime Rate, the Federal Funds Effective Rate, or such LIBO  Rate, as the case may be.               “Anti-Corruption Laws” has the meaning assigned to such term in Section 3.20.               “Applicable Margin” means (a) with respect to any ABR Loan, 1.50% per annum,  and  (b)  with  respect  to  any  Eurocurrency  Loan,  2.50%  per  annum:  provided  that  (i)  for  any  period during which the Consolidated Asset Coverage Ratio is less than 225% but greater than or  equal to 167% and the Senior Coverage Ratio is less than 2.25 to 1.00, the Applicable Margin  shall  be  (1)  with  respect  to  any  ABR  Loan,  1.75%  per  annum,  and  (2)  with  respect  to  any  Eurocurrency  Loan,  2.75%  per  annum,  and  (ii)  for  any  period  during  which  the  Consolidated  Asset Coverage Ratio is less than 167% and the Senior Coverage Ratio is less than 2.25 to 1.00,  the Applicable Margin shall be (1) with respect to any ABR Loan, 2.00% per annum, and (2)  with  respect  to  any  Eurocurrency  Loan,  3.00%  per  annum.   Any  change  in  the  Applicable  Margin due to a change in the Consolidated Asset Coverage Ratio and/or Senior Coverage Ratio  shall  be  as  specified  in  reasonable  detail  in  the  Borrowing  Base  Certificate  required  to  be  delivered pursuant to Section 5.01(d) immediately prior to the Applicable Margin Determination  Date, and shall be effective from and including such Applicable Margin Determination Date until  the immediately succeeding Applicable Margin Determination Date; provided, however, that if  the Borrower fails to timely provide such Borrowing Base Certificate prior to such Applicable  Margin Determination Date, the Applicable Margin for the applicable period shall be determined  pursuant to clause (ii) of this definition.               “Applicable Margin Determination Date” means the Restatement Effective Date  and, thereafter, the last Business Day of each calendar month.              “Applicable Percentage” means, with respect to any Lender, the percentage of the  total  Commitments  represented  by  such  Lender’s  Commitments.   If  the  Commitments  have  terminated  or  expired,  the  Applicable  Percentages  shall  be  determined  based  upon  the  Commitments  most  recently  in  effect,  giving  effect  to  any  assignments  pursuant  to  Section  9.04(b).               “Approved Dealer” means (a) in the case of any Eligible Portfolio Investment that  is  not  a  U.S.  Government  Security,  a  bank  or  a  broker-dealer  registered  under  the  Securities  Exchange Act of 1934 of nationally recognized standing or an Affiliate thereof as set forth on  Schedule  1.01(a),  (b) in  the  case  of  a  U.S.  Government  Security,  any  primary  dealer  in  U.S.  Government Securities as set forth on Schedule 1.01(a), or (c) any other bank or broker-dealer  acceptable to the Administrative Agent in its reasonable determination.               “Approved Pricing Service” means (a) a pricing or quotation service as set forth  in Schedule 1.01(a) or (b) any other pricing or  quotation service (i) approved by the  Board of  Directors  of  the  Borrower,  (ii)  designated  in  writing  by  the  Borrower  to  the  Administrative                                        3   25272637.12.BUSINESS 

 

Agent  (which  designation  shall  be  accompanied  by  a  copy  of  a  resolution  of  the  Board  of  Directors  of  the  Borrower  that  such  pricing  or  quotation  service  has  been  approved  by  the  Borrower), and (iii) acceptable to the Administrative Agent in its reasonable determination.               “Approved Third-Party Appraiser” means any Independent nationally recognized  third-party appraisal firm (a) designated by the Borrower in writing to the Administrative Agent  (which designation shall be accompanied by a copy of a resolution of the Board of Directors of  the Borrower  that  such firm  has  been  approved by  the  Borrower for  purposes of assisting the  Board  of  Directors  of  the  Borrower  in  making  valuations  of  portfolio  assets  to  determine  the  Borrower’s compliance with the applicable provisions of the Investment Company Act) and (b)  acceptable  to  the  Administrative  Agent;  provided  that,  if  any  proposed  appraiser  requests  or  requires a non-reliance letter, confidentiality agreement or similar agreement prior to allowing  the  Administrative  Agent  to  review  any  written  valuation  report,  such  Person  shall  only  be  deemed  an  Approved  Third-Party  Appraiser  if  the  Administrative  Agent  and  such  Approved  Third-Party  Appraiser  shall  have  entered  into  such  a  letter  or  agreement  on  customary  and  reasonable terms.  Subject to the foregoing (other than clause (b)), it is understood and agreed  that, so long as the same are Independent third-party appraisal firms approved by the Board of  Directors of the Borrower, CTS Capital Advisors, LLC, Houlihan Lokey, Duff & Phelps LLC,  Murray,  Devine  and  Company,  Lincoln  Partners  Advisors,  LLC,  Stout  Risius  Ross,  LLC  and  Valuation Research Corporation are acceptable to the Administrative Agent solely to the extent  they are not serving as the Independent Valuation Provider.              “Asset  Sale”  means  a  sale,  lease  or  sublease  (as  lessor  or  sublessor),  sale  and  leaseback, assignment, conveyance, transfer or other disposition to, or any exchange of property  with, any Person, in one transaction or a series of transactions, of all or any part of any Obligor’s  assets  or  properties  of  any  kind,  whether  real,  personal,  or  mixed  and  whether  tangible  or  intangible, whether now owned or hereafter acquired; provided, however, the term “Asset Sale”  as used in this Agreement shall not include the disposition of Portfolio Investments originated by  an Obligor and immediately transferred to an SBIC Subsidiary pursuant to the terms of Section  6.03(e) hereof.                “Assignment  and  Assumption”  means  an  Assignment  and  Assumption  entered  into by a Lender and an assignee (with the consent of any party whose consent is required by  Section 9.04(b)), and accepted by the Administrative Agent as provided in Section 9.04, in the  form of Exhibit A or any other form approved by the Administrative Agent.               “Assuming Lender” has the meaning assigned to such term in Section 2.07(f)(i).               “Availability  Period”  means  the  period  from  and  including  the  Restatement  Effective  Date  to  but  excluding  the  earlier  of  the  Revolver  Termination  Date  and  the  date  of  termination of the Commitments in accordance with this Agreement.               “Bail-In Action” means the exercise of any Write-Down and Conversion Powers  by  the  applicable  EEA  Resolution  Authority  in  respect  of  any  liability  of  an  EEA  Financial  Institution.                                          4   25272637.12.BUSINESS 

 

            “Bail-In  Legislation”  means,  with  respect  to  any  EEA  Member  Country  implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council  of the European Union, the implementing law for such EEA Member Country from time to time  which is described in the EU Bail-In Legislation Schedule.               “Beneficial Ownership Certification” means a certification regarding a beneficial  ownership required by the Beneficial Ownership Regulation.               “Beneficial Ownership Regulation” means 31 C.F.R § 1010.230.               “Board”  means  the  Board  of  Governors  of  the  Federal  Reserve  System  of  the  United States of America.               “Board  of  Directors”  means,  with  respect  to  any  person,  (a)  in  the  case  of  any  corporation,  the  board  of  directors  of  such  person,  (b)  in  the  case  of  any  limited  liability  company, the board of managers of such person, or if there is none, the Board of Directors of the  managing member of such Person, (c) in the case of any partnership, the Board of Directors of  the  general  partner  of  such  person  and  (d)  in  any  other  case,  the  functional  equivalent  of  the  foregoing.               “Borrower”  has  the  meaning  assigned  to  such  term  in  the  preamble  to  this  Agreement.               “Borrower External Unquoted Value” has the meaning assigned to such term in  Section 5.12(b)(ii)(B)(y).               “Borrower  Tested  Assets”  has  the  meaning  assigned  to  such  term  in  Section  5.12(b)(ii)(B)(y).               “Borrowing” means Loans of the same Type made, converted or continued on the  same date and, in the case of Eurocurrency Loans, that have the same Interest Period.               “Borrowing Base” has the meaning assigned to such term in Section 5.13.               “Borrowing  Base  Certificate”  means  a  certificate  of  a  Financial  Officer  of  the  Borrower, substantially in the form of Exhibit B and appropriately completed.               “Borrowing  Base  Deficiency”  means,  at  any  date  on  which  the  same  is  determined,  the  amount,  if  any,  that  (a) the  aggregate  Covered  Debt  Amount  as  of  such  date  exceeds (b) the Borrowing Base as of such date.               “Borrowing  Request”  means  a  request  by  the  Borrower  for  a  Borrowing  in  accordance with Section 2.03, substantially in the form of Exhibit D hereto or such other form as  is reasonably satisfactory to the Administrative Agent.               “Business Day” means any day (a) that is not a Saturday, Sunday or other day on  which commercial banks in New York City are authorized or required by law to remain closed  and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest                                        5   25272637.12.BUSINESS 

 

on, a continuation or conversion of or into, or the Interest Period for, a Eurocurrency Borrowing,  or  to  a  notice  by  the  Borrower  with  respect  to  any  such  borrowing,  payment,  prepayment,  continuation,  conversion,  or  Interest  Period,  that  is  also  a  day  on  which  dealings  in  deposits  denominated in Dollars are carried out in the London interbank market.               “Capital Lease Obligations” of any Person means the obligations of such Person  to  pay  rent  or other amounts  under any lease of  (or  other  arrangement  conveying the  right to  use) real  or  personal  property,  or  a  combination  thereof,  which  obligations  are  required  to  be  classified and accounted for as capital leases or finance leases on a balance sheet of such Person  under  GAAP,  and  the  amount  of  such  obligations  shall  be  the  capitalized  amount  thereof  determined in accordance with GAAP.               “Cash”  means  any  immediately  available  funds  in  Dollars  or  in  any  currency  other  than  Dollars  (measured  in  terms  of  the  Dollar  Equivalent  thereof)  which  is  a  freely  convertible currency.               “Cash Collateralize” shall mean, with respect to a Letter of Credit, the pledge and  deposit of immediately available funds (or, if the Issuing Bank shall agree in its sole discretion,  other credit support) into a cash collateral account maintained on behalf of the Administrative  Agent in an amount equal to one hundred and two percent (102%) of the face amount of such  Letter of Credit (or such other amount as may be specified in any applicable provision herein) as  collateral  pursuant  to  documentation  in  form  and  substance  satisfactory  to  the  Administrative  Agent and the Issuing Bank.  “Cash Collateral” shall have a meaning correlative to the foregoing  and shall include the proceeds of such cash collateral and other credit support (if any).               “Cash Equivalents” means investments (other than Cash) that are one or more of  the following obligations:               (a)   Short-Term U.S. Government Securities (as defined in Section 5.13);               (b)   investments in commercial paper maturing within 180 days from the date        of acquisition thereof and having, at such date of acquisition, a credit rating of at least        A-1 from S&P and at least P-1 from Moody’s;                (c)   investments  in  certificates  of  deposit,  banker’s  acceptances  and  time        deposits  maturing  within  180  days  from  the  date  of  acquisition  thereof  (i)  issued  or        guaranteed by or placed with, and money market deposit accounts issued or offered by,        any  domestic  office  of  any  commercial  bank  organized  under  the  laws  of  the  United        States of America or any State thereof; provided that such certificates of deposit, banker’s        acceptances and time deposits are held in a securities account (as defined in the Uniform        Commercial  Code)  through  which  the  Collateral  Agent  can  perfect  a  security  interest        therein and (ii) having,  at such date of  acquisition, a credit rating of at least A-1  from        S&P and at least P-1 from Moody’s;               (d)   fully collateralized repurchase agreements with a term of not more than 30        days from the date of acquisition thereof for U.S. Government Securities and entered into        with  (i)  a  financial  institution  satisfying  the  criteria  described  in  clause  (c)  of  this                                         6   25272637.12.BUSINESS 

 

      definition or (ii) an Approved Dealer having (or being a member of a consolidated group        having) at such date of acquisition, a credit rating of at least A-1 from S&P and at least P-       1 from Moody’s; and               (e)   investments  in  money  market  funds  and  mutual  funds,  which  invest        substantially  all  of  their  assets  in  Cash  or  assets  of  the  types  described  in  clauses  (a)        through (d) above;   provided, that (i) in no event shall Cash Equivalents include any obligation that provides for the  payment of interest alone (for example, interest-only securities or “IOs”); (ii) if any of Moody’s  or S&P changes its rating system, then any ratings included in this definition shall be deemed to  be an equivalent rating in a successor rating category of Moody’s or S&P, as the case may be;  (iii) Cash  Equivalents  (other  than  U.S.  Government  Securities,  certificates  of  deposit  or  repurchase  agreements) shall  not  include  any  such  investment  representing  more  than  25%  of  total  assets  of  the  Obligors  in  any  single  issuer;  and  (iv) in  no  event  shall  Cash  Equivalents  include any obligation that is not denominated in Dollars.               “Change  in  Control”  means  (a)  the  acquisition  of  ownership,  directly  or  indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities  Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) of  shares representing more than 35% of the aggregate ordinary voting power represented by the  issued and outstanding capital stock of the Borrower, (b) occupation of a majority of the seats  (other than vacant seats) on the Board of Directors of the Borrower by Persons who were neither  (A)  members  of  the  Board  of  Directors  of  the  Borrower  as  of  the  corresponding  date  of  the  previous year, (B) selected or nominated to become members of the Board of Directors of the  Borrower by the Board of Directors of the Borrower of which a majority consisted of individuals  described  in  clause  (A),  or  (C)  selected  or  nominated  to  become  members  of  the  Board  of  Directors  of  the  Borrower  by  the  Board  of  Directors  of  the  Borrower  of  which  a  majority  consisted of individuals described in clause (A) and individuals described in clause (B), or (c)  any  two  of  (i)  Bowen  Diehl,  (ii)  Michael  Sarner  or  (iii)  Douglas  Kelley  (except  if  any  such  individuals are replaced with individuals reasonably satisfactory to the Administrative Agent and  Required Lenders after the death, disability, resignation or termination of the same) are no longer  actively engaged in the day-to-day management of the Borrower.               “Change in Law” means (a) the adoption of any law, rule or regulation or treaty  after the Original Effective Date, (b) any change in any law, rule or regulation or treaty or in the  interpretation,  implementation  or  application  thereof  by  any  Governmental  Authority  after  the  Original Effective Date or (c) compliance by any Lender or the Issuing Bank (or, for purposes of  Section 2.13(b) or Section 2.18(a), by such Lender’s or the Issuing Bank’s holding company, if  any, or by any lending office of such Lender) with any request, guideline or directive (whether or  not having the force of law) of any Governmental Authority made or issued after the Original  Effective  Date;  provided  that,  notwithstanding  anything  herein  to  the  contrary,  (I)  the  Dodd- Frank  Wall  Street  Reform  and  Consumer  Protection  Act  and  all  requests,  rules,  guidelines  or  directives  in  connection  therewith  and  (II)  all  requests,  rules,  guidelines  or  directives  promulgated  by  the  Bank  For  International  Settlements,  the  Basel  Committee  on  Banking  Supervision  (or  any  successor  or  similar  authority)  or  the  United  States  or  foreign  regulatory                                         7   25272637.12.BUSINESS 

 

authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in  Law” regardless of the date enacted, adopted, issued, promulgated or implemented.               “Class  Action  Judgment”  means  the  Order  Awarding  Plaintiffs’  Counsel  Attorneys’ Fees and Expenses, filed as ECF No. 115, in Rines v. Heelys, Inc., Case No. 3:07-cv- 01468-K (Consolidated) (N.D. Tex. Nov. 17, 2009).               “Code” means the Internal Revenue Code of 1986, as amended from time to time.               “Collateral” has the meaning assigned to such term in the Guarantee and Security  Agreement.               “Collateral  Agent”  means  ING  Capital  LLC  in  its  capacity  as  Collateral  Agent  under  the  Guarantee  and  Security  Agreement,  and  includes  any  successor  Collateral  Agent  thereunder.               “Commitment”  means,  with  respect  to  each  Lender,  the  commitment  of  such  Lender to make Loans, and to acquire participations in Letters of Credit, expressed as an amount  representing  the  maximum  aggregate  amount  of  such  Lender’s  Credit  Exposure  hereunder,  as  such commitment may be (a) reduced or increased from time to time pursuant to Sections 2.07  and 2.09(c) and (b) reduced or increased from time to time pursuant to assignments by or to such  Lender pursuant to Section 9.04.  The aggregate amount of each Lender’s Commitment as of the  Restatement  Effective  Date  is  set  forth  on  Schedule 1.01(b),  or  in  the  Assignment  and  Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.   The  aggregate  amount  of  the  Lenders’  Commitments  as  of  the  Restatement  Effective  Date  is  $270,000,000.               “Commitment  Increase”  has  the  meaning  assigned  to  such  term  in  Section  2.07(f)(i).               “Commitment Increase Date” has the meaning assigned to such term in Section  2.07(f)(i).               “Consolidated Adjusted Interest Expense” means, for any period with respect to  the Borrower and its Subsidiaries on a consolidated basis, the sum of (x) cash interest paid in  respect  of  the  stated  rate  of  interest  (including  any  default  rate  of  interest,  if  applicable)  applicable to any Indebtedness plus (y) the net  amount paid in cash  (or minus the net amount  received  in  cash)  under  Hedging  Agreements  permitted  under  Section 6.04  relating  to  interest  during such period and to the extent not already taken into account under clause (x).               “Consolidated  Asset  Coverage  Ratio”  means,  on  a  consolidated  basis  for  Borrower  and  its  Subsidiaries,  the  ratio  (expressed  as  a  percentage)  which  the  value  of  total  assets,  less  all  liabilities  (including  all  Unfunded  Pension  Liabilities)  and  indebtedness  not  represented by Senior Securities, bears to the aggregate amount of Senior Securities representing  indebtedness of the Borrower and its Subsidiaries (all as determined pursuant to the Investment  Company Act and any orders of the SEC issued to the Borrower thereunder).  For clarity, the  calculation of the Asset Coverage Ratio shall be made in accordance with any exemptive order  issued by the SEC under Section 6(c) of the Investment Company Act relating to the exclusion of                                        8   25272637.12.BUSINESS 

 

any Indebtedness of any SBIC Subsidiary from the definition of Senior Securities only so long as  (a) such order is in effect, (b) no obligations have become due and owing pursuant to the terms  of any Permitted SBIC Guarantee and (c) such Indebtedness is owed to the SBA.               “Consolidated EBIT” means, for any period with respect to the Borrower and its  Subsidiaries  on  a  consolidated  basis,  income  after  deduction  of  all  expenses  and  other  proper  charges other than Taxes, Consolidated Interest Expense and non-cash employee stock options  expense and excluding (a) net realized gains or losses, (b) net change in unrealized appreciation  or depreciation, (c) gains on re-purchases of Indebtedness, (d) the amount of interest paid-in-kind  to the Borrower or any of its Subsidiaries (“PIK”) to the extent such amount exceeds the sum of  (i) PIK interest collected in cash (including any amortization payments on such applicable debt  instrument up to the amount of PIK interest previously capitalized thereon) and (ii) realized gains  collected in cash (net of realized losses); provided that the amount determined pursuant to this  clause  (d)(ii) shall  not  be  less  than  zero,  all  as  determined  in  accordance  with  GAAP,  and  (e)  other non-cash charges and gains to the extent included to calculate income.               “Consolidated Interest Coverage Ratio” means the ratio as of the last day of any  fiscal quarter of the  Borrower and its Subsidiaries on a consolidated basis of (a) Consolidated  EBIT  for  the  four  fiscal  quarter  period  then  ending,  taken  as  a  single  accounting  period,  to  (b) Consolidated Adjusted Interest Expense for such four fiscal quarter period.               “Consolidated  Interest  Expense”  means,  with  respect  to  the  Borrower  and  its  Subsidiaries  on  a  consolidated  basis  and  for  any  period,  the  sum  of  (x) the  total  consolidated  interest  expense  (including  capitalized  interest  expense  and  interest  expense  attributable  to  Capital Lease Obligations) of the Borrower and/or its Subsidiaries and in any event shall include  all interest expense with respect to any Indebtedness in respect of which the Borrower and/or its  Subsidiaries is wholly or partially liable plus (y) the net amount paid or payable (or minus the net  amount receivable) under Hedging Agreements permitted under Section 6.04 relating to interest  during such period (whether or not actually paid or received during such period) and to the extent  not already taken into account under clause (x).               “Control” means the possession, directly or indirectly, of the power to direct or  cause the direction of  the management  or policies  of  a Person,  whether  through the ability to  exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings  correlative thereto.               “Control Account” has the meaning assigned to such term in Section 5.08(c)(ii).               “Control Agreement” means that certain Amended and Restated Custody Control  Agreement, dated as of the Restatement Effective Date, entered into by and among the Borrower,  the  Collateral  Agent  and  the  Custodian,  as  amended,  restated,  supplemented  or  otherwise  modified from time to time in accordance with the terms hereof and thereof.                “Covered Debt Amount” means, on any date, the sum of (x) all of the Revolving  Credit  Exposures  of  all  Lenders  on  such  date,  plus  (y) the  aggregate  amount  (including  any  increase  in  the  aggregate  principal  amount  resulting  from  payable-in-kind  interest)  of  Other  Covered  Indebtedness  outstanding  on  such  date,  minus  (z)  LC  Exposure  that  has  been  Cash                                         9   25272637.12.BUSINESS 

 

Collateralized or LC Exposure that has been backstopped in a manner reasonably satisfactory to  the Administrative Agent.               “Covered Taxes” means (i) Taxes, other than Excluded Taxes, imposed on or with  respect to any payment made by or on account of any obligation of the Borrower under any Loan  Document and (ii) to the extent not otherwise described in clause (i), Other Taxes.               “Credit Exposure” means, with respect to any Lender at any time, the sum of the  outstanding principal amount of such Lender’s Loans and LC Exposure at such time (including,  for the avoidance of doubt, the Loans and LC Exposure surviving after the Revolver Termination  Date).               “Custodian”  means  U.S.  Bank  National  Association,  or  any  other  financial  institution  mutually  agreeable  to  the  Collateral  Agent  and  the  Borrower,  as  custodian  holding  accounts of the Borrower holding Portfolio Investments, on behalf of the Borrower and, pursuant  to  the  Control  Agreement,  the  Collateral  Agent.  The term  “Custodian” includes  any  agent  or  sub-custodian acting on behalf of the Custodian pursuant to the terms of the Custody Agreement.               “Custodian Account” means an account subject to a Custody Agreement.               “Custody  Agreement”  means  that  certain  Custody  Agreement,  dated  as  of  the  Original  Effective  Date,  entered  into  by  and  between  the  Borrower  and  the  Custodian,  as  amended, restated, supplemented or otherwise modified from time to time in accordance with the  terms hereof and thereof.               “Default” means any event or condition which constitutes an Event of Default or  which upon notice, lapse of time or both would, unless cured or waived, become an Event of  Default.               “Defaulting Lender” means any Lender that has, as reasonably determined by the  Administrative Agent, (a) failed to fund any portion of its Loans or participations in Letters of  Credit within two (2) Business Days of the date required to be funded by it hereunder, unless, in  the case of any Loans, such Lender notifies the Administrative Agent that such Lender’s failure  is based on such Lender’s reasonable determination that the conditions precedent to funding such  Loan under this Agreement have not been met, such conditions have not otherwise been waived  in accordance with the terms of this Agreement and such Lender has advised the Administrative  Agent in writing (with reasonable detail of those conditions that have not been satisfied) prior to  the  time  at  which  such  funding  was  to  have  been  made,  (b) notified  the  Borrower,  the  Administrative Agent, the Issuing Bank or any other Lender in writing that it does not intend to  comply with any of its funding obligations under this Agreement or has made a public statement  that it does not intend to comply with its funding obligations under this Agreement (unless such  writing or public statement states that such position is based on such Lender’s determination that  one  or  more  conditions  precedent  to  funding  (which  conditions  precedent,  together  with  the  applicable  default, if any,  shall  be  specifically identified  in  such  writing)  cannot  be  satisfied),  (c) failed,  within  three  (3) Business  Days  after  request  by  the  Administrative  Agent  or  the  Borrower to confirm in writing to the Administrative Agent and the Borrower that it will comply  with  the  terms  of  this  Agreement  relating  to  its  obligations  to  fund  prospective  Loans  or                                         10   25272637.12.BUSINESS 

 

participations in then-outstanding Letters of Credit (provided that such Lender shall cease to be a  Defaulting  Lender pursuant to this clause (c) upon receipt of such written confirmation by the  Administrative Agent and the Borrower), (d) otherwise failed to pay over to the Administrative  Agent or any other Lender any other amount (other than a de minimis amount) required to be  paid by it hereunder within two (2) Business Days of the date when due, unless the subject of a  good  faith  dispute,  or  (e)  other  than  via  an  Undisclosed  Administration,  either  (i) has  been  adjudicated as, or determined by any Governmental Authority having regulatory authority over  such Person or its assets to be, insolvent or has a parent company that has been adjudicated as, or  determined by any Governmental Authority having regulatory authority over such Person or its  assets to be, insolvent, (ii) become the subject of a bankruptcy or insolvency proceeding, or has  had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar  Person charged with reorganization or liquidation of its business or custodian, appointed for it, or  has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or  has  had  a  receiver,  conservator,  trustee,  administrator,  assignee  for  the  benefit  of  creditors  or  similar Person charged with reorganization or liquidation of its business or custodian appointed  for  it  (unless  in  the  case  of  any  Lender  referred  to  in  this  clause  (e),  the  Borrower  and  the  Administrative Agent shall be satisfied in the exercise of their respective reasonable discretion  that such Lender intends, and has all approvals required to enable it, to continue to perform its  obligations as a Lender hereunder) or (iii) become the subject of a Bail-In Action; provided that a  Lender  shall  not  qualify  as  a  Defaulting  Lender  solely  as  a  result  of  the  acquisition  or  maintenance of an ownership interest in such Lender or its parent company, or of the exercise of  control over such Lender or any Person controlling such Lender, by a Governmental Authority or  instrumentality thereof, or solely as a result of an Undisclosed Administration, so long as such  ownership interest or Undisclosed Administration does not result in or provide such Lender with  immunity  from  the  jurisdiction  of  courts  within the  United  States  or  from  the  enforcement  of  judgments  or  writs  of  attachment  on  its  assets  or  permit  such  Lender  (or  such  Governmental  Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such  Lender.               “Departing  Lenders” has the meaning  assigned  to such term in  the preamble  to  this Agreement.               “Disqualified Equity Interests” means Equity Interests of the Borrower that after  issuance  are  subject  to  any  agreement  between  the  holder  of  such  Equity  Interests  and  the  Borrower  whereby  the  Borrower  is  required  to  purchase,  redeem,  retire,  acquire,  cancel  or  terminate  such  Equity  Interests,  other  than  (x)  as  a  result  of  a  change  of  control,  or  (y)  in  connection  with  any  purchase,  redemption,  retirement,  acquisition,  cancellation  or  termination  with, or in exchange for, shares of Equity Interests that are not Disqualified Equity Interests.               “Document  Custodian”  means  U.S.  Bank  National  Association,  or  any  other  financial institution mutually agreeable to the Collateral Agent and the Borrower, as document  custodian  holding  documentation  for  Portfolio  Investments,  on  behalf  of  the  Borrower  and,  pursuant  to  the  Document  Custody  Agreement,  the  Collateral  Agent.   The  term  “Document  Custodian” includes any agent or sub-custodian acting on behalf of the Document Custodian.               “Document  Custody  Agreement”  means  that  certain  Amended  and  Restated  Document Custody Agreement, dated as of the Restatement Effective Date, entered into by and                                        11   25272637.12.BUSINESS 

 

among  the  Borrower,  the  Collateral  Agent  and  the  Custodian,  as  amended,  restated,  supplemented or otherwise modified from time to time in accordance with the terms hereof and  thereof.                “Dollar  Equivalent”  means,  on  any  date  of  determination,  with  respect  to  an  amount denominated in any  currency other than  Dollars, the amount of  Dollars that would be  required to purchase such amount of such currency on the date two Business Days prior to such  date,  based  upon  the  spot  selling  rate  at  which  the  Administrative  Agent  (or  other  foreign  currency broker reasonably acceptable to the Administrative Agent) offers to sell such currency  for Dollars in the London foreign exchange market at approximately 11:00 a.m., London time,  for delivery two Business Days later.                “Dollars” or “$” refers to lawful money of the United States of America.              “EEA  Financial  Institution”  means  (a)  any  credit  institution  or  investment  firm  established  in  any  EEA  Member  Country  which  is  subject  to  the  supervision  of  an  EEA  Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of  an institution described in clause (a) of this definition, or (c) any financial institution established  in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b)  of this definition and is subject to consolidated supervision with its parent.              “EEA Member Country” means any of the member states of the European Union,  Iceland, Liechtenstein, and Norway.              “EEA  Resolution  Authority”  means  any  public  administrative  authority  or  any  Person entrusted with public administrative authority of any EEA Member Country (including  any delegee) having responsibility for the resolution of any EEA Financial Institution.               “Eligible Liens” means, any right of offset, banker’s lien, security interest or other  like right against the Portfolio Investments held by the Custodian pursuant to or in connection  with its rights and obligations relating to the Custodian Account, provided that such rights are  subordinated,  pursuant  to  the  terms  of  the  Control  Agreement,  to  the  first  priority  perfected  security interest in the Collateral created in favor of the Collateral Agent, except to the extent  expressly provided therein.               “Eligible  Portfolio  Investment”  means  any  Portfolio  Investment  held  by  any  Obligor (and solely for purposes of determining the Borrowing Base, Cash and Cash Equivalents  held by any Obligor) that, in each case, meets all of the criteria set forth on Schedule 1.01(d)  hereto;  provided,  that  no  Portfolio  Investment,  Cash  or  Cash  Equivalent  shall  constitute  an  Eligible Portfolio Investment or be included in the Borrowing Base if the Collateral Agent does  not  at  all  times  maintain  a  first  priority,  perfected  Lien  (subject  to  no  other  Liens  other  than  Eligible  Liens)  on  such  Portfolio  Investment,  Cash  or  Cash  Equivalent  or  if  such  Portfolio  Investment,  Cash  or  Cash  Equivalent  has  not  been  or  does  not  at  all  times  continue  to  be  Delivered (as defined in the Guarantee and Security Agreement).  Without limiting the generality  of the foregoing, it is understood and agreed that (i) any Portfolio Investments that have been  contributed  or  sold,  purported  to  be  contributed  or  sold  or  otherwise  transferred  to  any  SBIC  Subsidiary, or held by any SBIC Subsidiary, or which secure obligations of any SBIC Subsidiary                                         12   25272637.12.BUSINESS 

 

and  (ii)  Special  Equity  Interests  shall  not  be  treated  as  Eligible  Portfolio  Investments  until  distributed, sold or otherwise transferred to the Borrower free and clear of all Liens (other than  Eligible  Liens).   Notwithstanding  the  foregoing,  nothing  herein  shall  limit  the  provisions  of  Section  5.12(b)(i),  which  provide  that,  for  purposes  of  this  Agreement,  all  determinations  of  whether an Investment is to be included as an Eligible Portfolio Investment shall be determined  on  a  settlement-date  basis  (meaning  that  any  Investment  that  has  been  purchased  will  not  be  treated  as  an  Eligible  Portfolio  Investment  until  such  purchase  has  settled,  and  any  Eligible  Portfolio  Investment  which  has  been  sold  will  not  be  excluded  as  an  Eligible  Portfolio  Investment until such sale has settled), provided that no such Investment shall be included as an  Eligible Portfolio Investment to the extent it has not been paid for in full.                “Equity  Interests”  means  shares  of  capital  stock,  partnership  interests,  membership interests in a limited liability company, beneficial interests in a trust or other equity  ownership  interests  in  a  Person,  and  any  warrants,  options  or  other  rights  entitling  the  holder  thereof  to  purchase  or  acquire  any  such  equity  interest.  As  used  in  this  Agreement,  “Equity  Interests”  shall  not  include  convertible  debt  unless  and  until  such  debt  has  been  converted  to  capital stock.               “ERISA”  means  the  Employee  Retirement  Income  Security  Act  of  1974,  as  amended from time to time.               “ERISA Affiliate” means any trade or business (whether or not incorporated) that,  together  with  the  Borrower,  is  treated  as  a  single  employer  under  Section 414(b) or  (c) of  the  Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as  a single employer under Section 414(m) or (o) of the Code.               “ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of  ERISA or the regulations issued thereunder with respect to a Pension Plan (other than an event  for which the 30-day notice period is waived); (b) with respect to any Plan that is intended to  qualify under Section 401(a) of the Code, the notification by the Internal Revenue Service of its  intent to disqualify the Plan; (c) the failure to make a required contribution to any Pension Plan  that would result in the imposition of a lien or other encumbrance or the provision of security  under Section 412 or 430 of the Code or Section 302 or 4068 of ERISA, or the arising of such a  lien  or  encumbrance;  there  being  or  arising  any  “unpaid  minimum  required  contribution”  or  “accumulated funding deficiency”  (as defined in or otherwise set forth in Section 4971 of the  Code or Part 3 of Subtitle B of Title 1 of ERISA), whether or not waived; the filing pursuant to  Section 412(c) of  the  Code  or  Section 302(c)  of  ERISA  of  an  application  for  a  waiver  of  the  minimum  funding  standard  with  respect  to  any  Pension  Plan;  or  the  determination  that  any  Pension  Plan  is,  or  is  expected  to  be,  in  “at-risk”  status  under  Title  IV  of  ERISA;  (d)  the  incurrence  by  the  Borrower  or  any  of  its  ERISA  Affiliates  of  any  liability  under  Title  IV  of  ERISA with respect to the termination of any Pension Plan (other than a standard termination  under and in accordance with Section 4041(b) of ERISA or premiums due and not delinquent  under Section 4007 of ERISA); (e) the receipt by the Borrower or any of its ERISA Affiliates  from the PBGC or a plan administrator of any notice relating to an intention to terminate any  Pension  Plan  or  Pension  Plans  or  to  appoint  a  trustee  to  administer  any  Pension  Plan;  (f) the  incurrence by the Borrower or any of its ERISA Affiliates of any Withdrawal Liability; (g) the  occurrence of any nonexempt prohibited transaction within the meaning of Section 4975 of the                                        13   25272637.12.BUSINESS 

 

Code or Section  406 of ERISA with  respect to  any  Pension Plan;  (h)  the failure  to make any  required contribution to a Multiemployer Plan or failure to make by its due date any required  contribution  to  any  Pension  Plan;  or  (i) the  receipt  by  the  Borrower  or  any  of  its  ERISA  Affiliates of any notice, or the receipt by any Multiemployer Plan from the Borrower or any of  its  ERISA  Affiliates  of  any  notice,  concerning  the  imposition  of  Withdrawal  Liability  or  a  determination that a Multiemployer Plan is, or is expected to be, in “critical” or “endangered”  status, as determined under Section 432 of the Code or Section 305 of ERISA.                “EU  Bail-In  Legislation  Schedule”  means  the  EU  Bail-In  Legislation  Schedule  published by the Loan Market Association (or any successor person), as in effect from time to  time.               “Eurocurrency”,  when  used  in  reference  to  any  Loan  or  Borrowing,  refers  to  whether  such  Loan,  or  the  Loans  constituting  such  Borrowing,  are  bearing  interest  at  a  rate  determined by reference to the Adjusted LIBO Rate.  For clarity, a Loan or Borrowing bearing  interest  by  reference  to  clause  (c)  of  the  definition  of  the  Alternate  Base  Rate  shall  not  be  a  Eurocurrency Loan or Eurocurrency Borrowing.               “Event of Default” has the meaning assigned to such term in Article VII.               “Exchange  Act” means  the Securities  Exchange  Act  of  1934,  as  amended  from  time to time.               “Excluded Taxes” means any of the following Taxes imposed on or with respect  to  the  Administrative  Agent,  any  Lender  or  the  Issuing  Bank  or  required  to  be  withheld  or  deducted from a payment to the Administrative Agent, any Lender or the Issuing Bank, (a) Taxes  imposed on (or measured by) its net income or franchise Taxes, in each case, imposed (i) by the  jurisdiction  (or  any  political  subdivision  thereof) under  the  laws  of  which  such  recipient  is  organized or in which its principal office is located or, in the case of any Lender, in which its  applicable lending office is located, or (ii) as a result of a present or former connection between  such recipient and the jurisdiction imposing such Tax (other than connections solely arising from  such recipient having executed, delivered, become a party to, performed its obligations under,  received payments under, received or perfected a security interest under, engaged in any other  transaction pursuant to or enforced any Loan Documents, or sold or assigned an interest in any  Loan or Loan Document), (b) any branch profits Taxes imposed by the United States of America  or any similar Tax imposed by any other jurisdiction in which the Borrower is located, (c) in the  case  of  a  Lender  (other  than  an  assignee  pursuant  to  a  request  by  the  Borrower  under  Section 2.18(b)), any U.S. federal withholding Tax that is imposed on amounts payable to such  Lender at the time such Lender becomes a party to this Agreement (or designates a new lending  office), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of  designation  of  a  new  lending  office  (or  assignment),  to  receive  additional  amounts  from  the  Borrower  with  respect  to  such  withholding  Tax  pursuant  to  Section  2.15(a),  (d)  Taxes  attributable to such recipient’s failure to comply with Section 2.15(f), and (e) any U.S. federal  withholding Taxes imposed under FATCA.               “Existing Affiliate Investments” means the Portfolio Investments held and owned  by any Obligor on the Original Effective Date in (i) Deepwater Corrosion Services, Inc. and (ii)                                        14   25272637.12.BUSINESS 

 

MRI,  and,  subject  to  Section  6.08(b)  and  paragraph  21  of  Schedule  1.01(d),  any  follow-on  Investments by any Obligor in the same Portfolio Companies.               “Existing  Continuing  Lenders”  has  the  meaning  assigned  to  such  term  in  the  preamble to this Agreement.               “Existing L/C” has the meaning assigned to such term in Section 2.04(l).               “Existing Lenders” has the meaning assigned to such term in the preamble to this  Agreement.               “Existing Loans” has the meaning assigned to such term in the preamble to this  Agreement.               “External Quoted Value” has the meaning set forth in Section 5.12(b)(ii)(A).               “External Unquoted Value” means (i) with respect to Borrower Tested Assets, the  Borrower External Unquoted Value and (ii) with respect to IVP Tested Assets, the IVP External  Unquoted Value.               “Extraordinary Receipts” means an amount equal to (a) any cash received by or  paid to any Obligor on account of any foreign, United States, state or local tax refunds, pension  plan  reversions,  judgments,  proceeds  of  settlements  or  other  consideration  of  any  kind  in  connection  with  any  cause  of  action,  condemnation  awards  (and  payments  in  lieu  thereof),  indemnity  payments  received  not  in  the  ordinary  course  of  business  and  any  purchase  price  adjustment  received  not  in  the  ordinary  course  of  business  in  connection  with  any  purchase  agreement and proceeds of insurance (excluding, however, for the avoidance of doubt, proceeds  of  any  issuance  of  Equity  Interests  by  the  Borrower  and  issuances  of  Indebtedness  by  any  Obligor),  minus  (b)  any  costs,  fees,  commissions,  premiums  and  expenses  incurred  by  any  Obligor directly incidental to such cash receipts, including reasonable legal fees and expenses;  minus (c) amounts estimated in good faith by the Borrower to be necessary for the Borrower to  make distributions sufficient in amount to achieve the objectives set forth in clauses (i), (ii) and  (iii) of Section 6.05(b) hereof, solely to the extent that the Required Payment Amount in or with  respect  to  any taxable  year (or any calendar  year,  as  relevant) is  increased as  a  result  of  such  Extraordinary  Receipt;  provided,  however, that  Extraordinary  Receipts  shall  not  include  any  (i) amounts that the Borrower receives from the Administrative Agent, any Lender or the Issuing  Bank  pursuant  to  Section  2.15(h),  (ii)  cash  receipts  to  the  extent  received  from  proceeds  of  insurance, condemnation awards (or payments in lieu thereof), indemnity payments or payments  in respect of judgments or settlements of claims, litigation or proceedings to the extent that such  proceeds,  awards  or  payments  are  received  by  any  Person  in  respect  of  any  unaffiliated  third  party claim against or loss by such Person and promptly applied to pay (or to reimburse such  Person for its prior payment of) such claim or loss and the costs and expenses of such Person  with respect thereto, (iii) proceeds of business interruption insurance to the extent such proceeds  constitute compensation for lost earnings, or (iv) indemnity payments or payments in respect of  judgments or settlements of claims, litigation or proceedings to the extent that such payments are  received by any Person in respect of any unaffiliated third party claim against or loss by such                                         15   25272637.12.BUSINESS 

 

Person and promptly applied to pay (or to reimburse such Person for its prior payment of) such  claim or loss and the costs and expenses of such Person with respect thereto.               “FATCA”  means  Sections  1471  through  1474  of  the  Code,  as  of  the  Original  Effective Date (or any amended or successor version that is substantively comparable  and not  materially  more  onerous  to  comply  with),  any  current  or  future  regulations  or  official  interpretations  thereof  and  any  agreements  entered  into  pursuant  to  Section  1471(b)(1)  of  the  Code, any intergovernmental agreement entered into in connection with the implementation of  such  Sections  of  the  Code,  and  any  fiscal  or  regulatory  legislation,  rules,  or  official  practices  adopted pursuant to any published intergovernmental agreement entered into in connection with  the implementation of such Sections of the Code.               “FCPA” has the meaning assigned to such term in Section 3.20.               “Federal  Funds  Effective  Rate”  means,  for  any  day,  the  weighted  average  (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds  transactions with members of the Federal Reserve System, as published on the next succeeding  Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for  any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of  1%) of the quotations for such day for such transactions received by the Administrative Agent  from  three  Federal  funds  brokers  of  recognized  standing  selected  by  it;  provided,  that  if  the  Federal  Funds  Effective  Rate  is  less  than  zero,  such  rate  shall  be  zero  for  purposes  of  this  Agreement.               “Financial Officer” means the chief executive officer, president, chief operating  officer, chief financial officer, treasurer, controller or chief compliance officer of the Borrower,  in each case, whom has been authorized by the Board of Directors of the Borrower to execute the  applicable document or certificate.              “Foreign Lender” means any Lender that is not a U.S. Person.               “GAAP” means generally accepted accounting principles in the United States of  America.               “Governmental  Authority”  means  the  government  of  the  United  States  of  America, or of any other nation, or any political subdivision thereof, whether state or local, and  any  agency,  authority,  instrumentality,  regulatory  body,  court,  central  bank  or  other  entity  exercising  executive,  legislative,  judicial,  taxing,  regulatory  or  administrative  powers  or  functions  of  or  pertaining  to  government  (including  any  supra-national  body  exercising  such  powers or functions, such as the European Union or the European Central Bank).               “Guarantee”  of  or  by  any  Person  (the  “guarantor”) means  any  obligation,  contingent  or  otherwise,  of  the  guarantor  guaranteeing  or  having  the  economic  effect  of  guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in  any manner, whether directly or indirectly, and including any obligation of the guarantor, direct  or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of)  such  Indebtedness  or  other  obligation  or  to  purchase  (or  to  advance  or  supply  funds  for  the                                         16   25272637.12.BUSINESS 

 

purchase of) any security for the payment thereof, (b) to purchase or lease property securities or  services for the purpose of assuring the owner of such Indebtedness or other obligation of the  payment thereof, (c) to maintain working capital, equity capital or any other financial statement  condition  or  liquidity  of  the  primary  obligor  so  as  to  enable  the  primary  obligor  to  pay  such  Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or  letter  of  guaranty  issued  to  support  such  Indebtedness  or  obligation;  provided,  that  the  term  “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of  business or customary indemnification agreements entered into in the ordinary course of business  in connection with obligations that do not constitute Indebtedness. The amount of any Guarantee  at  any  time  shall  be  deemed  to  be  an  amount  equal  to  the  maximum  stated  or  determinable  amount  of  the  primary  obligation  in  respect  of  which  such  Guarantee  is  incurred,  unless  the  terms of such Guarantee expressly provide that the maximum amount for which such Person may  be liable thereunder is  a  lesser amount  (in  which  case the amount  of  such  Guarantee shall  be  deemed to be an amount equal to such lesser amount).               “Guarantee and Security Agreement” means that certain Amended and Restated  Guarantee, Pledge and Security Agreement, dated as of the Restatement Effective Date, among  the  Borrower,  the  Subsidiary  Guarantors,  the  Administrative  Agent,  each  holder  (or  a  representative,  agent  or  trustee  therefor)  from  time  to  time  of  any  Secured  Longer-Term  Indebtedness,  and  the  Collateral  Agent,  as  amended,  restated,  supplemented  or  otherwise  modified from time to time in accordance with the terms hereof and thereof.               “Guarantee Assumption Agreement” means a Guarantee Assumption Agreement  substantially  in  the  form  of  Exhibit  B  to  the  Guarantee  and  Security  Agreement  among  the  Collateral Agent and an entity that pursuant to Section 5.08 is required to become a “Subsidiary  Guarantor”  under  the  Guarantee  and  Security  Agreement  (with  such  changes  as  the  Administrative Agent shall request consistent with the requirements of Section 5.08).               “Hedging  Agreement”  means  any  interest  rate  protection  agreement,  foreign  currency exchange protection agreement, commodity price protection agreement or other interest  or currency exchange rate or commodity price hedging arrangement.  For the avoidance of doubt,  in no event shall a Hedging Agreement include a total return swap.               “Hedging  Agreement  Obligations”  has  the  meaning  specified  in  the  Guarantee  and Security Agreement.               “I-45” means I-45 SLF, LLC, a Delaware limited liability company.               “I-45 Entities” means, collectively, (i) I-45, (ii) any direct or indirect parent of I- 45 (other than the Borrower) and (iii) in each case of clause (i) or (ii), any of their respective  Subsidiaries.               “Increasing Lender” has the meaning assigned to such term in Section 2.07(f)(i).               “Indebtedness”  of  any  Person  means,  without  duplication,  (a) all  obligations  of  such  Person  for  borrowed  money  or  with  respect  to  deposits,  loans  or  advances  of  any  kind,  (b) all  obligations  of  such  Person  evidenced  by  bonds,  debentures,  notes  or  similar  debt                                         17   25272637.12.BUSINESS 

 

instruments,  (c) all  obligations  of  such  Person  under  conditional  sale  or  other  title  retention  agreements  relating  to  property acquired by such  Person,  (d) all  obligations  of  such  Person  in  respect of the deferred purchase price of property or services (other than trade accounts payable  and accrued expenses in the ordinary course of business not past due for more than 90 days after  the date on which such trade account payable was due), (e) all Indebtedness of others secured by  any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured  thereby has been assumed (with the value of such debt being the lower of the outstanding amount  of such debt and the fair market value of the property subject to such Lien), (f) all Guarantees by  such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all  obligations, contingent or otherwise, of such Person as an account party in respect of letters of  credit and letters of guaranty, (i) the net amount such Person would be obligated for under any  Hedging Agreement if such Hedging Agreement was terminated at the time of determination, (j)  all obligations, contingent or otherwise, with respect to Disqualified Equity Interests, and (k) all  obligations,  contingent  or  otherwise,  of  such  Person  in  respect  of  bankers’  acceptances.   The  Indebtedness  of  any  Person  shall  include  the  Indebtedness  of  any  other  entity  (including  any  partnership in which such Person is a general partner) to the extent such Person is liable therefor  as a result of such Person’s ownership interest in or other relationship with such entity, except to  the extent the terms of such Indebtedness provide that such Person is not liable therefor (or such  Person  is  not  otherwise  liable  for  such  Indebtedness).  Notwithstanding  the  foregoing,  “Indebtedness” shall not include (x) purchase price holdbacks arising in the ordinary course of  business  in  respect  of  a  portion  of  the  purchase  price  of  an  asset  or  Investment  to  satisfy  unperformed obligations of the seller of such asset or Investment, (y) a commitment arising in  the ordinary course of business to make a future Portfolio Investment or fund the delayed draw  or unfunded portion of any Portfolio Investment or (z) indebtedness of the Borrower on account  of the sale by the Borrower of the first out tranche of any First Lien Bank Loan that arises solely  as an accounting matter under ASC 860, provided that such indebtedness (i) is non-recourse to  the Borrower and its Subsidiaries and (ii) would not represent a claim against the Borrower or  any of its Subsidiaries in a bankruptcy, insolvency or liquidation proceeding of the Borrower or  its Subsidiaries, in each case in excess of the amount sold or purportedly sold.                “Independent” when used  with respect  to any specified  Person  means  the  more  restrictive of the following: (a) that such Person (i) does not have any direct financial interest or  any  material  indirect  financial  interest  in  the  Borrower  or  any  of  its  Subsidiaries  or  Affiliates  (including its investment adviser or any Affiliate thereof) other than ownership of publicly traded  stock  of  the  Borrower  or  any  such  Subsidiary  or  Affiliate  with  a  market  value  not  to  exceed  $1,000,000 and (ii) is not an officer, employee, promoter, underwriter, trustee, partner, director  or  a  Person  performing  similar  functions of  the  Borrower  or  of  its  Subsidiaries  or  Affiliates  (including its investment advisor or any Affiliate thereof), (b) the definition of “disinterested” as  defined  in the  Investment  Company Act, (c)  that  such  Person  is  not  an “interested person”  as  defined  in  Section  2(a)(19)  of  the  Investment  Company  Act  or  (d)  the  definition  of  “independent” as defined in the Exchange Act.               “Independent  Valuation  Provider”  means  any  of  Duff  &  Phelps  LLC,  Murray,  Devine  and  Company,  Lincoln  Advisors,  Houlihan  Lokey,  Stout  Risius  Ross,  Inc.,  Valuation  Research  Corporation  and  Alvarez  &  Marsal,  or  any  other  Independent  nationally  recognized  third-party appraisal firm selected by the Administrative Agent in its reasonable discretion.                                         18   25272637.12.BUSINESS 

 

            “Industry Classification Group” means any of the classification groups set forth  on Schedule 1.01(e) on the Restatement Effective Date.               “ING” means ING Capital LLC.               “Interest  Election  Request”  means  a  request  by  the  Borrower  to  convert  or  continue a Borrowing in accordance with Section 2.06.               “Interest Payment Date” means (a) with respect to any ABR Loan, each Quarterly  Date and (b) with respect to any Eurocurrency Loan, the last day of each Interest Period therefor  and, in the case of any Interest Period of more than three months’ duration, each day that occurs  at three-month intervals after the first day of such Interest Period.              “Interest  Period”  means,  for  any  Eurocurrency  Loan  or  Borrowing,  the  period  commencing  on  the  date  of  such  Loan  or  Borrowing  and ending  on  the  numerically  corresponding  day  in  the  calendar  month  that  is  one,  two,  three  or  six  months  thereafter;  provided,  that  (a)  if  any  Interest  Period  would  end  on  a  day  other  than  a  Business  Day,  such  Interest  Period  shall  be  extended  to  the  next  succeeding  Business  Day  unless  such  next  succeeding  Business  Day  would  fall  in  the  next  calendar  month,  in  which  case  such  Interest  Period shall end on the next preceding Business Day, and (b) any Interest Period that commences  on the  last  Business  Day  of  a  calendar month (or  on a day for  which  there is  no numerically  corresponding  day  in  the  last  calendar  month  of  such  Interest  Period) shall  end  on  the  last  Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of  a Loan initially shall be the date on which such Loan is made and thereafter shall be the effective  date of the most recent conversion or continuation of such Loan, and the date of a Borrowing  comprising Loans that have been converted or continued shall be the effective date of the most  recent conversion or continuation of such Loans.               “Internal Value” has the meaning set forth in Section 5.12(b)(ii)(C).               “Investment” means, for any Person: (a) Equity Interests, bonds, notes, debentures  or  other  securities  of  any  other  Person  (including  convertible  securities)  or  any  agreement  to  acquire  any  Equity  Interests,  bonds,  notes,  debentures  or  other  securities  of  any  other  Person  (including any “short sale” or any sale of any securities at a time when such securities are not  owned by the Person entering into such sale); (b) deposits, advances, loans or other extensions of  credit made to any other Person (including purchases of property from another Person subject to  an understanding or agreement, contingent or otherwise, to resell such property to such Person);  or (c) Hedging Agreements.               “Investment  Company  Act”  means  the  Investment  Company  Act  of  1940,  as  amended from time to time.               “Investment  Policies”  means  the  Borrower’s  investment  objectives,  policies,  restrictions and limitations as in existence on the Restatement Effective Date.                “IRS” means the U.S. Internal Revenue Service.                                         19   25272637.12.BUSINESS 

 

            “Issuing  Bank”  means  ING,  in  its  capacity  as  the  issuer  of  Letters  of  Credit  hereunder, and its successors in such capacity as provided in Section 2.04(j).                “IVP External Unquoted Value” has the meaning assigned to such term in Section  5.12(b)(ii)(B)(x).               “IVP  Tested  Assets”  has  the  meaning  assigned  to  such  term  in  Section  5.12(b)(ii)(B)(x).                “Joint Venture” means any joint venture or other Person that primarily owns or  makes  investments  in  unaffiliated  financial  assets  (including  debt  or  equity  investments  in  unaffiliated Persons).               “LC  Disbursement”  means  a  payment  made  by  the  Issuing  Bank  pursuant  to  a  Letter of Credit.               “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount  of all outstanding Letters of Credit at such time (including any Letter of Credit for which a draft  has been presented but not yet honored by the Issuing Bank) plus (b) the aggregate amount of all  LC Disbursements in respect of such Letters of Credit that have not yet been reimbursed by or on  behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be its  Applicable Percentage of the total LC Exposure at such time.               “Lenders” means the Persons listed on Schedule 1.01(b) (as amended from time  to time pursuant to Section 2.07) as having Commitments and any other Person that shall have  become a party hereto pursuant to an Assignment and Assumption that provides for it to assume  a Commitment or to acquire Revolving Credit Exposure, other than any such Person that ceases  to be a party hereto pursuant to an Assignment and Assumption.               “Letter of Credit” means any letter of credit issued pursuant to this Agreement.               “Letter  of  Credit  Documents”  means,  with  respect  to  any  Letter  of  Credit,  collectively, any application therefor and any other agreements, instruments, guarantees or other  documents (whether general in application or applicable only to such Letter of Credit) governing  or providing for (a) the rights and obligations of the parties concerned or at risk with respect to  such Letter of Credit or (b) any collateral security for any of such obligations, each as the same  may be modified and supplemented and in effect from time to time.               “LIBO  Rate”  means,  for  any  Interest  Period,  (i)  the  Intercontinental  Exchange  Benchmark  Administration  Ltd.  LIBO  Rate  (or  the  successor  thereto  if  the  Intercontinental  Exchange Benchmark Administration Ltd. is no longer making such rates available) per annum  for  deposits  in  Dollars  for  a  period  equal  to  the  Interest  Period  appearing  on  the  display  designated  as  Reuters  Screen  LIBO01  Page  (or  such  other  page  on  that  service  or  such  other  service designated by the Intercontinental Exchange Benchmark Administration Ltd. LIBO Rate  (or the successor thereto if the Intercontinental Exchange Benchmark Administration Ltd. is no  longer making such rates available) for the display of such Administration’s Interest Settlement  Rates for deposits in Dollars) as of 11:00 a.m., London time on the day that is two Business Days  prior to the first day of the Interest Period (or if such Reuters Screen LIBO01 Page is unavailable                                        20   25272637.12.BUSINESS 

 

for any reason at such time, the rate which appears on the Reuters Screen ISDA Page as of such  date and such time), or (ii) if the Administrative Agent determines that the sources set forth in  clause  (i)  are  unavailable  for  the  relevant  Interest  Period,  LIBO  Rate  for  purposes  of  this  definition shall mean the rate of interest reasonably determined by the Administrative Agent to  be  the  average  (rounded  upward,  if  necessary,  to  the  nearest  1/100th  of  1%)  of  the  rates  per  annum  at  which  deposits  in  Dollars  are  offered  to  the  Administrative  Agent  two  (2)  business  days preceding the first  day of such  Interest Period by leading banks in the  London interbank  market as of 11:00 a.m. for delivery on the first day of such Interest Period, for the number of  days  comprised  therein  and  in  an  amount  comparable  to  the  amount  of  the  Administrative  Agent’s portion of the relevant Eurocurrency Borrowing.                “Lien”  means,  with  respect  to  any  asset,  (a) any  mortgage,  deed  of  trust,  lien,  pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the  interest  of  a  vendor  or  a  lessor  under  any  conditional  sale  agreement,  capital  lease  or  title  retention agreement (or any financing lease having substantially the same economic effect as any  of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call  or  similar  right  of  a  third  party  with  respect  to  such  securities,  except  in  favor  of  the  issuer  thereof (and, in the case of Portfolio Investments that are equity securities, excluding customary  drag-along,  tag-along,  right  of  first  refusal  and  other  similar  rights  in  favor  of  other  equity  holders of the same issuer).                 “Loan  Documents”  means,  collectively,  this  Agreement,  the  Letter  of  Credit  Documents,  any  promissory  notes  delivered  pursuant  to  Section 2.08(f)  and  the  Security  Documents.               “Loans” means the loans made by the Lenders to the Borrower pursuant to this  Agreement.               “Margin Stock” means “margin stock” within the meaning of Regulations T, U  and X.               “Material  Adverse  Effect”  means  a  material  adverse  effect  on  (a) the  business,  Portfolio  Investments of the Obligors (taken  as a whole) and other assets, liabilities (actual or  contingent), operations or condition (financial or otherwise) of the Borrower and its Subsidiaries  (other than the SBIC Subsidiaries), taken as a whole, or (b) the validity or enforceability of any  of the Loan Documents or the rights or remedies of the Administrative Agent and the Lenders  thereunder or the ability of the Obligors to perform their respective obligations thereunder.               “Material  Indebtedness”  means  (a) Indebtedness  (other  than  the  Loans  and  Hedging Agreements), of any one or more of the Borrower and its Subsidiaries (including any  SBIC Subsidiary) in an aggregate principal amount exceeding $5,000,000 and (b) obligations in  respect  of  one  or  more  Hedging  Agreements  or  other  swap  or  derivative  transactions  under  which the maximum  aggregate  amount (after  giving  effect  to any netting  agreements) that the  Borrower and its Subsidiaries would be required to pay if such Hedging Agreement(s) or other  swap or derivative transactions were terminated at such time would exceed $5,000,000.                                          21   25272637.12.BUSINESS 

 

            “Maturity Date” means the date that is the one year anniversary of the Revolver  Termination Date.               “Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.               “MRI” means Media Recovery, Inc., a Nevada corporation.               “Multiemployer Plan” means a multiemployer plan as defined in Section 3(37) or  4001(a)(3) of ERISA that is contributed to by (or to which there is an obligation to contribute of)  the  Borrower  or  any  of  its  ERISA  Affiliates,  and  each  such  plan  for  the  five-year  period  immediately  following  the  latest  date  on  which  the  Borrower  or  any  of  its  ERISA  Affiliates  contributed to or had an obligation to contribute to such plan.               “Net  Asset  Sale  Proceeds”  means,  with  respect  to  any  Asset  Sale,  an  amount  equal to (a) the sum of Cash payments and Cash Equivalents received by the Obligors from such  Asset  Sale  (including  any  Cash  or  Cash  Equivalents  received  by  way  of  deferred  payment  pursuant  to,  or  by  monetization  of,  a  note  receivable  or  otherwise,  but  only  as  and  when  so  received), minus (b) any costs, fees, commissions, premiums and expenses actually incurred by  any  Obligor directly incidental to  such  Asset  Sale  and  paid in  cash  to  a  Person  that is  not an  Affiliate of any Obligor (or if paid in cash to an Affiliate, only to the extent such expenses are  reasonable and customary), including reasonable legal fees and expenses, minus (c) all taxes paid  or reasonably estimated to be payable by any Obligor as a result of such Asset Sale (after taking  into  account  any  applicable  tax  credits  or  deductions  that  are  reasonably  expected  to  be  available), minus (d) amounts estimated in good faith by the Borrower to be necessary for the  Borrower to make distributions sufficient in amount to achieve the objectives set forth in clauses  (i), (ii) and (iii) of Section 6.05(b) hereof, solely to the extent that the Required Payment Amount  in or with respect to any taxable year (or any calendar year, as relevant) is increased as a result of  such Asset Sale, minus (e) reserves for indemnification, purchase price adjustments or analogous  arrangements  reasonably  estimated  by  the  Borrower  or  the  relevant  Subsidiary  in  connection  with  such  Asset  Sale;  provided  that  (i)  such  reserved  amount  shall  not  be  included  in  the  Borrowing  Base  and  (ii)  if  the  amount  of  any  estimated  reserves  pursuant  to  this  clause  (e)  exceeds the amount actually required to be paid in cash in respect of indemnification, purchase  price adjustments or analogous arrangements for such Asset Sale, the aggregate amount of such  excess shall constitute Net Asset Sale Proceeds.               “Non-Consenting  Lender”  has  the  meaning  assigned  to  such  term  in  Section 9.02(d).               “Non-Pledged SBIC Subsidiary” means, with respect to any SBIC Subsidiary, the  Equity  Interest  of  such  SBIC  Subsidiary  is  not  subject  to  a  first-priority  perfected  security  interest in favor of the Collateral Agent securing the Secured Obligations under and as defined in  the Guarantee and Security Agreement.               “Obligors” means, collectively, the Borrower and the Subsidiary Guarantors.                                          22   25272637.12.BUSINESS 

 

            “Obligors’  Net  Worth”  means,  at  any  date,  Stockholders’  Equity  at  such  date,  minus (x) the net asset value held by any Obligor in any non-Obligor Subsidiary and (y) the net  asset value held by any Obligor in any Special Equity Interest.               “OFAC” has the meaning assigned to such term in Section 3.18.               “Organization  Documents”  means,  for  any  Person,  its  constituent  or  organizational documents, including: (a) in the case of any limited partnership, the certificate of  limited  partnership  and  limited  partnership  agreement  for  such  Person;  (b)  in  the  case  of  any  limited liability company, the articles of formation and operating agreement for such Person; and  (c)  in  the  case  of  a  corporation,  the  certificate  of  articles  of  incorporation  and  the  bylaws  or  memorandum and articles of association for such Person.               “Original Effective Date” means August 30, 2016.               “Other  Covered  Indebtedness”  means,  collectively,  (i)  Secured  Longer-Term  Indebtedness, (ii) Unsecured Shorter-Term Indebtedness and (iii) from and after the date that is 9  months prior to their scheduled maturity, the 2022 Notes; provided that to the extent any portion  of  any  such  Indebtedness  is  subject  to  a  contractually  scheduled  amortization  payment,  other  principal payment or redemption earlier than the scheduled maturity date of such Indebtedness,  such  portion  of  such  Indebtedness  shall  be  included  in  the  calculation  of  Other  Covered  Indebtedness beginning upon the date that is the later of (x) 9 months prior to such scheduled  amortization  payment,  other  principal  payment  or  redemption  and  (y)  the  date  the  Borrower  becomes aware that such Indebtedness is required to be paid or redeemed.               “Other  Permitted  Indebtedness”  means  (a) accrued  expenses  and  current  trade  accounts payable incurred in the ordinary course of any Obligor’s business that are overdue for a  period  of  more  than  90  days  and  which  are  being  contested  in  good  faith  by  appropriate  proceedings, (b) Indebtedness in respect of judgments or awards that have been in force for less  than  the  applicable  period  for  taking  an  appeal  so  long  as  such  judgments  or  awards  do  not  constitute an Event of Default under clause (k) of Article VII, (c) Indebtedness incurred in the  ordinary course of business to finance equipment and fixtures; provided that such Indebtedness  does not exceed $1,000,000 in the aggregate at any time outstanding; and (d) other Indebtedness  not to exceed $2,500,000 in the aggregate.               “Other  Taxes”  means  any  and  all  present  or  future  stamp,  court,  documentary,  intangible, recording or filing Taxes or any other excise or property Taxes, charges or similar  levies  arising  from  any  payment  made  under  any  Loan  Document  or  from  the  execution,  delivery, performance, enforcement or registration of, from the receipt or perfection of a security  interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are  imposed  with  respect  to  an  assignment  (other  than  an  assignment  made  pursuant  to  Section  2.18(b))  and  as  a  result  of  a  present  or  former  connection  between  such  Lender  and  the  jurisdiction imposing such Tax (other than connections solely arising from such Lender having  executed, delivered, become a party to, performed is obligations under, received payments under,  received or perfected a security interest under, engaged in any other transaction pursuant to or  enforced any Loan Documents, or sold or assigned an interest in any Loan or Loan Document).                                         23   25272637.12.BUSINESS 

 

            “Participant” has the meaning assigned to such term in Section 9.04(f).               “Participant Register” has the meaning assigned to such term in Section 9.04(f).               “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined  in ERISA and any successor entity performing similar functions.               “Pension Plan” means any employee benefit plan within the meaning of Section  3(3) of ERISA (other than a Multiemployer Plan) that is subject to the provisions of Title IV of  ERISA or Section 412 of the Code or Section 302 of ERISA, in respect of which Borrower or  any  of  its  ERISA  Affiliates  is  (or  would  under  Section  4069  of  ERISA  be  deemed  to  be)  an  “employer” as defined in Section 3(5) of ERISA.               “Permitted Equity Interests” means common stock of the Borrower that after its  issuance  is  not  subject  to  any  agreement  between  the  holder  of  such  common  stock  and  the  Borrower  where  the  Borrower  is  required  to  purchase,  redeem,  retire,  acquire,  cancel  or  terminate any such  common stock at any time prior to the first anniversary of the later of the  Maturity Date (as in effect from time to time) and the Termination Date.               “Permitted Liens” means (a) Liens imposed by any Governmental Authority for  taxes,  assessments  or  charges  not  yet  due  or  that  are  being  contested  in  good  faith  and  by  appropriate proceedings if adequate reserves with respect thereto are maintained on the books of  the  Borrower  in  accordance  with  GAAP;  (b) Liens  of  clearing  agencies,  broker-dealers  and  similar Liens incurred in the ordinary course of business, provided that such Liens (i) attach only  to the securities (or proceeds) being purchased or sold and (ii) secure only obligations incurred in  connection  with  such  purchase  or  sale,  and  not  any  obligation  in  connection  with  margin  financing; (c) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmens’,  storage, landlord, and repairmen’s Liens and other similar Liens arising in the ordinary course of  business and securing obligations (other than Indebtedness for borrowed money) not yet due or  that are being contested in good faith and by appropriate proceedings if adequate reserves with  respect thereto are maintained on the books of the Borrower in accordance with GAAP; (d) Liens  incurred  or  pledges  or  deposits  made  to  secure  obligations  incurred  in  the  ordinary  course  of  business  under  workers’  compensation  laws,  unemployment  insurance  or  other  similar  social  security  legislation  (other  than  in  respect  of  employee  benefit  plans  subject  to  ERISA) or  to  secure  public  or  statutory  obligations;  (e) Liens  securing  the  performance  of,  or  payment  in  respect of, bids, insurance premiums, deductibles or co-insured amounts, tenders, government or  utility  contracts  (other  than  for  the  repayment  of  borrowed  money),  surety,  stay,  customs  and  appeal  bonds  and  other  obligations  of  a  similar  nature  incurred  in  the  ordinary  course  of  business; (f) Liens arising out of judgments or awards that have been in force for less than the  applicable period for taking an appeal so long as such judgments or awards do not constitute an  Event of Default; (g) customary rights of setoff and liens upon (i) deposits of cash in favor of  banks or other depository institutions in which such cash is maintained in the ordinary course of  business,  (ii) cash  and  financial  assets  held  in  securities  accounts  in  favor  of  banks  and  other  financial institutions with which such accounts are maintained in the ordinary course of business  and (iii) assets held by a custodian in favor of such custodian in the ordinary course of business,  in  the  case  of  each  of  clauses  (i)  through  (iii)  above,  securing  payment  of  fees,  indemnities,  charges  for  returning  items  and  other  similar  obligations;  (h) Liens  arising  solely  from                                        24   25272637.12.BUSINESS 

 

precautionary  filings  of  financing  statements  under  the  Uniform  Commercial  Code  of  the  applicable jurisdictions in respect of operating leases entered into by the Borrower or any of its  Subsidiaries  in  the  ordinary  course  of  business;  (i)  zoning  restrictions,  easements,  licenses,  or  other restrictions on the use of any real estate (including leasehold title), in each case which do  not interfere with or affect in any material respect the ordinary course conduct of the business of  the Borrower and its Subsidiaries; (j) purchase money Liens on specific equipment and fixtures,  provided  that  (i)  such  Liens  only  attach  to  such  equipment  and  fixtures,  (ii)  the  Indebtedness  secured  thereby  is  incurred  pursuant  to  clause  (c)  of  the  definition  of  “Other  Permitted  Indebtedness” and (iii) the Indebtedness secured thereby does not exceed the lesser of the cost  and the fair market value of such equipment and fixtures at the time of the acquisition thereof;  (k)  deposits  of  money  securing  leases  to  which  Borrower  is  a  party  as  lessee  made  in  the  ordinary course of business; (l) Eligible Liens; and (m) Liens in favor of any escrow agent solely  on and in respect of any cash earnest money deposits made by any Obligor in connection with  any letter of intent or purchase agreement (to the extent that the acquisition or disposition with  respect thereto is otherwise permitted hereunder).               “Permitted  Policy  Amendment”  is  an  amendment,  modification,  termination  or  restatement  of  the  Investment  Policies,  that  either  is  (a)   approved  in  writing  by  the  Administrative Agent (with the consent of the Required Lenders), (b)  required by applicable law  or Governmental Authority, or (c) not material.               “Permitted  SBIC  Guarantee”  means  a  guarantee  by  the  Borrower  of  SBA  Indebtedness of an SBIC Subsidiary on SBA’s then applicable form; provided that the recourse  to the Obligors thereunder is expressly limited only to periods after the occurrence of an event or  condition  that  is  an  impermissible  change  in  the  control  of  such  SBIC  Subsidiary  (it  being  understood  that,  as  provided  in  clause  (q)  of  Article VII,  it  shall  be  an  Event  of  Default  hereunder if any such event or condition giving rise to such recourse occurs).                “Person” means any natural person, corporation, limited liability company, trust,  joint venture, association, company, partnership, Governmental Authority or other entity.               “Plan”  means any  employee  benefit  plan  within  the  meaning  of  Section 3(3)  of  ERISA (other than a Multiemployer Plan) in respect of which the Borrower is (or would under  Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.               “Portfolio Company” means the issuer or obligor under any Portfolio Investment  held by any Obligor.                “Portfolio  Investment”  means  any  Investment  held  by  the  Borrower  and  its  Subsidiaries in their asset portfolio and included on the schedule of investments on the financial  statements of the Borrower delivered pursuant to Section 5.01(a) or (b) (or, for any Investment  made  during  a  given quarter  and  before  a  schedule  of  investments  is  required to  be delivered  pursuant to  Section  5.01(a) or  (b),  as  applicable,  with respect  to such quarter,  any  Investment  which is intended to be included on the schedule of investments when such Investment is made  shall be included until such time as a schedule of investments is delivered pursuant to Section  5.01(a)  or  (b),  as  applicable,  with  respect  to  such  quarter,  and  then  such  Investment  shall  continue  to  be  included  only  to  the  extent  such  Investment  is  included  on  the  schedule  of                                        25   25272637.12.BUSINESS 

 

investments delivered pursuant to Section 5.01(a) or (b), as applicable) (and, for the avoidance of  doubt, shall not include any Subsidiary of the Borrower).                “Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money  Rates Section, as the “U.S. Prime Rate” (or its successor), as in effect from time to time.  The  Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually  charged to any customer.  The Administrative Agent or any Lender may make commercial loans  or other loans at rates of interest at, above, or below the Prime Rate.               “Quarterly  Dates”  means  the  last  Business  Day  of  March,  June,  September and  December in each year, commencing on September 30, 2016.                “Quoted Investments” has the meaning set forth in Section 5.12(b)(ii)(A).               “Register” has the meaning set forth in Section 9.04(c).               “Regulations D, T, U and X” means, respectively, Regulations D, T, U and X of  the Board of Governors of the Federal Reserve System (or any successor), as the same may be  modified and supplemented and in effect from time to time.               “Related  Parties”  means,  with  respect  to  any  specified  Person,  such  Person’s  Affiliates and the respective directors, partners, officers, employees, agents and advisors of such  Person and such Person’s Affiliates.               “Required  Lenders”  means,  at  any  time,  subject  to  Section 2.17(b),  Lenders  having Revolving Credit Exposures and unused  Commitments representing more than 50% of  the  sum  of  the  total  Revolving  Credit  Exposures  and  unused  Commitments  at  such  time;  provided,  that,  (a) if  there  are  only  three  (3) Lenders  at  such  time,  “Required  Lenders”  shall  mean Lenders having Revolving Credit Exposures and unused Commitments representing more  than 67% of the sum of the total Revolving Credit Exposures and unused Commitments at such  time and (b) if there are only two (2) Lenders at such time, “Required Lenders” shall mean all  Lenders.                 “Required Payment Amount” has the meaning set forth in Section 6.05(b).               “Restatement Effective Date” means December 21, 2018.               “Restricted Payment” means any dividend or other distribution (whether in cash,  securities  or  other  property) with  respect  to  any  shares  of  any  class  of  capital  stock  of  the  Borrower  or  any  of  its  Subsidiaries,  or  any  payment  (whether  in  cash,  securities  or  other  property), including any sinking fund or similar deposit, on account of the purchase, redemption,  retirement,  acquisition,  cancellation  or  termination  of  any  such  shares  of  capital  stock  of  the  Borrower or any option, warrant or other right to acquire any such shares of capital stock of the  Borrower (other than any equity awards granted to employees, officers, directors and consultants  of the  Borrower and its  Affiliates); provided, for clarity, neither the conversion of convertible  debt  into  Permitted  Equity  Interests  nor  the  purchase,  redemption,  retirement,  acquisition,  cancellation or termination of convertible debt made solely with Permitted Equity Interests (other                                         26   25272637.12.BUSINESS 

 

than  interest  or  expenses,  which  may  be  payable  in  cash)  shall  be  a  Restricted  Payment  hereunder.               “Return of Capital” means an amount equal to (i) (a) any cash amount (and net  cash  proceeds  of  any  noncash  amount)  received  by  any  Obligor  at  any  time  in  respect  of  the  outstanding principal of any Portfolio Investment (whether at stated maturity, by acceleration or  otherwise), (b) without duplication of amounts received under clause (a), any net cash proceeds  (including net cash proceeds of any noncash consideration) received by any Obligor at any time  from  the  sale  of  any  property  or  assets  pledged  as  collateral  in  respect  of  any  Portfolio  Investment to the extent such net cash proceeds are less than or equal to the outstanding principal  balance of such Portfolio Investment, (c) any cash amount (and net cash proceeds of any noncash  amount) received by any Obligor at any time in respect of any Portfolio Investment that is an  Equity Interest (x) upon the liquidation or dissolution of the issuer of such Portfolio Investment,  (y) as a distribution of capital made on or in respect of such Portfolio Investment, or (z) pursuant  to the recapitalization or reclassification of the capital of the issuer of such Portfolio Investment  or pursuant to the reorganization of such issuer or (d) any similar return of capital received by  any Obligor in cash (and net cash proceeds of any noncash amount) in respect of any Portfolio  Investment minus (ii) (x) any costs, fees, commissions, premiums and expenses incurred by any  Obligor directly incidental to such Cash receipts, including reasonable legal fees and expenses  and (y) amounts estimated in good faith by the  Borrower to be necessary for the Borrower to  make distributions sufficient in amount to achieve the objectives set forth in clauses (i), (ii) and  (iii) of Section 6.05(b) hereof, solely to the extent that the Required Payment Amount in or with  respect  to  any taxable  year (or any calendar  year,  as  relevant) is  increased as  a  result  of  such  Return of Capital.               “Revalue  Right”  has  the  meaning  assigned  to  such  term  in  Section  5.12(b)(ii)(B)(z).              “Revolver Termination Date” means the date that is the four (4) year anniversary  of the Restatement Effective Date, unless extended with the consent of each Lender in its sole  and absolute discretion.               “Revolving Credit Exposure” means, with respect to any Lender at any time, the  sum of the outstanding principal amount of such Lender’s Loans at such time.               “RIC”  means  a  Person  qualifying  for  treatment  as  a  “regulated  investment  company” under Subchapter M of the Code.               “S&P” means S&P Global Ratings, a division of S&P Global Inc., a New York  corporation, or any successor thereto.               “Sanctioned Country” means, at any time, a country, territory or region that is, or  whose government is, the subject or target of any Sanctions.               “Sanctions” has the meaning assigned to such term in Section 3.18.               “SBA”  means  the  United  States  Small  Business  Administration  or  any  Governmental Authority succeeding to any or all of the functions thereof.                                        27   25272637.12.BUSINESS 

 

            “SBIC Subsidiary” means any Subsidiary of the Borrower (or such Subsidiary’s  general partner or manager entity) that is (x)  either (i) a “small business investment company”  licensed by the SBA (or that has applied for such a license and is actively pursuing the granting  thereof by appropriate proceedings promptly instituted and diligently conducted) under the Small  Business  Investment  Act  of  1958,  as  amended,  or  (ii)  any  wholly-owned,  direct  or  indirect,  Subsidiary of an entity referred to in clause (x)(i) of this definition, and (y) designated in writing  by the Borrower (as provided below) as an SBIC Subsidiary, so long as:                     (a)   other  than  pursuant  to  a  Permitted  SBIC  Guarantee  or  the        requirement by the SBA that the Borrower make an equity or capital contribution to the        SBIC Subsidiary in connection with its incurrence of SBA Indebtedness (provided that        such  contribution  is  permitted  by  Section 6.03(e)  and  is  made  substantially        contemporaneously  with  such  incurrence),  no  portion  of  the  Indebtedness  or  any  other        obligations (contingent or otherwise) of such Person (i) is Guaranteed by the Borrower or        any of its Subsidiaries (other than any SBIC Subsidiary), (ii) is recourse to or obligates        the Borrower or any of its Subsidiaries (other than any SBIC Subsidiary) in any way, or        (iii) subjects any property of the Borrower or any of its Subsidiaries (other than any SBIC        Subsidiary) to the satisfaction thereof;                     (b)   other  than  pursuant  to  a  Permitted  SBIC  Guarantee,  neither  the        Borrower nor any of its Subsidiaries has any material contract, agreement, arrangement        or understanding with such Person other than on terms no less favorable to the Borrower        or such Subsidiary than those that might be obtained at the time from Persons that are not        Affiliates of the Borrower or such Subsidiary;                      (c)   neither  the  Borrower  nor  any  of  its  Subsidiaries  (other  than  any        SBIC Subsidiary) has any obligation to such Person to maintain or preserve its financial        condition or cause it to achieve certain levels of operating results; and                     (d)   such Person has not  Guaranteed or become a  co-borrower under,        and has not granted a security interest in any of its properties to secure, and the Equity        Interests it has issued are not pledged to secure, in each case, any indebtedness, liabilities        or obligations of any one or more of the Obligors.               Any  designation  by  the  Borrower  under  clause  (y) above  shall  be  effected  pursuant  to  a  certificate  of  a  Financial  Officer  delivered  to  the  Administrative  Agent,  which  certificate  shall  include  a  statement  to  the  effect  that,  to  the  best  of  such  Financial  Officer’s   knowledge, such designation complied with the foregoing conditions.                “SEC”  means  the  United  States  Securities  and  Exchange  Commission  or  any  Governmental Authority succeeding to any or all of the functions thereof.               “Secured  Longer-Term  Indebtedness”  means,  as  at  any  date,  Indebtedness  for  borrowed  money  (other  than  Indebtedness  hereunder) of  the  Borrower  (which  may  be  Guaranteed  by  Subsidiary  Guarantors) that  (a) has  no  amortization  or  mandatory  redemption,  repurchase or prepayment prior to, and a final maturity date not earlier than, six months after the  Maturity  Date;  (b)  is  incurred  pursuant  to  documentation  containing  (i)  financial  covenants,                                         28   25272637.12.BUSINESS 

 

covenants  governing the borrowing base, if any, covenants  regarding portfolio valuations, and  events of default that are no more restrictive in any respect than those set forth in this Agreement  (other than, if such Indebtedness is governed by a customary indenture, events of default that are  customary  in  indentures  or  similar  instruments  and  that  have  no  analogous  provisions  in  this  Agreement  or  credit  agreements  generally)  and  (ii)  other  terms  (other  than  interest  and  any  commitment or related fees) that are no more restrictive in any material respect than those set  forth in this Agreement; and (c) ranks pari passu with the obligations under this Agreement and  is not secured by any assets of any Person other than any assets of any Obligor pursuant to the  Security  Documents  and  the  holders  of  which,  or  the  agent,  trustee  or  representative  of  such  holders  on  behalf  of  and  for  the  benefit  of  such  holders,  have  agreed  to  be  bound  by  the  provisions of the Security Documents in a manner reasonably satisfactory to the Administrative  Agent  and  the  Collateral  Agent.   For  the  avoidance  of  doubt,  (a)  Secured  Longer-Term  Indebtedness shall also include any refinancing, refunding, renewal or extension of any Secured  Longer-Term  Indebtedness  so  long  as  such  refinanced,  refunded,  renewed  or  extended  Indebtedness  continues  to  satisfy  the  requirements  of  this  definition  and  (b) any  payment  on  account of Secured Longer-Term Indebtedness shall be subject to Section 6.12.               “Secured Party” and “Secured Parties” have the meaning assigned to such terms  in the Guarantee and Security Agreement.               “Security  Documents”  means,  collectively,  the  Guarantee  and  Security  Agreement, the Custody Agreement, the Document Custody Agreement, the Control Agreement,  all Uniform Commercial Code financing statements filed with respect to the security interests in  personal  property  created  pursuant  to  the  Guarantee  and  Security  Agreement,  and  all  other  assignments, pledge agreements, security agreements, control agreements and other instruments  executed and delivered at any time by any of the Obligors pursuant to the Guarantee and Security  Agreement or otherwise providing or relating to any collateral security for any of the Secured  Obligations under and as defined in the Guarantee and Security Agreement.               “Senior Coverage Ratio” means  the  ratio of  (A) the  aggregate  fair  value of the  Collateral of the Obligors (exclusive of all Collateral that is not eligible for the Borrowing Base  that  exceeds  in  the  aggregate  for  all  such  Collateral  20%  of  the  total  value  of  the  Collateral;  provided  that  Investments  in  I-45  Entities  made  in  accordance  with  Section  6.04(i)  shall  be  considered Eligible Portfolio Investments solely for purposes of this calculation) to (B) Covered  Debt (excluding solely for this purpose any unsecured Indebtedness included therein).               “Senior  Securities”  means  senior  securities  (as  such  term  is  defined  and  determined pursuant to the Investment Company Act and any orders of the SEC issued to the  Borrower thereunder).               “Significant  Unsecured  Indebtedness  Event”  means  that  the  aggregate  principal  amount  of  Unsecured  Longer-Term  Indebtedness  plus  the  aggregate  principal  amount  of  Unsecured  Shorter-Term  Indebtedness  plus  the  aggregate  amount  of  Other  Permitted  Indebtedness exceeds, at any time of determination, the sum of (A) the excess of the Borrowing  Base over the Covered Debt Amount plus (B) 30% of the excess of Stockholders’ Equity over  Obligors’ Net Worth.                                         29   25272637.12.BUSINESS 

 

            “Solvent” means, with respect to any Obligor, that as of the date of determination,  both (a) (i) the sum of such Obligor’s debt and liabilities (including contingent liabilities) does  not  exceed  the  present  fair  saleable  value  of  such  Person’s  present  assets,  (ii) such  Obligor’s  capital is not unreasonably small in relation to its business as contemplated on the Restatement  Effective Date and reflected in any projections delivered to the Lenders or with respect to any  transaction  contemplated  or  undertaken  after  the  Restatement  Effective  Date,  and  (iii) such  Obligor  has  not  incurred  and  does  not  intend  to  incur,  or  believe  (nor  should  it  reasonably  believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether  at maturity or otherwise);  and (b) such Obligor  is  “solvent”  within  the meaning given  to such  term and similar terms under applicable laws relating to fraudulent transfers and conveyances.   For  purposes  of  this  definition,  the  amount  of  any  contingent  liability  at  any  time  shall  be  computed as the amount that, in light of all of the facts and circumstances existing at such time,  represents the amount that can reasonably be expected to become an actual or matured liability  (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement  of Financial Accounting Standard No. 5).               “Special  Equity  Interest”  means  any  Equity  Interest  that  is  subject  to  a  Lien  in  favor  of  creditors  of the issuer or  the  issuer’s  Affiliates  of  such  Equity  Interest, provided  that  (a) such Lien was created to secure Indebtedness owing by such issuer or such issuer’s Affiliates  to  such  creditors,  (b) such  Indebtedness  was  (i) in  existence  at  the  time  the  Obligors  acquired  such  Equity  Interest,  (ii) incurred  or  assumed  by  such  issuer  substantially  contemporaneously  with such acquisition or (iii) already subject to a  Lien granted to such creditors and (c) unless  such Equity Interest is not intended to be included in the Collateral, the documentation creating  or governing such Lien does not prohibit the inclusion of such Equity Interest in the Collateral.               “Statutory  Reserve  Rate”  means,  for  the  Interest  Period  for  any  Eurocurrency  Borrowing, a fraction (expressed as a decimal), the numerator of which is the number one and  the denominator of which is the number one minus the arithmetic mean, taken over each day in  such  Interest  Period,  of  the  aggregate  of  the  maximum  reserve  percentages  (including  any  marginal,  special,  emergency  or  supplemental  reserves) expressed  as  a  decimal  established  by  the  Board  to  which  the  Administrative  Agent  is  subject  for  eurocurrency  funding  (currently  referred to as “Eurocurrency liabilities” in Regulation D).  Such reserve percentages shall include  those  imposed  pursuant  to  Regulation  D.   Eurocurrency  Loans  shall  be  deemed  to  constitute  eurocurrency funding and to be subject to such reserve requirements without benefit of or credit  for proration, exemptions or offsets that may be available from time to time to any Lender under  Regulation  D  or  any  comparable  regulation.   The  Statutory  Reserve  Rate  shall  be  adjusted  automatically on and as of the effective date of any change in any reserve percentage.               “Stockholders’  Equity”  means,  at  any  date,  the  amount  determined  on  a  consolidated basis, without duplication, in accordance with GAAP, of stockholders’ equity for  the Borrower and its Subsidiaries at such date.               “Subsidiary”  means,  with  respect  to  any  Person  (the  “parent”)  at  any  date,  any  corporation,  limited  liability  company,  partnership,  association  or  other  entity  the  accounts  of  which  would  be  consolidated  with  those  of  the  parent  in  the  parent’s  consolidated  financial  statements if such financial statements were prepared in accordance with GAAP as of such date,  as  well  as  any  other  corporation,  limited  liability  company,  partnership,  association  or  other                                        30   25272637.12.BUSINESS 

 

entity  (a) of  which  securities  or  other  ownership  interests  representing  more  than  50%  of  the  equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than  50%  of  the  general  partnership  interests  are,  as  of  such  date,  owned,  controlled  or  held,  or  (b) that is, as of such date, otherwise Controlled by the parent or one or more subsidiaries of the  parent  or  by  the  parent  and  one  or  more  subsidiaries  of  the  parent.   Anything  herein  to  the  contrary notwithstanding, the term “Subsidiary” shall not include any Person that constitutes an  Investment held by any Obligor in the ordinary course of business and that is not, under GAAP,  consolidated on the financial statements of the Borrower and its Subsidiaries.  Unless otherwise  specified, “Subsidiary” means a Subsidiary of the Borrower.                “Subsidiary  Guarantor”  means  any  Subsidiary  that  is  or  is  required  to  be  a  Guarantor  under  the  Guarantee  and  Security  Agreement.   It  is  understood  and  agreed  that,  subject to Section 5.08(a), no SBIC Subsidiary shall be required to be a Subsidiary Guarantor as  long as it remains an SBIC Subsidiary.               “Tax Damages” has the meaning assigned to such term in Section 2.15(d).               “Taxes”  means  any  and  all  present  or  future  taxes  levies,  imposts,  duties,  deductions,  withholdings  (including  backup  withholding),  assessments,  fees  or  other  charges  imposed  by  any  Governmental  Authority,  including  any  interest,  additions  to  tax  or  penalties  applicable thereto.               “Termination Date” means the date on which the Commitments have expired or  been terminated and the principal of and accrued interest on each  Loan and all fees and other  amounts payable hereunder shall have been paid in full (excluding, for the avoidance of doubt,  any amount in connection with any contingent, unasserted indemnification obligations).               “Transactions” means the execution, delivery and performance by the Borrower  of  this  Agreement  and  other  Loan  Documents,  the  borrowing  of  Loans,  and  the  use  of  the  proceeds thereof.               “Two  Largest  Industry  Classification  Groups”  means,  as  of  any  date  of  determination,  each  of  the  two  Industry  Classification  Groups  that  a  greater  portion  of  the  Borrowing  Base  has  been  assigned  to  each  such  Industry  Classification  Group  pursuant  to  Section 5.12(a) than any other single Industry Classification Group.               “Type”, when used in reference to any Loan or Borrowing, refers to whether the  rate  of  interest  on  such  Loan,  or  on  the  Loans  constituting  such  Borrowing,  is  determined  by  reference to the Adjusted LIBO Rate or the Alternate Base Rate.               “Undisclosed  Administration”  means,  in  relation  to  a  Lender  or  its  direct  or  indirect parent company, the appointment of an administrator, provisional liquidator, conservator,  receiver, trustee, custodian or other similar official by a supervisory authority or regulator under  or based on the law in the country where such Lender or its direct or indirect parent company is  subject to home jurisdiction supervision if applicable law requires that such appointment is not to  be publicly disclosed and such appointment has not been publicly disclosed (including, without                                         31   25272637.12.BUSINESS 

 

limitation, under the Dutch Financial Supervision Act 2007 (as amended from time to time and  including any successor legislation)).               “Unfunded  Pension  Liability”  of  any  Pension  Plan  shall  mean  the  excess  of  a  Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA over the current value of  such Pension Plan’s assets, determined in accordance with the assumptions used for funding the  Pension Plan pursuant to Section 412 of the Code for the applicable plan year.               “Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as  in effect from time to time in the State of New York.               “Unquoted Investments” has the meaning set forth in Section 5.12(b)(ii)(B).               “Unsecured  Longer-Term  Indebtedness”  means  (A)  any  Indebtedness  for  borrowed  money  of  an  Obligor  that  (a)  has  no  amortization,  or  mandatory  redemption,  repurchase or prepayment prior to, and a final maturity date not earlier than, six months after the  Maturity Date (it being understood that (i) the conversion features into Permitted Equity Interests  under convertible notes (as well as the triggering of such conversion and/or settlement thereof  solely with Permitted Equity Interests, except in the case of interest or expenses, which may be  payable  in  cash)  shall  not  constitute  “amortization”,  “redemption”,  “repurchase”  or  “prepayment”  for  the  purposes  of  this  definition)  and  (ii)  that  any  mandatory  amortization,  redemption,  repurchase  or  prepayment  obligation  or  put  right  that  is  contingent  upon  the  happening of a Change in Control that is not certain to occur shall not in and of itself be deemed  to  disqualify  such  Indebtedness  under  this  clause  (a)  (notwithstanding  the  foregoing,  in  this  clause (ii), the Borrower acknowledges that any payment prior to the Termination Date in respect  of any such obligation or right shall only be made to the extent permitted by Section 6.12)), (b) is  incurred pursuant to documentation containing (i) financial covenants, covenants governing the  borrowing base, if any, covenants regarding portfolio valuation, and events of default that are no  more  restrictive  in  any  respect  than  those  set  forth  in  this  Agreement  (other  than,  if  such  Indebtedness  is  governed  by  a  customary  indenture,  events  of  default  that  are  customary  in  indentures  or  similar  instruments  and  that  have  no  analogous  provisions  in  this  Agreement  or  credit  agreements  generally)  (it  being  understood  that  customary  put  rights  or  repurchase  or  redemption  obligations  (x)  in  the  case  of  convertible  securities,  in  connection  with  the  suspension or delisting of the Equity Interests of the Borrower or the failure of the Borrower to  satisfy  a  continued  listing  rule  with  respect  to  its  Equity  Interests  or  (y) arising  out  of  circumstances that would constitute a “fundamental change” (as such term is customarily defined  in  convertible  note  offerings)  shall  not  be  deemed  to  be  more  restrictive  for  purposes  of  this  definition) and (ii) other terms that are substantially comparable to market terms for substantially  similar debt, and (c) is not secured by any assets of any Person, and (B) the 2022 Notes up until  the date that is 9 months prior to the scheduled maturity of the 2022 Notes, provided that the  2022 Notes otherwise comply with the provisions of the immediately preceding clause (A).  For  the  avoidance  of  doubt,  (a)  Unsecured  Longer-Term  Indebtedness  shall  also  include  any  refinancing,  refunding,  renewal  or  extension  of  any  Unsecured  Longer-Term  Indebtedness  so  long  as  such  refinanced,  refunded,  renewed  or  extended  Indebtedness  continues  to  satisfy  the  requirements  of  this  definition  and  (b)  any  payment  on  account  of  Unsecured  Longer-Term  Indebtedness shall be subject to Section 6.12.                                         32   25272637.12.BUSINESS 

 

            “Unsecured  Shorter-Term  Indebtedness”  means,  collectively,  (a) any  Indebtedness  for  borrowed  money  of  the  Borrower  or  any  Subsidiary  (other  than  an  SBIC  Subsidiary)  that  is  not  secured  by  any  assets  of  any  Person  and  that  does  not  constitute  Unsecured  Longer-Term  Indebtedness  and  (b) any  Indebtedness  for  borrowed  money  of  the  Borrower or any Subsidiary (other than an SBIC Subsidiary) that is designated as “Unsecured  Shorter-Term Indebtedness” pursuant to Section 6.11.   For the avoidance of doubt, Unsecured  Shorter-Term Indebtedness shall also include any refinancing, refunding, renewal or extension of  any  Unsecured  Shorter-Term  Indebtedness  so  long  as  such  refinanced,  refunded,  renewed  or  extended Indebtedness continues to satisfy the requirements of this definition.               “USA PATRIOT Act” has the meaning assigned to such term in Section 3.19.               “U.S. Government Securities” means securities that are direct obligations of, and  obligations  the  timely  payment  of  principal  and  interest  on  which  is  fully  guaranteed  by,  the  United States or any agency or instrumentality of the United States the obligations of which are  backed by  the  full faith  and credit  of  the  United  States  and in  the form  of  conventional  bills,  bonds, and notes.               “U.S. Person” means  any  Person  that is  a  “United States  Person”  as  defined  in  Section 7701(a)(30) of the Code.               “Valuation  Testing  Date”  has  the  meaning  assigned  to  such  term  in  Section  5.12(b)(ii)(B)(x).               “wholly owned Subsidiary” of any person shall mean a Subsidiary of such person,  all of the Equity Interests of which (other than directors’ qualifying shares or nominee or other  similar shares required pursuant to applicable law) are owned by such person and/or one or more  wholly  owned  Subsidiaries  of  such  person.   Unless  the  context  otherwise  requires,  “wholly  owned  Subsidiary  Guarantor”  shall  mean  a  wholly  owned  Subsidiary  that  is  a  Subsidiary  Guarantor.               “Withdrawal  Liability”  means  liability to  a  Multiemployer Plan  as  a result  of a  complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I  of Subtitle E of Title IV of ERISA.               “Write-Down  and  Conversion  Powers”  means,  with  respect  to  any  EEA  Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority  from time to time under the Bail-In Legislation for the applicable EEA Member Country, which  write-down and conversion powers are described in the EU Bail-In Legislation Schedule.               SECTION 1.02.  Classification of Loans and Borrowings.  For purposes of this  Agreement,  Loans  may  be  classified  and  referred  to  by  Type  (e.g.,  an  “ABR  Loan”).   Borrowings also may be classified and referred to by Type (e.g., an “ABR Borrowing”).               SECTION 1.03.  Terms Generally.  The definitions of terms herein shall apply  equally to the singular and plural forms of the terms defined.  Whenever the context may require,  any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words                                         33   25272637.12.BUSINESS 

 

“include”,  “includes”  and  “including”  shall  be  deemed  to  be  followed  by  the  phrase  “without  limitation”.  The word “will” shall be construed to have the same meaning and effect as the word  “shall”.   Unless  the  context  requires  otherwise  (a) any  definition  of  or  reference  to  any  agreement,  instrument  or  other  document  herein  shall  be  construed  as  referring  to  such  agreement,  instrument  or  other  document  as  from  time  to  time  amended,  supplemented  or  otherwise  modified  (subject  to  any  restrictions  on  such  amendments,  supplements  or  modifications  set  forth  herein),  (b) any  reference  herein  to  any  Person  shall  be  construed  to  include such Person’s successors and assigns (subject to any restrictions on such successors and  assigns set forth herein), (c) the words “herein”, “hereof” and “hereunder”, and words of similar  import,  shall  be  construed  to  refer  to  this  Agreement  in  its  entirety  and  not  to  any  particular  provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be  construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and  (e) the words “asset” and “property” shall be construed to have the same meaning and effect and  to refer to any and all tangible and intangible assets and properties, including cash, securities,  accounts and contract rights.               SECTION 1.04.  Accounting Terms; GAAP.  Except as otherwise expressly  provided herein, all terms of an accounting or financial nature shall be construed in accordance  with  GAAP,  as  in  effect  from  time  to  time;  provided  that,  if  the  Borrower  notifies  the  Administrative  Agent  that  the  Borrower  requests  an  amendment  to  any  provision  hereof  to  eliminate the effect of any change occurring after the Restatement Effective Date in GAAP or in  the  application  or  interpretation  thereof  on  the  operation  of  such  provision  (or  if  the  Administrative Agent notifies the Borrower that the Required Lenders request an amendment to  any provision hereof for such purpose), then Borrower, Administrative Agent and the Lenders  agree to enter into negotiations in good faith in order to amend such provisions of the Agreement  so  as  to  equitably  reflect  such  change  to  comply  with  GAAP  with  the  desired  result  that  the  criteria for evaluating the Borrower's financial condition shall be the same after such change to  comply  with  GAAP  as  if  such  change  had  not  been  made;  provided,  however,   until  such  amendments  to  equitably  reflect  such  changes  are  effective  and  agreed  to  by  Borrower,  Administrative Agent and the Required Lenders, the Borrower’s compliance with such financial  covenants shall be determined on the basis of GAAP as in effect and applied immediately before  such change in GAAP becomes effective.  Notwithstanding the foregoing or anything herein to  the  contrary,  the  Borrower  covenants  and  agrees  with  the  Lenders  that  whether  or  not  the  Borrower may at any time adopt Financial Accounting Standard No. 159 or Accounting Standard  Codification 825, all determinations relating to fair value accounting for liabilities or compliance  with the terms and conditions of this Agreement shall be made on the basis that the Borrower has  not adopted Financial Accounting Standard No. 159 or Accounting Standard Codification 825.  In addition, notwithstanding Accounting Standards Update 2015-03, GAAP or any other matter,  for purposes of calculating any financial or other covenants hereunder, debt issuance costs shall  not be deducted from the related debt obligation.  Notwithstanding any other provision contained  herein,  solely  with respect to  any  change  in GAAP  after  the Restatement  Effective Date  with  respect to the accounting for leases as either operating leases or capital leases, any lease that is  not (or would not be) a capital lease under GAAP as in effect on the Restatement Effective Date  shall not be treated as a capital lease, and any lease that would be treated as a capital lease under  GAAP as in  effect on the Restatement Effective Date shall continue to be treated as a  capital  lease, hereunder and under the other Loan Documents, notwithstanding such change in GAAP                                        34   25272637.12.BUSINESS 

 

after the Restatement Effective Date, and all determinations of Capital Lease Obligations shall be  made  consistently  therewith  (i.e.,  ignoring  any  such  changes  in  GAAP  after  the  Restatement  Effective Date).               SECTION 1.05.  Interest 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 comparable or successor rate thereto, or replacement rate therefor.                                    ARTICLE II                                   THE CREDITS               SECTION 2.01.  The Commitments.  Subject to the terms and conditions set  forth herein, each Lender agrees to make Loans to the Borrower from time to time during the  Availability  Period  in  an  aggregate  principal  amount  that  will  not  result  in  (a) such  Lender’s  Revolving Credit Exposure exceeding such Lender’s Commitment, (b) the aggregate Revolving  Credit  Exposure  of  all  of  the  Lenders  exceeding  the  aggregate  Commitments  or  (c) the  total  Covered Debt Amount exceeding the Borrowing Base then in effect.  Within the foregoing limits  and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and  reborrow Loans.               SECTION 2.02.  Loans and Borrowings.               (a)   Obligations of Lenders.  Each Loan shall be made as part of a Borrowing  consisting  of  Loans  of  the  same  Type  made  by  the  Lenders  ratably  in  accordance  with  their  respective Commitments.  The failure of any Lender to make any Loan required to be made by it  shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of  the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make  Loans as required.               (b)   Type  of  Loans.   Subject  to  Section 2.12,  each  Borrowing  shall  be  constituted  entirely  of  ABR  Loans  or  of  Eurocurrency  Loans  as  the  Borrower  may  request  in  accordance  herewith.  Each  Loan shall  be denominated in  Dollars.   Each  Lender  at  its  option  may  make  any  Eurocurrency  Loan  by  causing  any  domestic  or  foreign  branch  or  Affiliate  of  such Lender to make such Loan; provided that any exercise of such option shall not affect the  obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.               (c)   Minimum Amounts.  Each Borrowing shall be in an aggregate amount of  $1,000,000 or a larger multiple of $100,000 in excess thereof; provided that an ABR Borrowing  may  be  in  an  aggregate  amount  that  is  equal  to  the  entire  unused  balance  of  the  total  Commitments  or  that  is  required  to  finance  the  reimbursement  of  an  LC  Disbursement  as  contemplated by Section 2.04(f).  Borrowings of more than one Type may be outstanding at the  same time.                                         35   25272637.12.BUSINESS 

 

            (d)   Limitations on  Interest  Periods.  Notwithstanding any other provision of  this Agreement, the Borrower shall not be entitled to request any Eurocurrency Borrowing (or to  elect  to  convert  to  or  continue  as  a  Eurocurrency  Borrowing) if  the  Interest  Period  requested  therefor would end after the Maturity Date.               (e)   Restatement Effective Date Adjustments.                     (i)   On the Restatement Effective Date, Borrower shall (A) prepay the              Existing  Loans  (if  any)  in  full  and  (B)  simultaneously  borrow  new  Loans              hereunder  in  an  amount  equal  to  such  prepayment  (plus  the  amount  of  any              additional  borrowings  that  may  have  been  requested  by  the  Borrower  at  such              time). Each of the Existing Continuing Lenders agrees to waive payment of the              amounts,  if  any,  payable  under  Section  2.14  as  a  result  of,  and  solely  in              connection with, any such prepayment, and hereby consents to the non-pro rata              payment described in this Section 2.02(e).                       (ii)  On the Restatement Effective Date, the Borrower shall prepay to              the Departing Lenders such Departing  Lenders’  pro rata portion of the Existing              Loans,  including  (i)  all  accrued  but  unpaid  commitment  fees  relating  to  such              Existing Loans as of such date, and (ii) all accrued but unpaid interest relating to              such Existing Loans as of such date (in each case, calculated at the rate set forth              in  the  Existing  Credit  Agreement).   Each  of  the  Departing  Lenders  agrees  to              waive  repayment  of  the  amounts,  if  any,  payable  under  Section  2.13  of  the              Existing Credit Agreement as a result of, and solely in connection with, any such              prepayment,  and  hereby  consents  to  the  non-pro  rata  payment  described  in  this              Section  2.02(e).   Upon  the  receipt  of  such  prepayment,  each  Departing  Lender              shall  cease  to  be  a  “Lender”  under  the  Existing  Credit  Agreement,  but  shall              continue  to  be  entitled  to  the  benefits  of  Sections  2.12,  2.14  and  9.03  of  the              Existing Credit Agreement with respect to facts and circumstances occurring prior              to the Restatement Effective Date.               SECTION 2.03.  Requests for Borrowings.               (a)   Notice  by  the  Borrower.   To  request  a  Borrowing,  the  Borrower  shall  notify the Administrative Agent of such request by delivery of a signed Borrowing Request or by  telephone or e-mail (in each case, followed promptly by delivery of a signed Borrowing Request)  (i) in the case of a Eurocurrency Borrowing, not later than 12:00 p.m., New York City time, three  (3) Business  Days  before  the  date  of  the  proposed  Borrowing  or  (ii) in  the  case  of  an  ABR  Borrowing, not later than 12:00 p.m., New York City time, one Business Day before the date of  the proposed Borrowing.  Each such request for a Borrowing shall be irrevocable and shall be  confirmed  promptly  by  hand  delivery  or  telecopy  to  the  Administrative  Agent  of  a  written  Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower.               (b)   Content of Borrowing Requests.  Each request for a Borrowing (whether a  written Borrowing Request, a telephonic request or e-mail request) shall specify the following  information in compliance with Section 2.02:                                         36   25272637.12.BUSINESS 

 

            (i)   the aggregate amount of the requested Borrowing;               (ii)  the date of such Borrowing, which shall be a Business Day;               (iii) whether such  Borrowing is  to be an ABR Borrowing or  a Eurocurrency        Borrowing;               (iv)  in  the  case  of  a  Eurocurrency  Borrowing,  the  Interest  Period  therefor,        which shall be a period contemplated by the definition of the term “Interest Period” and        permitted under Section 2.02(d);               (v)   the Applicable Margin; and               (vi)  the location and number of the Borrower’s account to which funds are to        be disbursed, which shall comply with the requirements of Section 2.05.               (c)   Notice by the Administrative Agent to the Lenders.  Promptly following  receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall  advise each applicable Lender of the details thereof and of the amounts of such Lender’s Loan to  be made as part of the requested Borrowing.               (d)   Failure to Elect.  If no election as to the Type of a Borrowing is specified  in  a  Borrowing  Request,  then  the  requested  Borrowing  shall  be  a  Eurocurrency  Borrowing  having an  Interest Period of one (1) month.   If a Eurocurrency Borrowing is requested but no  Interest Period is specified, the Borrower shall be deemed to have selected an Interest Period of  one (1) month.               SECTION 2.04.  Letters of Credit.               (a)   General.  Subject to the terms and conditions set forth herein, in addition  to the Loans provided for in Section 2.01, the Borrower may request the Issuing Bank to issue, at  any  time  and  from  time  to  time  during  the  Availability  Period  and  under  the  Commitments,  Letters of Credit denominated in Dollars for its own account or for the account of its designee  (including any of its Portfolio Companies or other Investments permitted hereunder) (provided  the  Obligors  shall  remain  primarily  liable  to  the  Lenders  hereunder  for  payment  and  reimbursement  of  all  amounts  payable  in  respect  of  such  Letter  of  Credit  hereunder)  for  the  purposes  set  forth  in  Section  5.09  in  such  form  as  is  acceptable  to  the  Issuing  Bank  in  its  reasonable determination and for the benefit of such named beneficiary or beneficiaries as are  specified by the Borrower.  Letters of Credit issued hereunder shall constitute utilization of the  Commitments up to the aggregate amount then available to be drawn thereunder.               (b)   Notice of  Issuance,  Amendment,  Renewal  or  Extension.  To request the  issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter  of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication,  if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and  the Administrative Agent (reasonably in advance of the requested date of issuance, amendment,  renewal or extension) a  notice requesting the issuance of  a  Letter of Credit, or identifying the  Letter  of  Credit  to  be  amended,  renewed  or  extended,  and  specifying  the  date  of  issuance,                                        37   25272637.12.BUSINESS 

 

amendment, renewal or extension (which shall be a Business Day), the date on which such Letter  of Credit is to expire (which shall comply with paragraph (d) of this Section), the amount of such  Letter of Credit, stating that such Letter of Credit is to be issued under the Commitments, the  name and address of the beneficiary thereof and such other information as shall be necessary to  prepare, amend, renew or extend such Letter of Credit.  The Administrative Agent will promptly  notify  all  Lenders  following the issuance of  any  Letter  of Credit.   If requested by  the  Issuing  Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard  form in connection with any request for a Letter of Credit.   In the event of any inconsistency  between the terms and conditions of this Agreement and the terms and conditions of any form of  letter of credit application or other agreement submitted by the Borrower to, or entered into by  the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of  this Agreement shall control.               (c)   Limitations  on  Amounts.   A  Letter  of  Credit  shall  be  issued,  amended,  renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter  of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such  issuance, amendment, renewal or extension (i) the aggregate LC Exposure of the Issuing Bank  (determined for these purposes without giving effect to the participations therein of the Lenders  pursuant  to  paragraph  (e) of  this  Section) does  not  exceed  $20,000,000,  (ii) the  total  Credit  Exposures does not exceed the aggregate Commitments and (iii) the total Covered Debt Amount  does not exceed the Borrowing Base then in effect.               (d)   Expiration Date.  Each Letter of Credit shall expire at or prior to the close  of business on the date twelve months after the date of the issuance of such Letter of Credit (or,  in the case of any renewal or extension thereof, twelve months after the then-current expiration  date of such Letter of Credit, so long as such renewal or extension occurs within three months of  such then-current expiration date); provided that any Letter of Credit with a one-year term may  provide  (pursuant  to  customary  “evergreen”  provisions)  for  the  renewal  thereof  for  additional  one-year  periods;  provided,  further,  that  (x)  in  no  event  shall  any  Letter  of  Credit  have  an  expiration date that is later than the Revolver Termination Date unless the Borrower, on or prior  to  the  date  that  is  five  (5)  Business  Days  prior  to  the  Revolver  Termination  Date,  (1)  Cash  Collateralizes such Letter of Credit in an amount equal to 102% of the undrawn face amount of  all  Letters  of  Credit  that  will  remain  outstanding  as  of  the  close  of  business  on  the  Revolver  Termination Date and (2) pays in full all commissions required to be paid with respect to any  such Letter of Credit through the then-current expiration date of such Letter of Credit and (y) no  Letter of Credit shall have an expiration date after the Maturity Date.               (e)   Participations.  By the issuance of a Letter of Credit (or an amendment to  a Letter of Credit increasing the amount thereof) by the Issuing Bank, and without any further  action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each  Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of  Credit  equal  to  such  Lender’s  Applicable  Percentage  of  the  aggregate  amount  available  to  be  drawn under such Letter of Credit.  Each Lender acknowledges and agrees that its obligation to  acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and  unconditional  and  shall  not  be  affected  by  any  circumstance  whatsoever,  including  any  amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a  Default  or  reduction  or  termination  of  the  Commitments,  provided  that  no  Lender  shall  be                                        38   25272637.12.BUSINESS 

 

required to purchase a participation in a Letter of Credit pursuant to this Section 2.04(e) if (x) the  conditions set forth in Section 4.02 would not be satisfied in respect of a Borrowing at the time  such Letter of Credit was issued and (y) the Required Lenders shall have so notified the Issuing  Bank in writing and shall not have subsequently determined that the circumstances giving rise to  such conditions not being satisfied no longer exist.                 In  consideration  and  in  furtherance  of  the  foregoing,  each  Lender  hereby  absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the  Issuing  Bank,  such  Lender’s  Applicable  Percentage  of  each  LC  Disbursement  made  by  the  Issuing Bank in respect of Letters of Credit promptly upon the request of the Issuing Bank at any  time from the time of such LC Disbursement until such LC Disbursement is reimbursed by the  Borrower  or  at  any  time  after  any  reimbursement  payment  is  required  to  be  refunded  to  the  Borrower  for  any  reason.   Such  payment  shall  be  made  without  any  offset,  abatement,  withholding or reduction whatsoever.  Each such payment shall be made in the same manner as  provided  in  Section 2.05  with  respect  to  Loans  made  by  such  Lender  (and  Section 2.05  shall  apply,  mutatis  mutandis,  to  the  payment  obligations  of  the  Lenders),  and  the  Administrative  Agent shall promptly  pay to the Issuing Bank the amounts so received by it from the Lenders.   Promptly  following  receipt  by  the  Administrative  Agent  of  any  payment  from  the  Borrower  pursuant to paragraph (f), the Administrative Agent shall distribute such payment to the Issuing  Bank  or,  to  the  extent  that  the  Lenders  have  made  payments  pursuant  to  this  paragraph  to  reimburse the  Issuing  Bank, then to such Lenders and the  Issuing  Bank as their interests may  appear.   Any  payment  made  by  a  Lender  pursuant  to  this  paragraph  to  reimburse  the  Issuing  Bank for any LC Disbursement shall not constitute a Loan and shall not relieve the Borrower of  its obligation to reimburse such LC Disbursement.               (f)   Reimbursement.  If the Issuing Bank shall make any LC Disbursement in  respect of a Letter of Credit, the Borrower shall reimburse the Issuing Bank in respect of such  LC  Disbursement  by  paying  to  the  Administrative  Agent  an  amount  equal  to  such  LC  Disbursement not later than 12:00 p.m., New York City time, on (i) the Business Day that the  Borrower receives notice of such LC Disbursement, if such notice is received prior to 10:00 a.m.,  New York City time, or (ii) the Business Day immediately following the day that the Borrower  receives such notice, if such notice is not received prior to such time, provided that, if such LC  Disbursement  is  not  less  than  $1,000,000,  the  Borrower  may,  subject  to  the  conditions  to  borrowing  set  forth  herein,  request  in  accordance  with  Section 2.03  that  such  payment  be  financed with an ABR  Borrowing in an equivalent amount and, to the extent so financed, the  Borrower’s obligation to make such payment shall be discharged and replaced by the resulting  ABR Borrowing.                 If the Borrower fails to make such payment when due, the Administrative Agent  shall notify each  applicable  Lender of the applicable LC  Disbursement, the payment then due  from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof.               (g)   Obligations  Absolute.   The  Borrower’s  obligation  to  reimburse  LC  Disbursements as provided in paragraph (f) of this Section shall be absolute, unconditional and  irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under  any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability  of  any  Letter  of  Credit,  or  any  term  or  provision  therein,  (ii) any  draft  or  other  document                                        39   25272637.12.BUSINESS 

 

presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or  any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank  under a Letter of Credit against presentation of a draft or other document that does not comply  strictly  with  the  terms  of  such  Letter  of  Credit,  and  (iv) any  other  event  or  circumstance  whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of  this Section, constitute a legal or equitable discharge of the Borrower’s obligations hereunder.                 Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of  their Related Parties, shall have any liability or responsibility by reason of or in connection with  the issuance or transfer of any Letter of Credit by the Issuing Bank or any payment or failure to  make  any  payment  thereunder  (irrespective  of  any  of  the  circumstances  referred  to  in  the  preceding  sentence),  or  any  error,  omission,  interruption,  loss  or  delay  in  transmission  or  delivery of any draft,  notice or  other  communication  under or relating  to  any  Letter of Credit  (including any document required to make a drawing thereunder), any error in interpretation of  technical terms or any consequence arising from causes beyond the control of the Issuing Bank;  provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the  Borrower to the extent of any direct damages (as opposed to consequential damages, claims in  respect of which are hereby waived by the Borrower to the extent permitted by applicable law)  suffered  by  the  Borrower  that  are  caused  by  the  Issuing  Bank’s  gross  negligence  or  willful  misconduct when determining whether drafts and other documents presented under a Letter of  Credit comply with the terms thereof.  The parties hereto expressly agree that:               (i)   the Issuing Bank may accept documents that appear on their face to be in        substantial  compliance  with  the  terms  of  a  Letter  of  Credit  without  responsibility  for        further  investigation,  regardless  of  any  notice  or  information  to  the  contrary,  and  may        make  payment  upon  presentation  of  documents  that  appear  on  their  face  to  be  in        substantial compliance with the terms of such Letter of Credit;               (ii)  the Issuing Bank shall have the right, in its sole discretion, to decline to        accept  such  documents  and  to  make  such  payment  if  such  documents  are  not  in  strict        compliance with the terms of such Letter of Credit; and               (iii) this  sentence  shall  establish  the  standard  of  care  to  be  exercised  by  the        Issuing  Bank when determining whether drafts and other documents presented under a        Letter of Credit comply with the terms thereof (and the parties hereto hereby waive, to        the  extent  permitted  by  applicable  law,  any  standard  of  care  inconsistent  with  the        foregoing).               (h)   Disbursement  Procedures.   The  Issuing  Bank  shall,  within  a  reasonable  time following its receipt thereof, examine all documents purporting to represent a demand for  payment under a Letter of Credit.  The Issuing Bank shall promptly after such examination notify  the  Administrative  Agent  and  the  Borrower  by  telephone  (confirmed  by  telecopy) of  such  demand for payment and whether the Issuing Bank has made or will make an LC Disbursement  thereunder; provided that any failure to give or delay in giving such notice shall not relieve the  Borrower of its obligation to reimburse the  Issuing  Bank and the Lenders with respect to any  such LC Disbursement.                                         40   25272637.12.BUSINESS 

 

            (i)   Interim  Interest.   If  the  Issuing  Bank  shall  make  any  LC  Disbursement,  then, unless  the  Borrower  shall  reimburse such  LC  Disbursement  in  full on  the  date such  LC  Disbursement  is  made,  the  unpaid  amount  thereof  shall  bear  interest,  for  each  day  from  and  including the date such LC Disbursement is made to but excluding the date that the Borrower  reimburses  such  LC  Disbursement,  at  the  rate  per  annum  then  applicable  to  ABR  Loans;  provided  that,  if  the  Borrower  fails  to  reimburse  such  LC  Disbursement  within  two  Business  Days following the date when due pursuant to paragraph (f) of this Section, then the provisions  of  Section 2.11(c) shall  apply.   Interest  accrued  pursuant  to  this  paragraph  shall  be  for  the  account of the Issuing Bank, except that interest accrued on and after the date of payment by any  Lender  pursuant  to  paragraph  (f) of  this  Section to  reimburse  the  Issuing  Bank  shall  be  for  account of such Lender to the extent of such payment.               (j)   Replacement of the Issuing Bank.  The Issuing Bank may be replaced at  any  time  by  written  agreement  among  the  Borrower,  the  Administrative  Agent,  the  replaced  Issuing Bank and the successor Issuing Bank.  The Administrative Agent shall notify the Lenders  of any such replacement of the Issuing Bank.  In addition to the foregoing, if a Lender becomes,  and during the period in which it remains, a Defaulting Lender, and any Default has arisen from  a failure of the Borrower to comply with Section 2.17(c), then the Issuing Bank may, upon prior  written notice to the Borrower and the Administrative Agent, resign as Issuing Bank, effective at  the close of business New York City time on a date specified in such notice (which date may not  be less than five (5) Business Days after the date of such notice).  On or after the effective date  of any such resignation, the Borrower and the Administrative Agent may, by written agreement,  appoint  a  successor  Issuing  Bank.   The  Administrative  Agent  shall  notify  the  Lenders  of  any  such  replacement  of  the  Issuing  Bank.   At  the  time  any  such  replacement  under  any  of  the  foregoing circumstances shall become effective, the Borrower shall pay all unpaid fees accrued  for  account  of  the  replaced  Issuing  Bank  pursuant  to  Section 2.10(b).   From  and  after  the  effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights  and  obligations  of  the  replaced  Issuing  Bank  under  this  Agreement  with  respect  to  Letters  of  Credit  to  be  issued  thereafter  and  (ii) references  herein  to  the  term  “Issuing  Bank”  shall  be  deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all  previous Issuing Banks, as the context shall require.  After the replacement of the Issuing Bank  hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all  the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of  Credit issued by it prior to such replacement, but shall not be required to issue additional Letters  of Credit.               (k)   Cash Collateralization.  If the Borrower shall be required or shall elect, as  the case may be, to provide cover for LC Exposure pursuant to Section 2.04(d), Section 2.09(b),  Section  2.17(c)(ii)  or  the  last  paragraph  of  Article VII,  the  Borrower  shall  immediately  Cash  Collateralize such LC Exposure.               (l)   Assumption of Existing Letter of Credit.  Notwithstanding any provision  herein to the contrary, the Administrative Agent, the Issuing Bank, the Lenders and the Borrower  hereby agree and acknowledge that, effective immediately upon the Restatement Effective Date,  L/C No. USUTFSSBI0000710, issued by ING Capital LLC at the direction of Capital Southwest  Corporation to  Fast Sandwich  Holdings,  Inc. for  the benefit  of  Jimmy John’s  Franchise,  LLC  (the  “Existing  L/C”),  shall  be  deemed  to  have  been  assumed  hereunder  and  issued  on  the                                        41   25272637.12.BUSINESS 

 

Restatement Effective Date as a Letter of Credit hereunder, and shall automatically be subject to  all of the terms and provisions of the Loan Documents applicable to Letters of Credit, including  the obligation of each of the Lenders to participate in such Letter of Credit pursuant to Section  2.04(e) and the obligation of the Borrower to reimburse any LC Disbursement in respect thereof  pursuant to Section 2.04(f) and to pay fees, costs and expenses in connection with such Letter of  Credit pursuant to Section 2.10(b) (provided that, for the avoidance of doubt, no fee shall be paid  to the Issuing Bank on the Restatement Effective Date as an issuance fee).               SECTION 2.05.  Funding of Borrowings.               (a)   Funding by Lenders.  Each Lender shall make each Loan to be made by it  hereunder  on  the  proposed  date  thereof  by  wire  transfer  of  immediately  available  funds  by  1:00 p.m.,  New York  City  time,  to  the  account  of  the  Administrative  Agent  most  recently  designated by it for such purpose by notice to the Lenders.  The Administrative Agent will make  such  Loans  available  to  the  Borrower  by  promptly  crediting  the  amounts  so  received,  in  like  funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing  Request;  provided  that  ABR  Borrowings  made  to  finance  the  reimbursement  of  an  LC  Disbursement as provided in Section 2.04(f) shall be remitted by the Administrative Agent to the  Issuing Bank.               (b)   Presumption  by  the  Administrative  Agent.   Unless  the  Administrative  Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that  such Lender will not make available to the Administrative Agent such  Lender’s share of such  Borrowing,  the  Administrative  Agent  may  assume  that  such  Lender  has  made  such  share  available  on  such  date  in  accordance  with  paragraph  (a) of  this  Section and,  in  reliance  upon  such assumption, the Administrative Agent may (in its sole discretion and without any obligation  to do so) make available to the Borrower a corresponding amount.  In such event, if a Lender has  not  in  fact  made  its  share  of  the  applicable  Borrowing  available  to  the  Administrative  Agent,  then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent  forthwith on demand such corresponding amount with interest thereon, for each day from and  including the date such amount is made available to the Borrower to but excluding the date of  payment  to  the  Administrative  Agent,  at  (i) in  the  case  of  such  Lender,  the  Federal  Funds  Effective Rate and (ii) in the case of the Borrower, the interest rate applicable to ABR Loans.  If  such Lender pays such amount to the Administrative Agent, then such amount shall constitute  such  Lender’s  Loan  included  in such  Borrowing.  Nothing  in this  paragraph shall  relieve  any  Lender of its obligation to fulfill its commitments hereunder, and shall be without prejudice to  any claim the Borrower may have against a Lender that shall have failed to make such payment  to the Administrative Agent.               SECTION 2.06.  Interest Elections.               (a)   Elections by the Borrower for Borrowings.  Subject to Section 2.03(d), the  Loans  constituting  each  Borrowing  initially  shall  be  of  the  Type  specified  in  the  applicable  Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have the Interest Period  specified in such Borrowing Request.  Thereafter, subject to Section 2.06(e), the Borrower may  elect  to  convert  such  Borrowing  to  a  Borrowing  of  a  different  Type  or  to  continue  such  Borrowing as a Borrowing of the same Type and, in the case of a Eurocurrency Borrowing, may                                        42   25272637.12.BUSINESS 

 

elect  the  Interest  Period  therefor,  all  as  provided  in  this  Section.   The  Borrower  may  elect  different options with respect to different portions of the affected Borrowing, in which case each  such  portion  shall  be  allocated  ratably  among  the  Lenders  (except  as  provided  under  Section 2.12(b)),  and  the  Loans  constituting  each  such  portion  shall  be  considered  a  separate  Borrowing.               (b)   Notice  of  Elections.   To  make  an  election  pursuant  to  this  Section,  the  Borrower shall notify the Administrative Agent of such election by delivery of a signed Interest  Election  Request  in  a  form  approved  by  the  Administrative  Agent  or  by  telephone  (followed  promptly, but no later than the close of business on the date of such request, by a signed Interest  Election Request in a form approved by the Administrative Agent) by the time that a Borrowing  Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of  the Type resulting from such election to be made on the effective date of such election.  Each  such Interest Election Request shall be irrevocable.               (c)   Content  of  Interest  Election  Requests.   Each  Interest  Election  Request  shall specify the following information in compliance with Section 2.02:               (i)   the  Borrowing  to  which  such  Interest  Election  Request  applies  and,  if        different options are being elected with respect to different portions thereof, the portions        thereof to be allocated to each resulting Borrowing (in which case the information to be        specified  pursuant  to  clauses  (iii) and  (iv) of  this  paragraph  shall  be  specified  for  each        resulting Borrowing);               (ii)  the effective date of the election made pursuant to such Interest Election        Request, which shall be a Business Day;               (iii) whether  the  resulting  Borrowing  is  to  be  an  ABR  Borrowing  or  a        Eurocurrency Borrowing; and               (iv)  if  the  resulting  Borrowing  is  a  Eurocurrency  Borrowing,  the  Interest        Period therefor after giving effect to such election, which shall be a period contemplated        by  the  definition  of  the  term  “Interest  Period”  and  permitted  under  Section 2.02(d);        provided that there shall be no more than ten (10) separate Borrowings outstanding at any        one time.               (d)   Notice by the Administrative Agent to the Lenders.  Promptly following  receipt  of  an  Interest  Election  Request,  the  Administrative  Agent  shall  advise  each  applicable  Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.               (e)   Failure  to  Elect;  Events  of  Default.   If  the  Borrower  fails  to  deliver  a  timely and complete Interest Election Request with respect to a Eurocurrency Borrowing prior to  the end of the Interest Period therefor, then, unless such Borrowing is repaid as provided herein,  at  the  end  of  such  Interest  Period  such  Borrowing  shall  be  converted  to  a  Eurocurrency  Borrowing having an Interest Period of one (1) month.  Notwithstanding any contrary provision  hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at  the request of the Required Lenders, so notifies the Borrower, (i) any Eurocurrency Borrowing                                         43   25272637.12.BUSINESS 

 

shall,  at  the  end  of  the  applicable  Interest  Period  for  such  Eurocurrency  Borrowing,  be  automatically converted to an ABR Borrowing and (ii) the Borrower shall not be entitled to elect  to convert or continue any Borrowing into or as a Eurocurrency Borrowing.               SECTION 2.07.  Termination, Reduction or Increase of the Commitments.               (a)   Scheduled Termination.  Unless previously terminated in accordance with  the  terms  of  this  Agreement,  on  the  Revolver  Termination  Date  the  Commitments  shall  automatically be reduced to an amount equal to the aggregate principal amount of the Loans and  LC Exposure of all Lenders outstanding on the Revolver Termination Date and thereafter to an  amount equal to the aggregate principal amount of the Loans and LC Exposure outstanding after  giving  effect  to  each  payment  of  principal  and  each  expiration  or  termination  of  a  Letter  of  Credit hereunder; provided that, for clarity, except as expressly provided for herein (including,  without limitation, Section 2.04(e)), no Lender shall have any obligation to make new Loans or  to issue, amend or renew an existing Letter of Credit on or after the Revolver Termination Date,  and any outstanding amounts shall be due and payable on the Maturity Date in accordance with  Section 2.08..               (b)   Voluntary  Termination  or  Reduction.   The  Borrower  may  at  any  time  terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the  Commitments  pursuant  to  this  Section  2.07(b)  shall  be  in  an  amount  that  is  $5,000,000  or  a  larger  multiple  of  $100,000  in  excess  thereof  (or  an  amount  less  than  $5,000,000  if  the  Commitments are being reduced to zero) and (ii) the Borrower shall not terminate or reduce the  Commitments if, after giving effect to  any concurrent prepayment of the Loans in accordance  with Section 2.09, the total Revolving Credit Exposures would exceed the total Commitments.                 (c)   Notice of Voluntary Termination or Reduction.  The Borrower shall notify  the  Administrative  Agent  of  any  election  to  terminate  or  reduce  the  Commitments  under  paragraph (b) of this Section at least three (3) Business Days prior to the effective date of such  termination  or  reduction,  specifying  such  election  and  the  effective  date  thereof.   Promptly  following receipt of any notice, the Administrative Agent shall advise the applicable Lenders of  the  contents  thereof.   Each  notice  delivered  by  the  Borrower  pursuant  to  this  Section shall  be  irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower  may state that such notice is conditioned upon the effectiveness of other credit facilities, in which  case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or  prior to the specified effective date) if such condition is not satisfied.               (d)   Effect of Termination or Reduction.  Any termination or reduction of the  Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably  among the Lenders in accordance with their respective Commitments.               (e)   [Intentionally Omitted].               (f)   Increase of the Commitments.               (i)   Requests for Increase by Borrower.  The Borrower may, at any time prior        to the Revolver Termination Date, propose that the Commitments hereunder be increased                                         44   25272637.12.BUSINESS 

 

      (each  such  proposed  increase  being  a  “Commitment  Increase”) by  notice  to  the        Administrative  Agent  specifying  each  existing  Lender  (each  an  “Increasing  Lender”)        and/or each additional lender (each an “Assuming Lender”) that shall have agreed to an        additional  Commitment  and  the  date  on  which  such  increase  is  to  be  effective  (the        “Commitment Increase Date”), which date shall be a Business Day at least three Business        Days  (or  such  lesser  period  as  the  Administrative  Agent  may  reasonably  agree)  after        delivery  of  such  notice  and  at  least  thirty  (30)  days  prior  to  the  Revolver  Termination        Date; provided that  each  Lender may determine  in its sole discretion whether or not it        chooses  to  participate  in  a  Commitment  Increase;  provided,  further  that,  subject  to  the        foregoing,  each  Commitment  Increase  shall become effective only  upon  satisfaction  of        the following conditions:                     (A)   the  minimum  amount  of  the  Commitment  of  any  Assuming              Lender,  and  the  minimum  amount  of  the  increase  of  the  Commitment  of  any              Increasing Lender, as part of such Commitment Increase shall be $5,000,000 or a              larger  multiple  of  $1,000,000  in  excess  thereof  (or,  in  each  case,  in  such  other              amounts as agreed by the Administrative Agent),                     (B)   immediately after giving effect to such Commitment Increase, the              total Commitments of all of the Lenders hereunder shall not exceed the lesser of              (x) $350,000,000 and (y) 100% of the Obligors’ Net Worth at such time;                      (C)   each  Assuming  Lender  and  the  Commitment  Increase  shall  be              consented to by the Administrative Agent and the Issuing Bank  (which consent              shall not be unreasonably withheld);                     (D)   no  Default  or  Event  of  Default  shall  have  occurred  and  be              continuing on such Commitment Increase Date or shall result from the proposed              Commitment Increase; and                     (E)   the representations and warranties contained in this Agreement and              the other Loan Documents shall be true and correct in all material respects (other              than any  representation  or warranty  already qualified by materiality  or  Material              Adverse Effect, which shall be true and correct in all respects) on and as of the              Commitment  Increase  Date  as  if  made  on  and  as  of  such  date  (or,  if  any  such              representation or warranty is expressly stated to have been made as of a specific              date, as of such specific date).               (ii)  Effectiveness of Commitment Increase by Borrower.  On the Commitment        Increase  Date  for  any  Commitment  Increase,  each  Assuming  Lender  part  of  such        Commitment Increase, if any, shall become a Lender hereunder as of such Commitment        Increase Date with a Commitment in the amount set forth in the agreement referred to in        Section 2.07(f)(ii)(y)  and  the  Commitment  of  any  Increasing  Lender  part  of  such        Commitment  Increase  shall  be  increased  as  of  such  Commitment  Increase  Date  to  the        amount set forth in the agreement referred to in Section 2.07(f)(ii)(y); provided that:                                          45   25272637.12.BUSINESS 

 

                  (x)   the Administrative Agent shall have received on or prior to 12:00              p.m., New York City time, on such Commitment Increase Date (or on or prior to a              time on an earlier date specified by the Administrative Agent) a certificate of a              duly  authorized  officer  of  the  Borrower  stating  that  each  of  the  applicable              conditions  to  such  Commitment  Increase  set  forth  in  the  foregoing  paragraph              (i) has been satisfied; and                     (y)   each Assuming Lender  or Increasing Lender shall have delivered              to the Administrative Agent, on or prior to 12:00 p.m., New York City time on              such  Commitment  Increase  Date  (or  on  or  prior  to  a  time  on  an  earlier  date              specified  by  the  Administrative  Agent),  an  agreement,  in  form  and  substance              satisfactory  to  the  Borrower  and  the  Administrative  Agent,  pursuant  to  which              such Lender shall, effective as of such Commitment  Increase Date, undertake a              Commitment or an increase of Commitment, as applicable, duly executed by such              Assuming  Lender  or  Increasing  Lender,  as  applicable,  and  the  Borrower  and              acknowledged by the Administrative Agent.         Promptly following satisfaction of such conditions, the Administrative Agent shall notify        the  Lenders  (including  any  Assuming  Lenders) thereof  and  of  the  occurrence  of  the        Commitment Increase Date by facsimile transmission or electronic messaging system.               (iii) Recordation into Register.  Upon its receipt of an agreement referred to in        clause (ii)(y) above executed by an Assuming Lender or any Increasing Lender, together        with the certificate referred to in clause (ii)(x) above, the Administrative Agent shall, if        such  agreement  has  been  completed,  (x) accept  such  agreement,  (y) record  the        information contained  therein  in  the  Register  and  (z) give  prompt notice  thereof  to  the        Borrower.               (iv)  Adjustments  of  Borrowings  upon  Effectiveness  of  Increase.   On  each        Commitment  Increase  Date,  the  Borrower  shall  (A) prepay  the  outstanding  Loans  (if        any) in full, (B) simultaneously borrow new Loans hereunder in an amount equal to such        prepayment; provided that with respect to subclauses (A) and (B), (x) the prepayment to,        and borrowing from, any  existing Lender shall be effected by book entry  to the extent        that  any  portion  of  the  amount  prepaid  to  such  Lender  will  be  subsequently  borrowed        from such Lender and (y) the existing Lenders, the Increasing Lenders and the Assuming        Lenders shall make and receive payments among themselves, in a manner acceptable to        the Administrative Agent, so that, after giving effect thereto, the Loans are held ratably        by  the  Lenders  in  accordance with  the respective Commitments  of  such  Lenders  (after        giving effect to such Commitment Increase); and (C) pay to the Lenders the amounts, if        any,  payable  under  Section 2.14  as  a  result  of  any  such  prepayment.   Concurrently        therewith,  the  Lenders  shall be deemed to  have  adjusted their participation  interests  in        any  outstanding  Letters  of  Credit  so  that  such  interests  are  held  ratably  in  accordance        with their Commitments as so increased. The Administrative Agent shall amend Schedule        1.01(b)  to  reflect  the  aggregate  amount  of  each  Lender’s  Commitments  (including        Increasing Lenders and Assuming Lenders). Each reference to Schedule 1.01(b) in this        Agreement shall be to Schedule 1.01(b) as amended pursuant to this Section.                                         46   25272637.12.BUSINESS 

 

            (v)   Terms  of  Loans  issued  on  the  Commitment  Increase  Date.   For  the        avoidance of doubt, the terms and provisions of any new Loans issued by any Assuming        Lender or Increasing Lender, and the Commitment Increase of any Assuming Lender or        Increasing Lender, shall be identical to the Loans issued by, and the Commitments of, the        Lenders immediately prior to the applicable Commitment Increase Date.                SECTION 2.08.  Repayment of Loans; Evidence of Debt.               (a)   Repayment.   Subject  to,  and  in  accordance  with,  the  terms  of  this  Agreement, the Borrower hereby unconditionally promises to pay to the Administrative Agent  for  the  account  of  the  Lenders  the  outstanding  principal  amount  of  the  Loans  and  all  other  amounts due and owing hereunder and under the other Loan Documents on the Maturity Date.               (b)   Manner  of  Payment.   Prior  to  any  repayment  or  prepayment  of  any  Borrowings hereunder, the Borrower shall select the Borrowing or  Borrowings to be paid and  shall  notify  the  Administrative  Agent  by  telephone  (confirmed  by  telecopy  or  e-mail) of  such  selection not later than the time set forth in Section 2.09(e) prior to the scheduled date of such  repayment;  provided  that  each  repayment  of  Borrowings  shall  be  applied  to  repay  any  outstanding  ABR  Borrowings  before  any  other  Borrowings.   If  the  Borrower  fails  to  make  a  timely selection of the Borrowing or Borrowings to be repaid or prepaid, such payment shall be  applied,  first,  to  pay  any  outstanding  ABR  Borrowings  and,  second,  to  any  remaining  Borrowings  in  the  order  of  the  remaining  duration  of  their  respective  Interest  Periods  (the  Borrowing with  the  shortest  remaining  Interest  Period  to  be repaid  first).  Each  payment  of a  Borrowing shall be applied ratably to the Loans included in such Borrowing (except as otherwise  provided in Section 2.12(b)).               (c)   Maintenance  of  Records  by  Lenders.   Each  Lender  shall  maintain  in  accordance with its usual practice records evidencing the indebtedness of the Borrower to such  Lender resulting from each Loan made by such Lender, including the amounts of principal and  interest payable and paid to such Lender from time to time hereunder.               (d)   Maintenance of Records by the Administrative Agent.  The Administrative  Agent  shall  maintain  records  in  which  it  shall  record  (i) the  amount  of  each  Loan  made  hereunder, the Type thereof and each Interest Period therefor, (ii) the amount of any principal or  interest  due  and  payable  or  to  become  due  and  payable  from  the  Borrower  to  each  Lender  hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for  account of the Lenders and each Lender’s share thereof.               (e)   Effect of Entries.  The entries made in the records maintained pursuant to  paragraph (c) or (d) of this Section shall be prima facie evidence, absent manifest error, of the  existence  and  amounts  of  the  obligations  recorded  therein;  provided  that  the  failure  of  any  Lender or the Administrative Agent to maintain such records or any error therein shall not in any  manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of  this Agreement.   In the event of any conflict between the accounts and records maintained by  any Lender and the accounts and records of the Administrative Agent in respect of such matters,  the accounts and records of the Administrative Agent shall control in the absence of manifest  error.                                        47   25272637.12.BUSINESS 

 

            (f)   Promissory  Notes.   Any  Lender  may  request  that  Loans  made  by  it  be  evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver  to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to  such  Lender  and  its  permitted  registered  assigns) and  in  a  form  attached  hereto  as  Exhibit  C.   Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times  (including after assignment pursuant to Section 9.04) be represented by one or more promissory  notes in such form payable to the payee named therein (or, if such promissory note is a registered  note, to such payee and its permitted registered assigns).               SECTION 2.09.  Prepayment of Loans.               (a)   Optional Prepayments.  The Borrower shall have the right at any time and  from time to time (but subject to Section 2.09(e)) to prepay any Borrowing in whole or in part,  without premium or fee (but subject to Section 2.14), subject to the requirements of this Section.  Each prepayment in part under this Section 2.09(a) shall be in a minimum amount of $1,000,000  or a larger multiple of $100,000.               (b)   Mandatory Prepayments due to Borrowing Base Deficiency.  In the event  that  the  amount  of  total  Credit  Exposure  exceeds  the  total  Commitments,  the  Borrower  shall  prepay Loans (and, to the extent necessary, provide cover for Letters of Credit as contemplated  by  Section  2.04(k))  in  such  amounts  as  shall  be  necessary  so  that  the  amount  of  total  Credit  Exposure does not exceed the total Commitments.  In the event that at any time any Borrowing  Base Deficiency shall exist, promptly (but in no event later than 5 Business Days), the Borrower  shall either prepay (x) the Loans (and, to the extent necessary, provide cover for Letters of Credit  as contemplated by Section 2.04(k)) so that the Borrowing Base Deficiency is promptly cured or  (y) the Loans and the Other Covered Indebtedness in such amounts as shall be necessary so that  such Borrowing Base Deficiency is  promptly cured (and,  as  among the  Loans  (and  Letters  of  Credit) and the Other Covered Indebtedness, at least ratably (based on the aggregate outstanding  principal amount of such Indebtedness) and, with respect to the Loans, in the manner set forth in  the preceding subclause (y) as to payments of Loans in relation to Other Covered Indebtedness);  provided,  that  if  within  such  5  Business  Day  period,  the  Borrower  shall  present  to  the  Administrative  Agent  a  reasonably  feasible  plan,  which  plan  is  reasonably  satisfactory  to  the  Administrative Agent, that will enable any such Borrowing Base Deficiency to be cured within  30 Business Days of the occurrence of such Borrowing Base Deficiency (which 30-Business Day  period  shall  include  the  5  Business  Days  permitted  for  delivery  of  such  plan),  then  such  prepayment  or  reduction  shall  be  effected  in  accordance  with  such  plan  (subject,  for  the  avoidance of doubt, to the limitations as to the allocation of such prepayments set forth above in  this  Section  2.09(b)).  Notwithstanding  the  foregoing,  the  Borrower  shall  pay  interest  in  accordance with Section 2.11(c) for so long as the Covered Debt Amount exceeds the Borrowing  Base  during  such  30-Business  Day  period.  For  clarity,  in  the  event  that  the  Borrowing  Base  Deficiency is not cured prior to the end of such 5-Business Day period (or, if applicable, such  30-Business Day period), it shall constitute an Event of Default under clause (a) of Article VII.               (c)   Mandatory  Prepayments  due  to  Certain  Events  Following  Availability  Period.  Subject to Section 2.09(e):                                         48   25272637.12.BUSINESS 

 

            (i)   Asset Sales.  In the event that any Obligor shall receive any Net Asset Sale        Proceeds at any time after the Availability Period, the Borrower shall, no later than the        fifth (5th) Business Day following the receipt of such Net Asset Sale Proceeds, prepay the        Loans in an amount equal to such Net Asset Sale Proceeds (and the Commitments shall        be permanently reduced by such amount); provided, that with respect to Asset Sales of        assets that are not Portfolio Investments, the Borrower shall not be required to prepay the        Loans  unless  and  until  (and  to  the  extent  that)  the  aggregate  Net  Asset  Sale  Proceeds        relating to all such Asset Sales are greater than $2,000,000.               (ii)  Extraordinary  Receipts.   In  the  event  (but  only  to  the  extent)  that  the        aggregate amount of all Extraordinary Receipts received by the Obligors at any time after        the  Availability  Period  exceeds  $2,000,000,  the  Borrower  shall,  no  later  than  the  fifth        (5th) Business Day following the receipt of such excess Extraordinary Receipts, prepay        the  Loans  in  an  amount  equal  to  such  excess  Extraordinary  Receipts  (and  the        Commitments shall be permanently reduced by such amount).               (iii) Returns of Capital.  In the event that any Obligor shall receive any Return        of Capital at any time after the Availability Period, the Borrower shall, no later than the        fifth (5th) Business Day following the receipt of such Return of Capital, prepay the Loans        in an amount equal to 100% of such Return of Capital (and the Commitments shall be        permanently reduced by such amount).                 (iv)  Equity Issuances.  In the event that the Borrower shall receive any Cash        proceeds  from  the  issuance  of  Equity  Interests  of  the  Borrower  at  any  time  after  the        Availability  Period,  the  Borrower  shall,  no  later  than  the  fifth  (5th)  Business  Day        following  the  receipt  of  such  Cash  proceeds,  prepay  the  Loans  in  an  amount  equal  to        100%  of  such  Cash  proceeds,  net  of  underwriting  discounts  and  commissions  or  other        similar  payments  and  other  costs,  fees,  premiums  and  expenses  directly  associated        therewith, including reasonable legal fees and expenses (and the Commitments shall be        permanently reduced by such amount).               (v)   Indebtedness.   In  the  event  that  any  Obligor  shall  receive  any  Cash        proceeds from the issuance of Indebtedness at any time after the Availability Period, such        Obligor shall, no later than the fifth (5th) Business Day following the receipt of such Cash        proceeds, prepay the Loans in an amount equal to 100% of such Cash proceeds, net of        underwriting discounts and commissions or other similar payments and other costs, fees,        commissions, premiums and expenses directly associated therewith, including reasonable        legal  fees  and  expenses  (and  the  Commitments  shall  be  permanently  reduced  by  such        amount).               (d)   Mandatory Prepayment of Eurocurrency Loans.  If the Loans to be prepaid  pursuant to Sections 2.09(c)(ii) and (iii) are Eurocurrency Loans, the Borrower may defer such  prepayment  (and  permanent  Commitment  reduction)  until  the  last  day  of  the  Interest  Period  applicable  to  such  Loans,  so  long  as  the  Borrower  deposits  an  amount  equal  to  an  amount  required to be prepaid, no later than the third Business Day following the receipt of such amount,  into a segregated collateral account in the name and under the control (within the meaning of  Section  9-104  of  the  Uniform  Commercial  Code)  of  the  Administrative  Agent  pending                                        49   25272637.12.BUSINESS 

 

application  of  such  amount  to  the  prepayment  of  the  Loans  (and  permanent  reduction  of  the  Commitments) on the last day of such Interest Period.               (e)   Notices,  Etc.   The  Borrower  shall  notify  the  Administrative  Agent  in  writing  or  by  telephone  (followed  promptly  by  written  confirmation) of  any  prepayment  hereunder (i) in the case of prepayment of a Eurocurrency Borrowing under Section 2.09(a), not  later  than  11:00  a.m.,  New York  City  time,  three  (3)  Business  Days  before  the  date  of  prepayment or (ii) in the case of prepayment of an ABR Borrowing under Section 2.09(a), or any  prepayment under Section 2.09(b) or (c), not later than 11:00 a.m., New York City time, one (1)  Business Day before the date of prepayment.  Each such notice shall be irrevocable  and shall  specify the prepayment  date, the principal amount of each Borrowing or portion thereof to be  prepaid  and,  in  the  case  of  a  mandatory  prepayment,  a  reasonably  detailed  calculation  of  the  amount of such prepayment; provided, that, (1) if a notice of prepayment is given in connection  with a conditional notice of termination of the Commitments as contemplated by Section 2.07(c),  then  such  notice  of  prepayment  may  be  revoked  if  such  notice  of  termination  is  revoked  in  accordance with Section 2.07(c) and (2) any such notices  given in connection with any of the  events  specified  in  Section  2.09(c)  may  be  conditioned  upon  (x)  the  consummation  of  the  issuance  of  Equity  Interests  or  Indebtedness  (as  applicable)  or  (y)  the  receipt  of  net  cash  proceeds from Asset Sales, Extraordinary Receipts or Returns of Capital.  Promptly following  receipt  of  any  such  notice  relating  to  a  Borrowing,  the  Administrative  Agent  shall  advise  the  Lenders of the contents thereof.  Each prepayment of a Borrowing shall be applied ratably to the  Loans included in the prepaid Borrowing.   In the event the Borrower is  required to make any  concurrent  prepayments  under  both  paragraph  (b)  and  also  another  paragraph  of  this  Section  2.09,  any  such  prepayments  shall  be  applied  toward  a  prepayment  pursuant  to  paragraph  (b)  before any prepayment pursuant to any other paragraph of this Section 2.09.  Prepayments shall  be accompanied by accrued interest to the extent required by Section 2.11 and shall be made in  the manner specified in Section 2.08(b).               SECTION 2.10.  Fees.               (a)   Commitment  Fee.   The  Borrower  agrees  to  pay  to  the  Administrative  Agent for the account of each Lender a commitment fee, which shall accrue  at a rate equal to (x)  1.00% per annum on the daily unused amount of the Commitment of such Lender as of the close  of business on such day if the daily used amount as of the close of business on such day is less  than  or  equal  to  thirty-five  percent  (35%)  of  such  Lender’s  Commitment,  and  (y)  0.50%  per  annum  on  the  daily  unused  amount  of  the  Commitment  of  such  Lender  as  of  the  close  of  business on such day if the daily used amount as of the close of business on such day is greater  than thirty-five percent (35%).  Accrued commitment fees shall be payable in arrears (x) within  one Business Day after each Quarterly Date and (y) on the earlier of the date the Commitments  terminate and the Revolver Termination Date, commencing on the first such date to occur after  the Restatement Effective Date.  All commitment fees shall be computed on the basis of a year of  360 days and shall be payable for the actual number of days elapsed (including the first day but  excluding the last day).  For purposes of computing commitment fees, the Commitments shall be  deemed to be used to the extent of the outstanding Loans of all Lenders.               (b)   Letter  of  Credit  Fees.   The  Borrower  agrees  to  pay  (i) to  the  Administrative  Agent  for  account  of  each  Lender  a  participation  fee  with  respect  to  its                                        50   25272637.12.BUSINESS 

 

participations in Letters of Credit, which shall accrue at a rate per annum equal to the Applicable  Margin  applicable  to  interest  on  Eurocurrency  Loans  on  the  average  daily  amount  of  such  Lender’s  LC  Exposure  (excluding  any  portion  thereof  attributable  to  unreimbursed  LC  Disbursements) during  the  period  from  and  including  the  Restatement  Effective  Date  to  but  excluding the later of the date on which such Lender’s Commitment terminates and the date on  which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee,  which  shall  accrue  at  the  rate  of  0.50%  per  annum  on  the  average  daily  amount  of  the  LC  Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during  the period from and including the Restatement Effective Date to but excluding the later of the  date  of  termination  of  the  Commitments  and  the  date  on  which  there  ceases  to  be  any  LC  Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment  renewal or extension of any Letter of Credit or processing of drawings thereunder.  Participation  fees and fronting fees accrued through and including each Quarterly Date shall be payable on the  third Business Day following such Quarterly Date, commencing on the first such date to occur  after the Restatement Effective Date; provided that all such fees with respect to the Letters of  Credit shall be payable on the date on which the Commitments terminate (the “termination date”)  and  the  Borrower  shall  pay  any  such  fees  that  have  accrued  and  that  are  unpaid  on  the  termination date.  Any other fees payable to the Issuing Bank pursuant to this paragraph shall be  payable within 10 days after demand.  All participation fees and fronting fees shall be computed  on the basis of a year of 360 days and shall be payable for the actual number of days elapsed  (including the first day but excluding the last day).               (c)   Administrative  Agent  Fees.   The  Borrower  agrees  to  pay  to  the  Administrative  Agent,  for  its  own  account,  fees  payable  in  the  amounts  and  at  the  times  separately agreed upon between the Borrower and the Administrative Agent.               (d)   Payment of Fees.  All fees payable hereunder shall be paid on the dates  due, in Dollars and immediately available funds, to the Administrative Agent for distribution, in  the case of facility fees and participation fees, to the Lenders entitled thereto.  Fees paid shall not  be  refundable  under  any  circumstances  absent  manifest  error.   On  the  Restatement  Effective  Date, the Borrower shall pay (x) all fees required to be paid on the Restatement Effective Date  under that certain fee letter, dated as of December 10, 2018, by and between the Borrower and  ING  and  (ii)  all  costs  and  expenses  outstanding  on  such  date  required  to  be  paid  pursuant  to  Section 9.03(a)(i).               SECTION 2.11.  Interest.               (a)   ABR  Loans.   The  Loans  constituting  each  ABR  Borrowing  shall  bear  interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.               (b)   Eurocurrency  Loans.   The  Loans  constituting  each  Eurocurrency  Borrowing shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the related  Interest Period for such Borrowing plus the Applicable Margin.               (c)   Default Interest.  Notwithstanding the foregoing, if any Event of Default  described in clause (a), (b), (d) (only with respect to Section 6.07), (h), (i), (j) or (o) of Article  VII has occurred and is continuing, or on the written demand of the Administrative Agent or the                                        51   25272637.12.BUSINESS 

 

Required Lenders if any other Event of Default described in any other clause of Article VII has  occurred and is continuing, or if the Covered Debt Amount exceeds the Borrowing Base during  the 5-Business Day period (or, if applicable, the 30-Business Day period) referred to in Section  2.09(b), the interest applicable to the Loans shall accrue, and any fee or other amount payable by  the Borrower hereunder shall bear interest, after as well as before judgment, at a rate per annum  equal to (i) in the case of principal of any Loan, 2% plus the rate otherwise applicable to such  Loan  as  provided  above,  (ii)  in  the  case  of  any  Letter  of  Credit,  2%  plus  the  fee  otherwise  applicable to such Letter of Credit as provided in Section 2.10(b), or (iii) in the case of any fee or  other  amount,  2%  plus  the  rate  applicable  to  ABR  Loans  as  provided  in  paragraph  (a) of  this  Section.               (d)   Payment of  Interest.  Accrued interest on each  Loan shall be payable in  arrears on each Interest Payment Date for such Loan in Dollars and upon termination in full of  the  Commitments;  provided  that  (i) interest  accrued  pursuant  to  paragraph  (c) of  this  Section shall  be  payable  on  demand,  (ii) in  the  event  of  any  repayment  or  prepayment  of  any  Loan (other than a prepayment of an ABR Loan prior to the Maturity Date), accrued interest on  the  principal  amount  repaid  or  prepaid  shall  be  payable  on  the  date  of  such  repayment  or  prepayment and (iii) in the event of any conversion of any Eurocurrency Borrowing prior to the  end of the Interest Period therefor, accrued interest on such Borrowing shall be payable on the  effective date of such conversion.               (e)   Computation.  All interest hereunder shall be computed on the basis of a  year of 360 days, except that interest computed by reference to the Alternate Base Rate at times  when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a  year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual  number  of  days  elapsed  (including  the  first  day  but  excluding  the  last  day).   The  applicable  Alternate Base  Rate  or  Adjusted  LIBO Rate shall  be determined by  the  Administrative Agent  and such determination shall be conclusive absent manifest error.               SECTION 2.12.  Eurocurrency Borrowing Provisions.                 (a)   Alternate Rate of Interest.  If prior to the commencement of the Interest  Period for any Eurocurrency 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 for such Interest Period; or               (ii)  the  Administrative  Agent  is  advised  by  the  Required  Lenders  that  the        Adjusted  LIBO  Rate  for  such  Interest  Period  will  not  adequately  and  fairly  reflect  the        cost to such Lenders of making or maintaining their respective Loans included in such        Borrowing for such Interest Period;   then  the  Administrative  Agent  shall  give  notice  thereof  to  the  Borrower  and  the  Lenders  by  telephone, telecopy or e-mail 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,                                         52   25272637.12.BUSINESS 

 

or the continuation of any Borrowing as, a Eurocurrency Borrowing and such Borrowing (unless  prepaid) shall  be  continued  as,  or  converted  to,  an  ABR  Borrowing  and  (ii) if  any  Borrowing  Request  requests  a  Eurocurrency  Borrowing,  such  Borrowing  shall  be  made  as  an  ABR  Borrowing.               (b)   Illegality.   Without  duplication  of  any  other  rights  that  any  Lender  has   hereunder,  if  any  Lender  determines  that  any  law  has  made  it  unlawful,  or  that  any  Governmental Authority has asserted that it is unlawful for any Lender to make, maintain or fund  Loans  whose interest is  determined by  reference  to the  LIBO Rate, or to  determine or charge  interest rates based upon the LIBO Rate, or any Governmental Authority has imposed material  restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in  the London interbank market, then, on notice thereof by such Lender to the Borrower and the  Administrative  Agent,  (i)  any  obligation  of  such  Lender  to  make  or  continue  Eurocurrency  Borrowings or to convert ABR Borrowings to Eurocurrency Borrowings shall be suspended, and  (ii)  if  such  notice  asserts  the  illegality  of  such  Lender  making  or  maintaining  Eurocurrency  Borrowings the interest rate on which is determined by reference to the LIBO Rate component of  the  Alternate  Base  Rate,  the  interest  rate  on  which  ABR  Borrowings  of  such  Lender  shall,  if  necessary to avoid such illegality, be determined by the Administrative Agent without reference  to the LIBO Rate component of the Alternate Base Rate, in each case until such Lender notifies  the  Administrative  Agent  and  the  Borrower  that  the  circumstances  giving  rise  to  such  determination no longer exist. Upon receipt of such notice, (x) all Eurocurrency Borrowings of  such  Lender shall  automatically  convert  to ABR  Borrowings  (the interest  rate on  which  ABR  Borrowings  of  such  Lender  shall,  if  necessary  to  avoid  such  illegality,  be  determined  by  the  Administrative  Agent  without  reference  to  the  LIBO  Rate  component  of  the  Alternate  Base  Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue  to maintain such Eurocurrency Borrowings to such day, or immediately, if such Lender may not  lawfully continue to maintain such Eurocurrency Borrowings (in which event Borrower shall not  be required to pay any yield maintenance, breakage or similar fees) and (y) if such notice asserts  the illegality of such Lender determining or charging interest rates based upon the LIBO Rate,  the Administrative Agent shall during the period of such suspension compute the Alternate Base  Rate applicable to such Lender without reference to the LIBO Rate component thereof until the  Administrative Agent is advised in writing by such Lender that it is no longer illegal for such  Lender  to  determine  or  charge  interest  rates  based  upon  the  LIBO  Rate.  Upon  any  such  conversion, the Borrower shall also pay accrued interest on the amount so converted.               (c)   Notwithstanding  the  foregoing,  if  at  any  time  the  Administrative  Agent  determines  (which  determination  shall  be  conclusive  absent  manifest  error)  that  the  circumstances  set  forth  in  clause  (a)  have  arisen  and  such  circumstances  are  unlikely  to  be  temporary or (ii) the circumstances set forth in clause (a) have not arisen but the supervisor for  the  administrator  of  the  LIBO  Rate  or  a  Governmental  Authority  having  jurisdiction  over  the  Administrative  Agent  has  made  a  public  statement  identifying  a  specific  date  after  which  the  LIBO Rate (or any component thereof) shall no longer be used for determining interest rates for  loans, the Borrower and the Administrative Agent shall endeavor to establish an alternate rate of  interest  to  the  LIBO  Rate  that  (x)  gives  due  consideration  to  the  then-prevailing  market  convention for determining a rate of interest for syndicated loans in the United States at such  time and (y) is a rate for which the Administrative Agent has indicated in writing to the Lenders  that it is able to calculate and administer and the Borrower and the Administrative Agent may                                        53   25272637.12.BUSINESS 

 

enter  into  an  amendment  to  this  Agreement  to  reflect  such  alternate  rate  of  interest  and  such  other related changes to this Agreement as may be applicable (but for the avoidance of doubt,  such related changes shall not include a reduction of the Applicable Margin).  Notwithstanding  anything  to  the  contrary  herein,  such  amendment  shall  become  effective  without  any  further  action or consent of any other party to this Agreement so long as the Administrative Agent shall  not have received, within five Business Days of the date notice of such alternate rate of interest is  provided to the Lenders, a written notice from the Required Lenders stating that such Required  Lenders  object  to  such  amendment.   Until  an  alternate  rate  of  interest  is  determined  in  accordance with this clause (c), (x) the obligation of the Lenders to make or maintain Eurodollar  Loans shall be suspended and (y) the utilization of the LIBO Rate component in determining the  Alternate Base Rate shall be suspended.                SECTION 2.13.  Increased Costs.               (a)   Increased Costs Generally.  If any Change in Law shall:               (i)   impose,  modify  or  deem  applicable  any  reserve,  special  deposit,        compulsory loan, insurance charge or similar requirement against assets of, deposits with        or for account of, or credit extended by, any Lender (except any such reserve requirement        reflected in the Adjusted LIBO Rate) or the Issuing Bank;               (ii)  subject  any  Lender  to  any  Taxes  (other  than  Covered  Taxes  and  Taxes        described in clauses (a)(ii), (c), (d) and (e) of the definition of “Excluded Taxes”) on its        loans, loan principal, letters of credit, commitments, or other obligations, or its deposits,        reserves, other liabilities or capital attributable thereto; or               (iii) impose on any Lender or the Issuing Bank or the London interbank market        any  other  condition,  cost  or  expense  (other  than  Taxes)  affecting  this  Agreement  or        Eurocurrency Loans made by such Lender or any Letter of Credit or participation therein;   and the result of any of the foregoing shall be to increase the cost to such Lenders of making or  maintaining any Eurocurrency Loan (or of maintaining its obligation to make any such Loan) or  to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining  any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or  the Issuing Bank hereunder (whether of principal, interest or otherwise), then, upon the request  of such Lender or Issuing Bank, the Borrower will pay to such Lender or the Issuing Bank, as the  case may be, in Dollars, such additional amount or amounts as will compensate such Lender or  the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.               (b)   Capital Requirements.  If any Lender or the Issuing Bank determines that  any Change in Law regarding capital or liquidity requirements has or would have the effect of  reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of  such  Lender’s  or  the  Issuing  Bank’s  holding  company,  if  any,  as  a  consequence  of  this  Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or  the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the  Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but  for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies                                         54   25272637.12.BUSINESS 

 

and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital  adequacy  or  liquidity  position),  by  an  amount  deemed  to  be  material  by  such  Lender  or  the  Issuing Bank, then from time to time the Borrower will pay to such Lender or the Issuing Bank,  as  the  case  may  be,  in  Dollars,  such  additional  amount  or  amounts  as  will  compensate  such  Lender  or  the  Issuing  Bank  or  such  Lender’s  or  the  Issuing  Bank’s  holding  company  for  any  such reduction suffered.               (c)   Certificates from Lenders.  A certificate of a Lender or the Issuing Bank  setting  forth  (in  reasonable  detail  the  basis  for  and  calculation  of)  the  amount  or  amounts,  in  Dollars, necessary to compensate such Lender or the Issuing Bank or its holding company, as the  case may be, as specified in paragraph (a) or (b) of this Section shall be promptly delivered to the  Borrower and shall be conclusive absent manifest error (it being understood that no Lender shall  be required to disclose (i) any confidential or price-sensitive information or (ii) any information  to the extent prohibited by applicable law).  The Borrower shall pay such Lender or the Issuing  Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days  after receipt thereof.               (d)   Delay  in  Requests.   Failure  or  delay  on  the  part  of  any  Lender  or  the  Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of  such  Lender’s  or  the  Issuing  Bank’s  right  to  demand  such  compensation;  provided  that  no  Obligor shall be required to compensate a Lender or the Issuing Bank pursuant to the foregoing  provisions of this Section for any increased costs incurred or reductions suffered more than six  months prior to the date that such Lender or the Issuing Bank notifies the Borrower in writing of  any  such  Change  in  Law  giving  rise  to  such  increased  costs  or  reductions  (except  that,  if  the  Change  in  Law  giving  rise  to  such  increased  costs  is  retroactive,  then  the  six-month  period  referred to above shall be extended to include the period of retroactive effect thereof).               SECTION 2.14.  Break  Funding Payments.  In the event of (a) the payment of  any principal of any Eurocurrency Loan other than on the last day of an Interest Period therefor  (including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan other  than on the last day of an Interest Period therefor, (c) the failure to borrow, convert, continue or  prepay  any  Loan  on  the  date  specified  in  any  notice  delivered  pursuant  hereto  (regardless  of  whether  such  notice  is  permitted  to  be  revocable  under  Section 2.09(e) and  is  revoked  in  accordance herewith), or (d) the assignment as a result of a request by the Borrower pursuant to  Section 2.18(b)  of  any  Eurocurrency  Loan  other  than  on  the  last  day  of  an  Interest  Period  therefor, then, in any such event, the Borrower shall compensate each Lender for the loss, cost  and  expense  attributable  to  such  event.   In  the  case  of  a  Eurocurrency  Loan,  the  loss  to  any  Lender attributable to any such event shall be deemed to include an amount determined by such  Lender to be equal to the excess, if any, of               (i)   the amount of interest that such Lender would pay for a deposit equal to        the principal amount of such Loan referred to in clauses (a), (b), (c) or (d) of this Section        2.14 denominated in Dollars for the period from the date of such payment, conversion,        failure or assignment to the last day of the then current Interest Period for such Loan (or,        in the case of a failure to borrow, convert or continue, the duration of the Interest Period        that would have resulted from such borrowing, conversion or continuation) if the interest                                         55   25272637.12.BUSINESS 

 

      rate payable on such deposit were equal to the Adjusted LIBO Rate for Dollars for such        Interest Period, over               (ii)  the  amount  of  interest  that  such  Lender  would  earn  on  such  principal        amount  for  such  period  if  such  Lender  were  to  invest  such  principal  amount  for  such        period  at  the  interest  rate  that  would  be  bid  by  such  Lender  (or  an  Affiliate  of  such        Lender)  for  deposits  denominated  in  Dollars  from  other  banks  in  the  Eurocurrency        market at the commencement of such period.   Payments under this Section shall be made upon written request of a Lender delivered not later  than thirty (30) Business Days following the payment, conversion, or failure to borrow, convert,  continue  or  prepay  that  gives  rise  to  a  claim  under  this  Section accompanied  by  a  written  certificate  of  such  Lender  setting  forth  in  reasonable  detail  the  amount  or  amounts  that  such  Lender is entitled to receive pursuant to this Section, which certificate shall be conclusive absent  manifest  error.   The  Borrower  shall  pay  such  Lender  the  amount  shown  as  due  on  any  such  certificate within 10 days after receipt thereof.               SECTION 2.15.  Taxes.               (a)   Payments Free of Taxes.  Any and all payments by or on account of any  obligation of the Borrower hereunder or under any other Loan Document shall be made free and  clear  of  and  without  deduction  for  any  Taxes,  unless  otherwise  required  by  applicable  law;  provided  that  if  the  Borrower  shall  be  required  to  deduct  or  withhold  any  Taxes  from  such  payments, then (i) the Borrower shall make such deductions or withholdings, (ii) the Borrower  shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in  accordance with applicable law and (iii) if such Tax is a Covered Tax, the sum payable shall be  increased as necessary so that after making all required deductions and withholdings (including  deductions and withholdings applicable to additional sums payable under this Section 2.15) the  Administrative Agent, Lender or the Issuing Bank (as the case may be) receives an amount equal  to the sum it would have received had no such deductions or withholdings been made.               (b)   Payment of Other Taxes by the Borrower.  In addition, the Borrower shall  pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.               (c)   Indemnification  by  the  Borrower.   The  Borrower  shall  indemnify  the  Administrative Agent, each Lender and the Issuing Bank for and, within ten (10) Business Days  after  written  demand  therefor,  pay  the  full  amount  of  any  Covered  Taxes  (including  Covered  Taxes imposed or asserted on or attributable to amounts payable under this Section 2.15) payable  or paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, and  any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether  or  not  such  Covered  Taxes  were  correctly  or  legally  imposed  or  asserted  by  the  relevant  Governmental Authority.  A certificate as to the amount of such payment or liability delivered to  the  Borrower  by  a  Lender,  by  the  Issuing  Bank  or  by  the  Administrative  Agent  (on  its  own  behalf or on behalf of a Lender or the Issuing Bank), shall be conclusive absent manifest error.               (d)   Indemnification by the Lenders.  To the extent required by any applicable  law,  the  Administrative  Agent  may  withhold  from  any  payment  to  any  Lender  an  amount                                         56   25272637.12.BUSINESS 

 

equivalent to any applicable withholding Tax. Without limiting the provisions of Section 2.15(a)  or (c),  each  Lender  shall,  and  does  hereby,  agree to  indemnify the Administrative  Agent,  and  shall make payable in respect thereof within 10 days after demand therefor, (i) against any and  all Taxes and any and all related losses, claims, liabilities and expenses (including fees, charges  and disbursements of any counsel for the Administrative Agent) (collectively, “Tax Damages”)  incurred by or asserted against the Administrative Agent by the Internal Revenue Service or any  other Governmental Authority as a result of the failure of the Administrative Agent to properly  withhold Tax from amounts paid to or for the account of such Lender for any reason (including  because the appropriate form was not delivered or not properly executed, or because such Lender  failed  to  notify  the  Administrative  Agent  of  a  change  in  circumstance  that  rendered  the  exemption from, or reduction of withholding tax ineffective) and (ii) Tax Damages attributable  to  such  Lender’s  failure  to  comply  with  the  provisions  of  Section 9.04  relating  to  the  maintenance of a Participant Register. A certificate as to the amount of such payment or liability  delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each  Lender  hereby  authorizes  the  Administrative  Agent  to  set  off  and  apply  any  and  all  amounts at any time owing to such Lender under this Agreement or any other Loan Document  against any amount due to the Administrative Agent under this paragraph. The agreements in this  paragraph  shall  survive  the  resignation  and/or  replacement  of  the  Administrative  Agent,  any  assignment of rights by, or the replacement of, a Lender, the termination of the Commitments  and the repayment, satisfaction or discharge of all other obligations.               (e)   Evidence of Payments.  As soon as practicable after any payment of Taxes  by the Borrower to a Governmental Authority pursuant to this Section 2.15, the Borrower shall  deliver to the Administrative Agent the original or a certified copy of a receipt issued by such  Governmental Authority evidencing such payment, a copy of the return reporting such payment  or other evidence of such payment reasonably satisfactory to the Administrative Agent.  If the  Borrower fails to pay any U.S. federal withholding Taxes that are Excluded Taxes when due to  the  appropriate  Governmental  Authority  or  fails  to  remit  to  the  Administrative  Agent  the  required receipts or other required documentary evidence on account of such Excluded Taxes,  the  Borrower  shall  indemnify  the  Administrative  Agent  and  each  Lender  for  any  incremental  Taxes that may become payable by the Administrative Agent or such Lender as a result of such  failure.               (f)   Status of Lenders.                 (i)   Any  Lender  that  is  entitled  to  an  exemption  from  or  reduction  of        withholding  Tax  with  respect  to  payments  under  this  Agreement  or  any  other  Loan        Documents  shall  deliver  to  the  Borrower  and  the  Administrative  Agent,  at  the  time  or        times  prescribed  by  applicable  law  or  reasonably  requested  by  the  Borrower  or  the        Administrative Agent, such properly completed and executed documentation prescribed        by applicable law or reasonably requested by the Borrower or the Administrative Agent        as  will  permit  such  payments  to  be  made  without  withholding  or  at  a  reduced  rate  of        withholding.  In addition, any Lender, if requested by the Borrower or the Administrative        Agent, shall deliver such other documentation prescribed by applicable law or reasonably        requested by the Borrower or the Administrative Agent as will enable the Borrower or the        Administrative  Agent  to  determine  whether  or  not  such  Lender  is  subject  to  backup        withholding  or  information  reporting  requirements.   Notwithstanding  anything  to  the                                        57   25272637.12.BUSINESS 

 

      contrary  in  the  preceding  two  sentences,  the  completion,  execution  and  submission  of        such documentation (other than such documentation set forth in Section 2.15(f)(ii)(A) or        (B)  or  Section  2.15(g)  below)  shall  not  be  required  if  in  the  Lender’s  reasonable        judgment  such  completion,  execution  or  submission  would  subject such  Lender to  any        material  unreimbursed  cost  or  expense  or  would  materially  prejudice  the  legal  or        commercial position of such Lender.                (ii)  Without limiting the generality of the foregoing, if the Borrower is a U.S.        Person,                            (A)   any  Lender  that  is  a  U.S.  Person  shall  deliver  to  the                    Borrower and the Administrative Agent on or prior to the date on which                    such Lender becomes a  Lender under this Agreement (and from time to                    time  thereafter  upon  the  reasonable  request  of  the  Borrower  or  the                    Administrative  Agent),  executed  originals  of  IRS  Form  W-9  certifying                    that such Lender is exempt from U.S. federal backup withholding tax;                           (B)   each Foreign Lender shall deliver to the Borrower and the                    Administrative Agent (in such number of copies as shall be requested by                    the  recipient) on  or  prior  to  the  date  on  which  such  Foreign  Lender                    becomes a Lender under this Agreement (and from time to time thereafter                    upon the reasonable request of the Borrower or the Administrative Agent,                    but, in any event, only if such Foreign Lender is legally entitled to do so)                    whichever of the following is applicable:                           (1) in  the  case  of  a  Foreign  Lender  claiming  the  benefits  of  an                             income  tax  treaty  to  which  the  United  States  is  a  party  duly                             completed  executed  originals  of  Internal  Revenue  Service                             Form W-8BEN or Internal Revenue Service Form W-8BEN-E,                             as applicable, or any successor form establishing an exemption                             from,  or  reduction  of,  U.S.  federal  withholding  Tax  (x)  with                             respect  to  payments  of  interest  under  any  Loan  Document,                             pursuant to the “interest” article of such tax treaty and (y) with                             respect  to  any  other  applicable  payments  under  any  Loan                             Document, pursuant to the “business profits” or “other income”                             article of such tax treaty,                           (2) duly completed executed originals of Internal Revenue Service                             Form W-8ECI or any successor form certifying that the income                             receivable pursuant to this Agreement is effectively connected                             with the conduct of a trade or business in the United States,                           (3) in  the  case  of  a  Foreign  Lender  claiming  the  benefits  of  the                             exemption  for  portfolio  interest  under  Section 881(c)  of  the                             Code, (x) a certificate, signed under penalties of perjury, to the                             effect that such  Foreign Lender is not (I) a  “bank” within the                             meaning  of  Section 881(c)(3)(A) of  the  Code,  (II) a  “10                                        58   25272637.12.BUSINESS 

 

                           percent  shareholder”  of  the  Borrower  within  the  meaning  of                             Section 881(c)(3)(B) of the Code, or (III) a “controlled foreign                             corporation” described in Section 881(c)(3)(C) of the Code and                             (y) duly  completed  executed  originals  of  Internal  Revenue                             Service Form W-8BEN or Internal Revenue Service Form W-                            8BEN-E, as applicable (or any successor form), certifying that                             the Foreign Lender is not a U.S. Person, or                           (4) any other form  as prescribed by applicable law as a basis for                             claiming  exemption  from  or  a  reduction  in  United  States                             federal  withholding  tax  duly  completed  together  with  such                             supplementary  documentation  as  may  be  prescribed  by                             applicable  law  to  permit  the  Borrower  to  determine  the                             withholding or deduction required to be made, including, to the                             extent  a  Foreign  Lender  is  not  the  beneficial  owner,  duly                             completed  executed  originals  of  Internal  Revenue  Service                             Form  W-8IMY  accompanied  by  Internal  Revenue  Service                             Form  W-8ECI,  Internal  Revenue  Service  Form  W-8BEN  or                             Internal  Revenue  Service  Form  W-8BEN-E,  as  applicable,  a                             certificate  substantially  similar  to  the  certificate  described  in                             Section  2.15(f)(ii)(B)(3)(x)  above,  Internal  Revenue  Service                             Form  W-9  and/or  other  certification  documents  from  each                             beneficial owner, as applicable.                           (C)   any Foreign Lender shall, to the extent it is legally entitled                    to do so, deliver to the Borrower and the Administrative Agent (in such                    number of copies as shall be requested by the recipient) on or prior to the                    date  on  which  such  Foreign  Lender  becomes  a  Lender  under  this                    Agreement (and from time to time thereafter upon the reasonable request                    of the Borrower or the Administrative Agent), executed originals of  any                    other form prescribed by applicable law as a basis for claiming exemption                    from  or  a  reduction  in  U.S.  federal  withholding  Tax,  duly  completed,                    together with such supplementary documentation as may be prescribed by                    applicable  law  to  permit  the  Borrower  or  the  Administrative  Agent  to                    determine the withholding or deduction required to be made.                (g)   If a payment made to a Lender under this Agreement would be subject to  U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the  applicable reporting requirements of FATCA (including those contained in Section 1471(b) or  1472(b) of the Code, as applicable), such Lender shall deliver to the Administrative Agent and  the  Borrower  such  documentation  prescribed  by  applicable  law  (including  as  prescribed  by  Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested  by the Administrative Agent or the Borrower, at the time or times prescribed by law and at such  time  or  times  reasonably  requested  by  the  Administrative  Agent  or  the  Borrower,  as  may  be  necessary for the Administrative Agent and the Borrower to comply with their obligations under  FATCA and to determine that such Lender has complied with such Lender’s obligations under  FATCA or to determine the amount to deduct and withhold from any such payment. Solely for                                        59   25272637.12.BUSINESS 

 

purposes of this clause (g), “FATCA” shall include any amendments made to FATCA after the  date of this Agreement.   Each Lender agrees that if any form or certification it previously delivered under this Agreement  expires or becomes obsolete or inaccurate in any respect, it shall update such form or  certification or promptly notify the Borrower and the Administrative Agent in writing of its legal  inability to do so.               (h)   Treatment of Certain Refunds.  If the Administrative Agent, any Lender or  the Issuing Bank determines, in its sole discretion exercised in good faith, that it has received a  refund  of  any  Covered  Taxes  as  to  which  it  has  been  indemnified  by  the  Borrower  or  with  respect to which the Borrower has paid additional amounts pursuant to this Section 2.15, it shall  pay  to  the  Borrower  an  amount  equal  to  such  refund  (but  only  to  the  extent  of  indemnity  payments made, or additional amounts paid, by the Borrower under this Section with respect to  the Covered Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses of the  Administrative Agent, any Lender or the Issuing Bank, as the case may be, and without interest  (other  than  any  interest  paid  by  the  relevant  Governmental  Authority  with  respect  to  such  refund), provided that the Borrower, upon the request of the Administrative Agent, any Lender  or  the  Issuing  Bank,  agrees  to  repay  the  amount  paid  over  to  the  Borrower  pursuant  to  this  paragraph (h)  (plus  any  penalties,  interest  or  other  charges  imposed  by  the  relevant  Governmental  Authority)  to  the  Administrative Agent,  any  Lender  or  the  Issuing  Bank  in  the  event the Administrative Agent, any Lender or the Issuing Bank is required to repay such refund  to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (h),  in no event will the Administrative Agent, any Lender or the Issuing Bank be required to pay any  amount to  the Borrower pursuant to  this  paragraph (h)  the  payment  of  which  would  place the  Administrative  Agent,  such  Lender  or  the  Issuing  Bank  in  a  less  favorable  net  position  after- Taxes than the Administrative Agent, such Lender or the Issuing Bank would have been in if the  Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or  otherwise imposed and the indemnification payments or additional amounts with respect to such  Tax had never been paid.  This paragraph (h) shall not be construed to require the Administrative  Agent, any Lender or the Issuing Bank to make available its Tax returns or its books or records  (or any other information relating to its Taxes that it deems confidential) to the Borrower or any  other Person.               (i)   Defined Terms.   For purposes  of this  Section  2.15, the term  “applicable  law” includes FATCA.               SECTION 2.16.  Payments Generally; Pro Rata Treatment: Sharing of Set-offs.               (a)   Payments  by  the  Borrower.   The  Borrower  shall  make  each  payment  required to be made by it hereunder (whether of principal, interest, fees, or under Sections 2.13,  2.14 or 2.15, or otherwise) or under any other Loan Document prior to 12:00 p.m., New York  City time, on the date when due, in immediately available funds, without set-off, deduction or  counterclaim.  Any amounts received after such time on any date may, in the discretion of the  Administrative Agent, be deemed to have been received on the next succeeding Business Day for  purposes of calculating interest thereon.  All such payments shall be made to the Administrative  Agent  at  the  Administrative  Agent’s  Account,  except  as  otherwise  expressly  provided  in  the                                        60   25272637.12.BUSINESS 

 

relevant  Loan  Document  and  except  payments  to  be  made  directly  to  the  Issuing  Bank  as  expressly  provided  herein  and  pursuant  to  Sections 2.13,  2.14,  2.15  and  9.03,  which  shall  be  made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such  payments received by it for account of any other Person to the appropriate recipient promptly  following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business  Day, the date for payment shall be extended to the next succeeding Business Day and, in the case  of  any  payment  accruing  interest,  interest  thereon  shall  be  payable  for  the  period  of  such  extension.               All amounts owing under this Agreement (including commitment fees, payments  required under Sections 2.13 and 2.14 or under any other Loan Document (except to the extent  otherwise provided therein)) are payable in Dollars.                 (b)   Application of Insufficient Payments.  If at any time insufficient funds are  received  by  and  available  to  the  Administrative  Agent  to  pay  fully  all  amounts  of  principal,  unreimbursed  LC  Disbursements,  interest  and  fees  then  due  hereunder,  such  funds  shall  be  applied (i) first, to pay interest and fees then due hereunder, ratably among the parties entitled  thereto  in  accordance  with  the  amounts  of  interest  and  fees  then  due  to  such  parties,  and  (ii) second,  to  pay  principal  and  unreimbursed  LC  Disbursements  then  due  hereunder,  ratably  among the parties entitled thereto in accordance with the amounts of principal and unreimbursed  LC Disbursements then due to such parties.               (c)   Pro  Rata  Treatment.   Except  to  the  extent  otherwise  provided  herein:  (i) each  Borrowing  shall  be  made  from  the  Lenders,  each  payment  of  commitment  fee  under  Section 2.10 shall be made for account of the Lenders, and each termination or reduction of the  amount of the Commitments under Section 2.07, Section 2.09 or otherwise shall be applied to the  respective Commitments of the Lenders, pro  rata according to the amounts of their respective  Commitments; (ii) each Borrowing shall be allocated pro rata among the Lenders according to  the  amounts  of  their  respective  Commitments  (in  the  case  of  the  making  of  Loans) or  their  respective  Loans  that  are  to  be  included  in  such  Borrowing  (in  the  case  of  conversions  and  continuations of Loans); (iii) each payment or prepayment of principal of Loans by the Borrower  shall  be  made  for  account  of  the  Lenders  pro  rata  in  accordance  with  the  respective  unpaid  principal amounts of the Loans held by them; and (iv) each payment of interest on Loans by the  Borrower shall be made for account of the Lenders pro rata in accordance with the amounts of  interest on such Loans then due and payable to the respective Lenders.               (d)   Sharing of Payments by Lenders.  If any Lender shall, by exercising any  right of set-off or counterclaim or otherwise, obtain payment in respect  of any principal of or  interest  on  any  of  its  Loans,  or  participations  in  LC  Disbursements,  resulting  in  such  Lender  receiving payment of a greater proportion of the aggregate amount of its Loans and participations  in LC Disbursements, and accrued interest thereon then due than the proportion received by any  other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face  value) participations in the Loans and participations in LC Disbursements of other Lenders to the  extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in  accordance  with  the  aggregate  amount  of  principal  of  and  accrued  interest  on  their  respective  Loans and participations  in  LC  Disbursements;  provided that  (i) if  any  such participations  are  purchased  and  all  or  any  portion  of  the  payment  giving  rise  thereto  is  recovered,  such                                        61   25272637.12.BUSINESS 

 

participations shall be rescinded and the purchase price restored to the extent of such recovery,  without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any  payment  made  by  the  Borrower  pursuant  to  and  in  accordance  with  the  express  terms  of  this  Agreement or any payment obtained by a Lender as consideration for the assignment of or sale  of a participation in any of its Loans or participations in LC Disbursements to any assignee or  participant,  other  than to  the  Borrower or any  Subsidiary or Affiliate  thereof (as  to which the  provisions of this paragraph shall apply).  The Borrower consents to the foregoing and agrees, to  the extent it may effectively do so under applicable law, that any Lender acquiring a participation  pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and  counterclaim with respect to such participation as fully as if such Lender were a direct creditor of  the Borrower in the amount of such participation.               (e)   Presumptions  of  Payment.   Unless  the  Administrative  Agent  shall  have  received  notice  from  the  Borrower  prior  to  the  date  on  which  any  payment  is  due  to  the  Administrative  Agent  for  account  of  the  Lenders  or  the  Issuing  Bank  hereunder  that  the  Borrower will not make such payment, the Administrative Agent may assume that the Borrower  has  made  such  payment on  such  date in  accordance  herewith and may, in  reliance upon  such  assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due.   In such event, if the Borrower has not in fact made such payment, then each of the Lenders and  the  Issuing  Bank,  as  the  case  may  be,  severally  agrees  to  repay  to  the  Administrative  Agent  forthwith on demand the amount so distributed to such Lender or the Issuing Bank with interest  thereon,  for  each  day  from  and  including  the  date  such  amount  is  distributed  to  it  to  but  excluding the date of payment to the Administrative Agent at the Federal Funds Effective Rate.               (f)   Certain Deductions by the Administrative Agent.  If any Lender shall fail  to  make  any  payment  required  to  be  made  by  it  pursuant  to  Section 2.05(a) or  (b), 2.16(e)  or  9.03(c),  then  the  Administrative  Agent  may,  in  its  discretion  (notwithstanding  any  contrary  provision  hereof),  apply  any  amounts  thereafter  received  by  the  Administrative  Agent  for  account of such Lender to satisfy such Lender’s obligations under such Sections until all such  unsatisfied obligations are fully paid.               SECTION 2.17.  Defaulting Lenders.               Notwithstanding any provision of this Agreement to the contrary, if any Lender  becomes  a  Defaulting  Lender,  then  the  following  provisions  shall  apply  for  so  long  as  such  Lender is a Defaulting Lender:               (a)   commitment fees pursuant to Section 2.10(a) shall cease to accrue on the  unfunded  portion of the Commitment of such  Defaulting  Lender to  the  extent,  and  during the  period, such Lender is a Defaulting Lender;               (b)   the  Commitment  and  Revolving  Credit  Exposure  of  such  Defaulting  Lender shall not be included in determining whether all Lenders, two-thirds of the Lenders or the  Required  Lenders  have  taken  or  may  take  any  action  hereunder  or  under  any  other  Loan  Document (including any consent to any amendment or waiver pursuant to Section 9.02, except  for  any  amendment  or  waiver  described  in  Section  9.02(b)(i),  (ii)  or  (iii));  provided  that  any  waiver,  amendment  or  modification  requiring  the  consent  of  all  Lenders,  two-thirds  of  the                                        62   25272637.12.BUSINESS 

 

Lenders  or  each  affected  Lender  which  affects  such  Defaulting  Lender  differently  than  other  Lenders or affected Lenders (as applicable) shall require the consent of such Defaulting Lender.               (c)   if  any  LC  Exposure  exists  at  the  time  a  Lender  becomes  a  Defaulting  Lender then:               (i)   all or any part of such LC Exposure shall be reallocated among the non-       Defaulting Lenders in accordance with their respective Applicable Percentages but only        to  the  extent  (x)  the  sum  of  all  non-Defaulting  Lenders’  Credit  Exposures  plus  such        Defaulting  Lender’s  LC  Exposure  does  not  exceed  the  total  of  all  non-Defaulting        Lenders’  Commitments,  (y)  no  non-Defaulting  Lender’s  Credit  Exposure  will  exceed        such Lender’s Commitment, and (z) the conditions set forth in Section 4.02 are satisfied        at such time (and unless the Borrower has notified the Administrative Agent at such time,        the Borrower shall be deemed to have represented and warranted that such conditions are        satisfied at such time);               (ii)  if  the  reallocation  described  in  clause  (i)  above  cannot,  or  can  only        partially,  be  effected,  the  Borrower  shall,  without  prejudice  to  any  right  or  remedy        available to it hereunder or under law, within three Business Days following notice by the        Administrative Agent, Cash Collateralize such Defaulting  Lender’s  LC Exposure (after        giving effect to any partial reallocation pursuant to clause (i) above) in accordance with        the  procedures  set  forth  in  Section  2.04(k)  for  so  long  as  such  LC  Exposure  is        outstanding;               (iii) if  the  Borrower  Cash  Collateralizes  any  portion  of  such  Defaulting        Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to        pay any fees to such Defaulting Lender pursuant to Section 2.10(b) with respect to such        Defaulting  Lender’s  LC  Exposure  during  the  period  such  Defaulting  Lender’s  LC        Exposure is Cash Collateralized;               (iv)  if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant        to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.10(a) and        Section  2.10(b)  shall  be  adjusted  in  accordance  with  such  non-Defaulting  Lenders’        Applicable Percentages;               (v)   if any Defaulting Lender’s LC Exposure is neither Cash Collateralized nor        reallocated  pursuant  to  this  Section  2.17(c),  then,  without  prejudice  to  any  rights  or        remedies  of  the  Issuing  Bank  or  any  Lender  hereunder,  all  facility  fees  that  otherwise        would have been payable to such Defaulting Lender (solely with respect to the portion of        such Defaulting Lender’s Commitment that was utilized by such LC Exposure) and letter        of credit fees payable under Section 2.10(b) with respect to such Defaulting Lender’s LC        Exposure  shall  be  payable  to  the  Issuing  Bank  until  such  LC  Exposure  is  Cash        Collateralized and/or reallocated; and               (vi)  subject to Section 9.16, no reallocation hereunder shall constitute a waiver        or release of any claim of any party hereunder against a Defaulting Lender arising from        that Lender having become a Defaulting Lender, including any claim of a non-Defaulting                                         63   25272637.12.BUSINESS 

 

      Lender as  a  result  of  such  non-Defaulting  Lender’s  increased  exposure  following  such        reallocation               (d)   so long as any Lender is a Defaulting Lender, the Issuing Bank shall not  be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related  exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash  collateral will be provided by the Borrower in accordance with Section 2.17(c), and participating  interests in any such newly issued or increased Letter of Credit shall be allocated among non- Defaulting Lenders in a manner consistent with Section 2.17(c)(i) (and Defaulting Lenders shall  not participate therein).               In  the  event  that  the  Administrative  Agent,  the  Borrower  and  the  Issuing  Bank  each agrees in writing that a Defaulting Lender has adequately remedied all matters that caused  such Lender to be a Defaulting Lender, then, on the date of such agreement, such Lender shall no  longer  be  deemed  a  Defaulting  Lender,  the  Borrower  shall  no  longer  be  required  to  Cash  Collateralize any portion of such Lender’s LC Exposure Cash Collateralized pursuant to Section  2.17(c)(ii) above, the LC Exposure of the Lenders shall be readjusted to reflect the inclusion of  such Lender’s Commitment and such Lender shall purchase at par the portion of the Loans of the  other Lenders as the Administrative Agent shall determine may be necessary in order for such  Lender to hold such Loans in accordance with its Applicable Percentage.               SECTION 2.18.  Mitigation Obligations; Replacement of Lenders.               (a)   Designation  of  a  Different  Lending  Office.   If  any  Lender  exercises  its  rights under Section 2.12(b) or requests compensation under Section 2.13, or if the Borrower is  required to  pay  any  Covered Taxes  or additional  amount  to  any  Lender  or any Governmental  Authority  for  account  of  any  Lender  pursuant  to  Section 2.15,  then  such  Lender  shall  use  reasonable  efforts  (subject  to  overall  policy  considerations  of  such  Lender)  to  designate  a  different lending  office  for funding  or  booking  its  Loans  hereunder  or to  assign its  rights  and  obligations  hereunder  to  another  of  its  offices,  branches  or  affiliates,  if  in  the  sole  reasonable  judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts  payable  pursuant  to  Section 2.13  or  2.15,  as  the  case  may  be,  in  the  future,  or  eliminate  the  circumstance giving rise to such Lender exercising its rights under Section 2.12(b) and (ii) would  not subject such Lender to any cost or expense not required to be reimbursed by the Borrower  and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay  all  reasonable  costs  and  expenses  incurred  by  any  Lender  in  connection  with  any  such  designation or assignment.               (b)   Replacement  of  Lenders.   If  any  Lender  exercises  its  rights  under  Section 2.12(b) or requests compensation under Section 2.13, or if the Borrower is required to  pay any Covered Taxes or additional amount to any Lender or any Governmental Authority for  account of any Lender pursuant to Section 2.15 and, in each case, such Lender has declined or is  unable  to  designate  a  different  lending  office  in  accordance  with  Section  2.18(a),  or  if  any  Lender becomes a Defaulting Lender, or if any Lender becomes a Non-Consenting Lender, then  the  Borrower  may,  at  its  sole  expense  and  effort,  upon  notice  to  such  Lender  and  the  Administrative  Agent,  require  such  Lender  to  assign  and  delegate,  without  recourse  (in  accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights                                        64   25272637.12.BUSINESS 

 

and obligations under this Agreement and the other Loan Documents to an assignee that shall  assume  such  obligations  (which  assignee  may  be  another  Lender,  if  a  Lender  accepts  such  assignment); provided that (i) the Borrower shall have received the prior written consent of the  Administrative Agent and the Issuing Bank, which consent shall not be unreasonably withheld,  conditioned or delayed, (ii) such Lender shall have received payment of an amount equal to the  outstanding  principal  of  its  Loans  and  participations  in  LC  Disbursements,  accrued  interest  thereon, accrued fees  and all other amounts payable to it hereunder, from the assignee (to the  extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of  all  other  amounts) and  (iii) in  the  case  of  any  such  assignment  resulting  from  a  claim  for  compensation  under  Section 2.13  or  payments  required  to  be  made  pursuant  to  Section 2.15,  such assignment will result in a reduction in such compensation or payments.  A Lender shall not  be required to make any such assignment and delegation if prior thereto, as a result of a waiver  by  such  Lender  or  otherwise,  the  circumstances  entitling  the  Borrower  to  require  such  assignment and delegation cease to apply.               (c)   Defaulting  Lenders.   If  any  Lender  shall  fail  to  make  any  payment  required to be made by it pursuant to Section 2.04(e), 2.05 or 9.03(c), then the Administrative  Agent  may,  in  its  discretion  and  notwithstanding  any  contrary  provision  hereof,  (i)  apply  any  amounts thereafter received by the Administrative Agent or the Issuing Bank for the account of  such  Lender  for  the  benefit  of  the  Administrative  Agent  or  the  Issuing  Bank  to  satisfy  such  Lender’s  obligations  under  such  Sections  until  all  such  unsatisfied  obligations  are  fully  paid,  and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application  to,  any  future  funding obligations  of such  Lender under  such  Sections,  in the case  of  each  of  clauses  (i)  and  (ii)  above,  in  any  order  as  determined  by  the  Administrative  Agent  in  its  discretion.                                     ARTICLE III                       REPRESENTATIONS AND WARRANTIES               The Borrower represents and warrants to the Lenders that:               SECTION 3.01.  Organization; Powers.  Each of the Borrower and its  Subsidiaries,  as  applicable,  is  duly  organized  or  incorporated,  validly  existing  and  in  good  standing under the laws of the jurisdiction of its organization or incorporation, has all requisite  power and authority to carry on its business as now conducted and is qualified to do business in,  and  is  in  good  standing  in,  every  jurisdiction  where  the  failure  to  do  so  could  reasonably  be  expected to result in a Material Adverse Effect.  There is no existing default under any charter,  by-laws or other organizational documents of Borrower or its Subsidiaries or any event which,  with  the  giving  of  notice  or  passage  of  time  or  both,  would  constitute  a  default  by  any  party  thereunder.               SECTION 3.02.  Authorization; Enforceability.  The Transactions are within the  Borrower’s corporate powers and have been duly authorized by all necessary corporate and, if  required, by all necessary stockholder action and the Board of Directors of each of the Borrower                                        65   25272637.12.BUSINESS 

 

and  its  Subsidiaries  have  approved  the  transactions  contemplated  in  this  Agreement.   This  Agreement has been duly executed and delivered by the Borrower and each of the other Loan  Documents to which any Obligor is a party have been or will be duly executed and delivered by  each such Obligor.  This Agreement constitutes, and each of the other Loan Documents  to which  any Obligor is a party, when executed and delivered, will constitute a legal, valid and binding  obligation of the applicable Obligor or Obligors, enforceable in accordance with its terms, except  as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium  or similar laws of general applicability affecting the enforcement of creditors’ rights and (b) the  application  of  general  principles  of  equity  (regardless  of  whether  such  enforceability  is  considered in a proceeding in equity or at law).               SECTION 3.03.  Governmental Approvals; No Conflicts.  The Transactions  (a) do not require any consent or approval of registration or filing with, or any other action by,  any Governmental Authority, except for (i) such as have been or will be obtained or made and  are in full force and effect and (ii) filings and recordings in respect of the Liens created pursuant  to the Security Documents, (b) will not violate any applicable law or regulation or the charter,  by-laws  or  other  organizational  documents  of  the  Borrower  or  any  of  its  Subsidiaries  or  any  order  of  any  Governmental  Authority (including  the  Investment  Company  Act  and  the  rules,  regulations and orders issued by the SEC thereunder), (c) will not violate or result in a default in  any  material  respect  under  any  indenture,  agreement  or  other  instrument  binding  upon  the  Borrower or  any of its  Subsidiaries or  assets, or  give rise to a right thereunder to require any  payment to  be  made by  any such  Person,  and  (d) except for the  Liens  created  pursuant  to the  Security Documents, will not result in the creation or imposition of any Lien on any asset of the  Borrower or any of its Subsidiaries.               SECTION 3.04.  Financial Condition; No Material Adverse Effect.               (a)   Financial Statements.                (i)   The  financial  statements  delivered  to  the  Administrative  Agent  and  the        Lenders  by  the  Borrower  pursuant  to  Section  4.01(c)  present  fairly,  in  all  material        respects, the consolidated financial position, assets and liabilities, results of operations,        changes in net assets, cash flows and investments of the Borrower and its consolidated        Subsidiaries as of the end of and for the applicable period in accordance with GAAP.  On        the Restatement Effective Date, none of the Borrower or any of its Subsidiaries has any        material contingent liabilities, material liabilities for taxes, material unusual forward or        material  long-term  commitments  or  material  unrealized  or  anticipated  losses  from  any        unfavorable commitments not reflected in the financial statements referred to above.                 (ii)  The  financial  statements  delivered  to  the  Administrative  Agent  and  the        Lenders  by  the  Borrower  pursuant  to  Sections  5.01(a)  and  (b)  present  fairly,  in  all        material  respects,  the  consolidated  financial  position,  assets  and  liabilities,  results  of        operations,  changes  in  net  assets,  cash  flows  and  investments  of  the  Borrower  and  its        consolidated  Subsidiaries  as  of  the  end  of  and  for  the  applicable  period  in  accordance        with  GAAP,  subject,  in  the  case  of  unaudited  financial  statements,  to  year-end  audit        adjustments  and  the  absence  of  footnotes.   None  of  the  Borrower  or  any  of  its        Subsidiaries has any material contingent liabilities, material liabilities for taxes, material                                        66   25272637.12.BUSINESS 

 

      unusual forward or material long-term commitments or material unrealized or anticipated        losses from any unfavorable commitments not reflected in such financial statements.                 (b)   No Material  Adverse Effect.   Since  March 31, 2016,  there has  not  been  any event, development or circumstance that has had or could reasonably be expected to have a  Material Adverse Effect.               SECTION 3.05.  Litigation.                 (a)   There are no actions, suits, investigations or proceedings by or before any  arbitrator or Governmental Authority now pending against or, to the knowledge of the Borrower,  threatened against or affecting the Borrower or any of its Subsidiaries (a) as to which there is a  reasonable  possibility  of  an  adverse  determination  and  that,  if  adversely  determined,  could  reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or  (b) that involve this Agreement or the Transactions.               (b)   The Class Action Judgment has been satisfied and paid in full.               SECTION 3.06.  Compliance with Laws and Agreements.  Each of the Borrower  and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental  Authority  applicable  to  it or its  property and  all indentures,  agreements  and  other  instruments  binding upon it or its property, except where the failure to do so, individually or in the aggregate,  could not reasonably be expected to result in a Material Adverse Effect.  Neither the Borrower  nor any of its Subsidiaries is subject to any contract or other arrangement, the performance of  which  by  the  Borrower  could  reasonably  be  expected  to  result  in  a  Material  Adverse  Effect.   Neither  Borrower  nor  its  Subsidiaries  is  in  default  in  any  manner  under  any  provision  of  any  agreement or instrument to which it is a party or by which it or any of its property is or may be  bound,  and  no  condition  exists  which,  with  the  giving  of  notice  or  the  lapse  of  time  or  both,  would constitute such a default, in each case where such default could reasonably be expected to  result in a Material Adverse Effect. Each of the Borrower and its Subsidiaries is in compliance  with its respective Organization Documents in all material respects.               SECTION 3.07.  Taxes.   Each of  the Borrower  and its  Subsidiaries  has  timely  filed or has caused to be timely filed all U.S. federal, state and material local Tax returns that are  required to be filed by it and all other material Tax returns that are required to be filed by it and  has paid all Taxes for which it is directly or indirectly liable and any assessments made against it  or  any  of  its  property  and  all  other  Taxes,  fees  or  other  charges  imposed  on  it  or  any  of  its  property by any Governmental Authority, except such Taxes, fees or other charges that are being  contested  in  good  faith  by  appropriate  proceedings  and  with  respect  to  which  reserves  in  conformity with GAAP have been provided on the books of the Borrower or its Subsidiaries, as  the case may be.  The charges, accruals and reserves on the books of the Borrower and any of its  Subsidiaries in respect of Taxes and other governmental charges are adequate in accordance with  GAAP.  Neither the Borrower nor any of its Subsidiaries has given or been requested to give a  waiver of the statute of limitations relating to the payment of any federal, state, local and foreign  Taxes or other impositions, and no Tax lien has been filed with respect to the Borrower or any of  its  Subsidiaries.   There  is  no  proposed  Tax  assessment  against  the  Borrower  or  any  of  its  Subsidiaries, and there is no basis for such assessment.                                         67   25272637.12.BUSINESS 

 

            SECTION 3.08.  ERISA.                 (a)   Each Plan is in compliance in form and operation with its terms and with  ERISA and the Code (including without limitation the Code provisions compliance with which is  necessary for any intended favorable tax treatment) and all other applicable laws and regulations,  except as could not reasonably be expected to result in a Material Adverse Effect.  Each Plan  (and each related trust, if any) that is intended to be qualified under Section 401(a) of the Code  has  received  a  favorable  determination  letter  from  the  IRS  to  the  effect  that  it  meets  the  requirements of Section 401(a) and 501(a) of the Code or is comprised of a master and prototype  plan that has received a favorable opinion letter from the IRS, and nothing has occurred since the  date of such determination that would adversely affect such determination (or, in the case of a  Plan  with  no  determination,  nothing  has  occurred  that  would  materially  adversely  affect  the  issuance  of  a  favorable  determination  letter  or  otherwise  materially  adversely  affect  such  qualification).  No ERISA Event has occurred or is reasonably expected to occur that, alone or  together with any other ERISA Events that have occurred or are reasonably expected to occur,  could  reasonably  be  expected  to  result  in  liability  of  the  Borrower  and  its  Subsidiaries  in  an  aggregate amount exceeding $5,000,000.               (b)   (x) With respect to Pension Plans maintained by the Borrower, there exists  no  Unfunded  Pension  Liability  in  the  aggregate  (taking  into  account  only  such  Pension  Plans  with  positive  Unfunded  Pension  Liability)  in  excess  of  $2,500,000,  and  (y) with  respect  to  Pension  Plans  maintained  by  the  Borrower  or  its  ERISA  Affiliates,  there  exists  no  Unfunded  Pension  Liability  in  an  aggregate  amount  (taking  into  account  only  such  Pension  Plans  with  positive Unfunded Pension Liability) that would reasonably be expected to result in a Material  Adverse Effect  (and in  no  event  does  the Borrower have  actual knowledge of such Unfunded  Pension Liability in excess of $2,500,000).                 (c)   Schedule 3.08 discloses  all Unfunded Pension  Liabilities with respect to  Pension Plans maintained by the Borrower or any of its ERISA Affiliates.               (d)   (x) If the Borrower were to withdraw from all Multiemployer Plans in a  complete  withdrawal  as  of  the  date  this  assurance  is  given  or  deemed  given,  the  aggregate  Withdrawal Liability that would be incurred would not be in excess of $2,500,000, and (y) if the  Borrower and each of its ERISA Affiliates were to withdraw from all Multiemployer Plans in a  complete  withdrawal  as  of  the  date  this  assurance  is  given  or  deemed  given,  the  aggregate  Withdrawal  Liability  that  would  be  incurred  would  not  reasonably  be  expected  to  have  a  Material  Adverse  Effect  (and  in  no  event  does  Borrower  have  actual  knowledge  of  such  aggregate potential Withdrawal Liability that, if incurred, would reasonably be expected to result  in liability to the Borrower (including, without limitation, liability imposed thereon by virtue of  ERISA or the Code) in excess of $2,500,000).               (e)   There are no actions, suits or claims pending against or involving a Plan  (other than routine claims for benefits) or, to the knowledge of the Borrower or any of its ERISA  Affiliates, threatened, that would reasonably be expected to be asserted successfully against any  Plan  and,  if  so  asserted  successfully,  would  reasonably  be  expected  either  singly  or  in  the  aggregate to have a Material Adverse Effect.                                         68   25272637.12.BUSINESS 

 

            (f)   The  Borrower  and  each  of  its  ERISA  Affiliates  have  made  all  material  contributions to or under each Pension Plan and Multiemployer Plan required by law within the  applicable time limits prescribed thereby, the terms of such Pension Plan or Multiemployer Plan,  respectively,  or  any  contract  or  agreement  requiring  contributions  to  a  Pension  Plan  or  Multiemployer Plan save where any failure to comply, individually or in the aggregate, would  not reasonably be expected to have a Material Adverse Effect.               (g)   The  Borrower  and  any  ERISA  Affiliate  have  not  ceased  operations  at  a  facility so as to become subject to the provisions of Section 4068(a) of ERISA, withdrawn as a  substantial  employer  to  as  to  become  subject  to  the  provisions  of  Section  4063  of  ERISA  or  ceased making contributions to any Pension Plan subject to Section 4064(a) of ERISA to which  it  made  contributions.   None of the  Borrower or any of its  ERISA  Affiliates has  any liability  under Section 4069 or Section 4212(c) of ERISA.                SECTION 3.09.  Disclosure.                 (a)   All  written  information  (which, for  the  avoidance  of  doubt,  excludes all  financial  projections,  pro  forma  financial  information,  other  forward-looking  information,  information relating to third parties and information of a general economic or general industry  nature)  which  has  been  made  available  to  the  Administrative  Agent  or  any  Lender  by  or  on  behalf of the Borrower or any of its Subsidiaries or their respective representatives, in connection  with the transactions contemplated by this Agreement or delivered under any Loan Document,  taken as a whole, is complete, true and correct in all material respects as of the date furnished  and  does  not  contain  any  untrue  statement  of  a  material  fact  or  omit  to  state  a  material  fact  necessary  in  order  to  make  the  statements  contained  therein  at  the  time  made  and  taken  as  a  whole not misleading in light of the circumstances under which such statements were made; and               (b)   All  financial  projections,  pro  forma  financial  information  and  other  forward-looking  information  which  has  been  delivered  to  the  Administrative  Agent  or  any  Lender by the Borrower or on behalf of the Borrower or its Subsidiaries, in connection with the  transactions contemplated by this Agreement or delivered under any Loan Document, are based  upon good faith estimates and assumptions believed by the Borrower to be reasonable at the time  made, it being recognized that such projections, financial information and other forward-looking  information as they relate to future  events  are not to be viewed as fact  and to the extent they  relate to future events are subject to significant uncertainty and contingencies (many of which are  beyond the control of the Borrower) and that actual results during the period or periods covered  by  such  projections,  financial  information  and  other  forward-looking  information  (a)  may  materially  differ  from  the  projected  results  set  forth  therein  and  (b)  are  subject  to  significant  uncertainties and contingencies, many of which are beyond the control of the Borrower, and that  no assurance can be given that the projections will be realized.                 SECTION 3.10.  Investment Company Act; Margin Regulations.               (a)   Status  as  Business  Development  Company.   The  Borrower  is  an  “investment company”  that  has  elected  to  be  regulated  as  a  “business  development company”  within the meaning of the Investment Company Act and qualifies as a RIC and has qualified as a  RIC at all times since the Borrower’s taxable year ended December 31, 1988.                                        69   25272637.12.BUSINESS 

 

            (b)   Compliance  with  Investment  Company  Act.   The  business  and  other  activities of the Borrower and its Subsidiaries (including, without limitation, entering into this  Agreement  and  the  borrowings  made  hereunder)  do  not  result  in  a  violation  or  breach  of  the  provisions of the Investment Company Act or any rules, regulations or orders issued by the SEC  thereunder, except where such breaches or violations, individually or in the aggregate, could not  reasonably be expected to result in a Material Adverse Effect.               (c)   Investment  Policies.   The  Borrower  is  in  compliance  in  all  material  respects with the Investment Policies, as amended by Permitted Policy Amendments.               (d)   Use of Credit.  Neither the Borrower nor any of its Subsidiaries is engaged  principally,  or  as  one  of  its  important  activities,  in  the  business  of  extending  credit  for  the  purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no  part of the proceeds of any extension of credit hereunder will be used to buy or carry any Margin  Stock.  On  the  Original  Effective  Date,  neither  the  Borrower  nor  any  of  its  Subsidiaries  owned, and on the Restatement Effective Date neither the Borrower nor any of its Subsidiaries  owns, any Margin Stock.               SECTION 3.11.  Material Agreements and Liens.               (a)   Material Agreements.  Schedule 3.11(a) is a  complete and correct list of  each credit agreement, loan agreement, indenture, purchase agreement, guarantee, letter of credit  or other arrangement providing for or otherwise relating to any Indebtedness or any extension of  credit (or commitment for any extension of credit) to, or guarantee by, the Borrower or any of its  Subsidiaries outstanding on the Restatement Effective Date, and the aggregate principal or face  amount  outstanding  or  that  is,  or  may  become,  outstanding  under  each  such  arrangement  is  correctly described in Schedule 3.11(a).               (b)   Liens.   Schedule 3.11(b)  is  a  complete  and  correct  list  of  each  Lien  securing Indebtedness of any Person outstanding on the Restatement Effective Date covering any  property of the Borrower or any of its Subsidiaries, and the aggregate principal amount of such  Indebtedness secured (or that may be secured) by each such Lien and the property covered by  each such Lien as of the Restatement Effective Date is correctly described in Schedule 3.11(b).               SECTION 3.12.  Subsidiaries and Investments..                (a)   Subsidiaries. Set forth in Schedule 3.12(a) is a complete and correct list of  all of the Subsidiaries of the Borrower as of the Restatement Effective Date together with, for  each  such  Subsidiary,  (i) the  jurisdiction  of  organization  of  such  Subsidiary,  (ii) each  Person  holding  ownership  interests  in  such  Subsidiary  and  (iii)  the  percentage  of  ownership  of  such  Subsidiary represented by such ownership interests.  Except as disclosed in Schedule 3.12(a), as  of the Restatement Effective Date, (x) the Borrower owns, free and clear of Liens, and has the  unencumbered right to vote, all outstanding ownership interests in each Subsidiary shown to be  held by it in Schedule 3.12(a), and (y) all of the issued and outstanding capital stock of each such  Subsidiary  organized  as  a  corporation  is  validly  issued,  fully  paid  and  nonassessable  (to  the  extent such concepts are applicable).                                         70   25272637.12.BUSINESS 

 

            (b)   Investments.  Set forth in Schedule 3.12(b) is a complete and correct list of  all Investments (other than Investments of the types referred to in clauses (b), (c), (d), (e) and  (i) of  Section 6.04)  held  by  the  Borrower  or  any  of  its  Subsidiaries  in  any  Person  on  the  Restatement  Effective  Date  and,  for  each  such  Investment,  (i) the  identity  of  the  Person  or  Persons  holding  such  Investment,  (ii) the  nature  of  such  Investment,  (iii)  the  amount  of  such  Investment, (iv) the rate of interest charged for such Investment and (v) the value assigned to  such  Investment  by  the  Board  of  Directors  of  the  Borrower.   Except  as  disclosed  in  Schedule 3.12(b), as of the Restatement Effective Date each of the Borrower and its Subsidiaries  owns, free and clear of all Liens (other than Liens permitted pursuant to Section 6.02), all such  Investments.               SECTION 3.13.  Properties.               (a)   Title Generally.  Each of the Borrower and its Subsidiaries has good title  to, or valid leasehold interests in, all its real and personal property material to its business, except  for minor defects in title that do not interfere with its ability to conduct its business as currently  conducted or to utilize such properties for their intended purposes.               (b)   Intellectual Property.  Each of the Borrower and its Subsidiaries owns, or  is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property  material  to  its  business,  and  the  use  thereof  by  the  Borrower  and  its  Subsidiaries  does  not  infringe upon the rights of any other Person, except for any such infringements that, individually  or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.               SECTION 3.14.  Solvency.   On  the  Restatement  Effective  Date,  and  upon  the  incurrence of any  extension of credit hereunder, on any date on which this representation and  warranty  is  made,  (a)  the  Borrower  will  be  Solvent  on  an  unconsolidated  basis,  and  (b)  each  Obligor will be Solvent on a consolidated basis with the other Obligors.               SECTION 3.15.  No Default.  No Default or Event of Default has occurred and  is continuing under this Agreement.               SECTION 3.16.  Use of Proceeds.  The proceeds of the Loans shall be used for  the  general  corporate  purposes  of  the  Borrower  and  its  Subsidiaries  (other  than  SBIC  Subsidiaries except as expressly permitted under Section 6.03(e)) in the ordinary course of its  business, including making distributions not prohibited by this Agreement, making payments on  Indebtedness of the Obligors to the extent permitted under this Agreement and the acquisition  and  funding  (either  directly  or  through  one  or  more  wholly-owned  Subsidiary  Guarantors)  of  leveraged  loans,  mezzanine  loans,  high  yield  securities,  convertible  securities,  preferred stock,  common stock and other Portfolio Investments, but excluding, for clarity, Margin Stock.               SECTION 3.17.  Security Documents.  The Guarantee and Security Agreement  is effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, legal,  valid  and  enforceable  Liens  on,  and  security  interests  in,  the  Collateral  and,  when  (i)  all  appropriate filings or recordings are made in the appropriate offices as may be required under  applicable law and, as applicable, (ii) upon the taking of possession or control by the Collateral  Agent of the Collateral with respect to which a security interest may be perfected by possession                                         71   25272637.12.BUSINESS 

 

or  control  (which  possession  or  control  shall  be  given  to  the  Collateral  Agent  to  the  extent  possession  or  control  by  the  Collateral  Agent  is  required  by  the  Guarantee  and  Security  Agreement), the Liens created by the Guarantee and Security Agreement shall constitute fully  perfected  Liens  on,  and  security  interests  in,  all  right,  title  and  interest  of  the  grantors  in  the  Collateral (other than such Collateral in which a security interest cannot be perfected under the  UCC as in effect at the relevant time in the relevant jurisdiction), in each case subject to no Liens  other than Permitted Liens.               SECTION 3.18.  Compliance with Sanctions.  Neither the Borrower nor any of  its  Subsidiaries,  nor  any  executive  officer  or  director  thereof,  nor,  to  the  knowledge  of  the  Borrower, any Affiliate of the Borrower or any executive officer or director thereof (i) is subject  to,  or  subject  of,  sanctions  (collectively,  “Sanctions”)  administered  by  the  United  States  Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Department  of State, the European Union, Her Majesty’s Treasury, the United Nations Security Council, or  any other relevant sanctions authority, or (ii) is located, has a place of business or is organized or  resident in a Sanctioned Country. Furthermore, no part of the proceeds of a Loan will be used,  directly or indirectly, by the Borrower or, to the knowledge of the Borrower, any Affiliate of the  Borrower or by any of their respective executive officers or directors to finance or facilitate a  transaction with a person that is subject to Sanctions or is located, has a place of business or is  organized or resident in a Sanctioned Country.               SECTION 3.19.  Anti-Money Laundering Program.  The Borrower has  implemented  an  anti-money  laundering  program  to  the  extent  required  by  the  Uniting  And  Strengthening  America  By  Providing  Appropriate  Tools  Required  To  Intercept  And  Obstruct  Terrorism, as amended (the “USA PATRIOT Act”), and the rules and regulations thereunder and  maintains in effect and enforces policies and procedures designed to ensure compliance by the  Borrower and its Subsidiaries (and, when acting on behalf of the Borrower and its Subsidiaries,  their respective directors, officers, employees and agents) with applicable Sanctions.               SECTION 3.20.  Foreign Corrupt Practices Act.  Neither the Borrower nor any  Affiliate  of  the  Borrower  and,  to  the  Borrower’s  knowledge,  no  director,  officer,  agent,  employee, Affiliate or other person associated with or acting on behalf of the Borrower or any  Affiliate of the Borrower has: (i) used any corporate funds for any unlawful contribution, gift,  entertainment  or  other  unlawful  expense  relating  to  political  activity  or  to  influence  official  action; (ii) made any direct or indirect unlawful payment to any foreign or domestic government  official  or  employee  from  corporate  funds;  (iii)  made  any  bribe,  rebate,  payoff,  influence  payment, kickback or other unlawful payment; or (iv) violated or is in violation of any provision  of the  U.S. Foreign Corrupt Practices Act of 1977, as  amended, and the rules and regulations  thereunder  (the  “FCPA”)  and  any  applicable  law  or  regulation  implementing  the  OECD  Convention  on  Combating  Bribery  of  Foreign  Public  Officials  in  International  Business  Transactions  (collectively  with  the  FCPA,  the  “Anti-Corruption  Laws”);  and  each  of  the  Borrower and any Affiliate of the Borrower have conducted their businesses in compliance with  the Anti-Corruption Laws and have instituted and maintained policies and procedures reasonably  designed  to  ensure,  and  which  are  reasonably  expected  to  continue  to  ensure,  compliance  therewith.  Furthermore, no part of the proceeds of a Loan will be used, directly or indirectly, by  the Borrower or any Affiliate of the Borrower, or by any of their respective directors, officers,  agents,  employees,  Affiliates  or  other  persons  associated  with  or  acting  on  behalf  of  the                                        72   25272637.12.BUSINESS 

 

Borrower or any Affiliate of the Borrower, to finance or facilitate a transaction in violation of the  Anti-Corruption Laws.               SECTION 3.21.  Beneficial Ownership Certification.  To the best knowledge of  the Borrower, the information included in any Beneficial Ownership Certification provided prior  to, on or after the Restatement Effective Date to any Lender in connection with this Agreement is  true and correct in all respects.                                     ARTICLE IV                                   CONDITIONS               SECTION 4.01.  Restatement Effective Date.  The effectiveness of this  Agreement on  the  Restatement  Effective  Date  and  of  the  obligations  of  the  Lenders  to  make  Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective  until  completion  of  each  of  the  following  conditions  precedent  (unless  a  condition  shall  have  been waived in accordance with Section 9.02):               (a)   Documents.   Administrative  Agent  shall  have  received  each  of  the  following documents, each of which shall be reasonably satisfactory to the Administrative Agent  (and to the extent specified below to each Lender) in form and substance:               (i)   Executed Counterparts.  From each party hereto either (1) a counterpart of        this Agreement signed on behalf of such party or (2) written evidence satisfactory to the        Administrative  Agent  (which  may  include  telecopy  or  e-mail  transmission  of  a  signed        signature  page  to  this  Agreement) that  such  party  has  signed  a  counterpart  of  this        Agreement.               (ii)  Guarantee and Security Agreement; Custody Agreement.  The Guarantee        and  Security  Agreement,  the  Custody  Agreement  with  respect  to  the  Borrower’s        Custodian Account, the Document Custody Agreement and the Control Agreement, each        duly  executed  and  delivered by  each of the parties  thereto,  and  all other documents  or        instruments  required  to  be  delivered  by  the  Guarantee  and  Security  Agreement,  the        Custody Agreement, the Document Custody Agreement, and the Control Agreement in        connection with the execution thereof.               (iii) Opinion  of  Counsel  to  the  Borrower.   A  favorable  written  opinion        (addressed  to  the  Administrative  Agent  and  the  Lenders  and  dated  the  Restatement        Effective Date) of each of Thompson & Knight LLP and Eversheds Sutherland, counsel        for  the  Obligors,  and  of  Robison  Belaustegui  Sharp  &  Low,  Nevada  counsel  for  the        Obligors,  in  each  case  in  form  and  substance  reasonably  satisfactory  to  the        Administrative  Agent  and  covering  such  matters  as  the  Administrative  Agent  may        reasonably  request  (and  the  Borrower  hereby  instructs  such  counsel  to  deliver  such        opinion to the Lenders and the Administrative Agent).                                           73   25272637.12.BUSINESS 

 

            (iv)  Corporate  Documents.   The  Administrative  Agent  shall  have  received  a        certificate of the secretary or assistant secretary of each Obligor, dated the Restatement        Effective  Date,  certifying  that  attached  thereto  are  (1)  true  and  complete  copies  of  the        organizational documents of each Obligor certified as of a recent date by the appropriate        governmental  official, (2) signature and incumbency  certificates  of  the  officers  of  such        Person  executing  the  Loan  Documents  to  which  it  is  a  party,  (3) true  and  complete        resolutions  of  the  Board  of  Directors  of  each  Obligor  approving  and  authorizing  the        execution, delivery and performance of this Agreement and the other Loan Documents to        which  it  is  a  party  or  by  which  it  or  its  assets  may  be  bound  as  of  the  Restatement        Effective Date and, in the case of the Borrower, authorizing the borrowings hereunder,        and that such resolutions are in full force and effect without modification or amendment,        (4) a  good  standing  certificate  from  the  applicable  Governmental  Authority  of  each        Obligor’s jurisdiction of incorporation, organization or formation and in each jurisdiction        in which it is qualified as a foreign corporation or other entity to do business, each dated        a recent date prior to the Restatement Effective Date, and (5) such other documents and        certificates as the Administrative Agent or its counsel may reasonably request relating to        the organization, existence and good standing of the Obligors, and the authorization of        the Transactions, all in form and substance reasonably satisfactory to the Administrative        Agent and its counsel.               (v)   Officer’s  Certificate.  A  certificate, dated  the  Restatement  Effective  Date        and  signed  by  a  Financial  Officer  of  the  Borrower,  confirming  compliance  with  the        conditions set forth in Sections 4.01(e) and (h) and Section 4.02.               (vi)  Termination  of  Master  Reimbursement  Agreement.  The  Administrative        Agent  shall  have  received  reasonably  satisfactory  evidence  of  the  termination  of  the        obligations of ING Capital LLC under the Master Reimbursement Agreement, dated as of        May 9, 2018, by and between the Borrower and ING Capital LLC, as issuer.                (b)   Liens.  The Administrative Agent shall have received results of a recent  lien search in each relevant jurisdiction with respect to the Obligors, confirming the priority of  the  Liens  in  favor  of  the  Collateral  Agent  created  pursuant  to  the  Security  Documents  and  revealing  no  liens  on  any  of  the  assets  of  the  Borrower  or  its  Subsidiaries  except  for  Liens  permitted under Section 6.02 or Liens to be discharged on or prior to the Restatement Effective  Date  pursuant  to documentation satisfactory  to the Administrative  Agent.  All  UCC financing  statements, control agreements, stock certificates and other documents or instruments required to  be  filed  or  executed  and  delivered  in  order  to  create  in  favor  of  the  Collateral  Agent,  for  the  benefit of the Administrative Agent and the Lenders, a first-priority perfected (subject to Eligible  Liens)  security  interest  in  the  Collateral  (to  the  extent  that  such  a  security  interest  may  be  perfected by filing, possession or control under the Uniform Commercial Code) shall have been  properly  filed  (or  provided  to  the  Administrative  Agent)  or  executed  and  delivered  in  each  jurisdiction required.               (c)   Financial  Statements.   The  Administrative  Agent  and  the  Lenders  shall  have received, prior to the execution of this Agreement, (i) the audited consolidated statements  of  assets  and  liabilities  and  the  related  audited  consolidated  statements  of  operations,  audited  consolidated statements of changes in net assets, audited consolidated statements of cash flows                                        74   25272637.12.BUSINESS 

 

and related audited consolidated schedule of investments of the Borrower and its consolidated  Subsidiaries  as  of  and  for  the  fiscal  year  ended  March  31,  2018,  and  (ii)  the  consolidated  statements of assets and liabilities and the related consolidated statements of operations, changes  in  net  assets,  consolidated  statements  of  cash  flows  and  related  consolidated  schedule  of  investments of the Borrower and its consolidated Subsidiaries as of and for the fiscal quarters  ended June 30, 2018 and September 30, 2018, in each case, certified in writing by a Financial  Officer of the Borrower as presenting fairly in all material respects the financial condition and  results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance  with GAAP consistently applied, subject to normal year-end audit adjustments and the absence  of footnotes.  The Administrative Agent and the Lenders shall have received any other financial  statements of the Borrower and its Subsidiaries as they shall have reasonably requested.                 (d)   Consents.   The  Borrower  shall  have  obtained  and  delivered  to  the  Administrative Agent certified copies of all consents, approvals, authorizations, registrations, or  filings  (other  than  any  filing  required  under  the  Exchange  Act  or  the  rules  or  regulations  promulgated  thereunder,  including  any  filing  required  on  Form  8-K)  required  to  be  made  or  obtained by the Borrower and all guarantors in connection with the Transactions and any other  evidence reasonably requested by, and reasonably satisfactory to, the Administrative Agent as to  compliance with all material legal and regulatory requirements applicable to the Obligors, and  such  consents,  approvals,  authorizations,  registrations,  filings  and  orders  shall  be  in  full  force  and effect and all applicable waiting periods shall have expired and no investigation or inquiry  by  any  Governmental  Authority  regarding  the  Transactions  or  any  transaction  being  financed  with the proceeds of the Loans shall be ongoing.               (e)   No  Litigation.   There  shall  not  exist  any  action,  suit,  investigation,  litigation or proceeding or other legal or regulatory developments pending or, to the knowledge  of the Borrower, threatened in any court or before any arbitrator or Governmental Authority that  relates  to  the  Transactions  or  that  could  reasonably  be  expected  to  have  a  Material  Adverse  Effect.               (f)   Solvency  Certificate.   On  the  Restatement  Effective  Date,  the  Administrative  Agent  shall  have  received  a  solvency  certificate  of  a  Financial  Officer  of  the  Borrower dated as of the Restatement Effective Date and addressed to the Administrative Agent  and  the  Lenders,  and  in  form,  scope  and  substance  reasonably  satisfactory  to  Administrative  Agent, with appropriate attachments and demonstrating that both before and after giving effect to  the  Transactions,  (a)  the  Borrower  will  be  Solvent  on  an  unconsolidated  basis  and  (b)  each  Obligor will be Solvent on a consolidated basis with the other Obligors.               (g)   Due  Diligence.   All  customary  confirmatory  due  diligence  on  the  Borrower and its Subsidiaries shall have been completed by the Administrative Agent and the  Lenders and the results of such due diligence shall be satisfactory to the Administrative Agent  and the Lenders.  No information shall have become available which the Administrative Agent  reasonably believes has had, or could reasonably be expected to have, a Material Adverse Effect.               (h)   Default.  No  Default  or  Event  of  Default  shall  have  occurred  and  be  continuing under this Agreement, nor any default or event of default that permits (or which upon  notice,  lapse  of  time  or  both,  would  permit)  the  acceleration  of  any  Material  Indebtedness,                                        75   25272637.12.BUSINESS 

 

immediately before and after giving effect to the Transactions, any incurrence of Indebtedness  hereunder and the use of the proceeds hereof.               (i)   USA  PATRIOT  Act.   The  Administrative  Agent  and  each  Lender  shall  have received all documentation and other information required by bank regulatory authorities  under  applicable  “know  your  customer”  and  anti-money  laundering  rules  and  regulations,  including the USA PATRIOT Act, as reasonably requested by the Administrative Agent or any  Lender.               (j)   Investment  Policies.   The  Administrative  Agent  shall  have  received  the  Investment  Policies  as  in  effect  on  the  Restatement  Effective  Date  in  form  and  substance  reasonably satisfactory to the Administrative Agent.               (k)   Borrowing  Base  Certificate.   The  Administrative  Agent  shall  have  received  a  Borrowing  Base  Certificate  dated  as  of  the  Restatement  Effective  Date,  showing  a  calculation of the Borrowing Base as of the date immediately prior to the Restatement Effective  Date, in form and substance reasonably satisfactory to the Administrative Agent.               (l)   [Reserved].                 (m)   Insurance Certificates and Endorsements.  The Administrative Agent shall  have received certificates from the Borrower’s insurance broker or other evidence satisfactory to  it that all insurance required to be maintained pursuant to the Loan Documents is in full force  and  effect,  together  with  endorsements  naming  the  Collateral  Agent,  for  the  benefit  of  the  Administrative  Agent  and  the  Lenders,  as  additional  insured  and  lender’s  loss  payee,  as  applicable, thereunder.                 (n)   Other  Documents.   The  Administrative  Agent  shall  have  received  such  other documents, instruments, certificates, opinions and information as the Administrative Agent  may  reasonably  request  or  require  in  form  and  substance  reasonably  satisfactory  to  the  Administrative Agent.               (o)   Fees and Expenses.  The Borrower shall have paid in full (or shall pay in  full  simultaneously  with  any  funding  hereunder  on  the  Restatement  Effective  Date  with  the  proceeds  of  such  Loans),  to  the  extent  not  paid  pursuant  to  Section  2.10  hereof,  to  the  Administrative Agent and the Lenders all fees and expenses (including reasonable legal fees to  the extent  invoiced)  related to  this  Agreement owing on  or  prior  to  the  Restatement  Effective  Date, including any up-front fee due to any Lender on or prior to the Restatement Effective Date.               SECTION 4.02.  Conditions to Each Credit Event.  The obligation of each  Lender to make any Loan, and of the Issuing Bank to issue, amend, renew or extend any Letter  of Credit, including in each case any such extension of credit on the Restatement Effective Date,  is additionally subject to the satisfaction of the following conditions:               (a)   the representations  and  warranties  of the Borrower or any other Obligor  set  forth  in  this  Agreement  and  in  the  other  Loan  Documents  shall  be  true  and  correct  in  all  material respects (other than any representation or warranty already qualified by materiality or  Material Adverse Effect, which shall be true and correct in all respects) on and as of the date of                                        76   25272637.12.BUSINESS 

 

such Loan or the date of issuance, amendment, renewal or extension of such Letter of Credit, as  applicable, or, as to any such representation or warranty that refers to a specific date, as of such  specific date;               (b)   at the time of and immediately after giving effect to such Loan or the date  of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default  or Event of Default shall have occurred and be continuing or would result from such extension of  credit after giving effect thereto and to the use of proceeds thereof on a pro forma basis;               (c)   no Borrowing Base Deficiency shall exist at the time of and immediately  after giving effect to such extension of credit, and either (i) the aggregate Covered Debt Amount  (after  giving  effect  to  such  Loan) shall  not  exceed  the  Borrowing  Base  reflected  on  the  Borrowing  Base  Certificate  most  recently  delivered  to  the  Administrative  Agent  or  (ii) the  Borrower  shall  have  delivered  an  updated  Borrowing  Base  Certificate  demonstrating  that  the  Covered Debt Amount (after giving effect to such Loan) shall not exceed the Borrowing Base  after giving effect to such Loan as well as any concurrent acquisitions of Portfolio Investments  by the Borrower or payment of outstanding Loans or Other Covered Indebtedness;               (d)   after  giving  effect  to  such  Loan,  the  Borrower  shall  be  in  pro  forma  compliance with each of the covenants set forth in Sections 6.07(a), (b), (c), (e) and (f);                (e)   the  Custody  Agreement,  Document  Custody  Agreement  and  Control  Agreement shall have been duly executed and delivered by the Borrower, the Collateral Agent,  the  Custodian  and  the  Document  Custodian,  as  applicable,  and  all  other  control  arrangements  required at the time by Section 5.08(c)(ii) with respect to the Obligors’ other deposit accounts  and securities accounts shall have been entered into; and               (f)   the proposed date of such extension of credit shall take place during the  Availability Period.               Each Borrowing, and each issuance, amendment, renewal or extension of a Letter  of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date  thereof as to the matters specified in the preceding sentence.                                     ARTICLE V                            AFFIRMATIVE COVENANTS               Until the Termination Date, the Borrower covenants and agrees with the Lenders  that:               SECTION 5.01.  Financial Statements and Other Information.  The Borrower  will  furnish  to  the  Administrative  Agent  for  distribution  to  each  Lender  (provided  that,  the  Administrative Agent shall not be required to distribute any document or report to any Lender to  the  extent  such  distribution  would  cause  the  Administrative  Agent  to  breach  or  violate  any                                         77   25272637.12.BUSINESS 

 

agreement  that  it  has  with  another  Person  (including  any  non-reliance  or  non-disclosure  letter  with any Approved Third-Party Appraiser)):               (a)   within  90  days  after  the  end  of  each  fiscal  year  of  the  Borrower  (commencing with the fiscal year ending March 31, 2017), the audited consolidated statements  of  assets  and  liabilities  and  the  related  audited  consolidated  statements  of  operations,  audited  consolidated statements of changes in net assets, audited consolidated statements of cash flows  and related audited consolidated schedule of investments of the Borrower and its Subsidiaries on  a consolidated basis as of the end of and for such year, setting forth in each case in comparative  form  the  figures  for  the  previous  fiscal  year  (to  the  extent  full  fiscal  year  information  is  available), all reported on by Grant Thornton  LLP or other independent  public accountants of  recognized  national  standing  to  the  effect  that  such  consolidated  financial  statements  present  fairly in all material respects the financial condition and results of operations of the Borrower  and  its  Subsidiaries  on  a  consolidated  basis  in  accordance  with  GAAP  consistently  applied  (which report shall be unqualified as to going concern and scope of audit and shall not contain  any explanatory paragraph or paragraph of emphasis with respect to going  concern); provided  that  the  requirements  set  forth  in  this  clause  (a) may  be  fulfilled  by  providing  to  the  Administrative Agent for distribution to each Lender the report filed by the Borrower with the  SEC on Form 10-K for the applicable fiscal year;                (b)   within 45 days after the end of each of the first three (3) fiscal quarters of  each  fiscal  year  of  the  Borrower  (commencing  with  the  fiscal  quarter  ended  September  30,  2016),  the  consolidated  statements  of  assets  and  liabilities  and  the  related  consolidated  statements  of  operations,  consolidated  statements  of  changes  in  net  assets,  consolidated  statements of cash flows and related consolidated schedule of investments of the Borrower and  its Subsidiaries on a consolidated basis as of the end of and for such fiscal quarter and the then  elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for  (or,  in  the  case  of  the  statement  of  assets  and  liabilities,  as  of  the  end  of) the  corresponding  period or periods of the previous fiscal year (to the extent such information is available for the  previous fiscal year), all certified by a Financial Officer of the Borrower as presenting fairly in  all  material  respects  the  financial  condition  and  results  of  operations  of  the  Borrower  and  its  Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to  normal year-end audit adjustments and the absence of footnotes; provided that the requirements  set  forth  in  this  clause  (b) may  be  fulfilled  by  providing  to  the  Administrative  Agent  for  distribution to each Lender the report filed by the Borrower with the SEC on Form 10-Q for the  applicable quarterly period;                 (c)   concurrently with any delivery of financial statements under clause (a) or  (b) of this Section (or, solely with respect to clause (vi) of this Section 5.01(c), within ten (10)  calendar days thereafter), a certificate of a Financial Officer of the Borrower (i)  to the extent the  requirements in clauses (a) and (b) of this Section are not fulfilled by the Borrower delivering the  applicable  report  delivered  to  (or  filed  with)  the  SEC,  certifying  that  such  statements  are  consistent with the financial statements filed by the Borrower with the SEC, (ii) certifying as to  whether the Borrower has knowledge that a Default or Event of Default has occurred and, if a  Default or Event of Default has occurred, specifying the details thereof and any action taken or  proposed  to  be  taken  with  respect  thereto,  (iii) setting  forth  reasonably  detailed  calculations  demonstrating compliance with Sections 6.01(b), (d), (e) and (i), 6.02(f), 6.03(e) and (g), 6.04(i)                                        78   25272637.12.BUSINESS 

 

and (j), 6.05(b), (d) and (e) and 6.07, (iv) stating whether any change in GAAP as applied by (or  in the application of GAAP by) the Borrower has occurred since the Restatement Effective Date  (but only if the Borrower has not previously reported such change to the Administrative Agent)  and, if any such change has occurred (and has not been previously reported to the Administrative  Agent),  specifying  the  effect  of  such  change  on  the  financial  statements  accompanying  such  certificate, (v) attaching a list of Subsidiaries as of the date of delivery of such certificate or a  confirmation that there is no change in such information since the date of the last such list, (vi)  attaching a schedule providing  projected interest  and  principal  payments  for all  debt  Portfolio  Investments  as  of  such  date,  regardless  of  whether  such  Portfolio  Investments  are  Eligible  Portfolio  Investments and (vii) providing a reconciliation of any difference between the assets  and  liabilities  of  the  Borrower  and  its  consolidated  Subsidiaries  presented  in  such  financing  statements  and  the  assets  and  liabilities  of  the  Borrower  and  its  Subsidiaries  for  purposes  of  calculating the financial covenants in Section 6.07;               (d)   as soon as available and in any event not later than twenty (20) calendar  days after the end of each monthly accounting period (ending on the last day of each calendar  month) of the Borrower and its Subsidiaries, commencing with the monthly accounting period  ending September 30, 2016, a Borrowing Base Certificate as of the last day of such accounting  period  (which  Borrowing  Base  Certificate  shall  include:  (i)  an  Excel  schedule  containing  information substantially similar to the information included on the Excel schedule included in  the Borrowing Base Certificate delivered to the Administrative Agent for the period ended on  August  29,  2016  and  (ii) a  calculation  of  the  External  Quoted  Value  in  accordance  with  methodologies  described  in  Sections  5.12(b)(ii)(A)(w),  (x),  (y)  and  (z),  including  screenshots  showing actual bid prices or, as applicable, closing prices);               (e)   promptly but no later than two Business Days after any Financial Officer  of the Borrower shall at any time have knowledge (based upon facts and circumstances known to  him)  that  there  is  a  Borrowing  Base  Deficiency  or  knowledge  that  the  Borrowing  Base  has  declined by more than 15% from the Borrowing Base stated in the Borrowing Base Certificate  last delivered by the Borrower to the Administrative Agent, a Borrowing Base Certificate as at  the date such Financial  Officer has  knowledge  of  such Borrowing  Base Deficiency or decline  indicating the amount of the Borrowing Base Deficiency or decline as at the date such Financial  Officer obtained knowledge of such deficiency or decline and the amount of the Borrowing Base  Deficiency  or  decline  as  of  the  date  not  earlier  than  two  Business  Days  prior  to  the  date  the  Borrowing Base Certificate is delivered pursuant to this paragraph;               (f)   promptly  upon  receipt  thereof  copies  of  all  significant  written  reports  submitted  to  the  management  or  Board  of  Directors  of  the  Borrower  by  the  Borrower’s  independent  public  accountants  in  connection  with  each  annual,  interim  or  special  audit  or  review of any type of the financial statements or related internal control systems of the Borrower  or any of its Subsidiaries delivered by such accountants to the management or board of directors  of the Borrower;               (g)   promptly after the same become publicly available, copies of all periodic  and  other  reports,  proxy  statements  and  other  materials  sent  to  stockholders  and  filed  by  the  Borrower or any of its Subsidiaries with the SEC or with any national securities exchange, as the  case may be;                                         79   25272637.12.BUSINESS 

 

            (h)   within  45  days  after  the  end  of  each  fiscal  quarter  of  the  Borrower,  all  internal and external valuation reports relating to the Eligible Portfolio Investments (including all  valuation  reports  delivered  by  the  Approved  Third-Party  Appraiser  in  connection  with  the  quarterly appraisals of Unquoted Investments in accordance with Section 5.12(b)(ii)(B)), and any  other information relating to the Eligible Portfolio Investments as reasonably requested by the  Administrative Agent or any Lender;               (i)   within thirty (30) days after the initial closing of each Eligible Portfolio  Investment  that  is  acquired,  made  or  entered  into  after  the  Original  Effective  Date,  all  underwriting memoranda (or, if no underwriting memorandum has been prepared, all materials  similar  to  underwriting  memoranda)  for  such  Eligible  Portfolio  Investments,  and  any  other  information  relating  to  the  Eligible  Portfolio  Investments  as  reasonably  requested  by  the  Administrative Agent or any Lender;               (j)   to  the  extent  not  otherwise  provided  by  the  Custodian  and/or  the  Document  Custodian,  within  thirty  (30)  days  after  the  end  of  each  month,  full,  correct  and  complete updated copies of custody reports (including (i) activity reports with respect to Cash  and Cash Equivalents included in the calculation of the Borrowing Base, (ii) an itemized list of  each account and the amounts therein with respect to Cash and Cash Equivalents included in the  calculation of the Borrowing Base and (iii) an itemized list of each Portfolio Investment held in  any  Custodian  Account  owned  by  the  Borrower  or  any  Subsidiary)  reflecting  all  assets  being  held in any Custodian Account owned by the Borrower or any of its Subsidiaries or otherwise  subject to the Custody Agreement or the Document Custody Agreement;               (k)   within  45  days  after  the  end  of  each  fiscal  quarter  of  the  Borrower  a  certificate of a Financial Officer of the Borrower certifying that attached thereto is a complete  and correct description of all Portfolio Investments as of the date thereof, including, with respect  to  each  such  Portfolio  Investment,  the  name  of  the  Borrower  or  Subsidiary  holding  such  Portfolio Investment and the name of the Portfolio Company of such Portfolio Investment;                (l)   to the extent such information is not otherwise available in the financial  statements  delivered  pursuant  to  clause  (a)  or  (b)  of  this  Section,  upon  the  request  of  the  Administrative Agent, within five (5) Business Days of the due date set forth in clause (a) or (b)  of this Section for any quarterly or annual financial statements, as the case may be, a schedule  prepared  in  accordance  with  GAAP  setting  forth  in  reasonable  detail  with  respect  to  each  Portfolio Investment where there has been a realized gain or loss in the most recently completed  fiscal  quarter,  (i)  the  cost  basis  of  such  Portfolio  Investment,  (ii)  the  realized  gain  or  loss  associated  with  such  Portfolio  Investment,  (iii)  the  associated  reversal  of  any  previously  unrealized gains or losses associated with such Portfolio Investment, (iv) the proceeds received  with respect to such Portfolio Investment representing repayments of principal during the most  recently ended fiscal quarter, and (v) any other amounts received with respect to such Portfolio  Investment representing exit fees or prepayment penalties during the most recently ended fiscal  quarter;               (m)   any  change  in  the  information  provided  in  any  Beneficial  Ownership  Certification delivered to a Lender that would result in a change to the list of beneficial owners  identified in such certificate;                                        80   25272637.12.BUSINESS 

 

            (n)   information  and  documentation  reasonably  requested  by  the  Administrative  Agent  or  any  Lender  for  purposes  of  compliance  with  applicable  “know  your  customer”  and  anti-money  laundering  rules  and  regulations,  including  the  Patriot  Act  and  the  Beneficial Ownership Regulation; and               (o)   promptly following any request therefor, such other information regarding  the operations, business affairs and financial condition of the Borrower or any of its Subsidiaries,  or  compliance  with  the  terms  of  this  Agreement  and  the  other  Loan  Documents,  as  the  Administrative Agent or any Lender may reasonably request.                 SECTION 5.02.  Notices of Material Events.  Upon the Borrower becoming  aware of any of the following, the Borrower will furnish to the Administrative Agent and each  Lender prompt written notice of the following:               (a)   the occurrence of any Default or Event of Default (provided that if such  Default  is  subsequently  cured  within  the  time  periods  set  forth  herein,  the  failure  to  provide  notice of such Default shall not itself result in an Event of Default hereunder);               (b)   the filing or commencement of any action, suit or proceeding by or before  any  arbitrator  or  Governmental  Authority  against  or  affecting  the  Borrower  or  any  of  its  Affiliates  that,  if  adversely  determined,  could  reasonably  be  expected  to  result  in  a  Material  Adverse Effect;               (c)   (i) the filing by the Borrower or any of its ERISA Affiliates of a Schedule  B (or such other schedule as contains actuarial information) to IRS Form 5500 in respect of a  Plan  with  Unfunded  Pension  Liabilities  (and  the  Borrower  shall  furnish  to  the  Administrative  Agent  a  copy  of  such  Schedule  B),  (ii) the  occurrence  of  any  ERISA  Event  that,  alone  or  together with any other ERISA Events that have occurred, could reasonably be expected to result  in  liability  of  the  Borrower  in  an  aggregate  amount  exceeding  $5,000,000  (and  the  Borrower  shall  furnish  to  the  Administrative  Agent  a  certificate  of  a  Financial  Officer  of  the  Borrower  describing such ERISA Event and the action, if any, proposed to be taken with respect to such  ERISA Event and a copy of any notice filed with the PBGC or the IRS pertaining to such ERISA  Event and any notices received from such Borrower or ERISA Affiliate from the PBGC or any  other  Governmental  Authority  with  respect  thereto),  (iii) the  existence  of  material  Unfunded  Pension Liabilities (taking into account only Plans with positive Unfunded Pension Liabilities)  and  (iv)  (x) the  existence  of  material  aggregate  potential  Withdrawal  Liability  under  Section 4201  of  ERISA,  if  the  Borrower  and  all  of  its  ERISA  Affiliates  were  to  withdraw  completely  from  any  and  all  Multiemployer  Plans,  (y)  the  adoption  of,  or  commencement  of  contributions  to,  any  Plan  subject  to  Section  412  of  the  Code  by  the  Borrower  or  any  of  its  ERISA Affiliates, or (z) the adoption of any amendment to a Plan subject to Section 412 of the  Code that results in a material increase in contribution obligations of the Borrower or any of its  ERISA Affiliates; and               (d)   any other development that results in, or could reasonably be expected to  result in, a Material Adverse Effect.                                          81   25272637.12.BUSINESS 

 

            Each notice delivered under this Section shall be accompanied by a statement of a  Financial Officer or other executive officer of the Borrower setting forth the details of the event  or development requiring such notice and any action taken or proposed to be taken with respect  thereto.               SECTION 5.03.  Existence; Conduct of Business.  The Borrower will, and will  cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew  and keep in full force and effect its legal existence and the rights, licenses, permits, privileges  and  franchises  material  to  the  conduct  of  its  business;  provided  that  the  foregoing  shall  not  prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.               SECTION 5.04.  Payment of Obligations.  The Borrower will, and will cause  each of its Subsidiaries to, pay its obligations, including tax liabilities and material contractual  obligations, that, if not paid, could reasonably be expected to result in a Material Adverse Effect  before the same shall become delinquent or in default, except where (a) the validity or amount  thereof  is  being  contested  in  good  faith  by  appropriate  proceedings,  (b) the  Borrower  or  such  Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with  GAAP  and  (c) the  failure  to  make  payment  pending  such  contest  could  not  reasonably  be  expected to result in a Material Adverse Effect.               SECTION 5.05.  Maintenance of Properties; Insurance.  The Borrower will, and  will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct  of  its  business  in  good  working  order  and  condition,  ordinary  wear  and  tear  excepted,  (b) maintain,  with  financially  sound  and  reputable  insurance  companies,  insurance  in  such  amounts and against such risks as are customarily maintained by companies engaged in the same  or  similar  business,  operating  in  the  same  or  similar  locations  (including,  without  limitation,  directors and officers liability insurance) and (c) after the request of the Administrative Agent,  promptly deliver to the Administrative Agent any certificate or certificates from the Borrower’s  insurance broker or other documentary evidence, in each case, demonstrating the effectiveness of,  or any changes to, such insurance.  Each such policy of insurance (other than any director and  officer  liability  insurance  policy)  shall  name  the  Collateral  Agent,  for  the  benefit  of  the  Administrative Agent and the Lenders, as additional insured and loss payee thereunder.               SECTION 5.06.  Books and Records; Inspection and Audit Rights.               (a)   Books and Records; Inspection Rights.  The Borrower will, and will cause  each of its Subsidiaries to, keep books of record and account in accordance with GAAP.  The  Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated  by the Administrative Agent or any Lender, upon reasonable prior notice to the Borrower, at the  sole expense of the Borrower, to (i) visit and inspect its properties, to examine and make extracts  from its books and records, and (ii) discuss its affairs, finances and condition with its officers and  independent  accountants,  all  at  such  reasonable  times  and  as  often  as  reasonably  requested;  provided that the Borrower or such Subsidiary shall be entitled to have its representatives and  advisors  present  during  any  inspection  of  its  books  and  records;  provided,  further,  that  the  Borrower shall not be required to pay for more than two (2) such visits and inspections in any  calendar  year  unless  an  Event  of  Default  has  occurred  and  is  continuing  at  the  time  of  any  subsequent visits and inspections during such calendar year.                                        82   25272637.12.BUSINESS 

 

            (b)   Audit Rights.  The Borrower will, and will cause each of its Subsidiaries  to,  permit  any  representatives  designated  by  Administrative  Agent  (including  any  consultants,  accountants,  lawyers  and  appraisers  retained  by  the  Administrative  Agent) to  conduct  evaluations and appraisals of the Borrower’s computation of the Borrowing Base and the assets  included in  the  Borrowing  Base (including, for  clarity,  audits  of any Agency  Accounts,  funds  transfers  and  custody  procedures),  all  at  such  reasonable  times  and  as  often  as  reasonably  requested.   The  Borrower  shall  pay  the  reasonable,  documented  fees  and  expenses  of  representatives retained by the Administrative Agent to conduct any such evaluation or appraisal;  provided that the Borrower shall not be required to pay such fees and expenses for more than one  such evaluation or appraisal during any calendar year unless an Event of Default has occurred  and is continuing at the time of any subsequent evaluation or appraisal during such calendar year.   The Borrower also agrees to modify or adjust the computation of the Borrowing Base and/or the  assets included in the Borrowing Base, to the extent required by the Administrative Agent or the  Required Lenders as a result of any such evaluation or appraisal indicating that such computation  or  inclusion  of  assets  is  not  consistent  with  the  terms  of  this  Agreement,  provided  that  if  the  Borrower  demonstrates  that  such  evaluation  or  appraisal  is  incorrect,  the  Borrower  shall  be  permitted to re-adjust its computation of the Borrowing Base.                 (c)   Notwithstanding  the  foregoing,  nothing  contained  in  this  Section  5.06  shall  impair  or  affect  the  rights  of  the  Administrative  Agent  under  Section  5.12(b)(ii)  in  any  respect.               SECTION 5.07.  Compliance with Laws and Agreements.  The Borrower will,  and will cause each of its Subsidiaries to, comply with all laws, rules, regulations, including the  Investment  Company  Act  (if  applicable  to  such  Person),  and  orders  of  any  Governmental  Authority applicable to it (including orders issued by the SEC) or its property and all indentures,  agreements  and  other  instruments,  except  where  the  failure  to  do  so,  individually  or  in  the  aggregate, could not reasonably be expected to result in a Material Adverse Effect.  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 and each of its Subsidiaries and, when  acting on behalf of the Borrower or any of its Subsidiaries, their respective directors, officers,  employees  and  agents  with  any  applicable  Anti-Corruption  Laws  and  applicable  Sanctions,  in  each case, giving due regard to the nature of such Person’s business and activities. The Borrower  will,  and  will  cause  each  of  its  Subsidiaries  to,  act  in  accordance  with  their  respective  Organization Documents in all material respects.               SECTION 5.08.  Certain Obligations Respecting Subsidiaries; Further  Assurances.               (a)   Subsidiary Guarantors.                (i)   In the event that (1) the Borrower or any of its Subsidiaries shall form or        acquire any new Subsidiary (other than an SBIC Subsidiary), or any other Person shall        become a “Subsidiary” within the meaning of the definition thereof (other than an SBIC        Subsidiary) or (2) any SBIC Subsidiary shall no longer constitute a “SBIC Subsidiary”        pursuant  to  the  definition  thereof  (in  which  case  such  Person  shall  be  deemed  to  be  a                                        83   25272637.12.BUSINESS 

 

      “new” Subsidiary for purposes of this Section 5.08), the Borrower will, in each case, on        or before thirty  (30)  days  following  such  Person  becoming  a  Subsidiary  or such SBIC        Subsidiary  no  longer  qualifying  as  such,  cause  such  new  Subsidiary  or  former  SBIC        Subsidiary to become a  “Subsidiary Guarantor”  (and, thereby, an “Obligor”) under the        Guarantee and Security Agreement pursuant to a Guarantee Assumption Agreement and        to  deliver such proof of  corporate  or  other action, incumbency of officers,  opinions  of        counsel  and  other  documents  as  the  Administrative  Agent  shall  have  reasonably        requested.               (ii)  The  Borrower  acknowledges  that  the  Administrative  Agent  and  the        Lenders have agreed to exclude each SBIC Subsidiary as an Obligor only for so long as        such  Person  qualifies  as  an  “SBIC  Subsidiary”  pursuant  to  the  definition  thereof,  and        thereafter such Person shall no longer constitute an “SBIC Subsidiary” for any purpose of        this Agreement or any other Loan Document.               (b)   Ownership of Subsidiaries.  The Borrower will, and will cause each of its  Subsidiaries to, take such action from time to time as shall be necessary to ensure that each of its  Subsidiaries is a wholly owned Subsidiary.               (c)   Further  Assurances.   The  Borrower  will,  and  will  cause  each  of  the  Subsidiary Guarantors to, take such action from time to time as shall reasonably be requested by  the Administrative Agent to effectuate the purposes and objectives of this Agreement.  Without  limiting the generality of the foregoing, the Borrower will, and will cause each of the Subsidiary  Guarantors, to:               (i)   take such action from time to time (including filing appropriate Uniform        Commercial Code financing statements and executing and delivering such assignments,        security  agreements  and  other  instruments) as  shall  be  reasonably  requested  by  the        Administrative  Agent  to  create,  in  favor  of  the  Collateral  Agent  for  the  benefit  of  the        Lenders (and any affiliate thereof that is a party to any Hedging Agreement entered into        with the Borrower) and the holders of any Secured Longer-Term Indebtedness, perfected        first-priority security interests and Liens in the Collateral; provided that any such security        interest or Lien shall be subject to the relevant requirements of the Security Documents;               (ii)  with respect to each deposit account or securities account of the Obligors        (other than (A) any Agency Account, (B) any such accounts which hold solely money or        financial assets of an SBIC Subsidiary, (C) any payroll account so long as such payroll        account is coded as such, (D) withholding tax and fiduciary accounts or any trust account        maintained solely on behalf of a Portfolio Investment, and (E) any account in which the        aggregate  value  of  deposits  therein,  together  with  all  other  such  accounts  under  this        clause (E), does not at any time exceed $75,000; provided that in the case of each of the        foregoing clauses (A) through (E), no other Person (other than the depository institution        at  which  such  account  is  maintained)  shall  have  “control”  (within  the  meaning  of  the        Uniform  Commercial  Code)  over  such  account,  cause  each  bank  or  securities        intermediary (within the meaning of the Uniform Commercial Code)) to enter into such        arrangements with the Collateral Agent as shall be appropriate in order that the Collateral        Agent has “control” (within the meaning of the Uniform Commercial Code) over each                                        84   25272637.12.BUSINESS 

 

      such  deposit  account  or  securities  account  (each,  a  “Control  Account”)  and  in  that        connection, the Borrower agrees, subject to Sections 5.08(c)(iv) and (v) below, to cause        all  cash  and  other  proceeds  of  Portfolio  Investments  received  by  any  Obligor  to  be        immediately deposited into a Control Account (or otherwise delivered to, or registered in        the name of, the Collateral Agent) and, both prior to and following such deposit, delivery        or registration such cash and other proceeds shall be held in trust by the Borrower for the        benefit and as the property of the Collateral Agent and shall not be commingled with any        other funds or property of such Obligor or any other Person (including with any money or        financial assets of the Borrower in its capacity as an “agent” or “administrative agent” for        any other Bank Loans subject to Section 5.08(c)(v) below);               (iii) cause the SBIC Subsidiaries to execute and deliver to the Administrative        Agent such certificates and agreements, in form and substance reasonably satisfactory to        the Administrative Agent, as it shall determine are necessary to confirm that such SBIC        Subsidiary  qualifies  or  continues  to  qualify  as  an  “SBIC  Subsidiary”  pursuant  to  the        definition thereof;               (iv)  in  the  case  of  any  Portfolio  Investment  consisting  of  a  Bank  Loan  (as        defined  in  Section  5.13)  that  does  not  constitute  all  of  the  credit  extended  to  the        underlying  borrower  under  the  relevant  underlying  loan  documents  and  an  SBIC        Subsidiary holds any interest in the loans or other extensions of credit under such loan        documents, (x)(1) cause the interest owned by such SBIC Subsidiary to be evidenced by        a separate note or notes, which note or notes are either (A) in the name  of such SBIC        Subsidiary or (B) in the name of the Borrower, endorsed in blank and delivered to the        applicable SBIC Subsidiary and beneficially owned by the SBIC Subsidiary (or, in the        case of a Noteless Assigned Loan (as defined in Section 5.13), cause the interest owned        by  such  SBIC  Subsidiary  to  be  evidenced  by  separate  assignment  documentation        contemplated  by  paragraph  1(b)  of  Schedule  1.01(d)  in  the  name  of  such  SBIC        Subsidiary)  and  (2)  not  permit  such  SBIC  Subsidiary  to  have  a  participation  acquired        from  an  Obligor  in  such  underlying  loan  documents  and  the  extensions  of  credit        thereunder or any other indirect interest therein acquired from an Obligor; and (y) ensure        that,  subject  to  Section  5.08(c)(v)  below,  all  amounts  owing  to  any  Obligor  by  the        underlying borrower or other obligated party are remitted by such borrower or obligated        party  (or  the  applicable  administrative  agents,  collateral  agents  or  equivalent  Person)        directly   to  the  Custodian  Account  and  no  other  amounts  owing  by  such  underlying        borrower or obligated party are remitted to the Custodian Account;               (v)   in the event that any Obligor is acting as an agent or administrative agent        under any loan documents with respect to any Bank Loan (or is acting in an analogous        agency  capacity  under  any  agreement  related  to  any  Portfolio  Investment)  and  such        Obligor  does  not  hold  all  of  the  credit  extended  to  the  underlying  borrower  or  issuer        under  the  relevant  underlying  loan  documents  or  other  agreements,  ensure  that  (1)  all        funds  held  by  such  Obligor  in  such  capacity  as  agent  or  administrative  agent  are        segregated from all other funds of such Obligor and clearly identified as being held in an        agency capacity (an “Agency Account”); (2) all amounts owing on account of such Bank        Loan  or  Portfolio  Investment  by  the  underlying  borrower  or  other  obligated  party  are        remitted  by  such  borrower  or  obligated  party  to  either  (A)  such  Agency  Account  or                                        85   25272637.12.BUSINESS 

 

      (B) directly to an account in the name of the underlying lender to whom such amounts are        owed (for the avoidance of doubt, no funds representing amounts owing to more than one        underlying lender may be remitted to any single account other than the Agency Account);        and (3) within one (1) Business Day after receipt of such funds, such Obligor acting in its        capacity as agent or administrative agent shall distribute any such funds belonging to any        Obligor  to  the  Custodian  Account  (provided  that  if  any  distribution  referred  to  in  this        clause (c) is not permitted by applicable bankruptcy law to be made within such one (1)        Business  Day  period  as  a  result  of  the  bankruptcy  of  the  underlying  borrower,  such        Obligor  shall  use  commercially  reasonable  efforts  to  obtain  permission  to  make  such        distribution and shall make such distribution as soon as legally permitted to do so);               (vi)  cause  the  documentation  relating  to  each  Investment  in  Indebtedness        described in paragraph 1 of Schedule 1.01(d) to be delivered to the Custodian as provided        therein; and               (vii) in  the  case  of  any  Portfolio  Investment  held  by  any  SBIC  Subsidiary,        including any cash collection related thereto, ensure that such Portfolio Investment shall        not be held in any Custodian Account, or any other account of any Obligor.   Notwithstanding anything to the contrary contained herein, if any instrument, promissory note,  agreement, document or certificate held by the Document Custodian is destroyed or lost not as a  result of any action of the Borrower, then:               (i)   in  the  case  of  any  Investment  in  Indebtedness  other  than  a  Noteless        Assigned  Loan,  if  such  destroyed  or  lost  document  is  an  original  promissory  note        registered in the name of an Obligor, such original promissory note shall constitute an        “Undelivered Note” and the Borrower shall have up to twenty (20) Business Days from        the date when the Borrower has knowledge of such loss or destruction to deliver to the        Document Custodian a replacement promissory note and comply with the requirements        of  paragraph  (1)(c)(x)  of  Schedule  1.01(d);  provided,  that  during  such  twenty  (20)        Business Day period the limitations under paragraph (1)(a)(i) and (ii) of Schedule 1.01(d)        shall apply; and               (ii)  in the case of any Noteless Assigned Loans, if such destroyed instrument        or  document  is  an  original  transfer  document  or  instrument  relating  to  such  Noteless        Assigned Loan, the Borrower shall have up to twenty (20) Business Days from the date        when the Borrower has knowledge of such loss or destruction to deliver to the Document        Custodian a replacement instrument or document and comply with the requirements of        paragraph (1)(c)(x) of Schedule 1.01(d).                 SECTION 5.09.  Use of Proceeds.  The Borrower will use the proceeds of the  Loans and the issuances of Letters of Credit only for general corporate purposes of the Borrower  and  its  Subsidiaries  (other  than  the  SBIC  Subsidiaries  except  as  expressly  permitted  under  Section 6.03(e)) in the ordinary course of business, including making distributions not prohibited  by  this  Agreement, making  payments  on  Indebtedness  of  the  Obligors  to the extent permitted  under  this  Agreement  and  the  acquisition and funding (either directly or  through  one  or  more  wholly-owned Subsidiary Guarantors) of leveraged loans, mezzanine loans, high-yield securities,                                        86   25272637.12.BUSINESS 

 

convertible securities, preferred stock, common stock and other Portfolio Investments; provided  that neither the Administrative Agent nor any Lender shall have any responsibility as to the use  of  any  of  such  proceeds.   No  part  of  the  proceeds  of  any  Loan  will  be  used  in  violation  of  applicable  law  or,  directly  or  indirectly,  for  the  purpose,  whether  immediate,  incidental  or  ultimate, of buying or carrying any Margin Stock.  On the first day (if any) an Obligor acquires  any Margin Stock or at any other time requested by the Administrative Agent or any Lender, the  Borrower shall furnish to the Administrative Agent and each Lender a statement to the foregoing  effect  in  conformity  with  the  requirements  of  FR  Form  G-3  or  FR  Form  U-1,  as  applicable,  referred  to  in  Regulation  U.   Margin  Stock  shall  be  purchased  by  the  Obligors  only  with  the  proceeds of Indebtedness not directly or indirectly secured by Margin Stock (within the meaning  of Regulation U), or with the proceeds of equity capital of the Borrower.  No Obligor will, to its  actual  knowledge,  directly  or  indirectly  use  the  proceeds  of  the  Loans  or  otherwise  make  available such proceeds (I) to any Person for the purpose of financing the activities of any Person  currently  (A)  subject  to,  or  the  subject  of,  any  Sanctions  or  (B)  organized  or  resident  in  a  Sanctioned Country or (II) for any payments to any governmental official or employee, political  party,  official  of  a  political  party,  candidate  for  political  office,  or  anyone  else  acting  in  an  official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in  violation of any Anti-Corruption Laws.                SECTION 5.10.  Status of RIC and BDC.  The Borrower shall at all times  maintain its  status  as  a  “business development  company” under  the  Investment Company  Act  and  as  a  RIC  under  the  Code.   The  Borrower  shall  remain  an  internally  managed  business  development company and shall not submit any vote to its shareholder to approve any advisory  agreement or contract.               SECTION 5.11.  Investment Policies.  The Borrower shall at all times be in  compliance in all material respects with its Investment Policies, as amended by Permitted Policy  Amendments.               SECTION 5.12.  Portfolio Valuation and Diversification Etc.                (a)   Industry  Classification  Groups.   For  purposes  of  this  Agreement,  the  Borrower shall assign each Eligible Portfolio Investment to an Industry Classification Group as  reasonably determined by the Borrower.  To the extent that the Borrower reasonably determines  that any Eligible Portfolio Investment is not adequately correlated with the risks of other Eligible  Portfolio  Investments  in  an  Industry  Classification  Group,  such  Eligible  Portfolio  Investment  may  be  assigned  by  the  Borrower  to  an  Industry  Classification  Group  that  is  more  closely  correlated to such Eligible Portfolio Investment.                 (b)   Portfolio Valuation Etc.               (i)   Settlement Date Basis.  For purposes of this Agreement, all determinations        of whether a Portfolio Investment is an Eligible Portfolio Investment shall be determined        on  a  settlement-date  basis  (meaning  that  any  Portfolio  Investment  that  has  been        purchased will not be treated as an Eligible Portfolio Investment until such purchase has        settled, and any Eligible Portfolio Investment which has been sold will not be excluded as        an  Eligible  Portfolio  Investment  until  such  sale  has  settled),  provided  that  no  such                                        87   25272637.12.BUSINESS 

 

      investment shall be included as an Eligible Portfolio Investment to the extent it has not        been paid for in full.               (ii)  Determination of Values.  The Borrower will conduct reviews of the value        to be assigned to each of its Eligible Portfolio Investments as follows:                     (A)   Quoted  Investments  External  Review.   With  respect  to  Eligible              Portfolio Investments (including Cash Equivalents) traded in an active and orderly              market for which market quotations are readily available (“Quoted Investments”),              the Borrower shall, not less frequently than once each calendar week, determine              the  market  value  of  such  Quoted  Investments  which  shall,  in  each  case,  be              determined in accordance with one of the following methodologies as selected by              the Borrower (each such value, an “External Quoted Value”):                           (w)   in the case of public and 144A securities, the average of the                    recent bid prices as determined by two Approved Dealers selected by the                    Borrower,                           (x)   in  the  case  of  Bank  Loans,  the  average  of  the  recent  bid                    prices as determined by two Approved Dealers selected by the Borrower                    or  an  Approved  Pricing  Service  which  makes  reference  to  at  least  two                    Approved Dealers with respect to such Bank Loans,                           (y)   in  the  case  of  any  Quoted  Investment  traded  on  an                    exchange,  the  closing  price  for  such  Eligible  Portfolio  Investment  most                    recently posted on such exchange, and                           (z)   in the case of any other Quoted Investment, the fair market                    value thereof as determined by an Approved Pricing Service; and                     (B)   Unquoted Investments External Review.  With respect to Eligible              Portfolio  Investments  for  which  market  quotations  are  not  readily  available              (“Unquoted Investments”):                           (x)   Commencing with the quarter ending September 30, 2016                    and for each fiscal quarter thereafter (or such other dates as are reasonably                    agreed by the Borrower and the Administrative Agent (provided that such                    testing dates shall occur not less than quarterly), each a “Valuation Testing                    Date”),  the  Administrative  Agent  through  an  Independent  Valuation                    Provider will, solely for the purposes of determining the Borrowing Base,                    test  the  values  as  of  such  Valuation  Testing  Date  of  those  Unquoted                    Investments that are Portfolio Investments included in the Borrowing Base                    selected  by  the  Administrative  Agent  (such  selected  assets,  the  “IVP                    Tested  Assets”  and  such  value,  the  “IVP  External  Unquoted  Value”);                    provided  that  the  fair  value  of  such  Portfolio  Investments  tested  by  the                    Independent Valuation Provider as of any Valuation Testing Date shall be                    approximately 25% (but in no event shall exceed 30%) of the aggregate                                         88   25272637.12.BUSINESS 

 

                  value  of  the  Unquoted  Investments  in  the  Borrowing  Base  (the                    determination of fair value for such percentage thresholds shall be based                    off of the last determination of value of the Portfolio Investments pursuant                    to this Section 5.12); provided, further that the Administrative Agent shall                    provide written notice to the Borrower, setting forth a description of which                    Unquoted  Investments  shall  be  IVP  Tested  Assets  as  of  such  Valuation                    Testing Date, not later than 15 days prior to the Valuation Testing Date (or                    such  later  date  as  agreed  to  between  the  Administrative  Agent  and  the                    Borrower).  Each such valuation report shall also include the information                    required  to  comply  with  clause  (ii) of  paragraph  7  and  paragraph  22  of                    Schedule 1.01(d) for  an  IVP Tested Asset (to  the  extent such provisions                    are applicable).                           (y)   The  Borrower  shall  value  all  Unquoted  Investments  as  of                    such  Valuation  Testing  Date  in  a  manner  consistent  with  its  “Valuation                    Policy”,  as  amended  by  Permitted  Policy  Amendments,  and  use  an                    Approved  Third-Party  Appraiser  to  assist  the  Board  of  Directors  of  the                    Borrower in determining the value of at least 35% of the aggregate value                    of the Unquoted Investments in the Borrowing Base (such selected assets,                    the  “Borrower  Tested  Assets”,  and  such  value,  the  “Borrower  External                    Unquoted Value”) for which the determination of fair value for such 35%                    threshold shall be based off of the last determination of the value of the                    Portfolio Investments as of each Valuation Testing Date, such assistance                    each quarter to include providing the Board of Directors (with a copy to                    the  Administrative  Agent)  with  a  written  independent  valuation  report;                    provided,  however,  that  notwithstanding  anything  to  the  contrary                    contained  herein,  the  fair  market  value  of  any  Portfolio  Investment  that                    has not been valued by an Independent Valuation Provider or an Approved                    Third-Party  Appraiser  for  more  than  three  fiscal  quarters  shall  be  zero                    until  such  asset  is  valued  by  an  Independent  Valuation  Provider  or  an                    Approved  Third-Party  Appraiser.   Each  such  valuation  report  shall  also                    include the information required to comply with clause (ii) of paragraph 7                    and paragraph 22 of Schedule 1.01(d).                             (z)   The Administrative Agent (on its own initiative or upon the                    request of the holders of a majority of the outstanding Loans) shall have                    sole and absolute discretion exercised in good faith to reduce  the value of                    any Eligible Portfolio Investment included in the Borrowing Base that are                    not  IVP  Tested  Assets,  or  to  reject  Collateral  from  inclusion  in  the                    Borrowing  Base  that  are  not  IVP  Tested  Assets  (the  “Revalue  Right”);                    provided that the exercise of Administrative Agent’s Revalue Right shall                    not result in more than a 10% aggregate reduction in the Borrowing Base                    in any fiscal quarter of the Borrower.                     (C)   Internal Review.  The Borrower shall conduct internal reviews to              determine  the  value  of  all  Eligible  Portfolio  Investments  at  least  once  each              calendar  week which shall  take into account  any  events  of  which the Borrower                                        89   25272637.12.BUSINESS 

 

            has knowledge that adversely affect the value of any Eligible Portfolio Investment              (each such value, an “Internal Value”).                       (D)   Value  of  Quoted  Investments.  Subject  to  Sections  5.12(b)(ii)(G)              and 5.12(b)(iii), the “Value” of each Quoted  Investment for all purposes of this              Agreement  shall  be  the  lowest  of  (1)  the  Internal  Value  of  such  Quoted              Investment  as  most  recently  determined  by  the  Borrower  pursuant  to              Section 5.12(b)(ii)(C), (2) the External Quoted Value of such Quoted Investment              as  most  recently  determined  pursuant  to  Section 5.12(b)(ii)(A)  and  (3)  if  such              Quoted Investment is a debt investment, the par or face value of the such Quoted              Investment.                      (E)   Value of Unquoted Investments. Subject to Sections 5.12(b)(ii)(G)              and 5.12(b)(iii),                            (x)   if the Internal Value of any Unquoted Investment as most              recently  determined  by  the  Borrower  pursuant  to  Section 5.12(b)(ii)(C)  falls              below the range of the  IVP External Unquoted Value or the Borrower External              Unquoted  Value  of  such  Unquoted  Investment  as  most  recently  determined              pursuant to Section 5.12(b)(ii)(B), then the “Value” of such Unquoted Investment              for  all  purposes  of  this  Agreement  shall  be  deemed  to  be  the  lower  of  (i) the              Internal Value and (ii) if such Unquoted Investment is a debt investment, the par              or face value of such Unquoted Investment;                           (y)   (i)  if  the  Internal  Value  of  any  Unquoted  Investment  as              most recently determined by the Borrower pursuant to Section 5.12(b)(ii)(C) falls              above  the  range  of  the  Borrower  External  Unquoted  Value  of  such  Unquoted              Investment  as  most  recently  determined  pursuant  to  Section 5.12(b)(ii)(B),  then              the “Value” of such Unquoted Investment for all purposes of this Agreement shall              be  deemed  to  be  the  lower  of  (i) the  midpoint  of  the  range  of  the  Borrower              External  Unquoted  Value  and  (ii)  if  such  Unquoted  Investment  is  a  debt              investment, the par or face value of such Unquoted Investment;                                 (ii)  if  the  Internal  Value  of  any  Unquoted  Investment  as              most recently determined by the Borrower pursuant to Section 5.12(b)(ii)(C) falls              more  than  5%  above  the  midpoint  of  the  range  of  the  IVP  External  Unquoted              Value  of  such  Unquoted  Investment  as  most  recently  determined  pursuant  to              Section 5.12(b)(ii)(B),  then  the  “Value”  of  such  Unquoted  Investment  for  all              purposes of this Agreement shall be deemed to be the lower of (i) the midpoint of              the  range  of  the  IVP  External  Unquoted  Value  and  (ii) if  such  Unquoted              Investment  is  a  debt  investment,  the  par  or  face  value  of  such  Unquoted              Investment; and                           (z)   if the Internal Value of any Unquoted Investment as most              recently determined by the Borrower pursuant to Section 5.12(b)(ii)(C) is within              the range of the Borrower External Unquoted Value, or within or not more than              5% above the midpoint of the range of the IVP External Unquoted Value, of such                                        90   25272637.12.BUSINESS 

 

            Unquoted  Investment  as  most   recently  determined  pursuant  to              Section 5.12(b)(ii)(B),  then  the  “Value”  of  such  Unquoted  Investment  for  all              purposes  of  this  Agreement  shall  be  deemed  to  be  the  lower  of  (i) the  Internal              Value and (ii) if such Unquoted Investment is a debt investment, the par or face              value of such Unquoted Investment;               except that:                            (1)   if the difference between the highest and lowest Borrower                    External Unquoted Value in such range  exceeds an amount equal to 6%                    (or, with respect to determining the value of an Unquoted Investment that                    is Performing Common Equity, 15%) of the midpoint of such range, the                    “Value” of such Unquoted Investment for all purposes of this Agreement                    shall  instead  be  deemed  to  be  the  lowest  of  (i) the  lowest  Borrower                    External Unquoted Value in such range, (ii) the Internal Value determined                    pursuant to Section 5.12(b)(ii)(C), and (iii) if such Unquoted Investment is                    a debt investment, the par or face value  of such Unquoted Investment; and                           (2)   if an External Unquoted Value with respect to an Unquoted                    Investment  has  not  been  obtained,  the  “Value”  of  such  Unquoted                    Investment for all purposes of this Agreement shall be deemed to be equal                    to  the  lowest  of  (x) the  Internal  Value  of  such  Unquoted  Investment  as                    determined by the Borrower pursuant to Section 5.12(b)(ii)(C), (y) the cost                    of  such  Unquoted  Investment  until  such  time  as  the  External  Unquoted                    Value  of  such  Unquoted  Investment  is  determined  in  accordance  with                    Section 5.12(b)(ii)(B) as  at  the  Valuation  Testing  Date,  and  (z) if  such                    Unquoted Investment is a debt investment, the par or face value of such                    Unquoted  Investment;  provided,  however,  that  if  an  External  Unquoted                    Value  with  respect to an Unquoted  Investment  is not  obtained  as  of  the                    end of any three consecutive fiscal quarters, the value of such Unquoted                    Investment  shall  be  zero  until  such  asset  is  valued  by  an  Independent                    Valuation Provider or Approved Third-Party Appraiser.                    (F)   Actions Upon a Borrowing Base Deficiency. If, based upon such              weekly  internal  review,  the  Borrower  determines  that  a  Borrowing  Base              Deficiency  exists  or  that  the  Borrowing  Base  has  declined  by  more  than  15%              from the Borrowing Base stated in the Borrowing Base Certificate last delivered              by the Borrower to the Administrative Agent, then the Borrower shall, promptly              and in any event within two Business Days as provided in Section 5.01(e), deliver              a Borrowing Base Certificate reflecting the new amount of the Borrowing Base              and shall take the actions, and make the payments and prepayments (if any), all as              more specifically set forth in Section 2.09(b).                       (G)   Failure  to  Determine  Values.   If  the  Borrower  shall  fail  to              determine the value of any Eligible Portfolio Investment as at any date pursuant to              the requirements (but subject to the exclusions) of the foregoing subclauses (A),              (B),  (C),  (D) or  (E)  (or  if  the  Administrative  Agent  shall  fail  to  determine  the                                        91   25272637.12.BUSINESS 

 

            value of any Eligible Portfolio Investment as described in the foregoing subclause              (B) as a result of any action, inaction or lack of cooperation of the Borrower or              any of its Affiliates), then the “Value” of such Eligible Portfolio Investment as at              such  date  shall  be  deemed  to  be  zero.   Except  as  provided  in  the  immediately              preceding sentence, if the Administrative Agent shall fail to determine the value              of any Eligible Portfolio Investment as at any date pursuant to clause (B)(x), then              the  “Value”  of  such  Eligible  Portfolio  Investment  as  at  such  date  (subject  to              clause  (iii)  below)  shall  be  the  lower  of  (x)  the  Internal  Value  and  (y)  if  such              Unquoted Investment is a debt investment, the par or face value of such Unquoted              Investment; provided, however, that if a Borrower External Unquoted Value has              been  obtained  with  respect  to  such  asset  for  the  quarterly  period  immediately              preceding the current quarterly testing period, then the “Value” of such Eligible              Portfolio Investment will be determined as provided in clause (E) above.               (iii) Supplemental  Testing  of  Values;  Valuation  Dispute  Resolutions.         Notwithstanding the foregoing, the Administrative Agent, individually or at the request        of  the  Required  Lenders,  shall  at  any  time  have  the  right  to  request  any  Portfolio        Investment (other than IVP Tested Assets as of the most recent Valuation Testing Date)        included in the Borrowing Base with a value determined pursuant to Section 5.12(b)(ii) to        be independently valued by an Independent Valuation Provider.  There shall be no limit        on the number of such appraisals requested by the Administrative Agent and the costs of        any  such  valuation  shall  be  at  the  expense  of  the  Borrower.  If  (x) the  value  of  any        Borrower Tested Asset determined pursuant to Section 5.12(b)(ii) is less than the value        determined by the Independent Valuation Provider pursuant to this clause, then the value        determined  pursuant  to  Section 5.12(b)(ii) shall  continue  to  be  used  as  the  “Value”  for        purposes of this Agreement and (y) if the value of any Borrower Tested Asset determined        pursuant  to  Section 5.12(b)(ii) is  greater  than  the  value  determined  by  the  Independent        Valuation Provider and the difference between such values is (1) less than or equal to 5%        of  the  value  determined  pursuant  to  Section 5.12(b)(ii),  then  the  value  determined        pursuant  to  Section 5.12(b)(ii) shall  become  the  “Value”  of  such  Portfolio  Investment,        (2) greater than 5% and less than or equal to 20% of the value determined pursuant to        Section 5.12(b)(ii),  then  the  average  of  the  value  determined  pursuant  to        Section 5.12(b)(ii) and the value determined by the Independent Valuation Provider shall        become the “Value” of such Portfolio Investment, and (3) greater than 20% of the value        determined pursuant to Section 5.12(b)(ii), then either (i) the “Value” of such Portfolio        Investment shall be the lesser of the value determined pursuant to Section 5.12(b)(ii) and        the value determined by  the  Independent  Valuation  Provider  or  (ii)  if the Borrower so        elects,  the  Borrower  and  the  Administrative  Agent  shall  retain  (at  the  Borrower’s  sole        cost  and  expense)  an  additional  Third-Party  Appraiser  and,  upon  completion  of  such        appraisal,  the  “Value”  of  such  Portfolio  Investment  shall  be  the  average  of  the  three        valuations (with the average of the value determined pursuant to Section 5.12(b)(ii) and        the  value  determined  by  the  Independent  Valuation  Provider  to  be  used  until  the  third        value is obtained).  For purposes of this Section 5.12(b)(iii), the “Value” of any Portfolio        Investment  for  which  the  Independent  Valuation  Provider’s  value  is  used  shall  be  the        midpoint of the range (if any) determined by the Independent Valuation Provider.               (iv)  Generally Applicable Valuation Provisions.                                        92   25272637.12.BUSINESS 

 

                  (A)   The  Independent  Valuation  Provider  shall  apply  a  recognized              valuation methodology that is commonly accepted in the Borrower’s industry for              valuing Portfolio Investments of the type being valued and held by the Obligors.               Other procedures relating to the valuation will be reasonably agreed upon by the              Administrative Agent and the Borrower.                     (B)   All  valuations  shall  be  on  a  settlement  date  basis.   For  the             avoidance  of  doubt,  the  value  of  any  Portfolio  Investments  determined  in             accordance  with  any  provision  of  this  Section  5.12  shall  be  the  Value  of  such             Portfolio Investment for purposes of this Agreement until a new Value for such             Portfolio Investment is subsequently determined in good faith in accordance with             this Section 5.12.                     (C)   The  documented  out-of-pocket  costs  of  any  valuation  reasonably             incurred  by  the  Administrative  Agent  under  this  Section 5.12  shall  be  at  the             expense of the Borrower.                     (D)   The Administrative Agent shall provide a copy of the final results             of  any  valuation  received  by  the  Administrative  Agent  and  performed  by  the             Independent  Valuation  Provider  or  the  Approved  Third-Party  Appraiser  to  any             Lender  upon such  Lender’s  request,  except to  the extent  that such recipient  has             not  executed  and  delivered  a  non-reliance  letter,  confidentiality  agreement  or             similar  agreement,  in  each  case,  requested  or  required  by  such  Independent             Valuation Provider or Approved Third-Party Appraiser, as applicable.                     (E)   The  foregoing  valuation  procedures  shall  only  be  required  to  be             used for purposes of calculating the Borrowing Base and shall not be required to             be  utilized  by  the  Borrower  for  any  other  purpose,  including  the  delivery  of             financial  statements  or  valuations  required  under  ASC  820  or  the  Investment             Company Act.               (c)   Investment  Company  Diversification  Requirements.   The  Borrower  (together with its Subsidiaries to the extent required by the Investment Company Act) will at all  times  comply  with  the  portfolio  diversification  and  similar  requirements  set  forth  in  the  Investment Company Act applicable to business development companies. The Borrower will at  all  times,  subject  to  applicable  grace  periods  set  forth  in  the  Code,  comply  with  the  portfolio  diversification and similar requirements set forth in the Code applicable to RICs.               SECTION 5.13.  Calculation of Borrowing Base.  For purposes of this  Agreement, the “Borrowing Base” shall be determined, as at any date of determination, as the  sum of the products obtained by multiplying (x) the Value of each Eligible Portfolio Investment  by (y) the applicable Advance Rate; provided that:               (a)   the  Advance  Rate  applicable  to  the  aggregate  Value  of  all  Eligible        Portfolio Investments in their entirety shall be 0% at any time when the Borrowing Base        is composed entirely of Eligible Portfolio Investments issued by fewer than 15 different        issuers;                                        93   25272637.12.BUSINESS 

 

            (b)   with respect to all Eligible Portfolio Investments issued by a single issuer,        the Advance Rate applicable to that portion of such Eligible Portfolio Investments that        exceeds 5.0% of the Obligors’ Net Worth shall be 0%; provided that, with respect to each        of the three (3) largest Portfolio Companies that constitute Eligible Portfolio Investments        (based  on  the  fair  value  of  the  Eligible  Portfolio  Investments),  other  than  MRI  to  the        extent  the  investment  in  MRI  constitutes  an  Eligible  Portfolio  Investment,  only  that        portion of such Eligible Portfolio Investments issued by such Portfolio Companies that        exceeds 7.5% of the Obligors’ Net Worth shall have an Advance Rate of 0%; provided        further that, solely with respect to the investment in MRI (and solely to the extent such        investment  constitutes  an  Eligible  Portfolio  Investment),  only  that  portion  of  such        investment in MRI that exceeds 15% of the Obligors’ Net Worth shall have an Advance        Rate of 0%;               (c)   the  contribution  to  the  Borrowing  Base  attributable  to  Eligible  Portfolio        Investments  that  are  Cash,  Cash  Equivalents,  Long-Term  U.S.  Government  Securities        and Performing First Lien Bank Loans shall be greater than or equal to (x) 50% of the        Borrowing Base at any time that the Consolidated Asset Coverage Ratio is greater than or        equal to 200%, and the Borrowing Base shall be reduced by removing Eligible Portfolio        Investments therefrom (but not from the Collateral) to the extent such contribution would        not  otherwise equal or exceed 50% of the Borrowing Base, (y)  65%  of the Borrowing        Base at any time that the Consolidated Asset Coverage Ratio is greater than or equal to        167%  and  less  than  200%,  and  the  Borrowing  Base  shall  be  reduced  by  removing        Eligible Portfolio Investments therefrom (but not from the Collateral) to the extent such        contribution would not otherwise equal or exceed 65% of the Borrowing Base, and (z)        75% of the Borrowing Base at any time that the Consolidated Asset Coverage Ratio is        less than 167%, and the Borrowing Base shall be reduced by removing Eligible Portfolio        Investments therefrom (but not from the Collateral) to the extent such contribution would        not otherwise equal or exceed 75% of the Borrowing Base;               (d)   the  contribution  to  the  Borrowing  Base  attributable  to  Eligible  Portfolio        Investments  that  are  Cash,  Cash  Equivalents,  Long-Term  U.S.  Government  Securities,        Performing First Lien Bank Loans or Performing Last Out Loans shall be greater than or        equal  to  60%  of  the  Borrowing  Base,  and  the  Borrowing  Base  shall  be  reduced  by        removing  Eligible  Portfolio  Investments  therefrom  (but  not  from  the  Collateral)  to  the        extent  such  contribution  would  not  otherwise  equal  or  exceed  60%  of  the  Borrowing        Base;               (e)   the  contribution  of  the  Borrowing  Base  attributable  to  Eligible  Portfolio        Investments  that  are  Cash,  Cash  Equivalents,  Long-Term  U.S.  Government  Securities,        Performing First Lien Bank Loans, Performing Last Out Loans, Performing Second Lien        Bank  Loans  and Performing Covenant-Lite  Loans  shall  be  greater  than  or equal to  (x)        65% of the Borrowing Base at any time that the Consolidated Asset Coverage Ratio is        greater  than or  equal  to  200%,  and  the  Borrowing  Base  shall be  reduced by  removing        Eligible Portfolio Investments therefrom (but not from the Collateral) to the extent such        contribution would not otherwise equal or exceed 65% of the Borrowing Base, (y) 75%        of the Borrowing Base at any time that the Consolidated Asset Coverage Ratio is greater        than or equal to 167% and less than 200%, and the Borrowing Base shall be reduced by                                        94   25272637.12.BUSINESS 

 

      removing  Eligible  Portfolio  Investments  therefrom  (but  not  from  the  Collateral)  to  the        extent  such  contribution  would  not  otherwise  equal  or  exceed  75%  of  the  Borrowing        Base,  and  (z)  85%  of  the  Borrowing  Base  at  any  time  that  the  Consolidated  Asset        Coverage Ratio is less than 167%, and the Borrowing Base shall be reduced by removing        Eligible Portfolio Investments therefrom (but not from the Collateral) to the extent such        contribution would not otherwise equal or exceed 85% of the Borrowing Base;               (f)    [Reserved];                (g)   if at any time the Weighted Average Leverage Ratio is greater than 4.75,        the Borrowing  Base shall  be  reduced  by  removing Debt  Eligible  Portfolio  Investments        therefrom  (but  not  from  the  Collateral)  to  the  extent  necessary  to  cause  the  Weighted        Average  Leverage  Ratio  to  be  no  greater  than  4.75  (subject  to  all  other  constraints,        limitations  and  restrictions  set  forth  herein);  provided,  that  LTV  Transactions  may  be        excluded from such calculations;               (h)   the  portion  of  the  Borrowing  Base  attributable  to  Eligible  Portfolio        Investments in each of the Industry Classification Groups that are part of the Two Largest        Industry  Classification  Groups  shall,  in  each  case,  not  exceed  20%  of  the  Borrowing        Base,  and  the  Borrowing  Base  shall  be  reduced  by  removing  Eligible  Portfolio        Investments  therefrom  (but  not  from  the  Collateral)  to  the  extent  such  portion  would        otherwise exceed 20% of the Borrowing Base;                (i)   the  portion  of  the  Borrowing  Base  attributable  to  Eligible  Portfolio        Investments in any single Industry Classification Group (other than each of the Industry        Classification  Groups  that  are  part  of  the  Two  Largest  Industry  Classification  Groups)        shall not exceed 15% of the Borrowing Base, and the Borrowing Base shall be reduced        by removing Eligible Portfolio Investments therefrom (but not from the Collateral) to the        extent such portion would otherwise exceed 15% of the Borrowing Base;               (j)   if at any time the weighted average maturity of all Debt Eligible Portfolio        Investments (based on the fair value of such Eligible Portfolio Investments to the extent        included  in  the  Borrowing  Base)  exceeds  6.25  years,  the  Borrowing  Base  shall  be        reduced  by  removing  Debt  Eligible  Portfolio  Investments  therefrom  (but  not  from  the        Collateral)  to  the  extent  necessary  to  cause  the  weighted  average  maturity  of  all  Debt        Eligible Portfolio Investments included in the Borrowing Base to be no greater than 6.25        years (subject to all other constraints, limitations and restrictions set forth herein);               (k)   the portion of the Borrowing Base attributable to Debt Eligible Portfolio        Investments with a maturity greater than 7 years shall not exceed 15% of the Borrowing        Base,  and  the  Borrowing  Base  shall  be  reduced  by  removing  Eligible  Portfolio        Investments  therefrom  (but  not  from  the  Collateral)  to  the  extent  such  portion  would        otherwise exceed 15% of the Borrowing Base;               (l)   the  portion  of  the  Borrowing  Base  attributable  to  Eligible  Portfolio        Investments  issued  by  one  or  more  Portfolio  Companies  with  a  trailing  twelve-month        total  debt  to  EBITDA  ratio  of  greater  than  6.00  to  1.00  shall  not  exceed  15%  of  the                                         95   25272637.12.BUSINESS 

 

      Borrowing  Base,  and  the  Borrowing  Base  shall  be  reduced  by  removing  Eligible        Portfolio Investments therefrom (but not from the Collateral) to the extent such portion        would otherwise exceed 15% of the Borrowing Base; provided, that  LTV Transactions        may be excluded from such calculations;               (m)   the portion of the Borrowing Base attributable to PIK Obligations and DIP        Loans  shall  not  exceed  10%  of  the  Borrowing  Base,  and  the  Borrowing  Base  shall  be        reduced  by  removing  Eligible  Portfolio  Investments  therefrom  (but  not  from  the        Collateral)  to  the  extent  such  portion  would  otherwise  exceed  10%  of  the  Borrowing        Base;               (n)   if at any time the Weighted Average Fixed Coupon (after giving effect to        any Hedging Agreement) is less than the greater of (i) 8% and (ii) the one-month LIBO        Rate  plus  4.5%,  the  Borrowing  Base  shall  be  reduced  by  removing  Debt  Eligible        Portfolio Investments therefrom (but not from the Collateral) to the extent necessary to        cause the Weighted Average Fixed Coupon to be at least equal to the greater of (x) 8%        and (y) the one-month LIBO Rate plus 4.5% (subject to all other constraints, limitations        and restrictions set forth herein);                (o)   if at any time the Weighted Average Floating Spread (after giving effect to        any  Hedging  Agreement)  is  less  than  4.5%,  the  Borrowing  Base  shall  be  reduced  by        removing Debt Eligible Portfolio Investments therefrom (but not from the Collateral) to        the extent necessary to cause the Weighted Average Floating Spread to be at least 4.5%        (subject to all other constraints, limitations and restrictions set forth herein);                (p)   the  portion  of  the  Borrowing  Base  attributable  to  Eligible  Portfolio        Investments  that  are  Affiliate  Investments  (other  than  in  MRI  to  the  extent  such        investment  constitutes  an  Eligible  Portfolio  Investment)  shall  not  exceed  20%  of  the        Borrowing  Base,  and  the  Borrowing  Base  shall  be  reduced  by  removing  Affiliate        Investments,  other  than  in  MRI  to  the  extent  such  investment  constitutes  an  Eligible        Portfolio Investment, therefrom (but not from the Collateral) to the extent such portion        would otherwise exceed 20% of the Borrowing Base;                (q)   no portion of the Borrowing Base shall be attributable to (a) any (i) Equity        Interests (other than of MRI to the extent the investment in MRI constitutes an Eligible        Portfolio Investment), (ii) warrants, options or other rights for the purchase or acquisition        of  Equity  Interests,  (iii)  any  Investment  in  debt  Securities  that  is  convertible  into  or        exchangeable for shares of Equity Interests, (b) any Structured Finance Obligation or an        investment in any Third Party Finance Companies or (c) investment in a joint venture or        other  Person  that  is  in  the  principal  business  of  making  debt  or  equity  investments  in        other Persons;                (r)   the  portion  of  the  Borrowing  Base  attributable  to  Foreign  Eligible        Portfolio Investments shall not exceed 10% of the Borrowing Base, and the Borrowing        Base  shall  be  reduced  by  removing  Eligible  Portfolio  Investments  therefrom  (but  not        from  the  Collateral)  to  the  extent  such  portion  would  otherwise  exceed  10%  of  the        Borrowing Base; and                                        96   25272637.12.BUSINESS 

 

            (s)   the portion of the Borrowing Base attributable to LTV Transactions shall        not  exceed  10%  of  the  Borrowing  Base,  and  the  Borrowing  Base  shall  be  reduced  by        removing  Eligible  Portfolio  Investments  therefrom  (but  not  from  the  Collateral)  to  the        extent such portion would otherwise exceed 10% of the Borrowing Base; and               (t)   the portion of the Borrowing Base attributable to Debt Eligible Portfolio        Investments that are not Defaulted Obligations pursuant to clause (a)(v) of the definition        thereof,  but  as  to  which  the  Borrower  has  delivered  written  notice  to  the  Portfolio        Company declaring such Indebtedness in default and such default has not been remedied,        cured or waived, shall not exceed 20% of the Borrowing Base, and the Borrowing Base        shall be reduced by removing Eligible Portfolio Investments therefrom (but not from the        Collateral)  to  the  extent  such  portion  would  otherwise  exceed  20%  of  the  Borrowing        Base.               For all purposes of this Section 5.13, all issuers of Eligible Portfolio Investments  that  are  Affiliates  of  one  another  shall  be  treated  as  a  single  issuer  (unless  such  issuers  are  Affiliates of one another solely because they are under the common Control of the same private  equity sponsor or similar sponsor).  For the avoidance of doubt, (i) no Portfolio Investment shall  be  an  Eligible  Portfolio  Investment  unless,  among  the  other  requirements  set  forth  in  this  Agreement,  (x)  such  Investment  is  subject  only  to  Eligible  Liens  and  (y)  such  Investment  is  Transferable, (ii) with respect to Letters of Credit issued to support obligations of any Portfolio  Company, the underlying obligations of such Portfolio Company to the applicable Obligors in  respect of such Letters of Credit shall not be included in the Borrowing Base, and (iii) no Cash  Collateral securing any LC Exposure shall be included in the Borrowing Base.  In addition, as  used herein, the following terms have the following meanings:               “Advance  Rate”  means,  as  to  any  Eligible  Portfolio  Investment  and  subject  to  adjustment as provided above, the following percentages with respect to such Eligible Portfolio  Investment:                  Eligible Portfolio Investment            Unquoted     Quoted  Cash and Cash Equivalents (including Short-Term U.S.      n/a        100%  Government Securities)  Long-Term U.S. Government Securities                      n/a         85%  Performing First Lien Bank Loans                          65%         75%  Performing Last Out Loans                                 55%         65%  Performing Second Lien Bank Loans                         50%         60%  Performing High Yield Securities                          45%         55%  Performing Mezzanine Investments and Performing Covenant- 40%         50%  Lite Loans   Performing PIK Obligations and Performing DIP Loans       35%         40%  Performing Common Equity of MRI                           25%         30%               Notwithstanding  the  foregoing,  at  any  time  the  Consolidated  Asset  Coverage  Ratio  is  less  than  167%,  every  Advance  Rate  in  the  table  above  that  is  below  the  line  for  “Performing First Lien Bank Loans” shall be 5% less than the applicable Advance Rate indicated                                        97   25272637.12.BUSINESS 

 

in the table. For the avoidance of doubt, the above categories are intended to be indicative of the  traditional  investment  types  in  a  fully  capitalized  issuer.  All  determinations  of  whether  a  particular portfolio investment belongs to one category or another shall be made by the Borrower  on  a  consistent  basis  with  the  foregoing.    For  example,  a  secured  bank  loan  at  a  holding  company, the only assets of which are the shares of a fully capitalized operating company, may  constitute Mezzanine Investments but would not ordinarily constitute a First Lien Bank Loan.               “Approved  Foreign  Currency”  means  Canadian  Dollars,  Euro,  Great  British  Pound Sterling and any other currency approved from time to time by the Administrative Agent  in its reasonable discretion.                “Bank  Loans”  means  debt  obligations  (including  term  loans,  revolving  loans,  debtor-in-possession financings, the funded portion of revolving credit lines and letter of credit  facilities and other similar loans and investments including interim loans, bridge loans and senior  subordinated  loans)  that  are  generally  provided  under  a  syndicated  loan  or  credit  facility  or  pursuant to any loan agreement or other similar credit facility, whether or not syndicated.                “Cash” has the meaning assigned to such term in Section 1.01 of this Agreement.                “Cash Equivalents” has the meaning assigned to such term in Section 1.01 of this  Agreement.               “Covenant-Lite  Loan”  means  a  Bank  Loan  that  does  not  require  the  Portfolio  Company thereunder to comply with at least one financial maintenance covenant (including any  covenant  relating  to  a  borrowing  base,  asset  valuation  or  similar  asset-based  requirement),  in  each case, regardless of whether compliance with one or more incurrence covenants is otherwise  required by such Bank Loan.               “Debt Eligible Portfolio Investment” means an Eligible Portfolio Investment that  is an Investment in Indebtedness.                “Defaulted Obligation” means (a) any Investment in Indebtedness (i) as to which,  (x) a default as to the payment of principal and/or interest has occurred and is continuing for a  period of thirty two (32) consecutive days with respect to such Indebtedness (without regard to  any grace period applicable thereto, or waiver thereof) or (y) a default not set forth in clause (x)  has  occurred  and  the  holders  of  such  Indebtedness  have  accelerated  all  or  a  portion  of  the  principal amount thereof as a result of such default; (ii) as to which a default as to the payment of  principal and/or interest has occurred and is continuing on another material debt obligation of the  Portfolio Company under such Indebtedness which is senior or pari passu in right of payment to  such Indebtedness (with regard to any grace period applicable thereto, or waiver thereof); (iii) as  to which the Portfolio Company under such Indebtedness or others have (x) engaged in an out- of-court  restructuring  process  (including  through  any  provision  of  the  Uniform  Commercial  Code  or  other  law)  in  the  past  180  days  or  (y)  instituted  proceedings  to  have  such  Portfolio  Company  adjudicated  bankrupt  or  insolvent  or  placed  into  receivership  and  such  proceedings  have not been stayed or dismissed or such Portfolio Company has filed for protection under the  United States Bankruptcy Code or under any  foreign bankruptcy or insolvency proceeding, or  has  had  a  receiver,  conservator,  trustee,  administrator,  assignee  for  the  benefit  of  creditors  or                                        98   25272637.12.BUSINESS 

 

similar Person charged with reorganization or liquidation of its business or custodian, appointed  for it (unless, in the case of clause (ii) or (iii), such Indebtedness is a DIP Loan, in which case it  shall not be deemed to be a Defaulted Obligation under such clause); (iv) as to which a default  rate  of  interest  has  been  and  continues  to  be  charged  for  more  than  120  consecutive  days,  or  foreclosure on collateral for such Indebtedness has been commenced and is being pursued by or  on behalf of the holders thereof; or (v) as to which the Borrower has delivered written notice to  the  Portfolio  Company  declaring  such  Indebtedness  in  default  and  such  default  has  not  been  remedied, cured or waived within 90 days after delivery of such notice; or (vi) as to which the  Borrower otherwise exercises significant remedies following a default; and (b) stock in respect  of which (x) the issuer (x) has failed to meet any scheduled redemption obligations or pay its  latest  declared  cash  dividend  with  respect  to  such  stock  or  any  other  class  of  stock  after  the  expiration  of  any  applicable  grace period  or  (y) any outstanding  indebtedness of the  issuer  of  such  stock  would  satisfy  clause  (a)  above  if  such  indebtedness  was  an  Investment  in  Indebtedness  (or if  any  agent  or  lender with  respect to  any indebtedness  of  the  issuer of such  stock has delivered written notice declaring such indebtedness in default or as to which any such  agent or lender has exercised significant remedies following a default).               “DIP  Loan”  means  a  Bank  Loan,  whether  revolving  or  term,  that  is  originated  after  the  commencement  of  a  case  under  Chapter  11  of  the  Bankruptcy  Code  by  a   Portfolio  Company, which is a debtor in possession as described in Section 1107 of the Bankruptcy Code  or  a  debtor  as  defined  in  Section  101(13)  of  the  Bankruptcy  Code  in  such  case  (a  “Debtor”)  organized under the laws of the United States or any state therein and domiciled in the United  States, which satisfies the following criteria:  (a) the DIP Loan is duly authorized by a final order  of the applicable bankruptcy court or federal district court under the provisions of subsection (b),  (c) or (d) of 11 U.S.C. Section 364; (b) the Debtor’s bankruptcy case is still pending as a case  under  the  provisions  of  Chapter  11  of  Title  11  of  the  Bankruptcy  Code  and  has  not  been  dismissed or converted to a case under the provisions of Chapter 7 of Title 11 of the Bankruptcy  Code; (c) the Debtor’s obligations under such loan have not been (i) disallowed, in whole or in  part, or (ii) subordinated, in whole or in part, to the claims or interests of any other Person under  the provisions of 11 U.S.C. Section 510; (d) the DIP Loan is secured and the Liens granted by  the applicable  bankruptcy  court  or  federal  district  court  in relation  to the  Loan have  not been  subordinated or junior to, or pari passu with, in whole or in part, to the Liens of any other lender  under the provisions of 11 U.S.C. Section 364(d) or otherwise; (e) the Debtor is not in default on  its obligations under the loan; (f) neither the Debtor nor any party in interest has filed a Chapter  11 plan with the applicable federal bankruptcy or district court that, upon confirmation, would (i)  disallow or subordinate the loan, in whole or in part, (ii) subordinate, in whole or in part, any  Lien granted in connection with such loan, (iii) fail to provide for the repayment, in full and in  cash, of the loan upon the effective date of such plan or (iv) otherwise impair, in any manner, the  claim evidenced by  the  loan; (g) the DIP  Loan is  documented in  a  form  that is  commercially  reasonable; (h) the DIP Loan shall not provide for more than 50% (or a higher percentage with  the consent of the Required Lenders) of the proceeds of such loan to be used to repay prepetition  obligations owing to all or some of the same lender(s) in a “roll-up” or similar transaction; (i) no  portion of the DIP Loan is payable in consideration other than cash; and (j) no portion of the DIP  Loan has been credit bid under Section 363(k) of the Bankruptcy Code or otherwise.  For the  purposes of this definition, an order is a “final order” if the applicable period for filing a motion  to reconsider or notice of appeal in respect of a permanent order authorizing the Debtor to obtain                                         99   25272637.12.BUSINESS 

 

credit  has  lapsed  and  no  such  motion  or  notice has  been  filed  with  the  applicable  bankruptcy  court or federal district court or the clerk thereof.               “EBITDA”  means  the  consolidated  net  income  of  the  applicable  Person  (excluding extraordinary gains and extraordinary losses (to the extent excluded in the definition  of “EBITDA” in the relevant agreement relating to the applicable Eligible Portfolio Investment))  for  the  relevant  period  plus,  without  duplication,  the  following  to  the  extent  deducted  in  calculating  such  consolidated  net  income  in  the  relevant  agreement  relating  to  the  applicable  Eligible Portfolio Investment for such period: (i) consolidated interest charges for such period,  (ii) the provision for Federal, state, local and foreign income taxes payable for such period, (iii)  depreciation and amortization expense for such period, and (iv) such other adjustments included  in  the  definition  of  “EBITDA”  (or  similar  defined  term  used  for  the  purposes  contemplated  herein)  in  the  relevant  agreement  relating  to  the  applicable  Eligible  Portfolio  Investment,  provided that such adjustments are usual and customary and substantially comparable to market  terms for substantially similar debt of other similarly situated borrowers at the time such relevant  agreements are entered into as reasonably determined in good faith by the Borrower.               “Eligible  Liens”  has  the  meaning  assigned  to  such  term  in  Section  1.01  of  this  Agreement.               “First Lien Bank Loan” means a Bank Loan that is entitled to the benefit of a first  lien  and  first  priority  perfected  security  interest  on  all  or  substantially  all  of  the  assets  of  the  respective borrower and guarantors  obligated in respect thereof, and which has the most senior  pre-petition priority in any bankruptcy, reorganization, arrangement, insolvency, or liquidation  proceedings in such collateral; provided, however, that, in the case of accounts receivable and  inventory (and the proceeds thereof), such lien and security interest may be second in priority to  a Permitted Prior Working Capital Lien; and further provided that any portion (and only such  portion) of such a Bank Loan which has a total debt to EBITDA ratio above 4.00 to 1.00 shall  receive an Advance Rate equal to the Advance Rate applicable to a Second Lien Bank Loan. For  the avoidance of doubt, in no event shall a First Lien Bank Loan include a Last Out Loan.                “Fixed  Rate  Portfolio  Investment”  means  a  Debt  Eligible  Portfolio  Investment  that bears interest at a fixed rate.               “Floating Rate Portfolio Investment” means a Debt Eligible Portfolio Investment  that bears interest at a floating rate.                “Foreign  Eligible  Portfolio  Investments”  means  Eligible  Portfolio  Investments  with respect to which any or all of the following is true: (i) such Eligible Portfolio Investment is  denominated and payable only in the currency of a Permitted Foreign Jurisdiction, (ii) the issuer  of  such  Eligible  Portfolio  Investment  is  organized  under  the  laws  of  a  Permitted  Foreign  Jurisdiction,  (iii)  the  issuer  of  such  Eligible  Portfolio  Investment  is  domiciled  in  a  Permitted  Foreign Jurisdiction, (iv) the principal operations and property or any other assets of the issuer of  such  Eligible  Portfolio  Investment  pledged  as  collateral  are  located  in  a  Permitted  Foreign  Jurisdiction, or (v) the only place of payment of such loans is a Permitted Foreign Jurisdiction.                                        100   25272637.12.BUSINESS 

 

            “High Yield Securities” means debt Securities, in each case (a) issued by public  or private issuers, (b) issued pursuant to an effective registration statement or pursuant to Rule  144A under the Securities Act (or any successor provision thereunder) and (c) that are not Cash  Equivalents,  Mezzanine  Investments  (described  under  clause  (i)  of  the  definition  thereof)  or  Bank Loans.               “Last Out Loan” means, with respect to any Bank Loan that is a term loan  structured in a first out tranche and a last out tranche (with the first out tranche entitled to a lower  interest rate but priority with respect to payments), that portion of such Bank Loan that is the last  out tranche; provided that:   (a) such last out tranche is entitled (along with the first out tranche) to the benefit of a first lien  and  first  priority  perfected  security  interest  on  all  or  substantially  all  of  the  assets  of  the  respective borrower and guarantors obligated in respect thereof, and which has the most senior  pre-petition priority in any bankruptcy, reorganization, arrangement, insolvency, or liquidation  proceedings;   (b) the ratio of (x) the amount of the first out tranche to (y) EBITDA of the underlying obligor  does not at any time exceed 2.00 to 1.00;    (c)  such  last  out  tranche  (i)  gives  the  holders  of  such  last  out  tranche  full  enforcement  rights  during the existence of an event of default (subject to customary exceptions, including standstill  periods and if the holders of the first out tranche have previously exercised enforcement rights),  (ii)  shall  have  the  same  maturity  date  as  the  first  out  tranche,  (iii)  is  entitled  to  the  same  representations, covenants and events of default as the holders of the first out tranche (subject to  customary  exceptions), and (iv) provides  the holders  of  such last  out  tranche with  customary  protections (including consent rights with respect to (1) any increase of the principal balance of  the first out tranche, (2) any increase of the margins (other than as a result of the imposition of  default  interest)  applicable  to  the  interest  rates  with  respect  to  the  first  out  tranche,   (3)  any  reduction  of  the  final  maturity  of  the  first  out  tranche,  and  (4)  amending  or  waiving  any  provision  in  the  underlying  loan  documents  that  is  specific  to  the  holders  of  such  last  out  tranche); and   (d) such first out tranche is not subject to multiple drawings (unless, at the time of such drawing  and after giving effect thereto, the ratio referenced in clause (b) above is not exceeded).               “Long-Term  U.S.  Government  Securities”  means  U.S.  Government  Securities  maturing more than three months from the applicable date of determination.               “LTV  Transaction”  means  any  transaction  that  (i)  does  not  include  a  financial  covenant based on debt to EBITDA, debt to EBIT or a similar multiple of debt to operating cash  flow,  (ii)  is  not  a  Covenant-Lite  Loan,  and  (iii)  is  designated  as  an  LTV  Transaction  by  the  Borrower at the time of the initial investment.               “Mezzanine  Investments”  means  (i)  debt  Securities  (including  convertible  debt  Securities  (other  than  the  “in-the-money”  equity  component  thereof))  (a)  issued  by  public  or                                       101   25272637.12.BUSINESS 

 

private  Portfolio  Companies,  (b)  issued  without  registration  under  the  Securities  Act,  (c)  not  issued pursuant to Rule 144A under the Securities Act (or any successor provision thereunder),  (d) that are not Cash Equivalents and (e) contractually subordinated in right of payment to other  debt of the same Portfolio Company and (ii) a Bank Loan that is not a First Lien Bank Loan, a  Second Lien Bank Loan, High Yield Security, Last Out Loan or a Covenant-Lite Loan.               “Noteless  Assigned  Loan”  means  a  Bank  Loan  with  respect  to  which:  (a)  the  underlying  documentation  does  not  require  the  underlying  borrower  to  execute  and  deliver  a  promissory  note  to  evidence  the  indebtedness  created  under  such  Bank  Loan;  (b)  neither  the  Borrower nor any of its Affiliates was an agent with respect to such Bank Loan at the time of  origination; and (c) the applicable Obligor has affirmatively requested (or in the case of a Bank  Loan  acquired  by  an  Obligor  prior  to  the  Original  Effective  Date,  requested  prior  to  the  15th  Business  Day  following  the  Original  Effective  Date)  a  promissory  note  from  the  underlying  agent and borrower and has used all commercially reasonable efforts to obtain such promissory  note but has been unable to obtain a promissory note from the underlying borrower (but only for  so long as the applicable Obligor has not received such a promissory note); provided that, any  portion of the Borrowing Base that consists of an Eligible Portfolio Investment that is a Noteless  Assigned Loan shall be identified as such in any Borrowing Base Certificate.               “Performing”  means  with  respect  to  any  Eligible  Portfolio  Investment,  such  Eligible Portfolio Investment (i) is not a Defaulted Obligation, (ii) is not on non-accrual status  (including PIK non-accrual status) as of the Borrower’s latest financial filings with the SEC, and  (iii)  does  not  represent  debt  or  Equity  Interests  of  an  issuer  that  has  issued  a  Defaulted  Obligation.                “Performing  Common  Equity”  means  Equity  Interests  (other  than  Preferred  Stock) and warrants of a Portfolio Company all of whose outstanding debt is Performing.               “Performing  Covenant-Lite  Loans”  means  funded  Covenant-Lite  Loans  that  (a)  are not PIK Obligations and (b) are Performing.               “Performing  DIP  Loans”  means  funded  DIP  Loans  that  (a)  are  not  PIK  Obligations and (b) are not Defaulted Obligations.                “Performing First Lien Bank Loans” means funded First Lien Bank Loans that (a)  are not PIK Obligations, DIP Loans, Covenant-Lite Loans or Second Lien Bank Loans and (b)  are Performing.               “Performing High Yield Securities” means funded High Yield Securities that (a)  are not PIK Obligations and (b) are Performing.               “Performing Last Out Loans” means funded Last Out Loans that (a) are not PIK  Obligations,  DIP  Loans,  Covenant-Lite  Loans  or  Second  Lien  Bank  Loans  and  (b)  are  Performing.               “Performing Mezzanine Investments” means funded Mezzanine Investments that  (a) are not PIK Obligations and (b) are Performing.                                       102   25272637.12.BUSINESS 

 

            “Performing Second Lien Bank Loans” means funded Second Lien Bank Loans  that (a) are not PIK Obligations, DIP Loans, Covenant-Lite Loans or Last Out Loans and (b) are  Performing.               “Permitted Foreign Jurisdiction” means Canada, the United Kingdom, Guernsey,  Luxembourg and other countries and jurisdictions to be agreed upon.                “Permitted  Prior  Working  Capital  Lien”  means,  with  respect  to  a  Portfolio  Company that is a borrower under a Bank Loan, a security interest to secure a working capital  facility for such Portfolio Company in the accounts receivable and inventory (and the proceeds  thereof)  of  such  Portfolio  Company  and  any  of  its  subsidiaries  that  are  guarantors  of  such  working  capital  facility;  provided  that  (i)  such  Bank  Loan  has  a  second  priority  lien  on  such  accounts receivable and inventory (and the proceeds thereof), (ii) such working capital facility is  not secured by any other assets (other than a second priority lien, subject to the first priority lien  of the Bank Loan, on any other assets) and does not benefit from any standstill rights or other  agreements (other than customary rights) with respect to any other assets and (iii) the maximum  principal  amount  of  such  working  capital  facility  is  not  at  any  time  greater  than  15%  of  the  aggregate  enterprise  value  of  the  Portfolio  Company  (as  determined  in  accordance  with  the  valuation methodology for determining the enterprise value of the applicable Portfolio Company  as established by an Approved Third-Party Appraiser, Independent Valuation Provider or, with  respect to all other investments, in a commercially reasonable manner determined by the Board  of Directors of the general partners of the Borrower).               “PIK  Obligation”  means  an  obligation  that  provides  that  any  portion  of  the  interest accrued for a specified period of time or until the maturity thereof is, or at the option of  the obligor may be, added to the principal balance of such obligation or otherwise deferred and  accrued rather than being paid in cash, provided that any such obligation shall not constitute a  PIK Obligation if it (i) is a fixed rate obligation and requires payment of interest in cash on an at  least  semi-annual  basis  at  a  rate  of  not  less  than  8%  per  annum  or  (ii)  is  not  a  fixed  rate  obligation and requires payment of interest in cash on an at least semi-annual basis at a rate of  not less than 4.5% per annum in excess of the applicable index.                “Preferred Stock,” as applied to the Equity Interests of any Person, means Equity  Interests of such Person of any class or classes (however designated) that ranks prior, as to the  payment  of  dividends  or  as  to  the  distribution  of  assets  upon  any  voluntary  or  involuntary  liquidation, dissolution or winding up of such Person, to any shares (or other interests) of other  Equity Interests of such Person, and shall include, without limitation, cumulative preferred, non- cumulative preferred, participating preferred and convertible preferred Equity Interests.               “Restructured  Investment”  means,  as  of  any  date  of  determination,  (a)  any  Portfolio Investment that has been a Defaulted Obligation within the past six months, or (b) any  Portfolio  Investment  that  has  in  the  past  six  months  been  on  cash  non-accrual,  or  (c)  any  Portfolio  Investment  that  has  in  the  past  six months  been  amended or  subject  to a deferral  or  waiver if both (i) the effect of such amendment, deferral or waiver is either, among other things,  to  (1)  change  the  amount  of  previously  required  scheduled  debt  amortization  (other  than  by                                        103   25272637.12.BUSINESS 

 

reason  of  repayment  thereof)  or  (2)  extend  the  tenor  of  previously  required  scheduled  debt  amortization,  in  each  case  such  that  the  remaining  weighted  average  life  of  such  Portfolio  Investment is extended by more than 20% and (ii) the reason for such amendment, deferral or  waiver is related to the deterioration of the credit profile of the underlying borrower such that, in  the absence of such amendment, deferral or waiver, it is reasonably expected by the Borrower  that such underlying borrower either (x) will not be able to make any such previously required  scheduled  debt  amortization  payment  or  (y)  is  anticipated  to  incur  a  breach  of  a  material  financial covenant.  A DIP Loan shall not be deemed to be a Restructured Investment, so long as  it does not meet the conditions of the definition of Restructured Investment.                “Second Lien Bank Loan” means a Bank Loan (other than a First Lien Bank Loan  and a Last Out Loan) that is entitled to the benefit of a first and/or second lien and first and/or  second priority perfected security interest on all or substantially all of the assets of the respective  borrower and guarantors obligated in respect thereof.               “Securities” means common and preferred stock, units and participations, member  interests  in  limited  liability  companies,  partnership  interests  in  partnerships,  notes,  bonds,  debentures,  trust  receipts  and  other  obligations,  instruments  or  evidences  of  indebtedness,  including  debt  instruments  of  public  and  private  issuers  and  tax-exempt  securities  (including  warrants, rights, put and call options and other options relating thereto,  representing rights, or  any combination thereof) and other property or interests commonly regarded as securities or any  form of interest or participation therein, but not including Bank Loans.               “Securities Act” means the United States Securities Act of 1933, as amended.               “Short-Term  U.S.  Government  Securities”  means  U.S.  Government  Securities  maturing within three (3) months of the applicable date of determination.               “Spread”  means,  with  respect  to  a  Floating  Rate  Portfolio  Investment,  the  cash  interest  spread  of  such  Floating  Rate  Portfolio  Investment  over  the  applicable  LIBO  Rate;  provided, that, in the case of any Floating Rate Portfolio Investment that does not bear interest by  reference to the LIBO Rate, “Spread” shall mean the cash interest spread of such Floating Rate  Portfolio Investment over the LIBO Rate in effect as of the date of determination for deposits in  Dollars for a period of three (3) months.               “Structured  Finance  Obligations”  means  any  obligation  issued  by  a  special  purpose  vehicle  (or  any  similar  obligor  in  the  principal  business  of  offering,  originating  or  financing pools of receivables or other financial assets) and secured directly by, referenced to, or  representing ownership of or investment in, a pool of receivables or other financial assets of any  obligor, including collateralized loan obligations, collateralized debt obligations and mortgaged- backed securities, or any finance lease.  For the avoidance of doubt, if an obligation satisfies this  definition of “Structured Finance Obligation”, such obligation (a) shall not qualify as any other  category of Portfolio Investment and (b) shall not be included in the Borrowing Base.                                         104   25272637.12.BUSINESS 

 

            “Third Party Finance Company” means a Person that is (i) an operating company  with employees, officers and directors, and (ii) in the primary business of originating loans or  factoring or financing receivables, inventory or other current assets.               “U.S. Government Securities” has the meaning assigned to such term in Section  1.01 of this Agreement.               “Value”  means,  with  respect  to  any  Eligible  Portfolio  Investment,  the  value  thereof determined for purposes of this Agreement in accordance with Section 5.12(b)(ii).               “Weighted Average Fixed Coupon” means, as of any date of determination, the  number, expressed as a percentage, obtained by summing the products obtained by multiplying  the cash interest coupon of each Fixed Rate Portfolio Investment (other than PIK Obligations)  included  in  the  Borrowing  Base  as  of  such  date  by  the  outstanding  principal  balance  of  such  Fixed Rate Portfolio Investment as of such date, dividing such sum by the aggregate outstanding  principal  balance  of  all  such  Fixed Rate  Portfolio  Investments  and rounding up  to the  nearest  0.01%.  For  the  purpose  of  calculating  the  Weighted  Average  Fixed  Coupon,  all  Fixed  Rate  Portfolio Investments that are not currently paying cash interest shall have an interest rate of 0%.               “Weighted Average Floating Spread” means, as of any date of determination, the  number, expressed as a percentage, obtained by summing the products obtained by multiplying,  in the case of each  Floating Rate Portfolio Investment included in the Borrowing Base, on an  annualized  basis,  the  Spread  of  such  Floating  Rate  Portfolio  Investment,  by  the  outstanding  principal balance of such Floating Rate Portfolio Investment as of such date and dividing such  sum  by  the  aggregate  outstanding  principal  balance  of  all  such  Floating  Rate  Portfolio  Investments and rounding the result up to the nearest 0.01%.               “Weighted Average Leverage Ratio” means, as of any date of determination, the  number  obtained  by  summing  the  products  obtained  by  multiplying,  in  the  case  of  each  Debt  Eligible  Portfolio  Investment  included  in  the  Borrowing  Base,  the  leverage  ratio  (the  ratio  of  indebtedness  for  borrowed  money  to  EBITDA,  expressed  as  a  number)  for  the  Portfolio  Company of such Eligible Portfolio Investment of all Indebtedness that has a ranking of payment  or lien priority senior to or pari passu with and including the tranche that includes the Borrower's  Eligible Portfolio Investment, by the fair value of such Eligible Portfolio Investment as of such  date  and  dividing  such  sum  by  the  aggregate  of  the  fair  values  of  all  such  Eligible  Portfolio  Investments and rounding the result up to the nearest 0.01.               SECTION 5.14.  Taxes.  Each of the Borrower and its Subsidiaries will timely  file  or  cause  to  be  timely  filed  all  U.S.  federal,  state  and  material  local  Tax  returns  that  are  required to be filed by it and all other material Tax returns that are required to be filed by it and  will pay all Taxes for which it is directly or indirectly liable and any assessments made against it  or  any  of  its  property  and  all  other  Taxes,  fees  or  other  charges  imposed  on  it  or  any  of  its  property by any Governmental Authority, except Taxes that are being contested in good faith by  appropriate  proceedings,  and  with  respect  to  which  reserves  in  conformity  with  GAAP  are  provided  on the  books  of  the  Borrower or  its  Subsidiaries,  as  the  case  may  be.   The  charges,  accruals  and  reserves  on  the  books  of  the  Borrower  and  any  of  its  Subsidiaries  in  respect  of  Taxes and other governmental charges will be adequate in accordance with GAAP.                                       105   25272637.12.BUSINESS 

 

            SECTION 5.15.  Anti-Hoarding of Assets at Non-Pledged SBIC Subsidiaries.  If  any  Non-Pledged  SBIC  Subsidiary  is  not  prohibited  by  any  law,  rule  or  regulation  or  by  any  contract or agreement relating to indebtedness from distributing all or any portion of its assets to  an  Obligor,  then  such  Non-Pledged  SBIC  Subsidiary  shall,  if  a  Significant  Unsecured  Indebtedness Event has occurred and is continuing, distribute to an Obligor the amount of assets  held by such Non-Pledged SBIC Subsidiary that such Non-Pledged SBIC Subsidiary is permitted  to  distribute  and  that,  in  the  good  faith  judgment  of  the  Borrower,  such  Non-Pledged  SBIC  Subsidiary does not reasonably expect to utilize, in the ordinary course of business, to obtain or  maintain  a  financing  from  an  unaffiliated  third  party;  provided,  further,  however,  that  if  a  Significant Unsecured Indebtedness Event has occurred and is continuing and the value of the  assets  owned  by  such  Non-Pledged  SBIC  Subsidiary  significantly  exceeds  the  amount  of  indebtedness of such Non-Pledged SBIC Subsidiary, even if such Non-Pledged SBIC Subsidiary  is prohibited by any contract or agreement relating to indebtedness from distributing all or any  portion of its assets to an Obligor,  the Borrower shall use its commercially reasonable efforts to  take  such  action  as  is  necessary  to  cause  such  SBIC  Subsidiary  to  become  an  Obligor  or  distribute  assets  to an Obligor in  an  amount  equal  to the  amount  of assets  held  by  such  Non- Pledged SBIC Subsidiary that, in the good faith judgment of the Borrower, such Non-Pledged  SBIC  Subsidiary  does  not  reasonably  expect  to  utilize,  in  the  ordinary  course  of  business,  to  obtain or maintain a financing from an unaffiliated third party that includes advance rates that are  substantially comparable to market terms for substantially similar debt financings at such time of  determination.                                    ARTICLE VI                              NEGATIVE COVENANTS               Until the Termination Date, the Borrower covenants and agrees with the Lenders  that:               SECTION 6.01.  Indebtedness.  The Borrower will not nor will it permit any of  its Subsidiaries to, create, incur, assume or permit to exist any Indebtedness, except:               (a)   Indebtedness created hereunder or under any other Loan Document;               (b)   (i) Unsecured  Shorter-Term  Indebtedness  in  an  aggregate  principal  amount not to exceed $5,000,000, so long as no Default or Event of Default exists at the time of  the  incurrence,  refinancing  or  replacement  thereof  (or  immediately  after  the  incurrence,  refinancing  or  replacement  thereof),  and  (ii)  Secured  Longer-Term  Indebtedness,  so  long  as  (w) no  Default  or  Event  of  Default  exists  at  the  time  of  the  incurrence,  refinancing  or  replacement  thereof  (or  immediately  after  the  incurrence,  refinancing  or  replacement  thereof),  (x) prior  to  and  immediately  after  giving  effect  to  the  incurrence,  refinancing  or  replacement  thereof, the Borrower is in pro forma compliance with each of the covenants set forth in Sections  6.07(a), (b), (c), (e) and (f), and on the date of such incurrence, refinancing or replacement the  Borrower delivers to the Administrative Agent a certificate of a Financial Officer to such effect,  (y) prior  to  and  immediately  after  giving  effect  to  the  incurrence,  refinancing  or  replacement                                       106   25272637.12.BUSINESS 

 

thereof, the Covered Debt Amount does not or would not exceed the Borrowing Base then in  effect  and  (z) on  the  date  of  the  incurrence,  refinancing  or  replacement  thereof,  the  Borrower  delivers to the Administrative Agent and each Lender a Borrowing Base Certificate as at such  date  demonstrating  compliance  with  subclause  (y) after  giving  effect  to  such  incurrence,  refinancing or replacement.  For purposes of preparing such Borrowing Base Certificate, (A) the  fair market value of Quoted  Investments shall be the most  recent quotation available for such  Eligible Portfolio Investment and (B) the fair market value of Unquoted Investments shall be the  Value set forth in the Borrowing Base Certificate most recently delivered by the Borrower to the  Administrative Agent pursuant to Section 5.01(d) or if an Unquoted Investment is acquired after  the delivery of the Borrowing Base Certificate most recently delivered, then the Value of such  Unquoted Investment shall be the lower of the cost of such Unquoted Investment and the Internal  Value of such Unquoted Investment; provided, that the Borrower shall reduce the Value of any  Eligible Portfolio Investment referred to in this subclause (B) to the extent necessary to take into  account any events of which the Borrower has knowledge that adversely affect the value of such  Eligible Portfolio Investment;               (c)   Unsecured Longer-Term Indebtedness, so long as (x) no Default or Event  of  Default  exists  at  the  time  of  the  incurrence,  refinancing  or  replacement  thereof  (or  immediately  after  the  incurrence,  refinancing  or  replacement  thereof)  and  (y) prior  to  and  immediately  after  giving  effect  to  the  incurrence,  refinancing  or  replacement  thereof,  the  Borrower is in pro forma compliance with each of the covenants set forth in Sections 6.07(a),  (b), (c), (e) and (f) and on the date of such incurrence, refinancing or replacement (or such later  date  as  the  Administrative  Agent  may  agree  in  its  discretion)  the  Borrower  delivers  to  the  Administrative Agent a certificate of a Financial Officer to such effect;               (d)   Indebtedness of SBIC Subsidiaries; provided that (i) on the date that such  Indebtedness is incurred (for clarity, with respect to any and all revolving loan facilities, term  loan facilities, staged advance loan facilities or any other credit facilities, “incurrence” shall be  deemed  to  take  place  at  the  time  such  facility  is  entered  into,  and  not  upon  each  borrowing  thereunder), prior to and immediately after giving effect to the incurrence thereof, the Borrower  is in pro forma compliance with each of the covenants set forth in Sections 6.07(a), (b), (c), (e)  and (f) and on the date of such incurrence (or such later date as the Administrative Agent may  agree in its discretion) Borrower delivers to the Administrative Agent a certificate of a Financial  Officer  to  such  effect  and  (ii)  in  the  case  of  revolving  loan  facilities  or  staged  advance  loan  facilities, upon each borrowing thereunder, the Borrower is in pro forma compliance with each of  the covenants set forth in Sections 6.07(a), (b), (c), (e) and (f);                (e)   Other  Permitted  Indebtedness  in  an  aggregate  principal  amount  not  to  exceed $5,000,000;               (f)   repurchase  obligations  arising  in  the  ordinary  course  of  business  with  respect to U.S. Government Securities;               (g)   obligations payable to clearing agencies, brokers or dealers in connection  with the purchase or sale of securities in the ordinary course of business;               (h)   obligations of the Borrower under a Permitted SBIC Guarantee;                                        107   25272637.12.BUSINESS 

 

            (i)   Indebtedness of the Borrower under any Hedging Agreements entered into  in  the  ordinary  course  of  the  Borrower’s  business  and  not  for  speculative  purposes,  in  an  aggregate amount not to exceed $10,000,000 at any time outstanding (for clarity, the amount of  any  Indebtedness  under  any  Hedging  Agreement  shall  be  the  amount  such  Obligor  would  be  obligated for under such Hedging Agreement if such Hedging Agreement were terminated at the  time of determination);               (j)   Indebtedness of the Borrower on account of the sale by the Borrower of  the first out tranche of any First Lien Bank Loan that arises solely as an accounting matter under  ASC  860;  provided  that  such  Indebtedness  (i)  is  non-recourse  to  the  Borrower  and  its  Subsidiaries and (ii) would not represent a claim against the Borrower or any of its Subsidiaries  in a bankruptcy, insolvency or liquidation proceeding of the Borrower or its Subsidiaries, in each  case in excess of the amount sold or purportedly sold;                 (k)   Indebtedness in respect of judgments or awards that have been in force for  less than the applicable period for taking an appeal, so long as such judgments or awards do not  constitute an Event of Default; and               (l)   the 2022 Notes in an aggregate principal amount not to exceed, at any time  outstanding  after  the  Restatement  Effective  Date,  an  amount  equal  to  $80,000,000  less  the  aggregate amount of payments of principal made thereon on or after the Restatement Effective  Date.               SECTION 6.02.  Liens.  The Borrower will not, nor will it permit any of its  Subsidiaries  to,  create,  incur,  assume  or  permit  to  exist  any  Lien  on  any  property  or  asset  (including  Equity  Interests  in  any  SBIC  Subsidiary  or  any  other  Subsidiary)  now  owned  or  hereafter  acquired  by  it,  or  assign  or  sell  any  income  or  revenues  (including  accounts  receivable) or rights in respect of any thereof except:               (a)   any  Lien  on  any  property  or  asset  of  the  Borrower  existing  on  the  Restatement Effective Date and set forth in Schedule 3.11(b), provided that (i) no such Lien shall  extend to any other property or asset of the Borrower or any of its Subsidiaries, and (ii) any such  Lien shall secure only those obligations which it secures on the Restatement Effective Date and  extensions,  renewals  and  replacements  thereof  that  do  not  increase  the  outstanding  principal  amount thereof;               (b)   Liens created pursuant to the Security Documents;               (c)   Liens on assets owned by SBIC Subsidiaries;               (d)   Liens  on  Special  Equity  Interests  included  in  the  Portfolio  Investments,  but only to the extent securing obligations in the manner provided in the definition of “Special  Equity Investments” in Section 1.01;                 (e)   Permitted Liens;                                          108   25272637.12.BUSINESS 

 

            (f)   additional  Liens  securing  Indebtedness  not  to  exceed  $3,000,000  in  the  aggregate provided such Indebtedness is not otherwise prohibited under Section 6.01(e) of this  Agreement; and               (g)   Liens on Equity Interests in any SBIC Subsidiary created in favor of the  SBA.               SECTION 6.03.  Fundamental Changes.  The Borrower will not, nor will it  permit any of its Subsidiaries (other than an SBIC Subsidiary) to, enter into any transaction of  merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any  liquidation  or  dissolution).   The  Borrower  will  not,  nor  will  it  permit  any  of  its  Subsidiaries  (other than an SBIC Subsidiary) to, acquire any business or property from, or capital stock of, or  be a party  to any  acquisition of, any  Person,  except  for purchases  or acquisitions  of Portfolio  Investments  and  other  assets  in  the  normal  course  of  the  day-to-day  business  activities  of  the  Borrower and its Subsidiaries (other than an SBIC Subsidiary) and not in violation of the terms  and conditions of this Agreement or any other Loan Document.  The Borrower will not, nor will  it permit any of its Subsidiaries (other than an SBIC Subsidiary) to, convey, sell, lease, transfer  or  otherwise  dispose  of,  in  one  transaction  or  a  series  of  transactions,  any  part  of  its  assets  (including  Cash,  Cash  Equivalents  and  Equity  Interests),  whether  now  owned  or  hereafter  acquired, but excluding (x) assets (including Cash and Cash Equivalents but excluding Portfolio  Investments)  sold  or  disposed  of  in  the  ordinary  course  of  business  of  the  Borrower  and  its  Subsidiaries  (including  to  make  expenditures  of  cash  in  the  normal  course  of  the  day-to-day  business  activities  of  the  Borrower  and  its  Subsidiaries  (other  than  an  SBIC  Subsidiary)) and  (y) subject to the provisions of clauses (d) and (e) below, Portfolio Investments.  The Borrower  will not, nor will it permit any of its Subsidiaries to, file a certificate of division, adopt a plan of  division or otherwise take any action to effectuate a division pursuant to Section 18-217 of the  Delaware Limited Liability Company Act (or any analogous action taken pursuant to applicable  law with respect to any corporation, limited liability company, partnership or other entity.               Notwithstanding the foregoing provisions of this Section:               (a)   any Subsidiary  of  the Borrower may  be merged  or  consolidated with  or  into the Borrower or any other Subsidiary Guarantor; provided that if any such transaction shall  be  (i)  between  a  Subsidiary  or  a  wholly  owned  Subsidiary  Guarantor  and  the  Borrower,  the  Borrower shall be the continuing or surviving entity and (ii) between a Subsidiary and a wholly  owned Subsidiary Guarantor, the wholly owned Subsidiary Guarantor shall be the continuing or  surviving entity;               (b)   any  Subsidiary  of  the  Borrower  may  sell,  lease,  transfer  or  otherwise  dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or  any wholly owned Subsidiary Guarantor of the Borrower;               (c)   the  capital  stock  of  any  Subsidiary  of  the  Borrower  may  be  sold,  transferred or otherwise disposed of to the Borrower or any wholly owned Subsidiary Guarantor  of the Borrower;                                         109   25272637.12.BUSINESS 

 

            (d)   the  Obligors  may  sell,  transfer  or  otherwise  dispose  of  Portfolio  Investments (other than to an SBIC Subsidiary) so long as immediately prior to and immediately  after giving effect to such sale, transfer or other disposition (and any concurrent acquisitions of  Portfolio  Investments  or  payment  of  outstanding  Loans  or  Other  Covered  Indebtedness) the  Covered Debt Amount does not exceed the Borrowing Base;               (e)   the  Obligors  may  sell,  transfer  or  otherwise  dispose  of  Portfolio  Investments (other than ownership interests in SBIC Subsidiaries), Cash and Cash Equivalents to  an SBIC Subsidiary so long as (i) immediately  prior to and immediately after giving effect to  such sale, transfer or other disposition (and any concurrent acquisitions of Portfolio Investments  or  payment  of  outstanding  Loans  or  Other  Covered  Indebtedness) the  Covered  Debt  Amount  does not exceed the Borrowing Base and no Default or Event of Default shall have occurred and  be continuing, and the Borrower delivers to the Administrative Agent a certificate of a Financial  Officer  to  such  effect,  (ii) immediately  after  giving  effect  to  such  sale,  transfer  or  other  disposition,  either  (x) the  amount  by  which  the  Borrowing  Base  exceeds  the  Covered  Debt  Amount immediately prior to such sale, transfer or other disposition is not diminished as a result  of  such  sale,  transfer  or  other  disposition  or  (y) the  Covered  Debt  Amount  immediately  after  giving  effect  to  such  sale,  transfer  or  other  disposition  (and  any  concurrent  acquisitions  of  Portfolio Investments or payment of outstanding Loans or Other Covered Indebtedness) does not  exceed 85% of the Borrowing Base, (iii) immediately after giving effect to such sale, transfer or  other  disposition  (and  any  concurrent  acquisitions  of  Portfolio  Investments  or  payment  of  outstanding  Loans  or  Other Covered  Indebtedness), the  Consolidated Asset Coverage Ratio  is  not less than 167%, and (iv) if the sum of (x) all sales, transfers or other dispositions under this  clause  (e) that  occur  after the Revolver Termination  Date and do  not  result  in Net  Asset Sale  Proceeds  for  fair  value  that  are  applied  in  accordance  with  Section  2.09(c)(i)  and  (y)  all  Investments  under  Section  6.04(e)  that  occur  after  the  Revolver  Termination  Date,  shall  not  exceed 20% of the Commitments on the Revolver Termination Date;               (f)   the Borrower may merge or consolidate with any other Person, so long as  (i) the  Borrower  is  the  continuing  or  surviving  entity  in  such  transaction  and  (ii) at  the  time  thereof and after giving effect thereto, no Default or Event of Default shall have occurred or be  continuing;               (g)   the  Borrower  and  its  Subsidiaries  may  sell,  lease,  transfer  or  otherwise  dispose of equipment or other property or assets that do not consist of Portfolio Investments so  long as the aggregate amount of all such sales, leases, transfer and dispositions does not exceed  $5,000,000 in any fiscal year; and               (h)   any Subsidiary of the Borrower may be liquidated or dissolved; provided  that  (i)  in  connection  with  such  liquidation  or  dissolution,  any  and  all  of  the  assets  of  such  Subsidiary  shall  be  distributed  or  otherwise  transferred  to  the  Borrower  or  any  wholly  owned  Subsidiary Guarantor of the Borrower and (ii) the Borrower determines in good faith that such  liquidation is in the best interests of the Borrower and is not materially disadvantageous to the  Lenders.               SECTION 6.04.  Investments.  The Borrower will not, nor will it permit any of  its Subsidiaries to, acquire, make or enter into, or hold, any Investments except:                                       110   25272637.12.BUSINESS 

 

            (a)   operating deposit accounts with banks;               (b)   Investments  by  the  Borrower  and  the  Subsidiary  Guarantors  in  the  Borrower and the Subsidiary Guarantors;               (c)   Hedging Agreements entered into in the ordinary course of the Borrower’s  business for financial planning and not for speculative purposes;               (d)   Portfolio  Investments  by the  Borrower  and  its  Subsidiaries  to  the  extent  such Portfolio Investments are permitted under the Investment Company Act (to the extent such  applicable  Person  is  subject  to  the  Investment  Company  Act)  and  the  Investment  Policies  (as  amended by Permitted Policy Amendments); provided, however, that no Investment in any Joint  Venture (other than the I-45 Entities, the Investments in which are addressed in Section 6.04(i)  below) shall be permitted unless (i) immediately prior to, and immediately after giving effect to  such contribution, (A) no Default or Event of Default shall have occurred and be continuing, (B)  the  Obligors’  Net  Worth  exceeds  $225,000,000 and  the  Borrower  is  in  pro  forma  compliance  with each of the covenants set forth in Sections 6.07(a), (b), (c), (e) and (f) and (C) immediately  prior to and immediately after giving effect to the contribution, the Covered Debt Amount does  not  or  would  not  exceed  the  Borrowing  Base  then  in  effect  and  (ii) on  the  date  of  such  contribution,  the  Borrower  delivers  to  the  Administrative  Agent  and  each  Lender  (x)  a  Borrowing  Base  Certificate  as  at  such  date  demonstrating  compliance  with  subclause  (C) immediately after giving effect to such contribution and (y) a certification from a Financial  Officer certifying to subclauses (A) and (B);               (e)   Equity  Interests  in  (or  capital  contribution  to)  SBIC  Subsidiaries  to  the  extent not prohibited by Section 6.03(e);               (f)   Investments by any SBIC Subsidiary;               (g)   Investments in Cash and Cash Equivalents;               (h)   Investments described on Schedule 3.12(b) hereto;                (i)   Investments in I-45 Entities; provided that, after the aggregate amount of  all  contributions  made  by  the  Borrower  or  any  of  its  Subsidiaries  (whether  individually  or  collectively)  to  I-45  Entities  exceeds  or  will  exceed,  immediately  after  giving  effect  to  such  contribution,  $68,000,000,  no  Investment  in  any  I-45  Entity  shall  be  permitted  unless  (i)  immediately prior to, and immediately after giving effect to such contribution, (A) no Default or  Event of Default shall have occurred and be continuing, (B) the Obligors’ Net Worth exceeds  $225,000,000 and the Borrower is in pro forma compliance with each of the covenants set forth  in Sections 6.07(a), (b), (c), (e) and (f) and (C) immediately prior to and immediately after giving  effect  to  the  contribution,  the  Covered  Debt  Amount  does  not  or  would  not  exceed  the  Borrowing Base then in effect and (ii) on the date of such contribution, the Borrower delivers to  the  Administrative  Agent  and  each  Lender  (x)  a  Borrowing  Base  Certificate  as  at  such  date  demonstrating  compliance  with  subclause  (C) immediately  after  giving  effect  to  such  contribution and (y) a certification from a Financial Officer certifying to subclauses (A) and (B);  and                                        111   25272637.12.BUSINESS 

 

            (j)   additional  Investments  up  to  but  not  exceeding  $5,000,000  in  the  aggregate  (for  purposes  of  this  clause  (j),  the  aggregate  amount  of  an  Investment  at  any  time  shall be deemed to be equal to (A) the aggregate amount of cash, together with the aggregate fair  market  value  of  property  loaned,  advanced, contributed,  transferred  or  otherwise invested that  gives  rise to such  Investment (calculated  at the time such Investment is  made), minus (B) the  aggregate  amount  of  dividends,  distributions  or other  payments  received  in  cash  in  respect  of  such Investment; provided that in no event shall the aggregate amount of any Investment be less  than zero; and provided further that the amount of any Investment shall not be reduced by reason  of  any  write-off  of  such  Investment,  nor  increased  by  way  of  any  increase  in  the  amount  of  earnings retained in the Person in which such Investment is made that have not been dividended,  distributed or otherwise paid out).               SECTION 6.05.  Restricted Payments.  The Borrower will not, nor will it permit  any of its Subsidiaries (other than the SBIC Subsidiaries) to, declare or make, or agree to pay or  make, directly or indirectly, any Restricted Payment, except that:               (a)   the  Borrower  may  declare  and  pay  dividends  with  respect  to  the  capital  stock of the Borrower payable solely in additional shares of the Borrower’s common stock;                (b)   so  long  as,  immediately  prior  to  and  immediately  after  giving  effect  thereto, the Consolidated Asset Coverage Ratio exceeds 150%, the Borrower may declare and  pay  dividends  and  distributions  in  either  case  in  cash  or  other  property  (excluding  for  this  purpose the Borrower’s common stock) in or with respect to any taxable year of the Borrower (or  any  calendar  year,  as  relevant)  in  amounts  not  to  exceed  the  higher  of  (x)  the  net  investment  income of the Borrower for the applicable fiscal year determined in accordance with GAAP and  as specified in the annual financial statements most recently delivered pursuant to Section 5.1(a)  and  (y)  110%  (or  125%  if  (1)  no  Default  or  Event  of  Default  shall  have  occurred  and  be  continuing  and  (2)  the  Covered  Debt  Amount  does  not  exceed  85%  of  the  Borrowing  Base  calculated on a pro forma basis after giving effect to any such dividends and distributions) of the  amounts  that  are  required  to  be  distributed  to:  (i)  allow  the  Borrower  to  satisfy  the  minimum  distribution requirements imposed by Section 852(a) of the Code (or any successor thereto) to  maintain its eligibility to be taxed as a RIC for any such taxable year, (ii) reduce to zero for any  such taxable year its liability for federal income taxes imposed on (y) its investment company  taxable income pursuant to Section 852(b)(1) of the Code (or any successor thereto), or (z) its net  capital gain pursuant to Section 852(b)(3) of the Code (or any successor thereto), and (iii) reduce  to  zero  its  liability  for  federal  excise  taxes  for  any  such  calendar  year  imposed  pursuant  to  Section  4982  of  the  Code  (or  any  successor  thereto)  (such  higher  amount  of  (x)  and  (y),  the  “Required Payment Amount”);               (c)   the  Subsidiaries  of  the  Borrower  may  make  Restricted  Payments  to  the  Borrower or to any Subsidiary Guarantor;               (d)   Obligors may make Restricted Payments to repurchase Equity Interests of  the Borrower from officers, directors and employees of the Borrower or any of its Subsidiaries or  their authorized representatives upon the death, disability or termination of employment of such  employees or termination of their seat on the Board of Directors of the Borrower or any of its  Subsidiaries;  provided  that  (i)  no  Default  or  Event  of  Default  shall  have  occurred  and  be                                       112   25272637.12.BUSINESS 

 

continuing or would result therefrom, (ii) such Equity Interests are not registered on Form S-8 or  other  registration  statement or are  not transferable under Rule  144  of the  Securities  Exchange  Act  of  1934,  and  (iii)  the  aggregate  amount  of  all  repurchases  in  any  calendar  year  shall  not  exceed  $500,000, with  unused  amounts in  any  calendar  year being carried  over  to succeeding  calendar years subject to a maximum of $1,000,000 in any calendar year; and               (e)   the Borrower may make other Restricted Payments during the Availability  Period to repurchase or redeem Equity Interests of the Borrower up to an aggregate amount equal  to  $10,000,000  during  such  period,  so  long  as,  on  the  date  of  such  Restricted  Payment  and  immediately after giving effect thereto:                     (1)   no  Default  or  Event  of  Default  shall  have  occurred  and  be             continuing;                     (2)   immediately  prior  to  and  immediately  after  giving  effect  to  such             Restricted  Payment,  the  Covered  Debt  Amount  does  not  exceed  85%  of  the             Borrowing  Base calculated  on  a pro forma basis after  giving  effect  to  any such             Restricted Payment;                      (3)   immediately  prior  to  and  immediately  after  giving  effect  to  such             Restricted  Payment,  the  Borrower  is  in  pro  forma  compliance  with  each  of  the             covenants set forth in Sections 6.07(a), (b), (c), (e) and (f);                     (4)   immediately  prior  to  and  immediately  after  giving  effect  to  such             Restricted Payment, the Consolidated Asset Coverage Ratio exceeds the greater of             (x)  167%  and  (y)  the  covenant  level  in  effect  on  such  date  pursuant  to  Section             6.07(b); and                     (5)   the  Borrower  delivers  to  the  Administrative  Agent  and  each             Lender on such date (or such later date as the Administrative Agent may agree in             its  discretion),  (x)  a  Borrowing  Base  Certificate  as  at  such  date  demonstrating             compliance  with  subclause  (2) immediately  after  giving  effect  to  such             contribution  and  (y)  a  certification  from  a  Financial  Officer  certifying  to             subclauses (1), (3) and (4).               For  the  avoidance of  doubt, the Borrower  shall  not  declare  any dividend  to the  extent  such  declaration  violates  the  provisions  of  the  Investment  Company  Act  that  are  applicable to it.               SECTION 6.06.  Certain Restrictions on Subsidiaries.  The Borrower will not  permit any of its Subsidiaries (other than SBIC Subsidiaries) to enter into or suffer to exist any  indenture,  agreement,  instrument  or  other  arrangement  (other  than  the  Loan  Documents)  that  prohibits  or  restrains,  in  each  case  in  any  material  respect,  or  imposes  materially  adverse  conditions  upon,  the  incurrence  or  payment  of  Indebtedness,  the  granting  of  Liens,  the  declaration or payment of dividends, the making of loans, advances, guarantees or Investments  or the sale, assignment, transfer or other disposition of property, except for any prohibitions or  restraints  contained  in  (i)  any  Indebtedness  permitted  under  Section  6.01(b)  or  (c),  (ii)  any                                       113   25272637.12.BUSINESS 

 

Indebtedness permitted under Section 6.01(e) secured by a Lien permitted under Section 6.02(f)  provided that such prohibitions and restraints are applicable by their terms only to the assets that  are subject to such Lien, (iii) any Indebtedness permitted under Section 6.01(f) or (g) secured by  a Permitted Lien provided that such prohibitions and restraints are applicable by their terms only  to  the  assets  that  are  subject  to  such  Lien  and  (iv)  any  agreement,  instrument  or  other  arrangement pertaining to any sale or other disposition of any asset permitted by this Agreement  so long as the applicable restrictions (i) only apply to such assets and (ii) do not restrict prior to  the consummation of such sale or disposition the creation or existence of the Liens in favor of  the  Collateral  Agent  pursuant  to  the  Security  Documents  or  otherwise  required  by  this  Agreement, or the incurrence or payment of Indebtedness under this Agreement or the ability of  the  Borrower  and  its  Subsidiaries  to  perform  any  other  obligation  under  any  of  the  Loan  Documents.               SECTION 6.07.  Certain Financial Covenants.               (a)   Minimum  Stockholders’  Equity.   The  Borrower  will  not  permit  Stockholders’ Equity as of the last day of any fiscal quarter of the Borrower to be less than the  sum  of  (x) $200,000,000,  plus  (y) 65%  of  the  aggregate  net  proceeds  of  all  sales  of  Equity  Interests by the Borrower and its Subsidiaries after the Original Effective Date (other than the  proceeds of sales of Equity Interests by and among the Borrower and its Subsidiaries).               (b)   Consolidated  Asset  Coverage  Ratio.   The  Borrower  will  not  permit  the  Consolidated Asset Coverage Ratio to be less than 200% at any time; provided that the minimum  Consolidated  Asset  Coverage  Ratio  shall  be  reduced  to  150%  by  written  notice  to  the  Administrative Agent from and after the date on which such ratio is permitted to be so reduced  by the Borrower pursuant to applicable law.               (c)   Senior  Coverage  Ratio.   The  Borrower  will  not  permit  the  Senior  Coverage Ratio to be less than 2.00 to 1.00 at any time.               (d)   Consolidated Interest Coverage Ratio.  The Borrower will not permit the  Consolidated Interest Coverage Ratio to be less than 2.25 to 1.00 as of the last day of any fiscal  quarter of the Borrower.               (e)   Liquidity Test.  The Borrower will not permit the aggregate Value of the  Eligible  Portfolio  Investments  that  can  be  converted  to  Cash  in  fewer  than  10  Business  Days  without more than a 5% change in price to be less than 10% of the Covered Debt Amount for  more  than  30  Business  Days  during  any  period  when  the  Adjusted  Covered  Debt  Balance  is  greater than 90% of the Adjusted Borrowing Base.               (f)   Obligors’  Net  Worth  Test.   The  Borrower  will  not  permit  the  Obligors’  Net Worth to be less than $180,000,000.               SECTION 6.08.  Transactions with Affiliates.  (a)  The Borrower will not, and  will not permit any of its Subsidiaries to, enter into any transactions with any of its Affiliates,  even if otherwise permitted under this Agreement, except (i) transactions in the ordinary course  of  business  at  prices  and  on  terms  and  conditions  not  less  favorable  to  the  Borrower  or  such                                        114   25272637.12.BUSINESS 

 

Subsidiary (or, in the case of a transaction between an Obligor and a non-Obligor Subsidiary, not  less favorable to such Obligor) than could be obtained at the time on an arm’s-length basis from  unrelated third parties, (ii) transactions between or among the Obligors not involving any other  Affiliate,  (iii)  transactions  between  or  among  the  Obligors  and  any  SBIC  Subsidiary  or  any  “downstream affiliate” (as such term is used under the rules promulgated under the Investment  Company Act) company of an Obligor at prices and on terms and conditions not less favorable to  the Obligors than could  be obtained at the time on an  arm’s-length basis from unrelated third  parties,  (iv)  Restricted  Payments  permitted  by  Section  6.05,  dispositions  permitted  by  Section  6.03(e) and Investments permitted by Section 6.04(e), (v) the Existing Affiliate Investments as  the same may be amended in accordance with Section 6.08(b) below, (vi) existing transactions  with  Affiliates  as  set  forth  in  Schedule  6.08,  or  (vii)  the  payment  of  compensation  and  reimbursement  of  expenses  of  directors  in  a  manner  consistent  with  current  practice  of  the  Borrower and general market practice, and indemnification to directors in the ordinary course of  business.               (b)   The Borrower will not, and will not permit any of its Subsidiaries to, enter  into any transactions with any issuer of an Affiliate Investment (including the Existing Affiliate  Investments  and  any  Investment  that  becomes  an  Affiliate  Investment  as  a  result  of  such  transaction  or  any  modification,  supplement  or  waiver  to  an  Existing  Affiliate  Investment  or  other  existing  Affiliate  Investment  except  to  the  extent  in  effect  as  of  the  Original  Effective  Date),  except  transactions  in  the  ordinary  course  of  business  that  are  either  (i)  on  terms  and  conditions not less favorable to the Borrower or such Subsidiary than could be obtained at the  time on an arm's-length basis from unrelated third parties or (ii) in the nature of an amendment,  supplement  or  modification  to  any  such  Affiliate  Investment  on  terms  and  conditions  that  are  similar  to those obtained by  debt  or  equity investors  in similar types  of  investments  in which  such investors do not have the controlling equity interest, in each case, as reasonably determined  in good faith by the Borrower.               SECTION 6.09.  Lines of Business.  The Borrower will not, nor will it permit  any of its Subsidiaries to, engage to any material extent in any business other than in accordance  with its Investment Policies as amended by Permitted Policy Amendments.               SECTION 6.10.  No Further Negative Pledge.  The Borrower will not, and will  not permit any of its Subsidiaries to, enter into any agreement, instrument, deed or lease which  prohibits or limits the ability of any Obligor to create, incur, assume or suffer to exist any Lien  upon  any  of  its  properties,  assets  or  revenues,  whether  now  owned  or  hereafter  acquired,  or  which  requires  the  grant  of  any  security  for  an  obligation  if  security  is  granted  for  another  obligation,  except  the  following:  (a) this  Agreement  and  the  other  Loan  Documents  and  documents  with  respect  to  Indebtedness  under  Section  6.01(b)(ii); (b) covenants  in documents  creating  Liens  permitted  by  Section 6.02  prohibiting  further  Liens  on  the  assets  encumbered  thereby; (c) customary restrictions contained in leases not subject to a waiver; and (d) any other  agreement that does not restrict in any manner (directly or indirectly) Liens created pursuant to  the Loan Documents on any Collateral securing the “Secured Obligations” under and as defined  in the Guarantee and Security Agreement and does not require the direct or indirect granting of  any Lien securing any Indebtedness or other obligation by virtue of the granting of Liens on or  pledge of property of any Obligor to secure the Loans or any Hedging Agreement.                                        115   25272637.12.BUSINESS 

 

            SECTION 6.11.  Modifications of Indebtedness.  The Borrower will not, and  will not permit any of its Subsidiaries to, consent to any modification, supplement or waiver of  any of the provisions of any agreement, instrument or other document evidencing or relating to  any  Secured  Longer-Term  Indebtedness,  Unsecured  Longer-Term  Indebtedness  or  Unsecured  Shorter-Term Indebtedness that would result in such Indebtedness not meeting the requirements  of  the  definition  of  “Secured  Longer-Term  Indebtedness”,  “Unsecured  Longer-Term  Indebtedness”  or  “Unsecured  Shorter-Term  Indebtedness”,  as  applicable,  set  forth  in  Section 1.01  of  this  Agreement,  unless,  in  the  case  of  Unsecured  Longer-Term  Indebtedness,  such  Indebtedness  would  have  been  permitted  to  be  incurred  as  Unsecured  Shorter-Term  Indebtedness  at  the  time  of  such  modification,  supplement  or  waiver  and  the  Borrower  so  designates  such  Indebtedness  as  “Unsecured  Shorter-Term  Indebtedness”  (whereupon  such  Indebtedness  shall  be  deemed  to  constitute  “Unsecured  Shorter-Term  Indebtedness”  for  all  purposes of this Agreement).  The Administrative Agent hereby acknowledges and agrees that  the Borrower may, at any time and from time to time, without the consent of the Administrative  Agent,  freely  amend,  restate,  terminate,  or  otherwise  modify  any  documents,  instruments  and  agreements  evidencing,  securing  or  relating  to  Indebtedness  permitted  pursuant  to  Section  6.01(d) and (e), including increases in the principal amount thereof, modifications to the advance  rates and/or modifications to the interest rate, fees or other pricing terms; provided that no such  amendment,  restatement  or  modification  shall,  unless  Borrower  complies  with  the  terms  of  Section  5.08(a)(i)  hereof,  cause  an  SBIC  Subsidiary  to  fail  to  be  an  “SBIC  Subsidiary”  in  accordance with the definition thereof.                 SECTION 6.12.  Payments of Indebtedness.                 (a)   Payments of Longer-Term Indebtedness.  The Borrower will not, nor will  it  permit  any of its  Subsidiaries  (other than  SBIC  Subsidiaries) to, purchase, redeem, retire  or  otherwise acquire for value, or set apart any money for a sinking, defeasance or other analogous  fund for the purchase, redemption, retirement or other acquisition of or make any voluntary or  involuntary payment or prepayment of the principal of or interest on, or any other amount owing  in respect of, any Secured Longer-Term Indebtedness or Unsecured Longer-Term Indebtedness  (other  than  the  refinancing  of  Secured  Longer-Term  Indebtedness  or  Unsecured  Longer-Term  Indebtedness (other than the 2022 Notes) with Indebtedness permitted under Section 6.01(b) and  (c)  or  with  the  proceeds  of  any  issuance  of  Equity  Interests,  in  each  case  to  the  extent  not  required to be used to repay Loans), except (a) for regularly scheduled payments of interest in  respect  thereof  required  pursuant  to  the  instruments  evidencing  such  Indebtedness  and  the  payment when due of the types of fees and expenses that are customarily paid in connection with  such  Indebtedness  (it  being  understood  that  (w)  the  conversion  features  into  Permitted  Equity  Interests under convertible notes, (x) the triggering of such conversion and/or settlement thereof  solely  with  Permitted  Equity  Interests,  and  (y)  any  cash  payment  on  account  of  interest  or  expenses on such convertible notes made by the Borrower in respect of such triggering and/or  settlement thereof, shall be permitted under this clause (a)) or (b) for payments and prepayments  of Secured Longer-Term Indebtedness required to comply with requirements of Section 2.09(b).               (b)   Payments  of  2022  Notes.   Except  for  regularly  scheduled  payments  of  interest required pursuant to the 2022 Notes and the payment when due of the fees and expenses  that  are  required  to  be  paid  in  connection  with  2022  Notes,  the  Borrower  will  not  purchase,  redeem, retire or otherwise acquire for value, or set apart any money for a sinking, defeasance or                                       116   25272637.12.BUSINESS 

 

other analogous fund for the purchase,  redemption, retirement or other acquisition of or make  any voluntary or involuntary payment or prepayment of the principal of or interest on, or any  other amount owing in respect of, the 2022 Notes other than (i) to refinance the 2022 Notes in  full or in part with Indebtedness permitted under Section 6.01(c), (ii)  to prepay the 2022 Notes  in full or in part with the proceeds of any issuance of Equity Interests, or (iii) to prepay the 2022  Notes in full or in part using the proceeds of Loans (in an aggregate amount not to exceed, as  applicable,  the  aggregate  amount  of  cash  proceeds  received  by  the  Borrower  pursuant  to  the  immediately preceding clauses (i) and/or (ii) but not applied to refinance the 2022 Notes) so long  as (x) no Default or Event of Default shall have occurred or be continuing and (y) the Covered  Debt  Amount  does  not  exceed  80%  of  the  Borrowing  Base  calculated  on  a  pro  forma  basis  immediately after giving effect to such refinancing or prepayment.               SECTION 6.13.  Modification of Investment Policies.  Other than with respect  to Permitted Policy Amendments, the Borrower will not amend, supplement, waive or otherwise  modify in any material respect the Investment Policies as in effect on the Restatement Effective  Date.               SECTION 6.14.  SBIC Guarantee.  The Borrower will not, nor will it permit any  of its Subsidiaries to, cause or permit the occurrence of any event or condition that would result  in any recourse to any Obligor under any Permitted SBIC Guarantee.               SECTION 6.15.  Derivative Transactions.  The Borrower will not, nor will it  permit any of its Subsidiaries to, enter into any swap or derivative transactions (including total  return swaps) or other similar transactions or agreements, except for Hedging Agreements to the  extent permitted pursuant to Section 6.01(i) and 6.04(c).                                     ARTICLE VII                               EVENTS OF DEFAULT               If  any  of  the  following  events  (“Events  of  Default”)  shall  occur  and  be  continuing:               (a)   (i) the Borrower shall fail to pay any principal of any Loan (including any  principal payable under Section 2.09(b) or (c)) or any reimbursement obligation in respect of any  LC Disbursement when and as the same shall become due and payable, whether at the due date  thereof or at a date fixed for prepayment thereof or otherwise or (ii) fail to Cash Collateralize any  LC Exposure as and when required by Section 2.04(k);               (b)   the Borrower shall fail to pay any interest on any Loan or any fee or any  other amount (other than an amount referred to in clause (a) of this Article) payable under this  Agreement  or  under  any  other  Loan  Document,  when  and  as  the  same  shall  become  due  and  payable, and such failure shall continue unremedied for a period of five (5) or more  Business  Days;                                        117   25272637.12.BUSINESS 

 

            (c)   any representation or warranty made or deemed made by or on behalf of  the  Borrower  or  any  of  its  Subsidiaries  in  or  in connection  with  this  Agreement  or  any  other  Loan  Document  or  any  amendment  or  modification  hereof  or  thereof,  or  in  any  report,  certificate, financial statement or other document furnished pursuant to or in connection with this  Agreement or any other Loan Document or any amendment or modification hereof or thereof,  shall prove to have been incorrect when made or deemed made in any material respect (except  that such materiality qualifier shall not be applicable to any representation or warranty already  qualified by materiality or Material Adverse Effect);               (d)   the Borrower shall fail to observe or perform any covenant, condition or  agreement  contained  in  (i) Section 5.01(e),  Section  5.02(a),  Section 5.03  (with  respect  to  the  Borrower’s and its Subsidiaries’ existence only, and not with respect to the Borrower’s and its  Subsidiaries’ rights, licenses, permits, privileges or franchises), Sections 5.08(a) or (b), Section  5.09, Section 5.10, Section 5.12(c) or Article VI or any Obligor shall default in the performance  of  any  of  its  obligations  contained  in  Section 7  of  the  Guarantee  and  Security  Agreement  or  (ii) Section 5.01(f) or Sections 5.02(b), (c) or (d) and, in the case of this clause (ii), such failure  shall continue unremedied for a period of five (5) or more days  after the earlier of (A) notice  thereof from the Administrative Agent (given at the request of any Lender) to the Borrower and  (B) Borrower has knowledge of such failure;               (e)   the  Borrower  or  any  Obligor,  as  applicable,  shall  fail  to  observe  or  perform  any  covenant,  condition  or  agreement  contained  in  this  Agreement  (other  than  those  specified in clause (a), (b) or (d) of this Article) or any other Loan Document and such failure  shall continue unremedied for a period of thirty (30) or more days after the earlier of (A) notice  thereof from the Administrative Agent (given at the request of any Lender) to the Borrower and  (B) Borrower has knowledge of such failure;               (f)   the  Borrower  or  any  of  its  Subsidiaries  shall  fail  to  make  any  payment  (whether  of  principal  or  interest  and  regardless  of  amount) in  respect  of  any  Material  Indebtedness,  when  and  as  the  same  shall  become  due  and  payable,  taking  into  account  any  applicable grace period;               (g)   any event or condition occurs that (i) results in all or any portion of any  Material Indebtedness becoming due prior to its scheduled maturity or (ii) that enables or permits  (with  or  without  the  giving  of  notice,  the  lapse  of  time  or  both)  the  holder  or  holders  of  any  Material  Indebtedness  or  any  trustee  or  agent  on  its  or  their  behalf  to  cause  any  Material  Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance  thereof,  prior  to  its  scheduled  maturity,  unless,  in  the  case  of  this  clause  (ii),  such  event  or  condition  is  no  longer  continuing  or  has  been  waived  in  accordance  with  the  terms  of  such  Material  Indebtedness such that the holder or holders thereof or any trustee or  agent on its or  their behalf are no longer enabled or permitted to cause such Material Indebtedness to become  due,  or  to  require  the  prepayment,  repurchase,  redemption  or  defeasance  thereof,  prior  to  its  scheduled maturity; provided that this clause (g) shall not apply to (1) secured Indebtedness that  becomes due as a result of the voluntary sale or transfer of the property or assets securing such  Indebtedness;  or  (2)  convertible  debt  that  becomes  due  as  a  result  of  a  contingent  mandatory  conversion or redemption event provided such conversion or redemption is effectuated only in  capital stock that is not Disqualified Equity Interests;                                       118   25272637.12.BUSINESS 

 

            (h)   an involuntary proceeding shall be commenced or an involuntary petition  shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or  any of its Subsidiaries or its debts, or of a substantial part of its assets, under any Federal, state or  foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the  appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the  Borrower or any of its Subsidiaries or for a substantial part of its assets, and, in any such case,  such proceeding or petition shall continue undismissed and unstayed for a period of 60 or more  days or an order or decree approving or ordering any of the foregoing shall be entered;               (i)   the Borrower or any of its Subsidiaries shall (i) voluntarily commence any  proceeding  or  file  any  petition  seeking  liquidation,  reorganization  or  other  relief  under  any  Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in  effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any  proceeding  or  petition  described  in  clause  (h) of  this  Article,  (iii) apply  for  or  consent  to  the  appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the  Borrower  or  any  of  its  Subsidiaries  or  for  a  substantial  part  of  its  assets,  (iv) file  an  answer  admitting the material allegations of a petition filed against it in any such proceeding, (v) make a  general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting  any of the foregoing;               (j)   the  Borrower  or  any  of  its  Subsidiaries  shall  become  unable,  admit  in  writing its inability or fail generally to pay its debts as they become due;               (k)   there  is  rendered  against  the  Borrower  or  any  of  its  Subsidiaries  or  any  combination  thereof  (i)  one  or  more  judgments  or  orders  for  the  payment  of  money  in  an  aggregate amount (as to all such judgments and orders) in excess of $5,000,000 (to the extent not  covered  by  independent  third-party  insurance  as  to  which  the  insurer  has  been  notified  of  the  potential claim and does not dispute coverage) or (ii) any one or more non-monetary judgments  that, individually or in the aggregate, has resulted in or could reasonably be expected to result in  a Material Adverse Effect and, in either case, (1) enforcement proceedings, actions or collection  efforts are commenced by any creditor upon such judgment or order, or (2) there is a period of  thirty  (30)  consecutive  days  during  which  such  judgment  is  undischarged  or  a  stay  of  enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect;               (l)   the occurrence of any ERISA Event that, alone or together with any other  ERISA  Events  that  have  occurred,  could  reasonably  be  expected  to  result  in  liability  of  the  Borrower  in  an  aggregate  amount  exceeding  $5,000,000,  (ii) (x) there  is  or  arises  Unfunded  Pension Liability with respect to Plans maintained by Borrower (taking into account only such  Plans with positive Unfunded Pension Liability) of $2,500,000 or more, or (y) there is or arises  Unfunded  Pension  Liability  with  respect  to  Plans  maintained  by  the  Borrower  or  its  ERISA  Affiliates in an aggregate amount (taking into account only such Plans with positive Unfunded  Pension Liability) that would reasonably be expected to result in a Material Adverse Effect, or  (iii) (x) if  the  Borrower  were  to  withdraw  from  all  Multiemployer  Plans  in  a  complete  withdrawal,  the  aggregate  Withdrawal  Liability  that  would  be  incurred  would  be  in  excess  of  $2,500,000, or (y) if the Borrower and each of its ERISA Affiliates were to withdraw from all  Multiemployer Plans in a complete withdrawal, the aggregate Withdrawal Liability that would  be incurred would reasonably be expected to result in a Material Adverse Effect;                                       119   25272637.12.BUSINESS 

 

            (m)   a Change in Control shall occur;               (n)   any SBIC Subsidiary shall become  the  subject of an  enforcement  action  and be transferred into liquidation status by the SBA;               (o)   the  Liens  created  by  the  Security  Documents  shall,  at  any  time  with  respect to Portfolio Investments held by Obligors having an aggregate Value in excess of 5% of  the aggregate Value of all Portfolio Investments held by Obligors, not be valid and perfected (to  the extent perfection by filing, registration, recordation, possession or control is required herein  or therein) in favor of the Collateral Agent (or any Obligor or any Affiliate of an Obligor shall so  assert in writing), free and clear of all other Liens (other than Liens permitted under Section 6.02  or under the respective Security Documents), except to the extent that any such loss of perfection  results from the failure of the Collateral Agent to maintain possession of certificates representing  securities pledged under the Guarantee and Security Agreement; provided that if such default is  as  a  result  of  any  action  of  the  Administrative  Agent  or  Collateral  Agent  or  a  failure  of  the  Administrative Agent or Collateral Agent to take any action within its control, then there shall be  no Default or Event of  Default hereunder unless such default shall  continue unremedied for a  period  of  ten  (10)  consecutive  Business  Days  after  the  earlier  of  (i)  the  Borrower  becoming  aware  of  such default  and  (ii) the Borrower’s  receipt  of written notice of such default thereof  from  the  Administrative  Agent,  unless,  in  each  case,  the  continuance  thereof  is  a  result  of  a  failure of the Collateral Agent or Administrative Agent to take an action within their control (and  the Borrower has requested that the Collateral Agent or Administrative Agent take such action);               (p)   except  for  expiration  in  accordance  with  its  terms,  any  of  the  Security  Documents shall for whatever reason be terminated or cease to be in full force and effect in any  material respect, or the enforceability thereof shall be contested by any Obligor, or there shall be  any actual invalidity of any guaranty thereunder or any Obligor or any Affiliate of an Obligor  shall so assert in writing; or               (q)   the  Borrower  or  any  of  its  Subsidiaries  shall  cause  or  permit  the  occurrence of any condition or event that would result in any recourse to any Obligor under any  Permitted SBIC Guarantee;   then,  and  in  every  such  event  (other  than  an  event  described  in  clause  (h),   (i)  or  (j) of  this  Article),  and  at  any  time  thereafter  during  the  continuance  of  such  event,  the  Administrative  Agent may,  and  at  the  request  of  the  Required  Lenders  shall, by  notice to  the Borrower,  take  either  or  both  of  the  following  actions,  at  the  same  or  different  times:  (i) terminate  the  Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the  Loans then outstanding to be due and payable in whole (or in part, in which case any principal  not so declared to be due and payable may thereafter be declared to be due and payable), and  thereupon the principal of the Loans so declared to be due and payable, together with accrued  interest thereon and all fees and other obligations of the Borrower accrued hereunder and under  the  other  Loan  Documents,  shall  become  due  and  payable  immediately,  without  presentment,  demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and  in  case  of  any  event  described  in  clause  (h),   (i)  or  (j) of  this  Article,  the  Commitments  shall  automatically terminate and the principal of the Loans then outstanding, together with accrued  interest thereon and all fees and other obligations of the Borrower accrued hereunder and under                                       120   25272637.12.BUSINESS 

 

the other Loan Documents, shall automatically  become due and payable, without presentment,  demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.   In the event that the Loans shall be declared, or shall become, due and payable pursuant to the  immediately preceding paragraph then, upon notice from the Administrative Agent, the Issuing  Bank  or  Lenders  with  LC  Exposure  representing  more  than  50%  of  the  total  LC  Exposure  demanding  the  deposit  of  Cash  Collateral  pursuant  to  this  paragraph,  the  Borrower  shall  immediately  Cash  Collateralize  such  LC  Exposure  in  an  amount  equal  to  102%  of  the  LC  Exposure  as  of  such  date  plus  any  accrued  and  unpaid  interest  thereon;  provided  that  the  obligation to Cash Collateralize such LC Exposure shall become effective immediately without  demand or other notice of any kind, upon the occurrence of any Event of Default described in  clause (h),  (i) or (j) of this Article.                                    ARTICLE VIII                           THE ADMINISTRATIVE AGENT               SECTION 8.01.  Appointment.                 (a)   Appointment of the Administrative Agent.  Each of the  Lenders and the  Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent hereunder and  under the other Loan Documents and authorizes the Administrative Agent to take such actions on  its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms  hereof or thereof, together with such actions and powers as are reasonably incidental thereto.               (b)   Appointment  of  the  Collateral  Agent.   The  Collateral  Agent  is  hereby  confirmed and reaffirmed as having been appointed as the collateral agent hereunder and under  the Loan Documents and in such capacity has been and is authorized to have all the rights and  benefits  hereunder  and  thereunder  (including  Section  9  of  the  Guarantee  and  Security  Agreement), and to take such actions on its behalf and to exercise such powers as are delegated  to the Collateral Agent by the terms hereof or thereof, together with such actions and powers as  are  reasonably  incidental  thereto.   In  addition  to  the  rights,  privileges  and  immunities  in  the  Guarantee  and  Security  Agreement,  the  Collateral  Agent  has  been  and  shall  be  entitled  to  all  rights, privileges, immunities, exculpations and indemnities of the Administrative Agent and for  such purpose each reference to the Administrative Agent in this Article VIII has been and shall  be deemed to include the Collateral Agent..               SECTION 8.02.  Capacity as Lender.  The Person serving as the Administrative  Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other  Lender  and  may  exercise  the  same  as  though  it  were  not  the  Administrative  Agent,  and  such  Person and its  Affiliates may (without having to account therefor to any other  Lender) accept  deposits from, lend money to, make investments in and generally engage in any kind of business  with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative  Agent  hereunder,  and  such  Person  and  its  Affiliates  may  accept  fees  and  other  consideration                                        121   25272637.12.BUSINESS 

 

from the Borrower or any Subsidiary or other Affiliate thereof for services in connection with  this Agreement or otherwise without having to account for the same to the other Lenders.               SECTION 8.03.  Limitation of Duties; Exculpation.  The Administrative Agent  shall not have any duties or obligations except those expressly set forth herein and in the other  Loan Documents.  Without limiting the generality of the foregoing, (a) the Administrative Agent  shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or  Event of Default has occurred and is continuing, (b) the Administrative Agent shall not have any  duty to take any discretionary action or exercise any discretionary powers, except discretionary  rights  and  powers  expressly  contemplated  hereby  or  by  the  other  Loan  Documents  that  the  Administrative Agent is required to exercise in writing by the Required Lenders, and (c) except  as expressly set forth herein and in the other Loan Documents, the Administrative Agent shall  not have any duty to disclose, and shall not be liable for the failure to disclose, any information  relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the  bank  serving  as  Administrative  Agent  or  any  of  its  Affiliates  in  any  capacity.   The  Administrative Agent shall not be liable for any action taken or not taken by it with the consent  or at the request of the Required Lenders (or such other number or percentage of the Lenders as  shall be expressly provided for herein or in the other Loan Documents) or in the absence of its  own gross negligence or willful misconduct as determined by a court of competent jurisdiction  by final and non-appealable judgment.  The Administrative Agent shall be deemed not to have  knowledge of any Default or Event of Default unless and until written notice thereof is given to  the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not  be responsible  for  or have  any  duty to  ascertain or inquire  into (i) any  statement,  warranty  or  representation  made  in  or  in  connection  with  this  Agreement  or  any  other  Loan  Document,  (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or  in connection herewith or therewith, (iii) the performance or observance of any of the covenants,  agreements  or  other  terms  or  conditions  set  forth  herein  or  therein,  (iv) the  validity,  enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any  other  agreement,  instrument  or  document,  (v)  the  creation,  perfection  or  priority  of  any  Lien  purported to be created by the Loan Documents or the value or the sufficiency of any Collateral  or  (vi) the  satisfaction  of  any  condition  set  forth  in  Article IV  or  elsewhere  herein  or  therein,  other than to confirm receipt of items expressly required to be delivered to the Administrative  Agent.   Notwithstanding  anything  to  the  contrary  contained  herein,  in  no  event  shall  the  Administrative Agent be liable or responsible in any way or manner for the failure to obtain or  receive  an  IVP  External  Unquoted  Value  for  any  asset  or  for  the  failure  to  send  any  notice  required under Section 5.12(b)(ii)(B)(x).               SECTION 8.04.  Reliance.  The Administrative Agent shall be entitled to rely  upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent,  statement, instrument, document or other writing (including any electronic message, Internet or  intranet  website  posting  or  other  distribution) believed  by  it  to  be  genuine  and  to  have  been  signed or sent by or on behalf of the proper Person.  The Administrative Agent also may rely  upon any statement made to it orally or by telephone and believed by it to be made by or on  behalf of the proper Person or Persons, and shall not incur any liability for relying thereon.  The  Administrative Agent may consult with legal counsel, independent accountants and other experts  selected by it, and shall not be liable for any action taken or not taken by it in accordance with  the advice of any such counsel, accountants or experts.                                       122   25272637.12.BUSINESS 

 

            SECTION 8.05.  Sub-Agents.  The Administrative Agent may perform any and  all  its  duties  and  exercise  its  rights  and  powers  by  or  through  any  one  or  more  sub-agents  appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may  perform any and all its duties and exercise its rights and powers through their respective Related  Parties.   The  exculpatory  provisions  of the  preceding  paragraphs  shall  apply  to any such sub- agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall  apply  to  their  respective  activities  in  connection  with  the  syndication  of  the  credit  facilities  provided for herein as well as activities as Administrative Agent.               SECTION 8.06.  Resignation; Successor Administrative Agent.  The  Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the  Borrower.   Upon  any  such  resignation,  the  Required  Lenders  shall  have  the  right,  with  the  consent of the Borrower not to be unreasonably withheld (provided that no such consent shall be  required if an Event of Default has occurred and is continuing), to appoint a successor.  If no  successor shall have been so appointed by the Required Lenders and shall have accepted such  appointment  within  30  days  after  the  retiring  Administrative  Agent  gives  notice  of  its  resignation,  then  the  retiring  Administrative  Agent’s  resignation  shall  nonetheless  become  effective  and  (1) the  retiring  Administrative  Agent  shall  be  discharged  from  its  duties  and  obligations  hereunder  and  (2) the  Required  Lenders  shall  perform  the  duties  of  the  Administrative  Agent  (and  all  payments  and  communications  provided  to  be  made  by,  to  or  through the Administrative Agent shall instead be made by or to each Lender directly) until such  time as the Required Lenders appoint a successor agent as provided for above in this paragraph.   Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such  successor shall succeed to and become vested with all the rights, powers, privileges and duties of  the  retiring  (or  retired) Administrative  Agent  and  the  retiring  Administrative  Agent  shall  be  discharged  from  its  duties  and  obligations  hereunder  (if  not  already  discharged  therefrom  as  provided  above  in  this  paragraph).   The  fees  payable  by  the  Borrower  to  a  successor  Administrative  Agent  shall  be  the  same  as  those  payable  to  its  predecessor  unless  otherwise  agreed between the Borrower and such successor.  After the Administrative Agent’s resignation  hereunder,  the  provisions  of  this  Article  VIII and  Section 9.03  shall  continue  in  effect  for  its  benefit  in  respect  of  any  actions  taken  or  omitted  to  be  taken  by  it  while  it  was  acting  as  Administrative Agent.               SECTION 8.07.  Reliance by Lenders.  Each Lender acknowledges that it has,  independently  and  without  reliance  upon  the  Administrative  Agent  or  any  other  Lender  and  based  on  such  documents  and  information  as  it  has  deemed  appropriate,  made  its  own  credit  analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,  independently  and  without  reliance  upon  the  Administrative  Agent  or  any  other  Lender  and  based  on  such  documents  and  information  as  it  shall  from  time  to  time  deem  appropriate,  continue  to  make  its  own  decisions  in  taking  or  not  taking  action  under  or  based  upon  this  Agreement,  any  other  Loan  Document  or  any  related  agreement  or  any  document  furnished  hereunder or thereunder.               SECTION 8.08.  Modifications to Loan Documents.  Except as otherwise  provided in Section 9.02(b) or 9.02(c) with respect to this Agreement, the Administrative Agent  may,  with  the  prior  consent  of  the  Required  Lenders  (but  not  otherwise),  consent  to  any  modification, supplement or waiver under  any of the Loan  Documents;  provided that, without                                       123   25272637.12.BUSINESS 

 

the prior consent of each Lender, the Administrative Agent shall not (except as provided herein  or  in  the  Security  Documents) release  all  or  substantially  all  of  the  Collateral  or  otherwise  terminate  all  or  substantially  all  of  the  Liens  under  any  Security  Document  providing  for  collateral security, agree to additional obligations being secured by all or substantially all of such  collateral security, or alter the relative priorities of the obligations entitled to the benefits of the  Liens  created  under  the  Security  Documents  with  respect  to  all  or  substantially  all  of  the  Collateral, except that no such consent shall be required, and the Administrative Agent is hereby  authorized,  to  release  any  Lien  covering  property  that  is  the  subject  of  either  a  disposition  of  property permitted hereunder or a disposition to which the Required Lenders have consented.               SECTION 8.09.  Certain ERISA Matters.               (a)   Each  Lender  (x)  represents  and  warrants,  as  of  the  date  such  Person  became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender  party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the  Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to or for the benefit  of the Borrower or any other Obligor, that at least one of the following is and will be true:               (i)   such  Lender  is  not  using  “plan  assets”  (within  the  meaning  of  29  CFR        §2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in        connection with the Loans or the Commitments,               (ii)  the transaction exemption set forth in one or more PTEs, such as PTE 84-       14  (a  class  exemption  for  certain  transactions  determined  by  independent  qualified        professional  asset  managers),  PTE  95-60  (a  class  exemption  for  certain  transactions        involving insurance company general accounts), PTE 90-1 (a class exemption for certain        transactions involving insurance company pooled separate accounts), PTE 91-38 (a class        exemption  for  certain  transactions  involving  bank  collective  investment  funds)  or  PTE        96-23 (a class exemption for certain transactions determined by in-house asset managers),        is applicable with respect to such Lender’s entrance into, participation in, administration        of and performance of the Loans, the Commitments and this Agreement,               (iii) (A)  such  Lender  is  an  investment  fund  managed  by  a  “Qualified        Professional  Asset  Manager”  (within  the  meaning  of  Part  VI  of  PTE  84-14),  (B)  such        Qualified  Professional  Asset  Manager made the  investment decision on  behalf  of  such        Lender to enter into, participate in, administer and perform the Loans, the Commitments        and  this  Agreement,  (C)  the  entrance  into,  participation  in,  administration  of  and        performance  of  the  Loans,  the  Commitments  and  this  Agreement  satisfies  the        requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best        knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are        satisfied with respect to such Lender’s entrance into, participation in, administration of        and performance of the Loans, the Commitments and this Agreement, or               (iv)  such  other  representation,  warranty  and  covenant  as  may  be  agreed  in        writing between the Administrative Agent, in its sole discretion, and such Lender.                                         124   25272637.12.BUSINESS 

 

            (b)   In addition, unless subclause (i) in the immediately preceding clause (a) is  true with respect to a Lender or such Lender has not provided another representation, warranty  and covenant as provided in subclause (iv) in the immediately preceding clause (a), such Lender  further (x) represents and warrants, as of the date such Person became a Lender party hereto, to,  and  (y)  covenants,  from  the  date  such  Person  became  a  Lender  party  hereto  to  the  date  such  Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and its  Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other  Obligor, that:               (i)   none  of  the  Administrative  Agent  or  any  of  its  Affiliates  is  a  fiduciary        with respect to the assets of such Lender (including in connection with the reservation or        exercise  of  any  rights  by  the  Administrative  Agent  under  this  Agreement,  any  Loan        Document or any documents related to hereto or thereto),               (ii)  the Person making the investment decision on behalf of such Lender with        respect  to  the  entrance  into,  participation  in,  administration  of  and  performance  of  the        Loans, the Commitments and this Agreement is independent (within the meaning of 29        CFR § 2510.3-21) and is a bank, an insurance carrier, an investment adviser, a broker-       dealer or other person that holds, or has under management or control, total assets of at        least $50,000,000, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),               (iii) the Person making the investment decision on behalf of such Lender with        respect  to  the  entrance  into,  participation  in,  administration  of  and  performance  of  the        Loans, the Commitments and this Agreement is capable of evaluating investment risks        independently, both in general and with regard to particular transactions and investment        strategies (including in respect of the Obligations),               (iv)  the Person making the investment decision on behalf of such Lender with        respect  to  the  entrance  into,  participation  in,  administration  of  and  performance  of  the        Loans, the Commitments and this Agreement is a fiduciary under ERISA or the Code, or        both, with respect to the Loans, the Commitments and this Agreement and is responsible        for exercising independent judgment in evaluating the transactions hereunder, and               (v)   no fee or other compensation is being paid directly to the Administrative        Agent  or  any  of  its  Affiliates  for  investment  advice  (as  opposed  to  other  services)  in        connection with the Loans, the Commitments or this Agreement.               (c)   The  Administrative  Agent  hereby  informs  the  Lenders  that  it  is  not  undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in  connection  with  the  transactions  contemplated  hereby,  and  that  such  Person  has  a  financial  interest in the transactions contemplated hereby in that it or one of its Affiliates (i) may receive  interest or other payments with respect to the Loans, the Commitments and this Agreement, (ii)  may recognize a gain if it extended the Loans or the Commitments for an amount less than the  amount being paid for an interest in the Loans or the Commitments by such Lender or (iii) may  receive  fees  or  other  payments  in  connection  with  the  transactions  contemplated  hereby,  the  Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees,  facility fees, upfront fees, underwriting  fees, ticking fees, agency fees,  administrative agent or                                       125   25272637.12.BUSINESS 

 

collateral  agent  fees,  utilization  fees,  minimum  usage  fees,  letter  of  credit  fees,  fronting  fees,  deal-away  or  alternate  transaction  fees,  amendment  fees,  processing  fees,  term  out  premiums,  banker’s  acceptance  fees,  breakage  or  other  early  termination  fees  or  fees  similar  to  the  foregoing.   For purposes of this Section 8.09, the following definitions apply to each of the capitalized terms  below:               “Benefit  Plan”  means  any  of  (a)  an  “employee  benefit  plan”  (as  defined  in  ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code  or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for  purposes of Title  I of ERISA or Section 4975 of the Code) the  assets of any such “employee  benefit plan” or “plan”.              “PTE”  means  a  prohibited  transaction  class  exemption  issued  by  the  U.S.  Department of Labor, as any such exemption may be amended from time to time.               SECTION 8.10.  Collateral Matters.  (a) Except with respect to the exercise of  setoff rights in accordance with Section 9.08 or with respect to a Secured Party’s right to file a  proof of claim in an insolvency proceeding, no Secured Party shall have any right individually to  realize upon any of the Collateral or to enforce any Guarantee of the Guaranteed Obligations (as  defined  in  the  Guarantee  and  Security  Agreement),  it  being  understood  and  agreed  that  all  powers,  rights  and  remedies  under  the  Loan  Documents  may  be  exercised  solely  by  the  Administrative Agent and/or the Collateral Agent on behalf of the Secured Parties in accordance  with the terms thereof.               (b)   In  furtherance  of  the  foregoing  and  not  in  limitation  thereof,  no  arrangements  in  respect  of  any  Hedging  Agreement  the  obligations  under  which  constitute  Hedging Agreement Obligations, will create (or  be deemed to create) in favor of any Secured  Party  that  is  a  party  thereto  any  rights  in  connection  with  the  management  or  release  of  any  Collateral  or  of  the  obligations  of  any  Obligor  under  any  Loan  Document.  By  accepting  the  benefits of the Collateral, each Secured Party that is a party to any such arrangement in respect of  Hedging Agreements shall be deemed to have appointed the Administrative Agent and Collateral  Agent  to  serve  as  administrative  agent  and  collateral  agent,  respectively,  under  the  Loan  Documents  and  agreed  to  be  bound  by  the  Loan  Documents  as  a  Secured  Party  thereunder,  subject to the limitations set forth in this paragraph.               (c)   Neither  the  Administrative  Agent  nor  the  Collateral  Agent  shall  be  responsible  for  or  have  a  duty  to  ascertain  or  inquire  into  any  representation  or  warranty  regarding  the  existence,  value  or  collectability  of  the  Collateral,  the  existence,  priority  or  perfection of the Administrative Agent’s or the Collateral Agent’s Lien thereon or any certificate  prepared  by  any  Obligor  in  connection  therewith,  nor  shall  the  Administrative  Agent  or  the  Collateral  Agent  be  responsible  or  liable  to  the  Lenders  or  any  other  Secured  Party  for  any  failure to monitor or maintain any portion of the Collateral.                                         126   25272637.12.BUSINESS 

 

            SECTION 8.11.  Credit Bidding.  The Secured Parties hereby irrevocably  authorize the Collateral Agent, at the direction of the Required Lenders, to credit bid all or any  portion  of  the  Secured  Obligations  (including  by  accepting  some  or  all  of  the  Collateral  in  satisfaction of some or all of the Secured Obligations pursuant to a deed in lieu of foreclosure or  otherwise)  and  in  such  manner  purchase  (either  directly  or  through  one  or  more  acquisition  vehicles)  all  or  any  portion  of  the  Collateral  (a)  at  any  sale  thereof  conducted  under  the  provisions  of  the  Bankruptcy  Code,  including  under  Sections  363,  1123  or  1129  of  the  Bankruptcy Code, or any similar laws in any other jurisdictions to which an Obligor is subject, or  (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with  the consent or at the direction of) the Collateral Agent (whether by judicial action or otherwise)  in accordance with any applicable law. In connection with any such credit bid and purchase, the  Secured Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid  by the Collateral Agent at the direction of the Required Lenders on a ratable basis (with Secured  Obligations with respect to contingent or unliquidated claims receiving contingent interests in the  acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount  proportional  to  the  liquidated  portion  of  the  contingent  claim  amount  used  in  allocating  the  contingent  interests)  for  the  asset  or  assets  so  purchased  (or  for  the  equity  interests  or  debt  instruments  of  the  acquisition  vehicle  or  vehicles  that  are  issued  in  connection  with  such  purchase). In connection with any such bid, (i) the Collateral Agent shall be authorized to form  one  or  more  acquisition  vehicles  and  to  assign  any  successful  credit  bid  to  such  acquisition  vehicle or vehicles, (ii) each of the Secured Parties’ ratable interests in the Secured Obligations  which were credit bid shall be deemed without any  further action under this Agreement to be  assigned  to  such  vehicle  or  vehicles  for  the  purpose  of  closing  such  sale,  (iii)  the  Collateral  Agent shall be authorized to adopt documents providing for the governance of the acquisition  vehicle  or  vehicles  (provided  that  any  actions  by  the  Collateral  Agent  with  respect  to  such  acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof,  shall  be  governed,  directly  or  indirectly,  by,  and  the  governing  documents  shall  provide  for,  control by the vote of the Required Lenders or their permitted assignees under the terms of this  Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the  case may be, irrespective of the termination of this Agreement and without giving effect to the  limitations on actions by the Required Lenders contained in Section 9.02 of this Agreement), (iv)  the Collateral Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue  to  each  of  the  Secured  Parties,  ratably  on  account  of  the  relevant  Secured  Obligations  which  were  credit  bid,  interests,  whether  as  equity,  partnership,  limited  partnership  interests  or  membership  interests,  in  any  such  acquisition  vehicle  and/or  debt  instruments  issued  by  such  acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any  further action, and (v) to the extent that Secured Obligations that are assigned to an acquisition  vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher  or better, because the amount of Secured Obligations assigned to the acquisition vehicle exceeds  the  amount  of  Secured  Obligations  credit  bid  by  the  acquisition  vehicle  or  otherwise),  such  Secured Obligations shall automatically be reassigned to the Secured Parties pro rata with their  original  interest  in  such  Secured  Obligations  and  the  equity  interests  and/or  debt  instruments  issued by any acquisition vehicle on account of such Secured Obligations shall automatically be  cancelled, without the need for any Secured Party or any acquisition vehicle to take any further  action. Notwithstanding that the ratable portion of the Secured Obligations of each Secured Party  are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each                                        127   25272637.12.BUSINESS 

 

Secured Party shall execute such documents and provide such information regarding the Secured  Party  (and/or  any  designee  of  the  Secured  Party  which  will  receive  interests  in  or  debt  instruments issued by such acquisition vehicle) as the Collateral Agent may reasonably request  in connection with the formation of any acquisition vehicle, the formulation or submission of any  credit bid or the consummation of the transactions contemplated by such credit bid.                                     ARTICLE IX                                 MISCELLANEOUS               SECTION 9.01.  Notices; Electronic Communications.               (a)   Notices  Generally.   Except  in  the  case  of  notices  and  other  communications  expressly  permitted  to  be  given  by  telephone,  all  notices  and  other  communications  provided  for  herein  shall  be  in  writing  and  shall  be  delivered  by  hand  or  overnight  courier  service,  mailed  by  certified  or  registered  mail  or  sent  by  telecopy  or  to  the  extent permitted by Section 9.01(b) or otherwise herein, e-mail, as follows:               (i)   if to the Borrower, to it at:                          Capital Southwest Corporation                         Lincoln Center Tower                         5400 LBJ Freeway, Suite 1300                        Dallas, TX  75240                        Attention:  Michael Sarner                         Telephone:  214-884-3829                         Facsimile: 214-238-5701                         E-Mail: msarner@capitalsouthwest.com                          with a copy to (which shall not constitute notice):                          Thompson & Knight LLP                         811 Main Street, Suite 2500                         Houston, TX                         Attention: Cassandra Mott                         Telephone: (713) 951-5803                         Facsimile: (832) 397-8012                         E-Mail: cassandra.mott@tklaw.com               (ii)  if to the Administrative Agent, to it at:                                         128   25272637.12.BUSINESS 

 

                       ING Capital LLC                         1133 Avenue of the Americas                         New York, New York 10036                         Attention:  Grace Fu                         Telephone:  (646) 424-7213                         Facsimile:  (646) 424-6919                         E-Mail: grace.fu@ing.com                          with a copy, which shall not constitute notice, to:                          Dechert LLP                         1095 Avenue of the Americas                         New York, New York 10036                         Attention:  Jay R. Alicandri, Esq.                         Telephone:  (212) 698-3800                         Facsimile:  (212) 698-3599                         E-Mail: jay.alicandri@dechert.com                (iii) if to any other Lender, to it at its address (or telecopy number) set forth in        its Administrative Questionnaire.               Any party hereto may change its address, telecopy number or e-mail address for  notices and other communications hereunder by notice to the other parties hereto.  All notices  and other communications given to any party hereto in accordance with  the provisions of this  Agreement shall be deemed to have been given on the date of receipt.  Notices delivered through  electronic communications to the extent provided in paragraph (b) below, shall be effective as  provided in said paragraph (b).               (b)   Electronic  Communications.   Notices  and  other  communications  to  the  Lenders  and  the  Issuing  Bank  hereunder  may  be  delivered  or  furnished  by  electronic  communication  (including  e-mail  and  Internet  or  intranet  websites) pursuant  to  procedures  approved by the Administrative Agent; provided that the foregoing shall not apply to notices to  any Lender or the Issuing Bank pursuant to Section 2.03 if such Lender or the Issuing Bank, as  applicable, has notified the Administrative Agent that it is incapable of receiving notices under  such Article by electronic communication.  The Administrative Agent or the Borrower may, in  its  discretion,  agree  to  accept  notices  and  other  communications  to  it  hereunder  by  electronic  communications  pursuant  to  procedures  approved  by  it;  provided  that  approval  of  such  procedures may be limited to particular notices or communications.               Unless  the  Administrative  Agent  otherwise  prescribes,  (i) notices  and  other  communications sent to an e-mail address shall be deemed received upon the sender’s receipt of  an  acknowledgement  from  the  intended  recipient  (such  as  by  the  “return  receipt  requested”  function,  as  available,  return  e-mail  or  other  written  acknowledgement);  provided  that  if  such  notice or other communication is not sent during the normal business hours of the recipient, such  notice or communication shall be deemed to have been sent at the opening of business on the  next Business Day, and (ii) notices or communications posted to an Internet or intranet website  shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address                                       129   25272637.12.BUSINESS 

 

as  described  in  the  foregoing  clause  (i) of  notification  that  such  notice  or  communication  is  available and identifying the website address therefor.               (c)   Posting of Communications.                 (i)   For so long as a DebtdomainTM or equivalent website is available to each        of the Lenders hereunder, the Borrower may satisfy its obligation to deliver documents to        the Administrative Agent or the Lenders under Section 5.01 by delivering one hard copy        thereof to the Administrative Agent and either an electronic copy or a notice identifying        the website where such information is located for posting by the Administrative Agent on        DebtdomainTM or such equivalent website; provided that the Administrative Agent shall        have no responsibility to maintain access to DebtdomainTM or an equivalent website.               (ii)  The  Obligors  agree  that  the  Administrative  Agent  may,  but  shall  not  be        obligated  to,  make  any  Communications  available  to  the  Lenders  by  posting  the        Communications  on  IntraLinksTM,  DebtdomainTM,  SyndTrak,  ClearPar  or  any  other        electronic platform chosen by the Administrative Agent to be its electronic transmission        system (the “Approved Electronic Platform”).               (iii) Although the Approved Electronic Platform and its primary web portal are        secured  with  generally-applicable  security  procedures  and  policies  implemented  or        modified by the Administrative Agent from time to time (including, as of the Restatement        Effective  Date, a user  ID/password authorization  system)  and  the  Approved Electronic        Platform  is  secured  through  a  per-deal  authorization  method  whereby  each  user  may        access  the  Approved  Electronic  Platform  only  on  a  deal-by-deal  basis,  each  of  the        Lenders  and  each  of  the  Obligors  acknowledges  and  agrees  that  the  distribution  of        material through an electronic medium is not necessarily secure, that the Administrative        Agent is not responsible for approving or vetting the representatives or contacts of any        Lender  that  are  added  to  the  Approved  Electronic  Platform,  and  that  there  are        confidentiality and other risks associated with such distribution. Each of the Lenders and        each Obligor hereby approves distribution of the Communications through the Approved        Electronic Platform and understands and assumes the risks of such distribution.               (iv)  THE   APPROVED      ELECTRONIC     PLATFORM     AND     THE        COMMUNICATIONS  ARE  PROVIDED  “AS  IS”  AND  “AS  AVAILABLE”.  THE        APPLICABLE  PARTIES  (AS  DEFINED  BELOW)  DO  NOT  WARRANT  THE        ACCURACY  OR  COMPLETENESS  OF  THE  COMMUNICATIONS,  OR  THE        ADEQUACY OF THE APPROVED ELECTRONIC PLATFORM AND EXPRESSLY        DISCLAIM  LIABILITY  FOR  ERRORS  OR  OMISSIONS  IN  THE  APPROVED        ELECTRONIC PLATFORM AND THE COMMUNICATIONS. NO WARRANTY OF        ANY  KIND,  EXPRESS,  IMPLIED  OR  STATUTORY,  INCLUDING  ANY        WARRANTY  OF  MERCHANTABILITY,  FITNESS  FOR  A  PARTICULAR        PURPOSE,  NON-INFRINGEMENT  OF  THIRD  PARTY  RIGHTS  OR  FREEDOM        FROM VIRUSES OR  OTHER CODE DEFECTS,  IS MADE BY THE APPLICABLE        PARTIES  IN  CONNECTION  WITH  THE  COMMUNICATIONS  OR  THE        APPROVED  ELECTRONIC  PLATFORM.  IN  NO  EVENT  SHALL  THE        ADMINISTRATIVE      AGENT,    ANY     LEAD    ARRANGER,      ANY    CO-                                      130   25272637.12.BUSINESS 

 

      DOCUMENTATION  AGENT,  ANY  SYNDICATION  AGENT  OR  ANY  OF  THEIR        RESPECTIVE  RELATED  PARTIES  (COLLECTIVELY,  “APPLICABLE  PARTIES”)        HAVE  ANY  LIABILITY  TO  ANY  OBLIGOR,  ANY  LENDER  OR  ANY  OTHER        PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR        INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES        OR  EXPENSES  (WHETHER  IN  TORT,  CONTRACT  OR  OTHERWISE)  ARISING        OUT   OF   ANY    OBLIGOR’S    OR    THE   ADMINISTRATIVE      AGENT’S        TRANSMISSION  OF  COMMUNICATIONS  THROUGH  THE  INTERNET  OR  THE        APPROVED ELECTRONIC PLATFORM.               SECTION 9.02.  Waivers; Amendments.               (a)   No Deemed Waivers; Remedies Cumulative.  No failure or delay by the  Administrative  Agent,  the  Issuing  Bank  or  any  Lender  in  exercising  any  right  or  power  hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any such  right or power, or any abandonment or discontinuance of steps to enforce such a right or power,  preclude any other or further exercise thereof or the exercise of any other right or power.  The  rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder are  cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No  waiver  of  any  provision  of  this  Agreement  or  consent  to  any  departure  by  the  Borrower  therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of  this Section, and then such waiver or consent shall be effective only in the specific instance and  for the purpose for which given.  Without limiting the generality of the foregoing, the making of  a  Loan or issuance  of  a  Letter of Credit  shall not  be  construed as  a  waiver  of  any  Default or  Event  of  Default,  regardless  of  whether  the  Administrative  Agent,  any  Lender  or  the  Issuing  Bank may have had notice or knowledge of such Default or Event of Default at the time.               (b)   Amendments  to  this  Agreement.   Neither  this  Agreement  nor  any  provision  hereof  may  be  waived,  amended  or  modified  except  pursuant  to  an  agreement  or  agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower  and the Administrative Agent with the consent of the Required Lenders; provided that, subject to  Section 2.17(b), no such agreement shall               (i)   increase  the  Commitment  of  any  Lender  without  the  written  consent  of        such Lender,               (ii)  reduce the principal amount of any Loan or LC Disbursement or reduce        the  rate  of  interest  thereon,  or  reduce  any  fees  payable  hereunder,  without  the  written        consent of each Lender directly affected thereby,               (iii) postpone  the  scheduled  date  of  payment  of  the  principal  amount  of  any        Loan or LC Disbursement, or any interest thereon, or any fees or other amounts payable        to a Lender hereunder, or reduce the amount or waive or excuse any such payment, or        postpone  the  scheduled  date  of  expiration  of  any  Commitment,  without  the  written        consent of each Lender directly affected thereby,                                         131   25272637.12.BUSINESS 

 

            (iv)  change Section 2.16(b), (c) or (d) in a manner that would alter the pro rata        sharing of payments, or making of disbursements, required thereby without the written        consent of each Lender directly affected thereby,                (v)   change  any  of  the  provisions  of  this  Section or  the  percentage  in  the        definition of the term “Required  Lenders” or any  other provision hereof specifying the        number  or  percentage  of  Lenders  required  to  waive,  amend  or  modify  any  rights        hereunder or make any determination or grant any consent hereunder, without the written        consent of each Lender, or               (vi)  permit  the  assignment  or  transfer  by  any  Obligor  of  any  of  its  rights  or        obligations under any Loan Document without the consent of each Lender;   provided further that (x) no such agreement shall amend, modify or otherwise affect the rights or  duties  of  the  Administrative  Agent  or  the  Issuing  Bank  hereunder  without  the  prior  written  consent of the Administrative Agent or the Issuing Bank, as the case may be, and (y) the consent  of  Lenders  holding  not  less  than  two-thirds  of  the  total  Credit  Exposures  and  unused  Commitments  will  be  required  for  (A) any  change  adverse  to  the  Lenders  affecting  the  provisions  of  this  Agreement  relating  to  the  Borrowing  Base  (including  the  definitions  used  therein), or the provisions of Section 5.12(b)(ii), and (B) any release of any material portion of  the Collateral other than for fair value or as otherwise permitted hereunder or under the other  Loan Documents.               (c)   Amendments  to  Security  Documents.   No  Security  Document  nor  any  provision thereof may be waived, amended or modified, except to the extent otherwise expressly  contemplated  by  the  Guarantee  and  Security  Agreement,  and  the  Liens  granted  under  the  Guarantee  and  Security  Agreement  may  not  be  spread  to  secure  any  additional  obligations  (including  any  increase  in  Loans  hereunder, but excluding (i) any such  increase pursuant to  a  Commitment  Increase  under  Section 2.07(f)  and  (ii)  any  Secured  Longer-Term  Indebtedness  permitted  hereunder) except  to  the  extent  otherwise  expressly  contemplated  by  the  Guarantee  and Security Agreement and except pursuant to an agreement or agreements in writing entered  into  by  the  Borrower,  and  by  the  Collateral  Agent  with  the  consent  of  the  Required  Lenders;  provided that, subject to Section 2.17(b), (i) without the written consent of the holders exceeding  67%  of  the  total  Revolving  Credit  Exposures  and  unused  Commitments,  no  such  waiver,  amendment  or  modification  to  the  Guarantee  and  Security  Agreement  shall  (A)  release  any  Obligor representing more than 10% of the Stockholders’ Equity from its obligations under the  Security Documents, (B) release any guarantor representing more than 10% of the Stockholders’  Equity under the Guarantee and Security Agreement from its guarantee obligations thereunder,  or  (C)  amend  the  definition  of  “Collateral”  under  the  Security  Documents  (except  to  add  additional  collateral)  and  (ii) without  the  written  consent  of  each  Lender,  no  such  agreement  shall (W) release all or substantially all of the Obligors from their respective obligations under  the Security Documents, (X) release all or substantially all of the collateral security or otherwise  terminate all or substantially all of the Liens under the Security Documents, (Y) release all or  substantially  all  of  the  guarantors  under  the  Guarantee  and  Security  Agreement  from  their  guarantee obligations thereunder, or (Z) alter the relative priorities of the obligations entitled to  the Liens created under the Security Documents (except in connection with securing additional  obligations equally and ratably with the Loans and other obligations hereunder) with respect to                                       132   25272637.12.BUSINESS 

 

the collateral security provided thereby; except that no such consent described in clause (i) or (ii)  above shall be required, and the Administrative Agent is hereby authorized (and so agrees with  the  Borrower) to  direct  the  Collateral  Agent  under  the  Guarantee  and  Security  Agreement,  to  release  any  Lien  covering  property  (and  to  release  any  such  guarantor) that  is  the  subject  of  either  a  disposition  of  property  permitted  hereunder  or  a  disposition  to  which  the  Required  Lenders  or  the  required  number  or  percentage  of  Lenders  have  consented,  or  otherwise  in  accordance with Section 9.15.               (d)   Replacement  of  Non-Consenting  Lender.   If,  in  connection  with  any  proposed  amendment,  waiver  or  consent  requiring  (i)  the  consent  of  “each  Lender”  or  “each  Lender affected thereby,” or (ii) the consent of “two-thirds of the holders of the total Revolving  Credit Exposures and unused Commitments”, the consent of the Required Lenders is obtained,  but the consent of other necessary Lenders is not obtained (any such Lender whose consent is  necessary  but  not  obtained  being  referred  to  herein  as  a  “Non-Consenting  Lender”),  then  the  Borrower shall have the right, at its sole cost and expense, to replace each such Non-Consenting  Lender or Lenders with one or more replacement Lenders pursuant to Section 2.18(b) so long as  at the time of such replacement, each such replacement Lender consents to the proposed change,  waiver, discharge or termination.               (e)   Ambiguity, Omission, Mistake or Typographical Error.  Notwithstanding  the  foregoing,  if  the  Administrative  Agent  and  the  Borrower  acting  together  identify  any  ambiguity,  omission,  mistake,  typographical  error  or  other  defect  in  any  provision  of  this  Agreement or any other Loan Document, then the Administrative Agent and the Borrower shall  be permitted to amend, modify or supplement such provision to cure such ambiguity, omission,  mistake, typographical error or other defect, and such amendment shall become effective without  any further action or consent of any other party to this Agreement.               SECTION 9.03.  Expenses; Indemnity; Damage Waiver.               (a)   Costs  and  Expenses.  The  Borrower  shall  pay  (i) all  reasonable  and  documented  out-of-pocket  fees,  costs  and  expenses  incurred  by  the  Administrative  Agent,  the  Collateral Agent and their Affiliates, including the reasonable fees, charges and disbursements of  one  outside  counsel  and  of  any  necessary  special  and/or  local  counsel  for  the  Administrative  Agent and the Collateral Agent collectively (other than the allocated costs of internal counsel), in  connection with the syndication of the credit facilities provided for herein, the preparation and  administration  (other  than  internal  overhead  charges)  of  this  Agreement  and  the  other  Loan  Documents and any amendments, modifications or waivers of the provisions hereof or thereof  (whether  or  not  the  transactions  contemplated  hereby  or  thereby  shall  be  consummated)  including all costs and expenses of the Independent Valuation Provider, (ii) all reasonable and  documented out-of-pocket fees, costs and expenses incurred by the Issuing Bank in connection  with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for  payment  thereunder,  (iii) all  out-of-pocket  fees,  costs  and  expenses  incurred  by  the  Administrative  Agent,  the  Collateral  Agent,  the  Issuing  Bank  or  any  Lender,  including  fees,  charges and disbursements of any counsel for the Administrative Agent, the Collateral Agent, the  Issuing  Bank  or  any  Lender, in  connection  with  the  enforcement or protection  of  its  rights  in  connection with this Agreement and the other Loan Documents, including its rights under this  Section, or in connection with the Loans made or Letters of Credit issued hereunder, including                                       133   25272637.12.BUSINESS 

 

all  such  out-of-pocket  expenses  incurred  during  any  workout,  restructuring  or  negotiations  in  respect thereof and (iv) and all reasonable out-of-pocket costs, expenses, taxes, assessments and  other charges incurred in connection with any filing, registration, recording or perfection of any  security  interest  contemplated  by  any  Security  Document  or  any  other  document  referred  to  therein.               (b)   Indemnification  by  the  Borrower.   The  Borrower  shall  indemnify  the  Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the  foregoing  Persons  (each  such  Person  being  called  an  “Indemnitee”) against,  and  hold  each  Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses  (other than Taxes or Other Taxes which shall only be indemnified by the Borrower to the extent  provided  in  Section  2.15),  including  the  reasonable  and  documented  fees,  charges  and  disbursements  of  any  counsel  for  any  Indemnitee  (other  than  the  allocated  costs  of  internal  counsel), incurred by or asserted against any Indemnitee arising out of, in connection with, or as  a  result  of  (i) the  execution  or  delivery  of  this  Agreement  or  any  agreement  or  instrument  contemplated  hereby,  the  performance  by  the  parties  hereto  of  their  respective  obligations  hereunder  or  the  consummation  of  the  Transactions  or  any  other  transactions  contemplated  hereby  (including  any  arrangement  entered  into  with  an  Independent  Valuation  Provider),  (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by  the  Issuing  Bank  to  honor  a  demand  for  payment  under  a  Letter  of  Credit  if  the  documents  presented in connection with such demand do not strictly comply with the terms of such Letter of  Credit) or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to  any of the foregoing, whether based on contract, tort or any other theory and whether brought by  the  Borrower,  any  Indemnitee  or  a  third  party  and  regardless  of  whether  any  Indemnitee  is  a  party thereto; provided that such indemnity shall not as to any  Indemnitee, be available to the  extent that such losses, claims, damages, liabilities or related expenses are determined by a court  of competent jurisdiction by final and nonappealable judgment to have resulted from the willful  misconduct or gross negligence of such Indemnitee.               The  Borrower  shall  not  be  liable  to  any  Indemnitee  for  any  special,  indirect,  consequential or punitive damages (as opposed to direct or actual damages (other than in respect  of  any  such  damages  incurred  or  paid  by  an  Indemnitee  to  a  third  party))  arising  out  of,  in  connection  with,  or  as  a  result  of  the  Transactions  asserted  by  an  Indemnitee  against  the  Borrower  or  any  other  Obligor;  provided  that  the  foregoing  limitation  shall  not  be  deemed  to  impair  or  affect  the  obligations  of  the  Borrower  under  the  preceding  provisions  of  this  subsection.               (c)   Reimbursement by Lenders.  To the extent that the Borrower fails to pay  any  amount  required  to  be  paid  by  it  to  the  Administrative  Agent  or  the  Issuing  Bank  under  paragraph (a) or (b) of this Section (and without limiting its obligation to do so), each  Lender  severally agrees to pay to the Administrative Agent or the Issuing Bank, as the case may be, such  Lender’s  Applicable  Percentage  (determined  as  of  the  time  that  the  applicable  unreimbursed  expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed  expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was  incurred by or asserted against the Administrative Agent or the Issuing Bank in its capacity as  such.                                        134   25272637.12.BUSINESS 

 

            (d)   Waiver  of  Consequential  Damages,  Etc.   To  the  extent  permitted  by  applicable  law,  the  Borrower  shall  not  assert,  and  hereby  waives,  any  claim  against  any  Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as  opposed  to  direct  or  actual  damages) arising  out  of,  in  connection  with,  or  as  a  result  of,  this  Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or  Letter  of  Credit  or  the  use  of  the  proceeds  thereof.   No  Indemnitee  shall  be  liable  for  any  damages  arising  from  the  use  of  unintended  recipients  of  any  information  or  other  materials  distributed  by  it  through  telecommunications,  electronic  or  other  information  transmission  systems  in  connection  with  this  Agreement  or  the  other  Loan  Documents  or  the  transactions  contemplated hereby or thereby, except to the extent caused by the willful misconduct or gross  negligence of such Indemnitee, as determined by a final, non-appealable judgment of a court of  competent jurisdiction.               (e)   Payments.  All amounts due under this Section shall be payable promptly  after written demand therefor.               (f)   No  Fiduciary  Relationship.  The  Administrative  Agent,  each  Lender  and  their  Affiliates  (collectively,  solely  for  purposes  of  this  paragraph,  the  “Lenders”),  may  have  economic  interests  that  conflict  with  those  of  the  Borrower  or  any  of  its  Subsidiaries,  their  stockholders and/or their affiliates. The Borrower, on behalf of itself and each of its Subsidiaries,  agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory,  fiduciary or agency relationship or fiduciary or other implied duty between the Lender, on the  one hand, and the Borrower or any of its Subsidiaries, its stockholders or its Affiliates, on the  other.  The  Borrower  and  each  of  its  Subsidiaries  each  acknowledge  and  agree  that  (i)  the  transactions contemplated by the Loan Documents (including the exercise of rights and remedies  hereunder and thereunder) are arm’s-length commercial transactions between the Lenders, on the  one hand, and the Borrower and its Subsidiaries, on the other, and (ii) in connection therewith  and  with  the  process  leading  thereto,  (x)  except  as  otherwise  provided  in  any  of  the  Loan  Documents,  no  Lender  has  assumed  an  advisory  or  fiduciary  responsibility  in  favor  of  the  Borrower  or  any  of  its  Subsidiaries,  any  of  their  stockholders  or  affiliates  (irrespective  of  whether any Lender has advised, is currently advising or will advise the Borrower or any of its  Subsidiaries, their stockholders or their affiliates on other matters) and (y) each Lender is acting  hereunder  solely  as  principal  and  not  as  the  agent  or  fiduciary  of  the  Borrower  or  any  of  its  Subsidiaries,  their  management  or  stockholders.  The  Borrower  and  each  Obligor  each  acknowledge and agree that it has consulted legal and financial advisors to the extent it deemed  appropriate and that it is responsible for making its own independent judgment with respect to  such transactions  and  the  process  leading  thereto. The  Borrower and  each  Obligor  each agree  that it will not claim that any Lender has rendered advisory services hereunder of any nature or  respect,  or  owes  a  fiduciary  duty  to  the  Borrower  or  any  of  its  Subsidiaries,  in  each  case,  in  connection with such transactions contemplated hereby or the process leading thereto.               SECTION 9.04.  Successors and Assigns.               (a)   Assignments  Generally.   The  provisions  of  this  Agreement  shall  be  binding upon and inure to the benefit of the parties hereto and their respective successors and  assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any  Letter of  Credit),  except  that  (i)  the  Borrower  may  not  assign  or  otherwise  transfer  any  of  its  rights  or                                       135   25272637.12.BUSINESS 

 

obligations  hereunder  without  the  prior  written  consent  of  each  Lender  (and  any  attempted  assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no  Lender  may  assign  or  otherwise  transfer  any  of  its  rights  or  obligations  hereunder  except  in  accordance with this Section (and any attempted assignment or transfer by any Lender which is  not in accordance with this Section shall be treated as provided in the last sentence of Section  9.04(b)(iii)).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon  any  Person  (other  than  the  parties  hereto,  their  respective  successors  and  assigns  permitted  hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the  extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent,  the  Issuing  Bank  and  the  Lenders) any  legal  or  equitable  right,  remedy  or  claim  under  or  by  reason of this Agreement.               (b)   Assignments by Lenders.               (i)   Assignments  Generally.   Subject  to  the  conditions  set  forth  in  clause        (ii) below, any Lender may assign to one or more assignees all or a portion of its rights        and obligations under this Agreement (including all or a portion of its Commitment and        the Loans and LC Exposure at the time owing to it) with the prior written consent (such        consent not to be unreasonably withheld, conditioned or delayed) of:                     (A)   the Borrower; provided that (i) no consent of the Borrower shall be              required for an assignment to a Lender, an Affiliate of a Lender, or, if an Event of              Default has occurred and is continuing, any other assignee, and (ii) the Borrower              shall be deemed to have consented to any such assignment unless it shall object              thereto  by  written  notice  to  the  Administrative  Agent  within  five  (5)  Business              Days after having received written notice thereof; and                     (B)   the Administrative Agent and the  Issuing Bank; provided that no              consent of the Administrative Agent or the Issuing Bank shall be required for an              assignment by a Lender to a Lender or an Affiliate of a Lender with prior written              notice  by  such  assigning  Lender  to  the  Administrative  Agent  and  the  Issuing              Bank.               (ii)  Certain Conditions to Assignments.  Assignments shall be subject to the        following additional conditions:                     (A)   except in the case of an assignment to a Lender or an Affiliate of a              Lender or an assignment of the entire remaining amount of the assigning Lender’s              Commitment  or  Loans  and  LC  Exposure,  the  amount  of  the  Commitment  or              Loans and LC Exposure of the assigning Lender subject to each such assignment              (determined as of the date the Assignment and Assumption with respect to such              assignment  is  delivered  to  the  Administrative  Agent)  shall  not  be  less  than              $1,000,000 unless each of the Borrower and the Administrative Agent otherwise              consent;  provided  that  no  such  consent  of  the  Borrower  shall  be  required  if  an              Event of Default has occurred and is continuing;                                        136   25272637.12.BUSINESS 

 

                  (B)   each  partial  assignment  of  Commitments  or  Loans  and  LC              Exposure  shall  be  made  as  an  assignment  of  a  proportionate  part  of  all  the              assigning Lender’s rights and obligations under this Agreement in respect of  such              Commitments and Loans and LC Exposure;                     (C)   the  parties  to  each  assignment  shall  execute  and  deliver  to  the              Administrative Agent an Assignment and Assumption in substantially the form of              Exhibit A hereto, together with a processing and recordation fee of $3,500 (which              fee shall not be payable in connection with an assignment to a  Lender or to an              Affiliate  of  a  Lender),  for  which  the  Borrower  and  the  Guarantors  shall  not  be              obligated (except in the case of an assignment pursuant to Section 2.18(b)); and                     (D)   the assignee, if it shall not already be a Lender, shall deliver to the              Administrative Agent an Administrative Questionnaire.               (iii) Effectiveness  of  Assignments.   Subject  to  acceptance  and  recording        thereof  pursuant  to  paragraph  (c) of  this  Section,  from  and  after  the  effective  date        specified  in each Assignment  and  Assumption the assignee thereunder shall be a party        hereto and, to the extent of the interest assigned by such Assignment and Assumption,        have  the  rights  and  obligations  of  a  Lender  under  this  Agreement,  and  the  assigning        Lender thereunder shall, to the extent of the interest assigned by such  Assignment and        Assumption, be released from its obligations under this Agreement (and, in the case of an        Assignment and Assumption covering all of the assigning Lender’s rights and obligations        under this Agreement, such Lender shall cease to be a party hereto but shall continue to        be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.03 with respect to facts and        circumstances occurring prior to the effective date of such assignment).  Any assignment        or  transfer  by  a  Lender  of  rights  or  obligations  under  this  Agreement  that  does  not        comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by        such  Lender  of  a  participation  in  such  rights  and  obligations  in  accordance  with        paragraph (f) of this Section.               (c)   Maintenance of Registers  by  Administrative Agent.  The Administrative  Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain at  one of its offices in New York City a copy of each Assignment and Assumption delivered to it  and  a  register  for  the  recordation  of  the  names  and  addresses  of  the  Lenders,  and  the  Commitments of, and principal amount and stated interest of the Loans and LC Disbursements  owing to, each Lender pursuant to the terms hereof from time to time (the “Registers” and each  individually,  a  “Register”).   The  entries  in  the  Registers  shall  be  conclusive  absent  manifest  error, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall treat  each Person whose name is recorded in the Registers pursuant to the terms hereof as a Lender  hereunder  for  all  purposes  of  this  Agreement,  notwithstanding  notice  to  the  contrary.   The  Registers shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at  any reasonable time and from time to time upon reasonable prior notice.               (d)   Acceptance of Assignments by Administrative Agent.  Upon its receipt of  a duly completed Assignment and Assumption executed by an assigning Lender and an assignee,  the assignee’s  completed  Administrative Questionnaire  (unless the assignee  shall  already  be  a                                       137   25272637.12.BUSINESS 

 

Lender  hereunder),  the  processing  and  recordation  fee  referred  to  in  paragraph  (b) of  this  Section and any written consent to such assignment required by paragraph (b) of this Section, the  Administrative Agent shall accept such Assignment and Assumption and record the information  contained  therein  in  the  Register.   No  assignment  shall  be  effective  for  purposes  of  this  Agreement unless it has been recorded in the Register as provided in this paragraph.               (e)   Special  Purposes  Vehicles.   Notwithstanding  anything  to  the  contrary  contained  herein,  any  Lender  (a  “Granting  Lender”)  may  grant  to  a  special  purpose  funding  vehicle (an “SPC”) owned or administered by such Granting Lender, identified as such in writing  from time  to time  by the Granting  Lender to  the  Administrative Agent  and  the Borrower, the  option  to  provide  all  or  any  part  of  any  Loan  that  such  Granting  Lender  would  otherwise  be  obligated to make; provided that (i) nothing herein shall constitute a commitment to make any  Loan by any SPC, (ii) if an SPC elects not to exercise such option or otherwise fails to provide  all or any part of such Loan, the Granting Lender shall, subject to the terms of this Agreement,  make such Loan pursuant to the terms hereof, (iii) the rights of any such SPC shall be derivative  of the rights of the Granting Lender, and such SPC shall be subject to all of the restrictions upon  the  Granting  Lender  herein  contained,  and  (iv) no  SPC  shall  be  entitled  to  the  benefits  of  Section 2.13 (or any other increased costs protection provision), 2.14 or 2.15.  Each SPC shall be  conclusively presumed to have made arrangements with its Granting Lender for the exercise of  voting and other rights hereunder in a manner which is acceptable to the SPC, the Administrative  Agent, the Lenders and the Borrower, and each of the Administrative Agent, the Lenders and the  Obligors shall be entitled to rely upon and deal solely with the Granting Lender with respect to  Loans made by or through its SPC.  The making of a Loan by an SPC hereunder shall utilize the  Commitment of the Granting Lender to the same extent, and as if, such Loan were made by the  Granting Lender.               Each party hereto hereby agrees (which agreement shall survive the termination  of this Agreement) that, prior to the date that is one year and one day after the payment in full of  all  outstanding  senior  indebtedness  of  any  SPC,  it  will  not  institute  against,  or  join  any  other  person in instituting against, such SPC, any bankruptcy, reorganization, arrangement, insolvency  or liquidation proceedings or similar proceedings under the laws of the United States or any State  thereof, in respect of claims arising out of this Agreement; provided that the Granting Lender for  each SPC hereby agrees to indemnify, save and hold harmless each other party hereto for any  loss,  cost,  damage  and  expense  arising  out  of  their  inability  to  institute  any  such  proceeding  against its SPC.  In addition, notwithstanding anything to the contrary contained in this Section,  any SPC may (i) without the prior written consent of the Borrower and the Administrative Agent  and  without  paying  any  processing  fee  therefor,  assign  all  or  a  portion  of  its  interests  in  any  Loans  to  its  Granting  Lender  or  to  any  financial  institutions  providing  liquidity  and/or  credit  facilities to or for the account of such SPC to fund the Loans made by such SPC or to support the  securities (if any) issued by such SPC to fund such Loans (but nothing contained herein shall be  construed  in  derogation  of  the  obligation  of  the  Granting  Lender  to  make  Loans  hereunder);  provided  that  neither  the  consent  of  the  SPC  or  of  any  such  assignee  shall  be  required  for  amendments  or  waivers  hereunder  except  for  those  amendments  or  waivers  for  which  the  consent of participants is required under paragraph (f) below, and (ii) disclose on a confidential  basis (in the same manner described in Section 9.13(b)) any non-public information relating to  its  Loans  to  any  rating  agency,  commercial paper dealer or provider  of  a  surety,  guarantee  or  credit or liquidity enhancement to such SPC.                                       138   25272637.12.BUSINESS 

 

            (f)   Participations.  Any Lender may sell participations to one or more banks  or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under  this Agreement and the other Loan Documents (including all or a portion of its Commitments  and the Loans and LC Disbursements owing to it); provided that (i) such Lender’s obligations  under this Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender  shall remain solely responsible to the other parties hereto for the performance of such obligations  and (iii) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall  continue to deal solely and directly with such Lender in connection with such Lender’s rights  and  obligations  under  this  Agreement   and  the  other  Loan  Documents.   Any  agreement  or  instrument pursuant to which a Lender sells such a participation shall provide that such Lender  shall  retain  the  sole  right  to  enforce  this  Agreement  and  the  other  Loan  Documents  and  to  approve any amendment, modification or waiver of any provision of this Agreement or any other  Loan Document; provided that such agreement or instrument may provide that such Lender will  not,  without  the  consent  of  the  Participant,  agree  to  any  amendment,  modification  or  waiver  described  in  the  first  proviso  to  Section 9.02(b)  that  affects  such  Participant.   Subject  to  paragraph (g) of this Section, the Borrower agrees that each Participant shall be entitled to the  benefits  of  Sections 2.13,  2.14  and  2.15  (subject  to  the  requirements  and  limitations  therein,  including  Sections  2.15(f)  and  (g)  (it  being  understood  that  the  documentation  required  under  Sections 2.15(f) and (g) shall be delivered to the participating Lender)) to the same extent as if it  were  a  Lender  and  had  acquired  its  interest  by  assignment  pursuant  to  paragraph  (b) of  this  Section; provided that such Participant agrees to be subject to the provisions of Section 2.18 as if  it  were  an  assignee  under  paragraph  (b)  of  this  Section  9.04.   Each  Lender  that  sells  a  participation  agrees,  at  the  Borrower’s  request  and  expense,  to  use  reasonable  efforts  to  cooperate  with  the  Borrower  to  effectuate  the  provisions  of  Section  2.18  with  respect  to  any  Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits  of  Section 9.08  as  though  it  were  a  Lender,  provided  such  Participant  agrees  to  be  subject  to  Section 2.16(d) as  though  it  were  a  Lender  hereunder.   Each  Lender  that  sells  a  participation  shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register  on which it enters the name and address of each Participant and the principal amounts and stated  interest of each Participant’s interest in the Loans or other obligations under the Loan Documents  (each a “Participant Register”); provided, that no Lender shall have any obligation to disclose all  or  any  portion  of  the  Participant  Register  (including  the  identity  of  any  Participant  or  any  information relating to a Participant’s interest in any commitments, loans, letters of credit or its  other  obligations  under  any  Loan  Document)  to  any  Person  except  to  the  extent  that  such  disclosure  is  necessary  to  establish  that  such  commitment,  loan,  letter  of  credit  or  other  obligation  is  in  registered  form  under  Section  5f.103-1(c)  of  the  United  States  Treasury  Regulations.  The entries in each Participant Register shall be conclusive absent manifest error,  and such Lender shall treat each Person whose name is recorded in the Participant Register as the  owner of such participation for all purposes of this Agreement notwithstanding any notice to the  contrary.   For  the  avoidance  of  doubt,  the  Administrative  Agent  (in  its  capacity  as  the  Administrative Agent) shall have no responsibility for maintaining a Participant Register.               (g)   Limitations on Rights of Participants.  A Participant shall not be entitled to  receive any greater payment under Section 2.13 or 2.14 than the applicable Lender would have  been entitled to receive with respect to the participation sold to such Participant, unless the sale  of the participation  to  such Participant  is  made  with the Borrower’s  prior  written  consent.   A  Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits                                       139   25272637.12.BUSINESS 

 

of Section 2.15 unless such Participant agrees to comply with Section 2.15(f) as though it were a  Lender (it being understood that that the documentation required under Section 2.15(f) shall be  delivered to the participating Lender).               (h)   Certain Pledges.  Any Lender may at any time pledge or assign a security  interest  in  all  or  any  portion  of  its  rights  under  this  Agreement  to  secure  obligations  of  such  Lender, including any such pledge or assignment to a Federal Reserve Bank or any other central  bank, and this Section shall not apply to any  such pledge or assignment of a security interest;  provided that no such pledge or assignment of a security interest shall release a Lender from any  of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.               (i)   No Assignments or Participations to the Borrower or Affiliates or Certain  Other  Persons.   Anything  in  this  Section to  the  contrary  notwithstanding,  no  Lender  may  (i) assign  or  participate  any  interest  in  any  Commitment,  Loan  or  LC  Exposure  held  by  it  hereunder to the Borrower or any of its Affiliates or Subsidiaries without the prior consent of  each  Lender,  or  (ii) assign  any  interest  in  any  Commitment,  Loan  or  LC  Exposure  held  by  it  hereunder to a natural person (or a holding company, investment vehicle or trust for, or owned  and operated for the primary benefit of, a natural person) or to any Person known by such Lender  at the time of such assignment to be a Defaulting Lender, a Subsidiary of a Defaulting Lender or  a Person who, upon consummation of such assignment would be a Defaulting Lender.               SECTION 9.05.  Survival.  All covenants, agreements, representations and  warranties made by the Borrower herein and in the certificates or other instruments delivered in  connection with or pursuant to this Agreement shall be considered to have been relied upon by  the other parties hereto and shall survive the execution and delivery of this Agreement and the  making of any Loans and issuance of any Letters of Credit, regardless of any investigation made  by any such other party or on its behalf and notwithstanding that the Administrative Agent, the  Issuing  Bank  or  any  Lender  may  have  had  notice  or  knowledge  of  any  Default  or  Event  of  Default or incorrect representation or warranty at the time any credit is extended hereunder, and  shall continue in full force and effect as long as the principal of or any accrued interest on any  Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or  any  Letter  of  Credit  is  outstanding  and  so  long  as  the  Commitments  have  not  expired  or  terminated.  The provisions of Sections 2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive  and  remain  in  full  force  and  effect  regardless  of  the  consummation  of  the  transactions  contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of  Credit and the Commitments or the termination of this Agreement or any provision hereof.               SECTION 9.06.  Counterparts; Integration; Effectiveness; Electronic Execution.               (a)   Counterparts;  Integration;  Effectiveness.   This  Agreement  may  be  executed in counterparts (and by different parties hereto on different counterparts), each of which  shall  constitute  an  original,  but  all  of  which  when  taken  together  shall  constitute  a  single  contract.  This Agreement and any separate letter agreements with respect to fees payable to the  Administrative Agent constitute the entire contract between and among the parties relating to the  subject matter hereof and supersede any and all previous agreements and understandings, oral or  written,  relating  to  the  subject  matter  hereof.   This  Agreement  shall  become  effective  when  provided  in  Section  4.01,  and  thereafter  shall  be  binding  upon  and  inure  to  the  benefit  of  the                                       140   25272637.12.BUSINESS 

 

parties hereto and their respective successors and assigns.  Delivery of an executed counterpart  of a signature page to this Agreement by telecopy or electronic mail shall be effective as delivery  of a manually executed counterpart of this Agreement.               (b)   Electronic Execution of Assignments.  The words “execution,” “signed,”  “signature,”  and words  of  like import  in any  Assignment and Assumption shall  be  deemed to  include electronic signatures or the keeping of records in electronic form, each of which shall be  of the same legal effect validity or enforceability as a manually executed signature or the use of a  paper-based recordkeeping system, as the case may be, to the extent and as provided for in any  applicable law, including the Federal Electronic Signatures in Global and National Commerce  Act, the New York State Electronic Signatures and Records Act, or any other similar state laws  based on the Uniform Electronic Transactions Act.               SECTION 9.07.  Severability.  Any provision of this Agreement held to be  invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to  the extent of such invalidity, illegality or unenforceability without affecting the validity, legality  and enforceability of the remaining provisions hereof; and the invalidity of a particular provision  in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.               SECTION 9.08.  Right of Setoff.  If an Event of Default shall have occurred and  be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from  time  to  time,  to  the  fullest  extent  permitted  by  law,  to  set  off  and  apply  any  and  all  deposits  (general or special, time or demand, provisional or final) at any time held and other obligations at  any time owing by such Lender or Affiliate to or for the credit or the account of any Obligor  against  any  of  and  all  the  obligations  of  any  Obligor  now  or  hereafter  existing  under  this  Agreement held by such Lender, irrespective of whether or not such Lender shall have made any  demand under this Agreement and although such obligations may be unmatured.  The rights of  each  Lender  under  this  Section are  in  addition  to  other  rights  and  remedies  (including  other  rights  of  setoff) which  such  Lender  may  have;  provided  that  in  the  event  that  any  Defaulting  Lender exercises any such right of setoff, (a) all amounts so set off will be paid over immediately  to the Administrative Agent for further application in accordance with the provisions of Section  2.16 and, pending such  payment, will be segregated by such Defaulting Lender from its other  funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders and  (b)  the  Defaulting  Lender  will  provide  promptly  to  the  Administrative  Agent  a  statement  describing in reasonable detail the obligations owing to such Defaulting Lender as to which it  exercised such right of setoff.   Each  Lender agrees promptly to notify the Borrower after any  such set-off and application made by such Lender; provided that the failure to give such notice  shall not affect the validity of such set-off and application.               SECTION 9.09.  Governing Law; Jurisdiction; Etc.               (a)   Governing  Law.  This Agreement shall be construed in accordance with  and governed by the law of the State of New York.               (b)   Submission  to  Jurisdiction.   The  Borrower  hereby  irrevocably  and  unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme  Court of the State of New York sitting in New York County  and of the United States  District                                       141   25272637.12.BUSINESS 

 

Court of the Southern District of New York,  and any appellate court from any thereof, in any  action  or  proceeding  arising  out  of  or  relating  to  this  Agreement,  or  for  recognition  or  enforcement  of  any  judgment,  and  each  of  the  parties  hereto  hereby  irrevocably  and  unconditionally agrees that all claims in respect of any such action or proceeding may be heard  and determined in such New York State or, to the extent permitted by law, in such Federal court.   Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be  conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other  manner  provided  by  law.   Nothing  in  this  Agreement  shall  affect  any  right  that  the  Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or  proceeding relating to this Agreement against the Borrower or its properties in the courts of any  jurisdiction.               (c)   Waiver of Venue.  The Borrower hereby irrevocably and unconditionally  waives, to the fullest extent it may legally and effectively do so, any objection which it may now  or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating  to this Agreement in any court referred to in paragraph (b) of this Section.  Each of the parties  hereto  hereby  irrevocably  waives,  to  the  fullest  extent  permitted  by  law,  the  defense  of  an  inconvenient forum to the maintenance of such action or proceeding in any such court.               (d)   Service of Process.  Each party to this Agreement (i) irrevocably consents  to  service  of  process  in  the  manner  provided  for  notices  in  Section 9.01  and  (ii)  agrees  that  service  as  provided  in  the  manner  provided  for  notices  in  Section  9.01  is  sufficient  to  confer  personal jurisdiction over such party in any proceeding in any court and otherwise  constitutes  effective and binding service in every respect.  Nothing in this Agreement will affect the right of  any party to this Agreement to serve process in any other manner permitted by law.               SECTION 9.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO  HEREBY  WAIVES,  TO  THE  FULLEST  EXTENT  PERMITTED  BY  APPLICABLE  LAW,  ANY  RIGHT  IT  MAY  HAVE  TO  A  TRIAL  BY  JURY  IN  ANY  LEGAL  PROCEEDING  DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT  OR  THE  TRANSACTIONS  CONTEMPLATED  HEREBY  (WHETHER  BASED  ON  CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES  THAT NO REPRESENTATIVE, AGENT OR  ATTORNEY  OF ANY  OTHER  PARTY HAS  REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT  SUCH  OTHER  PARTY  WOULD  NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER  AND  (B) ACKNOWLEDGES  THAT  IT  AND  THE  OTHER  PARTIES  HERETO  HAVE  BEEN  INDUCED  TO  ENTER  INTO  THIS  AGREEMENT  BY,  AMONG  OTHER  THINGS,  THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.               SECTION 9.11.  Judgment Currency.  This is a loan transaction in which the  specification of Dollars and payment in New York City is of the essence, and Dollars shall be the  currency of account in all events relating to Loans.  The payment obligations of the Borrower  under this Agreement shall not be discharged or satisfied by an amount paid in another currency  or in another place, whether pursuant to a judgment or otherwise, to the extent that the amount so  paid on conversion to Dollars and transfer to New York City under normal banking procedures  does  not  yield the  amount  of  Dollars  in New York City due  hereunder.   If  for  the  purpose  of  obtaining  judgment  in  any  court  it  is  necessary  to  convert  a  sum  due  hereunder  into  another                                       142   25272637.12.BUSINESS 

 

currency (the “Other Currency”), the rate of exchange that shall be applied shall be the rate at  which in accordance with normal banking procedures the Administrative Agent could purchase  Dollars  with  the  Other  Currency  on  the  Business  Day  next  preceding  the  day  on  which  such  judgment is rendered.  The obligation of the Borrower in respect of any such sum due from it to  the Administrative Agent or any Lender hereunder or under any other Loan Document (in this  Section called an “Entitled Person”) shall, notwithstanding the rate of exchange actually applied  in rendering such judgment, be discharged only to the extent that on the Business Day following  receipt by such Entitled Person of any sum adjudged to be due hereunder in the Other Currency  such Entitled Person may in accordance with normal banking procedures purchase and transfer  Dollars to New York City with the amount of the Other Currency so adjudged to be due; and the  Borrower  hereby,  as  a  separate  obligation  and  notwithstanding  any  such  judgment,  agrees  to  indemnify such Entitled Person against, and to pay such Entitled Person on demand, in Dollars,  the amount (if any) by which the sum originally due to such Entitled Person in Dollars hereunder  exceeds the amount of Dollars so purchased and transferred.               SECTION 9.12.  Headings.  Article and Section headings and the Table of  Contents used herein are for convenience of reference only, are not part of this Agreement and  shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.               SECTION 9.13.  Treatment of Certain Information; Confidentiality.               (a)   Treatment of Certain Information.  The Borrower acknowledges that from  time  to  time  financial  advisory,  investment  banking  and  other  services  may  be  offered  or  provided to the Borrower or one or more of its Subsidiaries (in connection with this Agreement  or otherwise) by any Lender or by one or more subsidiaries or affiliates of such Lender and the  Borrower hereby authorizes each Lender to share any information delivered to such Lender by  the Borrower and its Subsidiaries pursuant to this Agreement, or in connection with the decision  of  such  Lender  to  enter  into  this  Agreement,  to  any  such  subsidiary  or  affiliate,  it  being  understood that any such subsidiary or affiliate receiving such information shall be bound by the  provisions of paragraph (b) of this Section as if it were a Lender hereunder.  Such authorization  shall survive the repayment of the Loans, the expiration or termination of the Letters of Credit  and  the  Commitments  or  the  termination  of  this  Agreement  or  any  provision  hereof.   The  Administrative Agent, each Lender and their Affiliates (collectively, solely for purposes of this  paragraph, the “Lender”), may have economic interests that conflict with those of the Borrower  or any of its Subsidiaries and/or their Affiliates.                (b)   Confidentiality.  Each  of the  Administrative  Agent, the  Lenders  and the  Issuing Bank agrees to maintain the confidentiality of the Information (as defined below), except  that  Information  may  be  disclosed  (a) to  its  Affiliates  and  to  its  and  its  Affiliates’  respective  partners,  directors,  officers,  employees,  agents,  advisors  and  other  representatives  (it  being  understood  that  the  Persons  to  whom  such  disclosure  is  made  will  be  informed  of  the  confidential  nature  of  such  Information  and  instructed  to  keep  such  Information  confidential),  (b) to  the  extent  requested  by  any  regulatory  authority  purporting  to  have  jurisdiction  over  it  (including  any  self-regulatory  authority),  (c) to  the  extent  required  by  applicable  laws  or  regulations  or  by  any  subpoena  or  similar  legal  process,  (d) to  any  other  party  hereto,  (e) in  connection with the exercise of any remedies hereunder or under any other Loan Document or  any  action  or  proceeding  relating  to  this  Agreement  or  any  other  Loan  Document  or  the                                       143   25272637.12.BUSINESS 

 

enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions  substantially the same  as  those  of this  Section, to  (i) any assignee  of  or  Participant  in, or any  prospective assignee of or Participant in, any of its rights or obligations under this Agreement,  (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction  relating  to  the  Borrower  and  its  obligations,  or  (iii)  any  insurer,  (g) with  the  consent  of  the  Borrower,  (h)  on  a  confidential  basis  to  (i)  any  rating  agency  in  connection  with  rating  the  Borrower  or  its  Subsidiaries  or  the  Loans  and  (ii)  the  CUSIP  Service  Bureau  or  any  similar  agency in connection with the issuance and monitoring of CUSIP numbers with respect to the  Loans, (i) to the extent such Information (x) becomes publicly available other than as a result of  a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the  Issuing Bank or any of their respective Affiliates on a nonconfidential basis from a source other  than the Borrower or (j) in connection with the Lenders’ right to grant a security interest pursuant  to  Section  9.04(h)  to  the  Federal  Reserve  Bank  or  any  other  central  bank,  or  subject  to  an  agreement  containing  provisions  substantially  the  same  as  those  of  this  Section,  to  any  other  pledgee or assignee pursuant to Section 9.04(h).   For purposes of this Section, “Information” means all information received from the Borrower or  any  of  its  Subsidiaries  relating  to  the  Borrower  or  any  of  its  Subsidiaries  or  any  of  their  respective businesses (including any Portfolio Investments), other than any such information that  is available to the Administrative Agent, any Lender or the Issuing Bank on a nonconfidential  basis prior to disclosure by the Borrower or any of its Subsidiaries, provided that, in the case of  information received  from  the  Borrower or any  of  its  Subsidiaries  after  the Original  Effective  Date, such information is clearly identified at the time of delivery as confidential.  Any Person  required  to  maintain  the  confidentiality  of  Information  as  provided  in  this  Section shall  be  considered to have complied with its obligation to do so if such Person has exercised the same  degree of care to maintain the confidentiality of such Information as such Person would accord  to its own confidential information.               SECTION 9.14.  USA PATRIOT Act.  Each Lender hereby notifies the  Borrower  that  pursuant  to  the  requirements  of  the  USA  PATRIOT  Act  (Title III  of  Pub.  L.  107-56  (signed  into  law  October 26,  2001)),  it  is  required  to  obtain,  verify  and  record  information that identifies the Borrower, which information includes the name and address of the  Borrower  and  other  information  that  will  allow  such  Lender  to  identify  the  Borrower  in  accordance  with  said  Act.   The  Obligors  shall,  promptly  following  a  request  by  the  Administrative Agent or any  Lender, provide all documentation and other information that the  Administrative Agent or such Lender requests in order to comply with its ongoing obligations  under  applicable  “know  your  customer”  and  anti-money  laundering  rules  and  regulations,  including the USA PATRIOT Act and the Beneficial Ownership Regulation (including, without  limitation, delivery to such Lender of a Beneficial Ownership Certification).               SECTION 9.15.  Termination.  Promptly upon the Termination Date, the  Administrative Agent shall direct the Collateral Agent to, on behalf of the Administrative Agent,  the  Collateral  Agent  and  the  Lenders,  deliver  to  Borrower  such  termination  statements  and  releases  and  other  documents  necessary  or  appropriate  to  evidence  the  termination  of  this  Agreement, the Loan Documents, and each of the documents securing the obligations hereunder  as the Borrower may reasonably request, all at the sole cost and expense of the Borrower.                                        144   25272637.12.BUSINESS 

 

            SECTION 9.16.  Acknowledgment and Consent to Bail-In of EEA Financial  Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other  agreement,  arrangement  or  understanding  among  any  such  parties,  each  party  hereto  acknowledges  that  any  liability  of  any  EEA  Financial  Institution  arising  under  any  Loan  Document,  to  the  extent  such  liability  is  unsecured,  may  be  subject  to  the  write-down  and  conversion  powers  of  an  EEA  Resolution  Authority  and  agrees  and  consents  to,  and  acknowledges and agrees to be bound by:               (a)   the  application  of  any  Write-Down  and  Conversion  Powers  by  an  EEA  Resolution Authority to any such liabilities arising hereunder which may be payable to it by any  party hereto that is an EEA Financial Institution; and               (b)   the  effects  of  any  Bail-In  Action  on  any  such  liability,  including,  if  applicable:                    (i)    a reduction in full or in part or cancellation of any such liability;                    (ii)   a  conversion  of  all,  or  a  portion  of,  such  liability  into  shares  or             other instruments of ownership in such EEA Financial Institution, its parent entity,             or a bridge institution that may be issued to it or otherwise conferred on it, and             that such shares or other instruments of ownership will be accepted by it in lieu of             any  rights  with  respect  to  any  such  liability  under  this  Agreement  or  any  other             Loan Document; or                    (iii)  the variation of the terms of such liability in connection with the             exercise  of  the  write-down  and  conversion  powers  of  any  EEA  Resolution             Authority.               SECTION 9.17.  Interest Rate Limitation.  Notwithstanding anything to the  contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan  Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable  Law (the “Maximum Rate”).  If Administrative Agent or any Lender shall receive interest in an  amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of  the Loans or, if it exceeds such unpaid principal, refunded to Borrower.  In determining whether  the interest contracted for, charged, or received by Administrative Agent or a Lender exceeds the  Maximum Rate, such Person may, to the extent permitted by applicable law, (a) characterize any  payment  that  is  not  principal  as  an  expense,  fee,  or  premium  rather  than  interest,  (b) exclude  voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in  equal  or  unequal  parts  the  total  amount  of  interest  throughout  the  contemplated  term  of  the  Obligations hereunder.               SECTION 9.18.  Amendment and Restatement.  On the Restatement Effective  Date,  the  Existing  Credit  Agreement  shall  be  amended  and  restated  in  its  entirety  by  this  Agreement, and the Existing Credit Agreement shall thereafter be of no further force and effect,  except to evidence (i) the incurrence by the Borrower of the obligations under the Existing Credit  Agreement  (whether  or  not  such  obligations  are  contingent  as  of  the  Restatement  Effective  Date),  (ii)  the  representations  and  warranties  made  by  the  Borrower  prior  to  the  Restatement                                        145   25272637.12.BUSINESS 

 

Effective Date and (iii) any action or omission performed or required to be performed pursuant  to such Existing Credit Agreement prior to the Restatement Effective Date (including any failure,  prior to the Restatement Effective Date, to comply with the covenants contained in such Existing  Credit Agreement). The amendments and restatements set forth herein shall not cure any breach  thereof  or  any  “Default”  or  “Event  of  Default”  under  and  as  defined  in  the  Existing  Credit  Agreement  prior  to  the  Restatement  Effective  Date.  It  is  the  intention  of  each  of  the  parties  hereto that the Existing Credit Agreement be amended and restated hereunder so as to preserve  the  perfection  and  priority  of  all  Liens  securing  the  “Secured  Obligations”  under  the  Loan  Documents and that  all “Secured Obligations” of the Borrower and the  Subsidiary Guarantors  hereunder shall continue to be secured by Liens evidenced under the Security Documents, and  that  this  Agreement  does  not  constitute  a  novation  or  termination  of  the  Indebtedness  and  obligations  existing  under  the  Existing  Credit  Agreement.  The  terms  and  conditions  of  this  Agreement  and  the  Administrative  Agent’s  and  the  Lenders’  rights  and  remedies  under  this  Agreement and the other Loan Documents shall apply to all of the obligations incurred under the  Existing Credit Agreement. This amendment and restatement is limited as written and is not a  consent  to  any  other  amendment,  restatement  or  waiver,  whether  or  not  similar  and,  unless  specifically amended hereby or by any other Loan Document, each of the Loan Documents shall  continue  in  full  force  and  effect  and,  from  and  after  the  Restatement  Effective  Date,  all  references  to  the  “Credit  Agreement”  contained  therein  shall  be  deemed  to  refer  to  this  Agreement.                        [Remainder of Page Intentionally Left Blank]                                        146   25272637.12.BUSINESS 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                    Schedule 1.01(a)                  APPROVED DEALERS AND APPROVED PRICING SERVICES  BNP Paribas Securities Corp.  Banc of America Securities LLC  Barclays Capital Inc.  BMO Capital Markets  BofA Distributors, Inc.  BTIG LLC  Cantor Fitzgerald & Co.  Citigroup Global Markets Inc.  Citicorp Securities Services, Inc.  Courtview Capital   Credit Agricole  Credit Suisse Securities (USA) LLC  Daiwa Capital Markets America Inc.  Deutsche Bank Securities Inc.  FBR Capital Markets & Co.  Fidelity Brokerage Services LLC  Global Hunter Securities LLC  Goldman, Sachs & Co.  Guggenheim Securities LLC  HSBC Securities (USA) Inc.  Imperial Capital LLC  ING Financial Markets LLC  Jeffries & Company, Inc.  J.P. Morgan Securities Inc.  Knight Capital Americas LP  Lazard Freres & Co. LLC  Macquarie Capital USA Inc.  Merrill Lynch Government Securities Inc.  Merrill Lynch, Pierce, Fenner & Smith Incorporated  Mitsubishi UFJ Securities USA Inc.  Mizuho Securities USA Inc.  Morgan Stanley & Co. Incorporated  Morgan Stanley Smith Barney  Nomura Securities International, Inc.  RBC Capital Markets  RBS Securities Inc.  RW Baird  Scotia Bank  Sterne Agee  UBS Financial Services Inc.  UBS Securities LLC  Wells Fargo Advisors, LLC    25272637.12.BUSINESS 

 

Wells Fargo Securities, LLC  Wells Fargo Investments, LLC   APPROVED PRICING SERVICES   Bloomberg  FT Interactive Data Corporation  International Data Corporation  Loan Pricing Corporation  Markit                                          2   25272637.12.BUSINESS 

 

                               SCHEDULE 1.01(b)                                  COMMITMENTS                  Lender                           Commitment Amount ING Capital LLC                                      $60,000,000 TIAA, FSB                                            $40,000,000 Customers Bank                                       $35,000,000 Texas Capital Bank, N.A.                             $35,000,000 Cadence Bank, N.A.                                   $30,000,000 Amegy Bank, a division of Zions                      $30,000,000 Bancorporation, N.A. Hitachi Capital America Corp.                        $20,000,000 LegacyTexas Bank                                     $15,000,000 Dallas Capital Bank                                  $5,000,000 Total                                               $270,000,000 

 

                                       SCHEDULE 1.01(c)                                     [INTENTIONALLY OMITTED]    25272637.12.BUSINESS 

 

                               SCHEDULE 1.01(d)                                ELIGIBILITY CRITERIA  A Portfolio Investment shall not be an Eligible Portfolio Investment on any date of determination unless it  meets all of the following criteria:       1)    (a) If an Investment in Indebtedness other than a Noteless Assigned Loan (and other than a           High Yield Security that is held through DTC and has been credited to the Custodian Account           pursuant to the terms of the Custody Agreement), such Portfolio Investment is evidenced by           an original promissory note registered in the name of an Obligor, delivered to the Custodian           and  credited  to  the  Custodian  Account  pursuant  to  the  terms  of  the  Custody  Agreement;           provided,  however,  that  solely  in  the  case  of  Portfolio  Investments  (other  than  Noteless           Assigned Loans) in which the Collateral Agent has a first priority perfected security interest           pursuant  to  a  valid  Uniform  Commercial  Code  filing,  (x)  if  such  Portfolio  Investment  is           owned  by  such  Obligor  on  the  Original  Effective  Date,  the  Borrower  shall  have  up  to  45           Business Days following the Original Effective Date to deliver such original promissory note           with  respect  to  such  Portfolio  Investment  to  the  Custodian,  and  (y)  (1)  if  such  Portfolio           Investment is acquired by the Obligor after the Original Effective Date, the Borrower shall           have up to 10 Business Days following the acquisition of such Portfolio Investment to deliver           an original promissory note with respect to such Portfolio Investment to the Custodian or the           Collateral Agent and (2) as a result of the syndication, sale, transfer, assignment or exchange           of  a  portion  of  a  Portfolio  Investment  the  Borrower  shall  have  up  to  20  Business  Days  to           return,  transfer,  assign  or  exchange  any  promissory  note  with  respect  to  such  Portfolio           Investment and deliver new or additional promissory notes to the Document Custodian or the           Collateral Agent as required above (each note referred to in clause (x) or (y) during the time           when  it  is  not  in  the  possession  of  the  Document  Custodian  or  the  Collateral  Agent,  an           “Undelivered Note”) (it being understood that during the time periods in clauses (x) and (y)           above  only  the  portion  of  such  Portfolio  Investment  that  has  not  been  syndicated,  sold,           transferred, assigned or exchanged shall satisfy the criteria specified in this paragraph 1(a));           provided,  further  that  (i)  any  portion  of  the  Borrowing  Base  that  consists  of  an  Eligible           Portfolio Investment that is an Undelivered Note shall be identified as such in any Borrowing           Base Certificate and (ii) with respect to Undelivered Notes under clause (y) above, at no time           may the aggregate amount of Undelivered Notes included in the Borrowing Base constitute           more than 10% of the Portfolio Investments included in the Borrowing Base;           (b) If a debt investment is a Noteless Assigned Loan, the Custodian shall have received and           credited  to  the  Custodian  Account  pursuant  to  the  terms  of  the  Custody  Agreement  an           original  of  each  transfer  document  or  instrument  relating  to  such  Noteless  Assigned  Loan           evidencing the assignment of such Noteless Assigned Loan from any prior third party owner           thereof directly to the applicable Obligor (together with the consent of each party required           under the applicable loan documentation); provided that, any portion of the Borrowing Base           that  consists  of an  Eligible  Portfolio  Investment that is  a  Noteless  Assigned  Loan  shall be           identified as such in any Borrowing Base Certificate; and    25272637.12.BUSINESS 

 

         (c)  If  any  Investment  in  Indebtedness,  (x)  the  Custodian  shall  have  received  originals  or           copies of each of the following, to the extent applicable, any related loan agreement, credit           agreement,  note  purchase  agreement,  security  agreement  (if  separate  from  any  mortgage),           sale and servicing agreement, acquisition agreement pursuant to which such Investment was           acquired, subordination agreement, intercreditor agreement or similar instruments, guarantee,           assumption  or  substitution  agreement  or  similar  material operative  document,  in  each  case           together with any amendment or modification thereto; and (y) all documentation evidencing           or otherwise relating to such Portfolio Investment has been duly authorized and executed, is           in  full  force  and  effect  and  is  the  legal,  binding  and  enforceable  obligation  of  the  parties           thereto and has been delivered to the Custodian;     2)    (d) If any Affiliate of the Borrower holds a Portfolio Investment in the same issuer and such           investment is evidenced by a promissory note, the Borrower shall hold a separate promissory           note registered in the name of the Borrower representing its interests in such issuer;     3)    Such  Portfolio  Investment,  whether  originated  directly  or purchased, was  underwritten and           closed  or  acquired  in  all  material  respects  in  accordance  with  the  Investment  Policies  (as           amended by Permitted Policy Amendments);     4)    If the issuer of such Portfolio Investment is a “Debtor” (as defined in the definition of “DIP           Loan”) and such Portfolio Investment is a Bank Loan, such Portfolio Investment meets the           other criteria set forth in the definition of “DIP Loan”;      5)    Such Portfolio Investment is Transferable (as defined below);      6)    Other  than  with  respect  to  LTV  Transactions,  the  underlying  issuer  of  such  Portfolio           Investment shall have a trailing 12-month EBITDA of at least $1,000,000 as calculated by the           Borrower in a commercially reasonable manner;      7)    Such Portfolio Investment is not a Defaulted Obligation or a Restructured Investment;     8)    Any Portfolio Company of such Portfolio Investment with trailing 24-month EBITDA of less           than  $20,000,000  as  calculated  by  the  Borrower  in  a  commercially  reasonable  manner           satisfies  at  least  one  of  the  following  two  conditions  at  all  times: (i)  a  total  leverage  ratio           (based  on  trailing  12-month  EBITDA)  as  calculated  by  the  Borrower  in  a  commercially           reasonable  manner  of  less  than  4.5x,  or  (ii)  a  loan  (through  the  Borrower  or  Obligor’s           exposure) to enterprise value ratio of not more than 65%, where enterprise value shall be the           value determined by the Approved Third-Party Appraiser in its most recent valuation report           provided in connection with such Portfolio Investment (except that, prior to the delivery of           the  first  valuation  report  of  the  Approved  Third-Party  Appraiser  to  be  delivered  after  the           Borrower's acquisition of such Portfolio Investment, if such Portfolio Investment is acquired           by the Borrower in connection with or at the time of an applicable transaction involving the           equity  of  the  Portfolio  Company,  the  enterprise  value  of  such  Portfolio  Company  may  be           imputed from such transaction by the Borrower in a commercially reasonable manner);     9)    Such  Portfolio  Investment  does  not  represent  an  investment  in  any  Portfolio  Company  in           which the Borrower or any of its Affiliates, or any entities advised by any of the foregoing,           holds any  Investment other than an Investment that is in the same class or classes as such           Portfolio Investment (and, in the case of multiple classes, such Investment shall represent a           ratable strip of each class) and is (a) made in accordance with the requirements of an effective           SEC exemptive order allowing such co-investment or joint follow-on investment or (b) made           in  compliance  with  the  Massachusetts  Mutual  Life  Insurance  Co.,  SEC  No  Action  Letter           (pub. Avail. June 7, 2000), other interpretive guidance issued by the SEC or the Investment           Company Act.                                          2   25272637.12.BUSINESS 

 

   10)   Such Portfolio Investment does not represent an investment in any SBIC Subsidiary,           investment fund, Structured Finance Obligation, Third Party Finance Companies, or similar           off balance sheet financing vehicle, or any joint venture or other Person that is in the principal           business of making debt or equity investments primarily in other unaffiliated Persons;     11)   (x) Such Portfolio Investment is owned by the Borrower or any Obligor, free and clear of any           liens  and  Collateral  Agent  holds  a  first  priority,  perfected  security  interest  in  the  Portfolio           Investment (subject to no other Lien other than any Eligible Liens), (y) the Collateral Agent           or  the  Custodian  as  bailee  on  behalf  of  the  Collateral  Agent  is  holding  all  documents           evidencing or otherwise relating to such Portfolio Investment (which may be copies, except           as  required  in  paragraph  (1)(a)  above)  and  (z) the  other  steps  to  ensure  that  the  Collateral           Agent  has  “control”  or  other  customary  protection  of  the  relevant  Portfolio  Investment  set           forth in Section 5.08 and in the Guarantee and Security Agreement have been taken;     12)   Such Portfolio Investment and related documents are in compliance, in all material respects,           with applicable laws rules and regulations (including relating to usury, truth in lending, fair           credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and           privacy, OFAC and USA PATRIOT Act);     13)   Such  Portfolio  Investment  is  denominated  and  payable  only  in  Dollars  or  an  Approved           Foreign Currency and the issuer of such Portfolio Investment is organized under the laws of           the United States or any state or commonwealth thereof or any Permitted Foreign Jurisdiction           or province thereof, is domiciled in the United States or any Permitted Foreign Jurisdiction,           and its principal operations and any property or other assets of the issuer thereunder pledged           as collateral are primarily located in the United States or any Permitted Foreign Jurisdiction,           and the only place of payment of such loans is the United States or any Permitted Foreign           Jurisdiction; provided that no credit shall be given to the Borrowing Base if any obligor does           not qualify for zero withholding for loans to Permitted Foreign Jurisdiction borrowers;      14)   Such Portfolio Investment, if a debt investment, bears interest which is due and payable no           less frequently than semi-annually and provides for a fixed amount of principal payable on a           scheduled payment date and or at maturity, and does not have a final maturity greater than 10           years;     15)   Such Portfolio Investment, if a debt investment, includes a contractual provision requiring all           payments  to  be  made  without  set  off,  defense  or  counterclaim,  and  does  not  include  a           contractual provision granting rights of rescission, set off, counterclaim or defense in favor of           the obligor in respect of such Portfolio Investment, and no material dispute has been asserted           with respect to such Portfolio Investment;     16)   Such Portfolio Investment is not (x) secured primarily by a mortgage, deed of trust or similar           lien on real estate, or (y) issued by a Person whose primary asset is real estate, or whose value           is otherwise primarily derived from real estate;     17)   Such Portfolio Investment does not represent a consumer obligation (including a mortgage           loan, auto loan, credit card loan or personal loan);      18)   No  payment  in  respect  of  such  Portfolio  Investment,  if  a  debt  investment,  is  subject  to           withholding in respect to taxes of any nature, unless the issuer is required to make customary           and market-based gross-up payments on an after tax basis for the full amount of such tax;     19)   Such Portfolio Investment is not a derivative instrument;      20)   The  issuer  of  such  Portfolio  Investment  (or  an  agent  on  its  behalf)  is  required  to  make           payments directly into an account of the Borrower or any Obligor over which the Collateral           Agent has “control” and no other person’s assets are commingled in such account;     21)   No Person acting as administrative agent, collateral agent or in a similar capacity shall be an           Affiliate of the Borrower unless such person is an Obligor;                                          3   25272637.12.BUSINESS 

 

   22)   In the case of any Existing Affiliate Investment, neither such investment nor any investment           in the same issuer held by the Borrower or any of its Affiliates, or any entities advised by any           of the foregoing, has been, or will be, increased, amended, modified or otherwise restructured           after the Original Effective Date, except for any follow-on Investment made after the Original           Effective  Date  in  the  same  Portfolio  Company  that  has  been  made  (i)  for  the  purpose  of           facilitating the growth of such issuer and not to avert a default under any existing investment,           (ii)  on  substantially  similar  terms  as  the  existing  investment  of  the  same  investor,  (iii)  in           compliance with laws, rules and regulations (including laws, rules and regulations applicable           to business development companies), and (iv) in a manner that would not be adverse to any           existing Eligible Portfolio Investment in such Portfolio Company;      23)   If such Portfolio Investment is a Bank Loan and the issuer of such Portfolio Investment has           issued  a  Permitted  Prior  Working  Capital  Lien,  the  Borrower  has  delivered  to  the           Administrative  Agent  a  written  valuation  report  of  an  Approved  Third-Party  Appraiser           determining  the  enterprise  value  of  such  issuer  to  be  used  for  purposes  of  the  conditions           outlined in clause (iii) of the definition of “Permitted Prior Working Capital Lien” (except           that, prior to the delivery of the first valuation report of the Approved Third-Party Appraiser           to be delivered after the Borrower’s acquisition of such Portfolio Investment, the enterprise           value  of  such  issuer of such  Portfolio  Investment  shall  be  calculated by  the  Borrower in a           commercially reasonable manner);     24)   If  such  Portfolio  Investment  is  in  MRI,  such  Portfolio  Investment  is  an  Eligible  Portfolio          Investment and it satisfies at all times: (i) a total leverage ratio (based on trailing 12-month          EBITDA) as calculated by the Borrower in a commercially reasonable manner of not greater          than 1.00 to 1.00, (ii) the aggregate payments made in cash by MRI to the Borrower in the          form of dividends (other than any dividends on account of taxes, indemnification or expense          reimbursement)  and  management  fees  (and  excluding  reimbursement  of  any  fees,  costs  or          expenses) shall not be less than $1,500,000 per year and (iii) the Borrower owns, directly, not          less than 98% of each class and each series of the Equity Interests of MRI; and     25)   Such Portfolio Investment is not a participation or similar interest, and is not an investment in          which any Obligor has sold, issued or granted a participation or similar interest.      For purposes of paragraph (4) above, “Transferable” means, in the case of any Portfolio Investment,     both that:              (i)   the applicable Obligor may create a security interest in or pledge all of its rights        under and interest in such Portfolio Investment to secure its obligations under this Agreement or        any  other  Loan  Document,  and  that  such  pledge  or  security  interest  may  be  enforced  in  any        manner permitted under applicable law; and                (ii)  such  Portfolio  Investment  (and  all  documents  related  thereto)  contains  no        provision that directly or indirectly restricts the assignment of such Obligor’s, or any assignee of        Obligor’s, rights under such Portfolio Investment (including any requirement that the Borrower        maintain  a  minimum  ownership  percentage  of  such  Portfolio  Investment);  provided  that,  such        Portfolio  Investment  may  contain  the  following  restrictions  on  customary  and  market  based        terms: (a) restrictions pursuant to which assignments may be subject to the consent of the obligor        or Portfolio Company or agent under the Portfolio Investment so long as the applicable provision        also provides that such consent may not be unreasonably withheld, (b) restrictions on transfer to        parties that are not ‘eligible assignees’ within the customary and  market based meaning of the        term,  and  (c)  restrictions  on  transfer  to  the  applicable  obligor  or  issuer  under  the  Portfolio        Investment or its equity holders or financial sponsor entities.                                        4   25272637.12.BUSINESS 

 

                               SCHEDULE 1.01(e)                          INDUSTRY CLASSIFICATION GROUPS     1)    Aerospace & Defense     2)    Automotive     3)    Banking     4)    Beverage, Food, & Tobacco     5)    Capital Equipment     6)    Chemicals, Plastics, & Rubber     7)    Construction & Building     8)    Consumer Goods: Durable     9)    Consumer Goods: Non-Durable     10)   Containers, Packaging, & Glass     11)   Energy: Electricity     12)   Energy: Oil & Gas     13)   Environmental Industries     14)   FIRE Finance     15)   FIRE Insurance     16)   FIRE Real Estate     17)   Forest Products & Paper     18)   Healthcare Equipment     19)   Healthcare Services     20)   High Tech Industries     21)   Hotel, Gaming, & Leisure     22)   Media: Advertising, Printing & Publishing     23)   Media: Broadcasting & Subscription     24)   Media: Digital Media     25)   Media: Diversified & Production     26)   Metals & Mining     27)   Pharmaceuticals     28)   Retail     29)   Services: Business     30)   Services: Consumer     31)   Software     32)   Sovereign & Public Finance     33)   Telecommunications     34)   Transportation: Cargo     35)   Transportation: Consumer     36)   Utilities: Electric     37)   Utilities: Oil & Gas     38)   Utilities: Water     39)   Wholesale                                         5   25272637.12.BUSINESS 

 

                               SCHEDULE 3.08                            Unfunded Pension Liabilities  None. 

 

                              SCHEDULE 3.11(a)                               Material Agreements  Indenture dated as of October 23, 2017, as supplemented as of December 15, 2017, between the Borrower and U.S. Bank, National Association.  2022 Notes as defined in the Credit Agreement.  All “Loan Documents” as defined in the Credit Agreement. 

 

                              SCHEDULE 3.11(b)                                      Liens  None. 

 

                              SCHEDULE 3.12(a)                                   Subsidiaries        Subsidiary           Jurisdiction of       % of Equity     Certificate No.                        Incorporation and Type Interest owned by     (if any)                            of Organization        Borrower Capital Southwest      Nevada corporation           100%              1 Management Corporation Capital Southwest Equity Delaware corporation       100%             R-1 Investments, Inc. 

 

                              SCHEDULE 3.12(b)                                   Investments  None. 

 

                               SCHEDULE 6.08                            Certain Affiliate Transactions   None.arguaranteepledgeands

                                                         Execution Version                           AMENDED AND RESTATED              GUARANTEE, PLEDGE AND SECURITY AGREEMENT                                   dated as of                               December 21, 2018                                    among                     CAPITAL SOUTHWEST CORPORATION,                                 as Borrower,                   the SUBSIDIARY GUARANTORS party hereto,                              ING CAPITAL LLC,             as Revolving Administrative Agent for the Revolving Lenders,                          each FINANCING AGENT and               DESIGNATED INDEBTEDNESS HOLDER party hereto                                      and                              ING CAPITAL LLC,                              as Collateral Agent    522144.000028 21651939.2  25323438.4.BUSINESS 

 

                          TABLE OF CONTENTS                                                                       Page   Section 1.  Definitions, Etc. ........................................................................................... 2       1.01  Certain Uniform Commercial Code Terms ................................................. 2       1.02  Additional Definitions ................................................................................. 2       1.03  Terms Generally ........................................................................................ 21  Section 2.  Representations and Warranties ................................................................ 21       2.01  Organization .............................................................................................. 21       2.02  Authorization; Enforceability .................................................................... 21       2.03  Governmental Approvals; No Conflicts .................................................... 22       2.04  Title ............................................................................................................ 22       2.05  Names, Etc. ................................................................................................ 22       2.06  Changes in Circumstances ......................................................................... 22       2.07  Pledged Equity Interests ............................................................................ 23       2.08  Promissory Notes ....................................................................................... 23       2.09  Deposit Accounts and Securities Accounts ............................................... 23       2.10  Commercial Tort Claims ........................................................................... 24       2.11  Intellectual Property and Licenses ............................................................. 24  Section 3.  Guarantee ................................................................................................... 25       3.01  The Guarantee ............................................................................................ 25       3.02  Obligations Unconditional ......................................................................... 26       3.03  Reinstatement ............................................................................................ 26       3.04  Subrogation ................................................................................................ 27       3.05  Remedies .................................................................................................... 27       3.06  Continuing Guarantee ................................................................................ 27       3.07  Instrument for the Payment of Money ....................................................... 27       3.08  Rights of Contribution ............................................................................... 27       3.09  General Limitation on Guarantee Obligations ........................................... 28       3.10  Indemnity by Borrower .............................................................................. 29       3.11  Keepwell .................................................................................................... 29  Section 4.  Collateral .................................................................................................... 29  Section 5.  Certain Agreements Among Secured Parties ............................................ 31       5.01  Priorities; Additional Collateral ................................................................. 31       5.02  Turnover of Collateral ............................................................................... 31       5.03  Cooperation of Secured Parties ................................................................. 32       5.04  Limitation upon Certain Independent Actions by Secured Parties ............ 32       5.05  No Challenges ............................................................................................ 32       5.06  Rights of Secured Parties as to Secured Obligations ................................. 33       5.07  General Application ................................................................................... 33  Section 6.  Designation of Designated Indebtedness; Recordkeeping, Etc. ................ 33  522144.000028 21651939.2  25323438.4.BUSINESS 

 

      6.01  Designation of Other Indebtedness ............................................................ 33       6.02  Recordkeeping ........................................................................................... 34  Section 7.  Covenants of the Obligors ......................................................................... 34       7.01  Delivery and Other Perfection ................................................................... 34       7.02  Name; Jurisdiction of Organization, Etc. .................................................. 36       7.03  Other Liens, Financing Statements or Control .......................................... 37       7.04  Transfer of Collateral ................................................................................. 37       7.05  Additional Subsidiary Guarantors ............................................................. 37       7.06  Control Agreements ................................................................................... 37       7.07  Revolving Credit Agreement ..................................................................... 38       7.08  Pledged Equity Interests ............................................................................ 38       7.09  Voting Rights, Dividends, Etc. in Respect of Pledged Interests ............... 39       7.10  Commercial Tort Claims ........................................................................... 41       7.11  Intellectual Property ................................................................................... 41  Section 8.  Acceleration Notice; Remedies; Distribution of Collateral ....................... 43       8.01  Notice of Acceleration ............................................................................... 43       8.02  Preservation of Rights ................................................................................ 43       8.03  Events of Default, Etc. ............................................................................... 43       8.04  Deficiency .................................................................................................. 44       8.05  Private Sale ................................................................................................ 45       8.06  Application of Proceeds ............................................................................. 45       8.07  Attorney-in-Fact ........................................................................................ 46       8.08  Intellectual Property ................................................................................... 46  Section 9.  The Collateral Agent .................................................................................. 47       9.01  Appointment; Powers and Immunities ...................................................... 47       9.02  Information Regarding Secured Parties ..................................................... 48       9.03  Reliance by Collateral Agent ..................................................................... 48       9.04  Rights as a Secured Party .......................................................................... 48       9.05  Indemnification .......................................................................................... 49       9.06  Non-Reliance on Collateral Agent and Other Secured Parties .................. 49       9.07  Failure to Act ............................................................................................. 50       9.08  Resignation of Collateral Agent ................................................................ 50       9.09  Agents and Attorneys-in-Fact .................................................................... 51  Section 10. Miscellaneous ............................................................................................ 51       10.01       Notices ........................................................................................... 51       10.02       No Waiver ...................................................................................... 51       10.03       Amendments to Security Documents, Etc. .................................... 51       10.04       Expenses; Indemnity; Damage Waiver ......................................... 53       10.05       Successors and Assigns ................................................................. 54       10.06       Counterparts; Integration; Effectiveness; Electronic Execution .... 54       10.07       Severability .................................................................................... 55       10.08       Governing Law; Submission to Jurisdiction .................................. 55       10.09       WAIVER OF JURY TRIAL ......................................................... 56   522144.000028 21651939.2  25323438.4.BUSINESS 

 

      10.10       Headings ........................................................................................ 56       10.11       Termination .................................................................................... 56       10.12       Confidentiality ............................................................................... 57       10.13       Amendment and Restatement ........................................................ 57  EXHIBIT A  –      Form of Notice of Designation  EXHIBIT B  –      Form of Guarantee Assumption Agreement  EXHIBIT C  –      Form of Intellectual Property Security Agreement  EXHIBIT D  –      Form of Pledge Supplement    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            AMENDED  AND  RESTATED  GUARANTEE,  PLEDGE  AND  SECURITY AGREEMENT, dated as of December 21, 2018 (as amended, supplemented,  or  otherwise  modified  from  time  to  time,  this  “Agreement”),  among  CAPITAL  SOUTHWEST  CORPORATION,  a  corporation  duly  organized  and  validly  existing  under  the  laws  of  the  State  of  Texas  (the  “Borrower”),  CAPITAL  SOUTHWEST  EQUITY  INVESTMENTS,  INC.,  a  corporation  duly  organized  and  validly  existing  under  the  laws  of  the  State  of  Delaware  (“CSWE”),  CAPITAL  SOUTHWEST  MANAGEMENT  CORPORATION,  a  corporation  duly  organized  and  validly  existing  under the laws of the State of Nevada (“CSWM”), and each other entity that becomes a  “SUBSIDIARY  GUARANTOR”  after  the  date  hereof  pursuant  to  Section  7.05  hereof  (collectively with CSWE and CSWM, the “Subsidiary Guarantors” and, together with the  Borrower,  the  “Obligors”),  ING  CAPITAL  LLC,  as  administrative  agent  for  the  Revolving Lenders (as hereinafter defined) (in such capacity, together with its successors  in  such  capacity,  the  “Revolving  Administrative  Agent”),  each  “Financing  Agent”  (as  hereinafter  defined)  or  “Designated  Indebtedness  Holder”  (as  hereinafter  defined)  that  becomes  a  party  hereto  after  the  date  hereof  pursuant  to  Section  6.01  hereof  and  ING  CAPITAL LLC, as collateral agent for the Secured Parties hereinafter referred to (in such  capacity, together with its successors in such capacity, the “Collateral Agent”).                              W I T N E S S E T H:               WHEREAS, on August 30, 2016, certain of the Obligors, the Revolving  Administrative  Agent  and  the  Collateral  Agent  entered  into  that  certain  Guarantee,  Pledge and Security Agreement (the “Existing Security Agreement”);               WHEREAS,  the  Obligors  and  the  Secured  Parties  desire  to  amend  and  restate the Existing Security Agreement in certain respects and, accordingly, hereby agree  that  this  Agreement  amends,  restates,  supersedes  and  replaces  the  Existing  Security  Agreement  without  disrupting  the  validity,  priority,  perfection,  enforceability  or  continuity of the security interests in and liens upon the Collateral (as hereinafter defined)  as granted under the Existing Security Agreement;;               WHEREAS,  to  induce  (i)  the  Revolving  Lenders  to  extend credit to  the  Borrower under the Revolving Credit Agreement and (ii) the holders of such “Designated  Indebtedness”  to  extend  other  credit  to  the  Borrower,  the  Borrower  wishes  to  provide  (a) for certain of its Subsidiaries to guarantee the payment of the Guaranteed Obligations  (as hereinafter defined) and from time to time to become parties hereto, and (b) for the  Borrower and the Subsidiary Guarantors to continue to provide collateral security for the  Secured Obligations (as hereinafter defined);               WHEREAS, the Revolving Administrative Agent (on behalf of itself and  the Revolving Lenders), any Financing Agent (on behalf of itself and the holders of the  “Designated Indebtedness” for which it serves as agent or trustee) and each Designated  Indebtedness Holder that becomes a party hereto pursuant to Section 6.01 are or will be  entering into this Agreement for the purpose of setting forth their respective rights to the  Collateral (as hereinafter defined); and    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            WHEREAS, the Obligors and the Secured Parties agree that the Collateral  Agent shall administer the Collateral, and the Collateral Agent is willing to so administer  the Collateral, pursuant to the terms and conditions set forth herein.                NOW  THEREFORE,  the  parties  hereto  agree  that,  effective  as  of  the  Restatement  Effective  Date,  the  Existing  Security  Agreement  is  hereby  amended  and  restated in its entirety as follows:               Section 1.  Definitions, Etc.                1.01  Certain Uniform Commercial Code Terms.  As used herein, the  terms  “Account”,  “Chattel  Paper”,  “Commodity  Account”,  “Commodity  Contract”,  “Deposit  Account”,  “Document”,  “Electronic  Chattel  Paper”,  “Equipment”,  “General  Intangible”,  “Goods”,  “Instrument”,  “Inventory”,  “Investment  Property”,  “Letter-of- Credit Right”, “Money”, “Proceeds”, “Promissory Note”, “Supporting Obligations” and  “Tangible  Chattel  Paper”  have  the  respective  meanings  set  forth  in  Article  9  of  the  NYUCC  (as  defined  herein),  and  the  terms  “Certificated  Security”,  “Clearing  Corporation”,  “Entitlement  Holder”,  “Financial  Asset”,  “Indorsement”,  “Securities  Account”,  “Security”,  “Security  Entitlement”,  “Securities  Intermediary”  and  “Uncertificated  Security”  have  the  respective  meanings  set  forth  in  Article  8  of  the  NYUCC.               1.02  Additional Definitions.  In addition, as used herein:               “Acceleration” means the Revolving Credit Agreement Obligations or any  other Secured Obligations of any Secured Party having been declared (or become) due  and  payable  in  full  in  accordance  with  the  applicable  Debt  Documents  following  the  occurrence of an “event of default” (as defined in the applicable Debt Documents) or an  analogous  event  by  the  Borrower  and  expiration  of  any  applicable  grace  period  with  respect thereto.               “Acceleration Notice” has the meaning assigned to such term in Section  8.01.               “Affiliate” means, with respect to a specified Person, another Person that  directly, or indirectly through one or more intermediaries, Controls or is Controlled by or  is  under  common  Control  with  the  Person  specified.   Anything  herein  to  the  contrary  notwithstanding,  the  term  “Affiliate”  of  an  Obligor  shall  not  include  any  Person  that  constitutes a Portfolio Investment held by any Obligor in the ordinary course of business.               “Agent  Members”  means  members  of,  or  participants  in,  a  depositary,  including the Depositary, Euroclear or Clearstream.               “Agreement”  has  the  meaning  assigned to  such term  in  the preamble  of  this Agreement.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            “Bank  Loans”  means  debt  obligations  (including  term  loans,  revolving  loans,  debtor-in-possession  financings,  the funded  portion  of  revolving credit  lines  and  letter of credit facilities and other similar loans and investments including interim loans,  bridge  loans  and  senior  subordinated  loans)  that  are  generally  provided  under  a  syndicated loan or credit facility or pursuant to any loan agreement or other similar credit  facility, whether or not syndicated.               “Bankruptcy  Code”  means  Title  11  of  the  United  States  Code  entitled  “Bankruptcy,” as in effect from time to time, or any successor statute.               “Borrower” has the meaning assigned to such term in the preamble of this  Agreement.               “Borrowing Base” has the meaning assigned to such term in Section 5.13  of the Revolving Credit Agreement.               “Business Day” means any day that is not a Saturday, Sunday or other day  on  which  commercial  banks  in  New  York  City  are  authorized  or  required  by  law  to  remain closed.               “Capital Lease Obligations” of any Person means the obligations of such  Person to pay rent or other amounts under any lease of (or other arrangement conveying  the right to use) real or personal property, or a combination thereof, which obligations are  required to be classified and accounted for as capital leases or finance leases on a balance  sheet  of  such  Person  under  GAAP,  and  the  amount  of  such  obligations  shall  be  the  capitalized amount thereof determined in accordance with GAAP.               “Class”  means,  separately,  each  of  the  following:  (a)  the  Revolving  Lenders  as  a  group  and  (b)  the  Designated  Indebtedness  Holders  holding  a  Series  of  Designated Indebtedness as a group.               “Clearing Corporation Security” means a security that is registered in the  name of, or Indorsed to, a Clearing Corporation or its nominee or is in the possession of  the Clearing Corporation in bearer form or Indorsed in blank by an appropriate Person.               “Clearstream”  means  Clearstream  Banking,  société  anonyme,  a  corporation organized under the laws of the Grand Duchy of Luxembourg.               “Clearstream  Security”  means  a  Security  that  (a)  is  a  debt  or  equity  security  and  (b)  is  capable  of  being  transferred  to  an  Agent  Member’s  account  at  Clearstream  pursuant  to  the  definition  of  “Delivery”,  whether  or  not  such  transfer  has  occurred.               “Code” means the Internal Revenue Code of 1986, as amended from time  to time.               “Collateral” has the meaning assigned to such term in Section 4.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            “Commercial Tort Claims” means all “commercial tort claims” (as defined  in Article 9 of the NYUCC) held by any Obligor, including all commercial tort claims  listed on Annex 2.10 hereto.               “Commodity Exchange Act” shall mean the Commodity Exchange Act (7  U.S.C. §1 et seq.), as amended from time to time, and any successor statute.               “Control”  means  the  possession,  directly  or  indirectly,  of  the  power  to  direct or cause the direction of the management or policies of a Person, whether through  the  ability  to  exercise  voting  power,  by  contract  or  otherwise.   “Controlling”  and  “Controlled” have meanings correlative thereto.               “Control  Agreement”  has  the  meaning  assigned  to  such  term  in  Section  1.01 of the Revolving Credit Agreement.               “Copyright  Licenses”  means  any  and  all  agreements  providing  for  the  granting of any  right  in or to  Copyrights  (whether  such Obligor is  licensee or licensor  thereunder) including each agreement referred to in Annex 2.11 hereto.               “Copyrights”  shall  mean  all  United  States  and  foreign  copyrights  (including community designs), including but not limited to copyrights in software and  databases, and all “Mask Works” (as defined under 17 U.S.C. 901 of the U.S. Copyright  Act), whether registered or unregistered, and, with respect to any and all of the foregoing:  (i) all registrations and applications therefor including the registrations and applications  referred to in Annex 2.11 hereto, (ii) all extensions and renewals thereof, (iii) all rights  corresponding  thereto  throughout  the  world,  (iv)  all  rights  to  sue  for  past,  present  and  future  infringements  thereof,  and  (v)  all  proceeds  of  the  foregoing,  including  licenses,  royalties, income, payments, claims, damages and proceeds of suit.               “Custodian” has the meaning assigned to such term in Section 1.01 of the  Revolving Credit Agreement.               “Custody Agreement” has the meaning assigned to such term in Section  1.01 of the Revolving Credit Agreement.               “Debt  Documents”  means,  collectively,  the  Loan  Documents,  the  Designated Indebtedness Documents, any Hedging Agreement evidencing or relating to  any Hedging Agreement Obligations, and the Security Documents.               “Default”  means  any  event  or  condition  which  constitutes  an  Event  of  Default  or  which  upon  notice,  lapse  of  time  or  both  would,  unless  cured  or  waived,  become an Event of Default or any comparable event under any Designated Indebtedness  Document or Hedging Agreement.               “Deliver”, “Delivered” or “Delivery” (whether to the Collateral Agent or  otherwise)  means,  with  respect  to  any  Portfolio  Investment  of  any  Obligor  or  other  Collateral, that such Portfolio Investment or other Collateral is held, registered or covered    522144.000028 21651939.2  25323438.4.BUSINESS 

 

by a recorded UCC-1 financing statement as described below, in each case in a manner  reasonably satisfactory to the Collateral Agent:                (a)   subject to clause (l) below, in the case of each Certificated Security        (other  than  a  Special  Equity  Interest,  U.S.  Government  Security,  Clearing        Corporation  Security,  Euroclear  Security  or  Clearstream  Security),  that  such        Certificated  Security  is  either  (i)  in  the  possession  of  the  Collateral  Agent  and        registered in the name of the Collateral Agent (or its nominee) or Indorsed to the        Collateral  Agent  or  in  blank,  or  (ii)  in  the  possession  of  the  Custodian  and        registered in the name of the Custodian (or its nominee) or Indorsed in blank and        the Custodian has either (A) agreed in documentation reasonably satisfactory to        the Collateral Agent to hold such Certificated Security as bailee on behalf of the        Collateral Agent or (B) credited the same to a Securities Account for which the        Custodian is the Securities Intermediary and has agreed in a control agreement in        form  and  substance  reasonably  satisfactory  to  the  Collateral  Agent  that  such        Certificated Security constitutes  a Financial  Asset and which control agreement        provides  that  the  Collateral  Agent  has  NYUCC  Control  over  such  Securities        Account;               (b)   subject  to  clause  (l)  below,  in  the  case  of  each  Instrument,  that        such Instrument is either (i) in the possession of the Collateral Agent and Indorsed        to the Collateral Agent or in blank, or (ii) in the possession of the Custodian and        the Custodian has either (A) agreed in documentation reasonably satisfactory to        the Collateral Agent to hold such Instrument as a bailee on behalf of the Collateral        Agent or (B) credited the same to a Securities Account for which the Custodian is        the  Securities  Intermediary  and  has  agreed  in  a  control  agreement  in  form  and        substance  reasonably  satisfactory  to  the  Collateral  Agent  that  such  Instrument        constitutes  a  Financial  Asset  and  which  control  agreement  provides  that  the        Collateral Agent has NYUCC Control over such Securities Account;               (c)   subject  to  clause  (l)  below,  in  the  case  of  each  Uncertificated        Security  (other  than  a  Special  Equity  Interest,  U.S.  Government  Security,        Clearing Corporation Security, Euroclear Security or Clearstream Security), that        such  Uncertificated  Security  is  either  (i)  registered  on  the  books  of  the  issuer        thereof to the Collateral Agent (or its nominee), or (ii) registered on the books of        the issuer thereof to the Custodian (or its nominee) under an arrangement where        the  Custodian  has  credited  the  same  to  a  Securities  Account  for  which  the        Custodian  is  a  Securities  Intermediary  and  has  agreed  that  such  Uncertificated        Security constitutes a Financial Asset and that the Collateral Agent has NYUCC        Control over such Securities Account;               (d)   subject  to  clause  (l)  below,  in  the  case  of  each  Uncertificated        Security  (other  than  a  Special  Equity  Interest,  U.S.  Government  Security,        Clearing Corporation Security, Euroclear Security or Clearstream Security), that        such  Uncertificated  Security  is  either  (i)  registered  on  the  books  of  the  issuer        thereof to the Collateral Agent (or its nominee), or (ii) registered on the books of    522144.000028 21651939.2  25323438.4.BUSINESS 

 

      the issuer thereof to the Custodian (or its nominee) under an arrangement where        the  Custodian  has  credited  the  same  to  a  Securities  Account  for  which  the        Custodian  is  a  Securities  Intermediary  and  has  agreed  that  such  Uncertificated        Security  constitutes  a  Financial  Asset  and  such  arrangement  provides  that  the        Collateral Agent has NYUCC Control over such Securities Account;               (e)   in  the  case  of  each  Euroclear  Security  and  Clearstream  Security,        that the actions described in clause (d) above have been taken with respect to such        Security as if such Security were a Clearing Corporation Security and Euroclear        and  Clearstream  were  Clearing  Corporations;  provided,  that  such  additional        actions shall have been taken as shall be necessary under the law of Belgium (in        the case of Euroclear) and Luxembourg (in the case of Clearstream) to accord the        Collateral  Agent  rights  substantially  equivalent  to  NYUCC  Control  over  such        Security under the NYUCC;               (f)   in  the  case  of  each  U.S.  Government  Security,  that  such  U.S.        Government Security is either (i) credited to a securities account of the Collateral        Agent at a Federal Reserve Bank, or (ii) credited to a Securities Account of the        Custodian  at  a  Federal  Reserve  Bank  and  the  Security  Entitlement  of  the        Custodian in such Federal Reserve Bank Securities Account has been credited by        the  Custodian  to  a  Securities  Account  for  which  the  Custodian  is  a  Securities        Intermediary under an arrangement where the Custodian has agreed that such U.S.        Government Security constitutes a Financial Asset and such arrangement provides        that the Collateral Agent has NYUCC Control over such Securities Account;               (g)   in the case of any Tangible Chattel Paper, that the original of such        Tangible Chattel Paper is either (i) in the possession of the Collateral Agent in the        United States or (ii) in the possession of the Document Custodian in the United        States under an arrangement where the Document Custodian has agreed to hold        such Tangible Chattel Paper  as bailee on behalf of the Collateral Agent, and in        each case any agreements that constitute or evidence such Tangible Chattel Paper        is  free  of  any  marks  or  notations  indicating  that  it  is  then  pledged,  assigned  or        otherwise conveyed to any Person other than the Collateral Agent;               (h)   subject to clause (m) below, in the case of each General Intangible        (including any participation in a debt obligation) of an Obligor organized in the        United States, that such General Intangible falls within the collateral description        of a UCC-1 financing statement, naming the relevant Obligor as debtor and the        Collateral Agent as secured party and filed (x) in the jurisdiction of organization        of such Obligor, in the case of an Obligor that is a “registered organization” (as        defined in the NYUCC) or (y) in such other filing office as may be required under        the Uniform Commercial Code as in effect in any applicable jurisdiction, in the        case of any other Obligor; provided that in the case of a participation in a debt        obligation  where  such  debt  obligation  is  evidenced  by  an  Instrument,  either  (i)        such Instrument is in the possession of the applicable participating institution in        the  United  States,  and  such  participating  institution  has  agreed  that  it  holds    522144.000028 21651939.2  25323438.4.BUSINESS 

 

      possession of such Instrument for the benefit of the Collateral Agent (or for the        benefit of the Custodian, and the Custodian has agreed that it holds the interest in        such Instrument as a bailee on behalf of the Collateral Agent as provided in the        Custody Agreement or otherwise) or (ii) such Instrument is in the possession of        the  applicable  participating  institution  outside  of  the  United  States  and  such        participating  institution  (and,  if  applicable,  the  obligor  that  issued  such        Instrument)  has  taken  such  actions  as  shall  be  necessary  under  the  law  of  the        jurisdiction where such Instrument is physically located to accord the Collateral        Agent  rights  equivalent  to  NYUCC  Control  over  such  Instrument  under  the        NYUCC;               (i)   subject to clause (m) below, in the case of each General Intangible        (including any participation in a debt obligation) of an Obligor not organized in        the  United  States,  that  such  Obligor  shall  have  taken  such  action  as  shall  be        necessary  to  accord  the  Collateral  Agent  rights  substantially  equivalent  to  a        perfected  first-priority  (subject  to  Liens  permitted  pursuant  to  the  Debt        Documents) security interest in such General Intangible under the NYUCC;               (j)   in the case of any Deposit Account or Securities Account that the        bank  or  Securities  Intermediary  at  which  such  Deposit  Account  or  Securities        Account,  as  applicable,  is  located  has  agreed  that  the  Collateral  Agent  has        NYUCC Control over such Deposit Account or Securities Account, or that such        Deposit Account or Securities Account is in the name of the Custodian and the        Custodian has credited its rights in respect of such Deposit Account or Securities        Account  (the  “Underlying  Accounts”)  to  a  Securities  Account  for  which  the        Custodian is a Securities Intermediary under an arrangement where the Custodian        has agreed in a control agreement in form and substance reasonably acceptable to        the Collateral Agent that the rights of the Custodian in such Underlying Accounts        constitute  a  Financial  Asset  and  that  the  Collateral  Agent  has  NYUCC  Control        over such Securities Account;               (k)   in the case of any money (regardless of currency), that such money        has  been  credited  to  a  Deposit  Account  over  which  the  Collateral  Agent  has        NYUCC Control as described in clause (j) above;               (l)   in  the  case  of  any  Certificated  Security,  Uncertificated  Security,        Instrument or Special Equity Interest either physically located outside the United        States  or  issued  by  a  Person  organized  outside  of  the  United  States,  that  such        additional  actions  shall  have  been  taken  as  shall  be  necessary  under  applicable        law or as shall be reasonably requested by the Collateral Agent under applicable        law  to  accord  the  Collateral  Agent  rights  substantially  equivalent  to  those        accorded to a secured party under the NYUCC that has possession or control of        such Certificated Security, Uncertificated Security, Instrument or Special Equity        Interest, in  each  case,  unless  (x) the Borrower provides  a  written request to  the        Collateral Agent promptly (but in no event more than one (1) Business Day after        issuance to any Obligor of any such Certificated Security, Uncertificated Security,    522144.000028 21651939.2  25323438.4.BUSINESS 

 

      Instrument  or  Special  Equity  Interest)  that  such  actions  are not  reasonable with        respect  to  such  Certificated  Security,  Uncertificated  Security,  Instrument  or        Special Equity Interest, together with an explanation thereof and (y) the Collateral        Agent, in its sole discretion, consents to such request;               (m)   in the case of each Portfolio Investment of any Obligor consisting        of a Bank Loan, in addition to all other actions required to be taken hereunder,        that all actions shall have been taken as required by Section 5.08(c)(iv), (v) or (vi)        of the Revolving Credit Agreement;                (n)   subject to clause (l) above, in the case of a Special Equity Interest        constituting  a  Certificated  Security,  that  the  holder  of  the  first  Lien  on  such        Certificated  Security  has  possession  of  such  Certificated  Security  in  the  United        States (which has been registered in the name of such holder (or its nominee) or        Indorsed  to  such  holder  or  in  blank)  and  has  agreed  to  deliver  the  certificates        evidencing  such  Certificated  Security  directly  to  the  Collateral  Agent  upon  the        discharge of such Lien and has acknowledged that it holds such certificates for the        Collateral Agent subject to such  Lien (it being understood that, upon  receipt of        any  such  Certificated  Security,  if  so  requested  by  the  Borrower  the  Collateral        Agent shall deliver the same to the Custodian to be held in accordance with the        provisions  of  clause  (a)  above)  and,  in  the  case  of  a  Special  Equity  Interest        constituting an Uncertificated Security, that the holder of the first  Lien on such        Uncertificated Security has been registered as the holder thereof on the books of        the issuer thereof and acknowledged that it holds such Uncertificated Security for        the Collateral Agent subject to such Lien; and               (o)   in  the  case  of  each  Portfolio  Investment  of  any  Obligor  or  other        Collateral not of a type covered by the foregoing clauses (a) through (n), that such        Portfolio  Investment  or  other  Collateral  has  been  transferred  to  the  Collateral        Agent in accordance with applicable law and regulation.               “Depositary”  means  The  Depositary  Trust  Company,  its  nominees  and  their respective successors.               “Designated  Indebtedness”  means  any  Indebtedness  that  has  been  designated  by  the  Borrower  at  the  time  of  the  incurrence  thereof  as  “Designated  Indebtedness”  for  purposes  of  this  Agreement  in  accordance  with  the  requirements  of  Section 6.01.               “Designated  Indebtedness  Documents”  means,  in  respect  of  any  Designated  Indebtedness,  all  agreements,  documents  or  instruments  pursuant  to  which  such  Designated  Indebtedness  shall  be  incurred  or  otherwise  governing  the  terms  or  conditions thereof.               “Designated  Indebtedness  Holders” means,  in  respect  of  any Designated  Indebtedness, the Persons from time to time holding such Designated Indebtedness.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            “Designated  Indebtedness Obligations” means, collectively, in respect of  any  Designated  Indebtedness,  all  obligations  of  the  Borrower  to  any  Designated  Indebtedness Holder or Financing Agent under the Designated Indebtedness Documents  relating  to  such  Designated  Indebtedness,  including  in  each  case  in  respect  of  the  principal  of  and interest  on loans  made, letters  of  credit issued  and any notes  or other  instruments  issued  thereunder,  all  reimbursement  obligations,  fees,  indemnification  payments  and  other  amounts  whatsoever,  whether  direct  or  indirect,  absolute  or  contingent,  now  or  hereafter  from  time  to  time  owing  to  any  Designated  Indebtedness  Holder  or  any  Financing  Agent  or  any  of  them  under  such  Designated  Indebtedness  Documents, and including all interest and expenses accrued or incurred subsequent to the  commencement  of  any  bankruptcy  or  insolvency  proceeding  with  respect  to  the  Borrower,  whether  or  not  such  interest  or  expenses  are  allowed  as  a  claim  in  such  proceeding;  provided  that  Designated  Indebtedness  Obligations  shall  not  include  any  Excluded Swap Obligation.               The designation of any Designated Indebtedness as being secured by this  Agreement  in  accordance  with  the  first  paragraph  under  this  definition  of  “Designated  Indebtedness  Obligations”  shall  not  create  in  favor  of  any  Designated  Indebtedness  Holder or any Affiliate thereof that is a party thereto (i) any rights in connection with the  management  or  release  of  any  Collateral  or  of  the  obligations  of  any  Subsidiary  Guarantor under this Agreement or (ii) any rights to consent to any amendment, waiver,  or  other  matter  under  this  Agreement  or  any  other  Loan  Document.   Notwithstanding  anything to the contrary in this Agreement or any other Loan Document, as applicable, no  provider or holder of any Designated Indebtedness Obligations (other than in its capacity  as Revolving Administrative Agent, Collateral Agent or Revolving Lender to the extent  applicable) has any individual right to enforce this Agreement or bring any remedies with  respect to any Lien on Collateral granted pursuant to the Loan Documents.  By accepting  the  benefits  of  this  Agreement,  such  party  shall  be  deemed  to  have  appointed  the  Collateral  Agent  as  its  agent  and  agreed  to  be  bound  by  this  Agreement  as  a  Secured  Party, subject to the limitations set forth in the preceding sentence.               “Disqualified  Equity  Interests”  means  Equity  Interests  of  the  Borrower  that  after  issuance  are  subject  to  any  agreement  between  the  holder  of  such  Equity  Interests and the Borrower whereby the Borrower is required to purchase, redeem, retire,  acquire, cancel or terminate such Equity Interests, other than (x) as a result of a change of  control,  or  (y)  in  connection  with  any  purchase,  redemption,  retirement,  acquisition,  cancellation or termination with, or in exchange for, shares of Equity Interests that are not  Disqualified Equity Interests.                “Document Custodian” has the meaning assigned to such term in Section  1.01 of the Revolving Credit Agreement.               “Document Custody Agreement” has the meaning assigned to such term in  Section 1.01 of the Revolving Credit Agreement.               “Effective Date” has the meaning assigned to such term in Section 1.01 of  the Revolving Credit Agreement.   522144.000028 21651939.2  25323438.4.BUSINESS 

 

            “Eligible  Liens”  means  those  Liens  on  the  Collateral  included  in  the  Borrowing  Base  permitted  by  each  Debt  Document  (for  the  avoidance  of  doubt  in  the  event  of  any  conflict  or  difference  among  the  Debt  Documents,  the  most  restrictive  provisions  that  are  in  effect  (after  taking  into  account  any  modification,  supplement,  amendment or waiver to such provisions) shall apply against the Obligors hereunder).               “Equity  Interests”  means  shares  of  capital  stock,  partnership  interests,  membership interests in a limited liability company, beneficial interests in a trust or other  equity ownership interests in a Person, and any warrants, options or other rights entitling  the  holder  thereof  to  purchase  or  acquire  any  such  equity  interest.   As  used  in  this  Agreement,  “Equity  Interests”  shall  not  include  convertible  debt  unless  and  until  such  debt has been converted to capital stock.               “Euroclear” means Euroclear Bank, S.A., as operator of the Euroclear  system.               “Euroclear Security” means a Security that (a) is a debt or equity Security  and  (b)  is  capable  of  being  transferred  to  an  Agent  Member’s  account  at  Euroclear,  whether or not such transfer has occurred.               “Event of Default” means any Event of Default under and  as defined in  the Revolving Credit Agreement and any event or condition that enables or permits (after  giving  effect  to  any  applicable  grace  or  cure  periods)  the  holder  or  holders  of  any  Designated Indebtedness Obligations or Hedging Agreement Obligations  or any trustee  or  agent  on  its  or  their  behalf  to  cause  any  Designated  Indebtedness  Obligations  or  Hedging  Agreement  Obligations  to  become  due,  or  to  require  the  prepayment,  repurchase, redemption or defeasance thereof, prior to its scheduled maturity.               “Excluded Assets” means, individually and collectively, (i) any Excluded  Equity Interest, (ii) any payroll accounts so long as such payroll account is coded as such,  withholding tax accounts, pension fund accounts and 401(k) accounts, (iii) any “Agency  Account”  pursuant  to  Section  5.08(c)(v)  of  the  Revolving  Credit  Agreement,  (iv)  any  “intent-to-use”  applications  for  trademarks  or  service  marks  filed  in  the  United  States  Patent and Trademark Office pursuant to 15 U.S.C. § 1051 Section (b)(1) unless and until  evidence of use of the mark in interstate commerce is submitted to and accepted by the  United States Patent and Trademark Office pursuant to 15 U.S.C. §1051 Section (c) or  Section  (d),  at  which  point  such  trademark  or  service  mark  application  shall  be  considered automatically included in the Collateral, (v) any Equity Interest in a Portfolio  Investment that is issued as an “equity kicker” to holders of subordinated debt and such  Equity Interest is pledged to secure senior debt of such Portfolio Investment to the extent  required thereby, and (vi) any assets with respect to which applicable law prohibits the  creation or perfection of such security interests therein (other than to the extent that any  such prohibition is rendered ineffective by Section 9-406, 9-407, 9-408 or 9-409 of the  Uniform  Commercial  Code  as  in  effect  in  the  relevant  jurisdiction  (or  any  successor  provision)  or  any  other  applicable  law  or  principles  of  equity;  provided,  however,  that  such security interest shall attach immediately at such time as such law is not effective or    522144.000028 21651939.2  25323438.4.BUSINESS 

 

applicable,  and,  to  the  extent  severable,  shall  attach  immediately  to  any  portion  of  the  Collateral that does not result in such consequences).               “Excluded Equity Interest” means any Equity Interest issued by any SBIC  Subsidiary; provided, that if any such SBIC Subsidiary shall at any time cease to be an  SBIC  Subsidiary  pursuant  to  the  definition  thereof  in  Section  1.01  of  the  Revolving  Credit Agreement, the Equity Interests issued by such Person shall no longer constitute  Excluded Equity Interests and shall become part of the Collateral hereunder.               “Excluded  Swap  Obligation”  means,  with  respect  to  any  Subsidiary  Guarantor,  any  Swap  Obligation  if,  and  to  the  extent  that,  all  or  a  portion  of  the  Guarantee of such Subsidiary Guarantor of, or the grant by such Subsidiary Guarantor of  a  security  interest  to  secure,  such  Swap  Obligation  (or  any  Guarantee  thereof)  is  or  becomes illegal under the Commodity Exchange Act or any rule, regulation or order of  the Commodity Futures Trading Commission (or the application or official interpretation  of  any  thereof)  by  virtue  of  such  Subsidiary  Guarantor’s  failure  for  any  reason  to  constitute an “eligible contract participant” as defined in the Commodity Exchange Act  and the regulations thereunder at the time the Guarantee of such Subsidiary Guarantor or  the  grant  of  such  security  interest  becomes  effective  with  respect  to  such  Swap  Obligation.  If a Swap Obligation arises under a master agreement governing more than  one swap, such exclusion shall apply only to the portion of such Swap Obligation that is  attributable to swaps for which such Guarantee or security interest is or becomes illegal.               “Financial  Officer”  means  the  chief  executive  officer,  president,  chief  operating officer, chief financial officer, treasurer, controller or chief compliance officer  of the Borrower, in each case, whom has been authorized by the Board of Directors of the  Borrower to execute the applicable document or certificate.               “Financing Agent” means, in respect of any Designated Indebtedness, any  trustee, representative or agent for the holders of such Designated Indebtedness.               “GAAP”  means  generally  accepted  accounting  principles  in  the  United  States.               “Governmental Authority” means the government of the United States, or  of any other nation, or any political subdivision thereof, whether state or local, and any  agency,  authority,  instrumentality,  regulatory  body,  court,  central  bank  or  other  entity  exercising executive, legislative, judicial, taxing, regulatory or administrative powers or  functions of or pertaining to government (including any supra-national body exercising  such powers or functions, such as the European Union or the European Central Bank).               “Guarantee” of or by any Person (the “guarantor”) means any obligation,  contingent or otherwise, of the guarantor guaranteeing or having the economic effect of  guaranteeing  any  Indebtedness  or  other  obligation  of  any  other  Person  (the  “primary  obligor”) in any manner, whether directly or indirectly, and including any obligation of  the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the  purchase  or  payment  of)  such  Indebtedness  or  other  obligation  or  to  purchase  (or  to    522144.000028 21651939.2  25323438.4.BUSINESS 

 

advance or supply funds for the purchase of) any security for the payment thereof, (b) to  purchase or lease property securities or services for the purpose of assuring the owner of  such  Indebtedness  or  other  obligation  of  the  payment  thereof,  (c) to  maintain  working  capital,  equity  capital  or  any  other  financial  statement  condition  or  liquidity  of  the  primary  obligor  so  as  to  enable  the  primary  obligor  to  pay  such  Indebtedness  or  other  obligation or (d) as an account party in respect of any letter of credit or letter of guaranty  issued to support such Indebtedness or obligation; provided, that the term Guarantee shall  not include endorsements for collection or deposit in the ordinary course of business or  customary indemnification agreements entered into in the ordinary course of business in  connection  with  obligations  that  do  not  constitute  Indebtedness.  The  amount  of  any  Guarantee at any time shall be deemed to be an amount equal to the maximum stated or  determinable  amount  of  the  primary  obligation  in  respect  of  which  such  Guarantee  is  incurred, unless the terms of such Guarantee expressly provide that the maximum amount  for  which  such  Person  may  be  liable  thereunder  is  a  lesser  amount  (in  which  case  the  amount of such Guarantee shall be deemed to be an amount equal to such lesser amount).               “Guarantee  Assumption  Agreement”  means  a  Guarantee  Assumption  Agreement substantially in the form of Exhibit B between the Collateral  Agent and an  entity  that,  pursuant  to  Section  7.05,  is  required  to  become  a  “Subsidiary  Guarantor”  hereunder (with such changes as the Collateral Agent shall reasonably request, consistent  with the requirements of Section 7.05, or to which the Collateral Agent shall otherwise  consent in its sole discretion).               “Guaranteed  Obligations”  means,  collectively,  the  Revolving  Credit  Agreement  Obligations,  the  Designated  Indebtedness  Obligations  and  the  Hedging  Agreement  Obligations;  provided  that  “Guaranteed  Obligations”  shall  exclude  any  Excluded Swap Obligation.               “Hedging  Agreement”  means  any  interest  rate  protection  agreement,  foreign currency exchange protection agreement, commodity price protection agreement  or  other  interest  or  currency  exchange  rate  or  commodity  price  hedging  arrangement  entered into in the ordinary course of business and not for speculative purposes.  For the  avoidance of doubt, in no event shall a Hedging Agreement include a total return swap.               “Hedging Agreement Obligations” means, collectively, all obligations of  any  Obligor  to  any  Revolving  Lender  (or  any  Affiliate  thereof)  under  any  Hedging  Agreement  that  is  an  interest  rate  protection  agreement  or  other  interest  rate  hedging  arrangement and has been designated by the Borrower by notice to the Collateral Agent  as  being  secured  by  this  Agreement,  including  in  each  case  all  fees,  indemnification  payments  and  other  amounts  whatsoever,  whether  direct  or  indirect,  absolute  or  contingent, now or hereafter from time to time owing to such Revolving Lender (or any  Affiliate thereof) under such Hedging Agreement, and including all interest and expenses  accrued or incurred subsequent to the commencement of any bankruptcy or insolvency  proceeding  with  respect  to  such  Obligor,  whether  or  not  such  interest  or  expenses  are  allowed  as  a  claim  in  such  proceeding;  provided  that  Hedging  Agreement  Obligations  shall not include any Excluded Swap Obligation.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            For purposes hereof, it is understood that any obligations of any Obligor to  a Person arising under a Hedging Agreement entered into at the time such Person (or an  Affiliate thereof) is a “Revolving Lender” party to the Revolving Credit Agreement (as  applicable) shall nevertheless continue to constitute Hedging Agreement Obligations for  purposes hereof, notwithstanding that such Person (or its Affiliate) may have assigned all  of its Loans and other interests in the Revolving Credit Agreement and, therefore, at the  time a claim is to be made in respect of such obligations, such Person (or its Affiliate) is  no longer a “Revolving Lender” party to the Revolving Credit Agreement, provided that  neither  such  Person  nor  any  such  Affiliate  shall  be  entitled  to  the  benefits  of  this  Agreement  (and  such  obligations  shall  not  constitute  Hedging  Agreement  Obligations  hereunder) unless, at or prior to the time it ceased to be a Revolving Lender hereunder, it  shall have  notified  the  Collateral  Agent  in  writing  of  the  existence  of  such  agreement.   Subject  to  and  without  limiting  the  preceding  sentence,  any  Affiliate  of  a  Revolving  Lender that is a party to a Hedging Agreement shall be included in the term “Revolving  Lender” for purposes of this Agreement solely for purposes of the rights and obligations  arising  hereunder  in  respect  of  such  Hedging  Agreement  and  the  Hedging  Agreement  Obligations thereunder.               The  designation  of  any  Hedging  Agreement  as  being  secured  by  this  Agreement  in  accordance  with  the  first  paragraph  under  this  definition  of  “Hedging  Agreement  Obligations”  shall  not  create  in  favor  of  any  Revolving  Lender  or  any  Affiliate thereof that is a party thereto (i) any rights in connection with the management  or release of any Collateral or of the obligations of any Subsidiary Guarantor under this  Agreement or (ii) any rights to consent to any amendment, waiver, or other matter under  this Agreement or any other Loan Document.  Notwithstanding anything to the contrary  in this Agreement or any other Loan Document, as applicable, no provider or holder of  any  Hedging  Agreement  Obligations  (other  than  in  its  capacity  as  Revolving  Administrative Agent, Collateral Agent or Revolving Lender to the extent applicable) has  any individual right to enforce this Agreement or bring any remedies with respect to any  Lien on Collateral granted pursuant to the Loan Documents.  By accepting the benefits of  this Agreement, such party shall be deemed to have appointed the Collateral Agent as its  agent  and  agreed  to  be  bound  by  this  Agreement  as  a  Secured  Party,  subject  to  the  limitations set forth in the preceding sentence.               “Indebtedness”  of  any  Person  means,  without  duplication,  (a) all  obligations  of  such  Person  for  borrowed  money  or  with  respect  to  deposits,  loans  or  advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures,  notes or similar debt instruments, (c) all obligations of such Person under conditional sale  or  other  title retention agreements  relating  to  property  acquired  by such Person,  (d) all  obligations  of  such  Person  in  respect  of  the  deferred  purchase  price  of  property  or  services (other than trade accounts payable and accrued expenses in the ordinary course  of business not past due for more than 90 days after the date on which such trade account  payable was due), (e) all Indebtedness of others secured by any Lien on property owned  or acquired by such Person, whether or not the Indebtedness secured thereby has been  assumed (with the value of such debt being the lower of the outstanding amount of such  debt and the fair market value of the property subject to such Lien), (f) all Guarantees by    522144.000028 21651939.2  25323438.4.BUSINESS 

 

such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person,  (h) all obligations, contingent or otherwise, of such Person as an account party in respect  of  letters  of  credit  and  letters  of  guaranty,  (i) the  net  amount  such  Person  would  be  obligated for under any Hedging Agreement if such Hedging Agreement was terminated  at the time of determination, (j) all obligations, contingent or otherwise, with respect to  Disqualified  Equity  Interests,  and  (k) all  obligations,  contingent  or  otherwise,  of  such  Person in respect of bankers’ acceptances.  The Indebtedness of any Person shall include  the Indebtedness of any other entity (including any partnership in which such Person is a  general partner) to the extent such Person is liable therefor as a result of such Person’s  ownership interest in or other relationship with such entity, except to the extent the terms  of such Indebtedness provide that such Person is not liable therefor (or such Person is not  otherwise liable for such  Indebtedness). Notwithstanding the foregoing, “Indebtedness”  shall not include (x) purchase price holdbacks arising in the ordinary course of business  in  respect  of  a  portion  of  the  purchase  price  of  an  asset  or  Investment  to  satisfy  unperformed obligations of the seller of such asset or  Investment or (y)  a commitment  arising in the ordinary course of business to make a future Portfolio Investment or fund  the delayed draw or unfunded portion of any Portfolio Investment or (z) indebtedness of  the Borrower on account of the sale by the Borrower of the first out tranche of any First  Lien Bank Loan (as defined in the Revolving Credit Agreement) that arises solely as an  accounting matter under ASC 860, provided that such indebtedness (i) is non-recourse to  the  Borrower  and  its  Subsidiaries  and  (ii)  would  not  represent  a  claim  against  the  Borrower or any of its Subsidiaries in a bankruptcy, insolvency or liquidation proceeding  of  the  Borrower  or  its  Subsidiaries,  in  each  case  in  excess  of  the  amount  sold  or  purportedly sold.               “Indorsed”  means,  with  respect  to  any  Certificated  Security,  that  such  Certificated  Security  has  been  assigned  or  transferred  to  the  applicable  transferee  pursuant to an effective Indorsement.               “ING” means ING Capital LLC.               “Insolvency Law” means, as applicable, (a) the Bankruptcy Code and (b)  any other federal, state, provincial or foreign law for the relief of debtors or affecting  creditors’ rights generally.               “Insolvency  Proceeding”  means:  (a)  any  voluntary  case  or  proceeding  under  any  Insolvency  Law  with  respect  to  any  Obligor,  (b)  any  other  voluntary  proceeding or involuntary or bankruptcy case or proceeding, or any interim receivership,  liquidation or other similar case or proceeding with respect to any Obligor or with respect  to a material portion of its assets, (c) any liquidation, dissolution, or winding up of any  Obligor whether voluntary or involuntary and whether or not involving any Insolvency  Law or  (d)  any assignment  for  the  benefit of any  creditors  or  any  other marshaling of  assets or liabilities of any Obligor.               “Intellectual Property” means, collectively, the Copyrights, the Copyright  Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, the  Trade Secrets, and the Trade Secret Licenses.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            “Investment”  means,  for  any  Person:  (a)  Equity  Interests,  bonds,  notes,  debentures  or  other  securities  of  any  other  Person  (including  convertible  securities)  or  any  agreement  to  acquire  any  Equity  Interests,  bonds,  notes,  debentures  or  other  securities of any other Person (including any “short sale” or any sale of any securities at a  time  when  such  securities  are  not  owned  by  the  Person  entering  into  such  sale);  (b)  deposits,  advances,  loans  or  other  extensions  of  credit  made  to  any  other  Person  (including  purchases  of  property  from  another  Person  subject  to  an  understanding  or  agreement,  contingent  or  otherwise,  to  resell  such  property  to  such  Person);  or  (c)  Hedging Agreements.               “Lien” means, with respect to any asset, (a) any mortgage, deed of trust,  lien,  pledge,  hypothecation,  encumbrance,  charge  or  security  interest  in,  on  or  of  such  asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital  lease or title retention agreement (or any financing lease having substantially the same  economic  effect  as  any  of  the  foregoing) relating  to  such  asset  and  (c) in  the  case  of  securities, any purchase option, call or similar right of a third party with respect to such  securities, except in favor of the issuer thereof (and, in the case of Portfolio Investments  that are equity securities, excluding customary drag-along, tag-along, right of first refusal  and other similar rights in favor of other equity holders of the same issuer).               “Loan Documents” has the meaning assigned to such term in Section 1.01  of the Revolving Credit Agreement.               “Loans” means the loans made by the Revolving Lenders to the Borrower  pursuant to the Revolving Credit Agreement.                “Notice of Designation” has the meaning assigned to such term in Section  6.01.               “NYUCC” means the Uniform Commercial Code as in effect from time to  time in the State of New York.               “NYUCC Control” means “control” as defined in Section 9-104, 9-105, 9- 106 or 9-107 of the NYUCC.               “Obligors” has the meaning assigned to such term in the preamble of this  Agreement.                “Patent Licenses” means all agreements providing for the granting of any  right in or to Patents (whether such Obligor is licensee or licensor thereunder) including  each agreement referred to in Annex 2.11 hereto.               “Patents” means all United States and foreign patents and certificates of  invention, or similar industrial property rights, and applications for any of the foregoing,  including, but not limited to: (i) each patent and patent application referred to in Annex  2.11  hereto,  (ii)  all  reissues,  divisions,  continuations,  continuations-in-part,  extensions,  renewals, and reexaminations thereof, (iii) all rights corresponding thereto throughout the    522144.000028 21651939.2  25323438.4.BUSINESS 

 

world,  (iv)  all  inventions  and  improvements  described  therein,  (v)  all  rights  to  sue  for  past,  present  and  future  infringements  thereof,  and  (vi)  all  proceeds  of  the  foregoing,  including licenses, royalties, income, payments, claims, damages, and proceeds of suit.               “Permitted  Liens”  means  those  Liens  on  the  Collateral  (other  than  Collateral  included  in the  Borrowing  Base)  permitted by each Debt  Document (for  the  avoidance of doubt in the event of any conflict or difference among the Debt Documents,  the  most  restrictive  provisions  that  are  in  effect  (after  taking  into  account  any  modification, supplement, amendment or waiver of such provisions) shall apply against  the Obligors hereunder).               “Person”  means  any  natural  person,  corporation,  limited  liability  company, trust, joint venture, association, company, partnership, Governmental Authority  or other entity.               “Pledge Supplement” means a supplement to this Agreement substantially  in the form of Exhibit D.               “Pledged Debt” means all indebtedness owed to any Obligor (other than  Portfolio  Investments  (unless  issued  by  a  Subsidiary)),  the  instruments  (if  any)  evidencing such indebtedness (including the instruments described on Annex 2.08 hereto)  and  all  interest,  cash,  instruments  and  other  property  or  proceeds  from  time  to  time  received, receivable or otherwise distributed in respect of or in exchange for any or all of  such indebtedness.               “Pledged Equity Interests” means all Equity Interests (other than Excluded  Equity  Interests)  owned  by  any  Obligor  issued  by  any  Subsidiary  of  such  Obligor  (including  the  Equity  Interests  described  on  Annex  2.07  hereto)  and  the  certificates,  if  any, representing such Equity Interests and any interest of such Obligor in the entries on  the  books  of  the  issuer  of  such  Equity  Interests  or  on  the  books  of  any  Securities  Intermediary  pertaining  to  such  Equity  Interests,  and  all  dividends,  distributions,  cash,  warrants, rights, options, instruments, securities and other property or proceeds from time  to time received, receivable or otherwise distributed in respect of or in exchange for any  or all of such Equity Interests.                 “Pledged Interests” means all Pledged Debt and Pledged Equity Interests.               “Portfolio Investment” means any Investment held by the Borrower and its  Subsidiaries in their asset portfolio and included on the schedule of investments on the  financial statements of the Borrower delivered pursuant to Section 5.01(a) or (b) of the  Revolving  Credit  Agreement  (or,  for  any  Investment  made  during  a  given  quarter  and  before a schedule of investments is required to be delivered pursuant to Section 5.01(a) or  (b) of the Revolving Credit Agreement, as applicable, with respect to such quarter, any  Investment which is intended to be included on the schedule of investments when such  Investment  is  made  shall  be  included  until  such  time  as  a  schedule  of  investments  is  delivered  pursuant  to  Section  5.01(a)  or  (b)  of  the  Revolving  Credit  Agreement,  as  applicable, with  respect to such quarter, and then such Investment shall  continue to be    522144.000028 21651939.2  25323438.4.BUSINESS 

 

included only to the extent such Investment is included on the schedule of investments  delivered  pursuant  to  Section  5.01(a)  or  (b)  of  the  Revolving  Credit  Agreement,  as  applicable)  (and,  for  the  avoidance  of  doubt,  shall  not  include  any  Subsidiary  of  the  Borrower).                 “Qualified  ECP  Guarantor”  means,  in  respect  of  any  Swap  Obligation,  each  Subsidiary  Guarantor  that  has  total  assets  exceeding  $10,000,000  at  the  time  the  relevant  Guarantee  or  grant  of  the  relevant  security  interest  becomes  effective  with  respect to such Swap Obligation or such other person as constitutes an “eligible contract  participant”  under  the  Commodity  Exchange  Act  or  any  regulations  promulgated  thereunder and can cause another person to qualify as an “eligible contract participant” at  such time by entering into a keepwell under section 1a(18)(A)(v)(II) of the Commodity  Exchange Act.               “Related  Parties”  means,  with  respect  to  any  specified  Person,  such  Person’s Affiliates and the respective directors, officers, employees, agents and advisors  of such Person and such Person’s Affiliates.               “Required Designated Indebtedness Holders” means, with respect to each  issuance of Designated Indebtedness (if any, or so long as, such Designated Indebtedness  is  outstanding  (other  than  unasserted  contingent  indemnification  obligations))  by  the  Borrower  (each  such  issuance,  a  “Series”),  the  meaning  given  to  the  term  “Required  Holders” or “Required Lenders” in the Debt Documents with respect to such Designated  Indebtedness.                “Required  Revolving  Lenders”  has  the  meaning  given  to  the  term  “Required Lenders” in the Revolving Credit Agreement (so long as the obligations under  the  Revolving  Credit  Agreement  are  outstanding  (other  than  unasserted  contingent  indemnification obligations)).               “Required  Secured  Parties”  means,  (a)  so  long  as  no  Trigger  Event  has  occurred and is continuing, “Required Lenders” under and as defined in the Revolving  Credit  Agreement  or  (b)  if  a  Trigger  Event  shall  have  occurred  and  be  continuing,  Secured Parties holding more than 50% of the aggregate outstanding amount of the sum  of  the  Revolving  Credit  Agreement  Obligations  and  the  Designated  Indebtedness  Obligations.                “Restatement Effective Date” means December 21, 2018               “Revolving Administrative Agent” has the meaning assigned to such term  in the preamble of this Agreement.               “Revolving Credit Agreement” means the Amended and Restated Senior  Secured Revolving Credit Agreement, dated as of the Restatement Effective Date, by and  among  the  Borrower,  the  Revolving  Lenders  from  time  to  time,  and  the  Revolving  Administrative Agent.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            “Revolving  Credit  Agreement  Obligations”  means,  collectively,  all  obligations of the Borrower and the Subsidiary Guarantors to the Revolving Lenders and  the Revolving Administrative Agent under the Revolving Credit Agreement and the other  Loan Documents, including in each case in respect of the principal of and interest on the  loans  made  thereunder,  and  all  fees,  indemnification  payments  and  other  amounts  whatsoever, whether direct or indirect, absolute or contingent, now or hereafter from time  to time owing to the Revolving Administrative Agent or the Revolving Lenders or any of  them  under  or  in  respect  of  the  Revolving  Credit  Agreement  and  the  other  Loan  Documents, and including all interest and expenses accrued or incurred subsequent to the  commencement  of  any  bankruptcy  or  insolvency  proceeding  with  respect  to  the  Borrower,  whether  or  not  such  interest  or  expenses  are  allowed  as  a  claim  in  such  proceeding; provided that Revolving Credit Agreement Obligations shall not include any  Excluded Swap Obligation.                “Revolving  Lender”  means  any  “Lender”  (as  defined  in  the  Revolving  Credit Agreement) that is from time to time party to the Revolving Credit Agreement.               “Revolving  Loans”  means  the  revolving  loans  made  by  the  Revolving  Lenders to the Borrower pursuant to the Revolving Credit Agreement.               “SBIC Subsidiary” means any Subsidiary of the Borrower designated by  the  Borrower  as  an  “SBIC  Subsidiary”  under  the  applicable  Debt  Documents  and  pursuant  to  the  procedures  specified  in  such  Debt  Documents  (with  notice  to  the  Collateral Agent).               “Secured Obligations” means, collectively, (a) in the case of the Borrower,  the  Revolving  Credit  Agreement  Obligations,  the  Designated  Indebtedness  Obligations  and the Hedging Agreement Obligations, (b) in the case of the Subsidiary Guarantors, the  obligations  of  the  Subsidiary  Guarantors  in  respect  of  the  Guaranteed  Obligations  pursuant  to  Section  3.01  and  the  Hedging  Agreement  Obligations  (if  such  Subsidiary  Guarantor  is  a  primary  guarantor)  and  (c)  in  the  case  of  all  Obligors,  all  present  and  future obligations of the Obligors to the Secured Parties, or any of them, hereunder or  under any other Security Document, provided  that Secured Obligations shall not include  any Excluded Swap Obligation.               “Secured  Party”  means,  collectively,  the  Revolving  Lenders  (including  those  holding  Hedging  Agreement  Obligations),  the  Revolving  Administrative  Agent,  each Designated Indebtedness Holder, each Financing Agent and each Person that is not a  Revolving Lender and is owed a Hedging Agreement Obligation of the type described in,  and  subject  to  the  conditions  set  forth  in,  the  second  paragraph  of  the  definition  of  “Hedging Agreement Obligations”, and the Collateral Agent.               “Security  Documents”  means,  collectively,  this  Agreement,  the  Custody  Agreement,  the  Document  Custody  Agreement,  the  Control  Agreement,  all  Uniform  Commercial Code financing statements filed with respect to the security interests in the  Collateral created pursuant hereto and all other assignments, pledge agreements, security  agreements,  control  agreements,  custodial  agreements  and  other  instruments  executed   522144.000028 21651939.2  25323438.4.BUSINESS 

 

and delivered at any time by any of the Obligors pursuant hereto or otherwise providing  or relating to any collateral security for any of the Secured Obligations.               “Series”  has  the  meaning  assigned  to  such  term  in  the  definition  of  “Required Designated Indebtedness Holders”.               “Special  Equity  Interest”  means  any  Equity  Interest  that  is  subject  to  a  Lien in favor of creditors of the issuer or the issuer’s Affiliates of such Equity Interest;  provided that (a) such Lien was created to secure Indebtedness owing by such issuer or  the issuer’s Affiliates to such creditors, (b) such Indebtedness was (i) in existence at the  time the Obligors acquired such Equity Interest, (ii) incurred or assumed by such issuer  substantially contemporaneously with such acquisition or (iii) already subject to a Lien  granted to such creditors and (c) unless such Equity Interest is not intended to be included  in the Collateral, the documentation creating or governing such Lien does not prohibit the  inclusion of such Equity Interest in the Collateral.                “Subsidiary” means, with respect to any Person (the “parent”) at any date,  any  corporation,  limited  liability  company,  partnership,  association  or  other  entity  the  accounts  of  which  would  be  consolidated  with  those  of  the  parent  in  the  parent’s  consolidated  financial  statements  if  such  financial  statements  were  prepared  in  accordance with GAAP as of such date, as well as any other corporation, limited liability  company,  partnership,  association  or  other  entity  (a) of  which  securities  or  other  ownership interests representing more than 50% of the equity or more than 50% of the  ordinary  voting  power  or,  in  the  case  of  a  partnership,  more  than  50%  of  the  general  partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of  such date, otherwise Controlled by the parent or one or more subsidiaries of the parent or  by the parent and one or more subsidiaries of the parent.  Anything herein to the contrary  notwithstanding,  the  term  “Subsidiary”  shall  not  include  any  Person  that  constitutes  a  Portfolio Investment held by any Obligor in the ordinary course of business and that is  not,  under  GAAP,  consolidated  on  the  financial  statements  of  the  Borrower  and  its  Subsidiaries.   Unless  otherwise  specified,  “Subsidiary”  means  a  Subsidiary  of  the  Borrower.               “Subsidiary  Guarantors”  has  the  meaning  assigned  to  such  term  in  the  preamble of this Agreement.               “Swap Obligation”  means,  with  respect  to any  Subsidiary  Guarantor, an  obligation to pay or perform under any agreement, contract or transaction that constitutes  a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.               “Termination Date” means (a) with respect to the Revolving Lenders, the  date  on  which  the  conditions  set  forth  in  the  definition  of  “Termination  Date”  in  the  Revolving  Credit  Agreement  are  satisfied  and  (b)  with  respect  to  any  Designated  Indebtedness Holders, the date on which the principal and accrued interest on each such  Designated  Indebtedness and all  fees  and  other  amounts  payable  thereunder shall  have  been paid in full (excluding, for the avoidance of doubt, any amount in connection with  any contingent, unasserted indemnification obligations).    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            “Trademark  Licenses”  means  any  and  all  agreements  providing  for  the  granting of any right in or to Trademarks (whether such Obligor is licensee or licensor  thereunder) including each agreement referred to in Annex 2.11 hereto.               “Trademarks”  means  all  United  States  and  foreign  trademarks,  trade  names,  corporate  names,  company  names,  business  names,  fictitious  business  names,  Internet domain names, service marks, certification marks, collective marks, logos, other  source  or  business  identifiers,  designs  and  general  intangibles  of  a  like  nature,  and  all  registrations and applications for any of the foregoing including, but not limited to: (i) the  registrations  and  applications  referred  to  in  Annex  2.11  hereto,  (ii)  all  extensions  or  renewals of any of the foregoing, (iii) all of the goodwill of the business connected with  the  use  of  and  symbolized  by  the  foregoing,  (iv)  the  right  to  sue  for  past,  present  and  future infringement or dilution of any of the foregoing or for any injury to goodwill, and  (v) all proceeds of the foregoing, including licenses, royalties, income, payments, claims,  damages, and proceeds of suit.               “Trade Secret Licenses” means any and all agreements providing for the  granting of any right in or to Trade Secrets (whether such Obligor is licensee or licensor  thereunder) including each agreement referred to in Annex 2.11 hereto.                “Trade  Secrets”  means  all  trade  secrets  and  all  other  confidential  or  proprietary  information  and  know-how  whether  or  not  such  Trade  Secret  has  been  reduced  to  a  writing  or  other  tangible  form,  including  all  documents  and  things  embodying, incorporating, or referring in any way to such Trade Secret, including but not  limited  to:  (i)  the  right  to  sue  for  past,  present  and  future  misappropriation  or  other  violation of any Trade Secret, and (ii) all proceeds of the foregoing, including licenses,  royalties, income, payments, claims, damages, and proceeds of suit.               “Trigger Event” means any of the following events or conditions:               (a)   Acceleration  of  the  Secured  Obligations  representing  66-2/3%  or        more of the aggregate Secured Obligations at the time outstanding;               (b)   an involuntary proceeding shall be commenced or an involuntary        petition  shall  be  filed  seeking  (i)  liquidation,  reorganization  or  other  relief  in        respect of any Obligor or its debts, or of a substantial part of its assets, under any        Federal  or  state  bankruptcy,  insolvency,  receivership  or  similar  law  now  or        hereafter  in  effect  or  (ii)  the  appointment  of  a  receiver,  trustee,  custodian,        sequestrator,  conservator  or  similar  official  for  any  Obligor  or  for  a  substantial        part of its assets, and, in any such case, such proceeding or petition shall continue        undismissed  for  a  period  of  sixty  (60)  or  more  days  or  an  order  or  decree        approving or ordering any of the foregoing shall be entered; or               (c)   any Obligor shall (i) voluntarily commence any proceeding or file        any petition seeking liquidation, reorganization or other relief under any Federal        or  state  bankruptcy, insolvency, receivership  or  similar law now  or  hereafter  in        effect,  (ii)  consent  to  the  institution  of,  or  fail  to  contest  in  a  timely  and   522144.000028 21651939.2  25323438.4.BUSINESS 

 

      appropriate  manner,  any  proceeding  or  petition  described  in  clause  (b)  above,        (iii) apply  for  or  consent  to  the  appointment  of  a  receiver,  trustee,  custodian,        sequestrator,  conservator  or  similar  official  for  any  Obligor  or  for  a  substantial        part of its assets, (iv) file an answer admitting the material allegations of a petition        filed  against  it  in  any  such  proceeding,  (v)  make  a  general  assignment  for  the        benefit of creditors or (vi) take any corporate or other action for the purpose of        effecting any of the foregoing.               “United States” means the United States of America.               “U.S.  Government  Securities”  means  securities  that  are  the  direct  obligations of, and obligations the timely payment of principal and interest on which is  fully  guaranteed  by,  the  United  States  or  any  agency  or  instrumentality  of  the  United  States and the obligations of which are backed by the full faith and credit of the United  States and in the form of conventional bills, bonds and notes.               1.03  Terms Generally.  The definitions of terms herein shall apply  equally to the singular and plural forms of the terms defined.  Whenever the context may  require,  any  pronoun  shall  include  the  corresponding  masculine,  feminine  and  neuter  forms.  The words “include”, “includes” and “including” shall be deemed to be followed  by the phrase “without limitation”.  The word “will” shall be construed to have the same  meaning  and effect as the word “shall”.  Unless the context requires otherwise (a) any  definition of or reference to any agreement, instrument or other document herein shall be  construed as referring to such agreement, instrument or other document as from time to  time amended, supplemented or otherwise modified (subject to any restrictions on such  amendments, supplements or modifications set forth herein or therein), (b) any reference  herein to any Person shall be construed to include such Person’s successors and assigns  (subject to any restrictions on such successors and assigns set forth herein or therein), (c)  the  words  “herein”,  “hereof”  and  “hereunder”,  and  words  of  similar  import,  shall  be  construed  to  refer  to  this  Agreement  in  its  entirety  and  not  to  any  particular  provision  hereof, (d) all references herein to Sections, Exhibits and Annexes shall be construed to  refer  to  Sections  of,  and  Exhibits  and  Annexes  to,  this  Agreement  and  (e)  the  words  “asset”  and  “property”  shall  be  construed  to  have  the  same  meaning  and  effect  and  to  refer  to  any  and  all  tangible  and  intangible  assets  and  properties,  including  cash,  securities, accounts and contract rights.  Capitalized terms used herein, unless otherwise  defined  herein,  shall  have  the  meanings  ascribed  thereto  in  the  Revolving  Credit  Agreement.               Section 2.  Representations and Warranties.  Each Obligor represents  and warrants to the Secured Parties that:               2.01  Organization.  Such Obligor is duly organized, validly existing and  in good standing under the laws of the jurisdiction of its organization.               2.02  Authorization;  Enforceability.   The  execution,  delivery  and  performance of this Agreement, and the granting of the  Liens contemplated hereunder,  are within such Obligor’s corporate or other powers and have been duly authorized by all   522144.000028 21651939.2  25323438.4.BUSINESS 

 

necessary  corporate  or  other  action,  including  by  all  necessary  shareholder,  manager  and/or member action and action by the board of directors or other governing body of  such  Obligor.   This Agreement has  been  duly  executed and delivered by  such Obligor  and  constitutes  a  legal,  valid  and  binding  obligation  of  such  Obligor,  enforceable  in  accordance  with  its  terms,  except  as  such  enforceability  may  be  limited  by  (a)  bankruptcy,  insolvency,  reorganization,  moratorium  or  similar  laws  of  general  applicability  affecting  the  enforcement  of  creditors’  rights  and  (b)  the  application  of  general principles of equity (regardless of whether such enforceability is considered in a  proceeding in equity or at law).               2.03  Governmental  Approvals;  No  Conflicts.   The  execution,  delivery  and  performance  of  this  Agreement,  and  the  granting  of  the  Liens  contemplated  hereunder, (a) do not require any consent or approval of, registration or filing with, or any  other action by, any Governmental Authority, except for (i) such as have been or will be  obtained or made and are in full force and effect and (ii) filings and recordings in respect  of the Liens created pursuant hereto, (b) will not violate any applicable law or regulation  or the charter, by-laws or other organizational documents of any Obligor or any order of  any  Governmental  Authority  (including  the  Investment  Company  Act  of  1940,  as  amended  from  time  to  time,  and  the  rules,  regulations  and  orders  issued  by  the  SEC  thereunder), (c) will not violate or result in a default in any material respect under any  indenture, agreement or other instrument binding upon any Obligor or any of its assets, or  give rise to a right thereunder to require any payment to be made by any such Person, and  (d)  except  for  the  Liens  created  pursuant  hereto,  will  not  result  in  the  creation  or  imposition of any Lien on any asset of any Obligor.               2.04  Title.  Such Obligor is the sole beneficial owner of the Collateral in  which  a  security interest is  purported to  be  granted by  such Obligor  hereunder  and no  Lien exists upon such Collateral other than (a) the security interest created or provided  for  herein,  which  security  interest  constitutes  a  valid  first  and  prior  perfected  Lien,  subject to Eligible Liens on the Collateral included in the Borrowing Base and subject to  Permitted Liens on all other Collateral (except that any such security interest in a Special  Equity Interest may be subject to a Lien in favor of a creditor of the issuer of such Special  Equity Interest as contemplated by the definition of such term in Section 1.02) and (b)  other Liens not prohibited by the provisions of any Debt Document.               2.05  Names, Etc.  The full and correct legal name, type of organization,  jurisdiction  of  organization,  organizational  ID  number  (if  applicable)  and  place  of  business  (or,  if  more  than  one,  chief  executive  office)  of  each  Obligor  as  of  the  Restatement Effective Date are correctly set forth in Annex 2.05 (and of each additional  Obligor as of the date of the Guarantee Assumption Agreement referred to below are set  forth  in  the  supplement  to  Annex  2.05  in  Appendix  A  to  the  Guarantee  Assumption  Agreement executed and delivered by such Obligor pursuant to Section 7.05).               2.06  Changes in Circumstances.  No Obligor has (a) within the period  of  four  months  prior  to  the  date  hereof  (or,  in  the  case  of  any  Subsidiary  Guarantor,  within the period of four months prior to the date it becomes a party hereto pursuant to a    522144.000028 21651939.2  25323438.4.BUSINESS 

 

Guarantee Assumption Agreement), changed its location (as defined in Section 9-307 of  the NYUCC), (b) as of the date hereof other than as set forth on Annex 2.06 (or, with  respect to any Subsidiary Guarantor, as of the date it becomes a party hereto pursuant to a  Guarantee  Assumption  Agreement),  changed  its  name  or  (c)  as  of  the  date  hereof  (or,  with  respect  to  any  Subsidiary  Guarantor,  as  of  the  date  it  becomes  a  party  hereto  pursuant to a Guarantee Assumption Agreement), become a “new debtor” (as defined in  Section  9-102(a)(56)  of  the  NYUCC)  with  respect  to  a  currently  effective  security  agreement previously entered into by any other Person and binding upon such Obligor, in  each case except as notified in writing to the Collateral Agent prior to the date hereof (or,  in  the  case  of  any  Subsidiary  Guarantor,  prior  to  the  date  it  becomes  a  party  hereto  pursuant to a Guarantee Assumption Agreement).               2.07  Pledged Equity Interests.  (i) Annex 2.07 sets forth a complete and  correct  list  of  all  Pledged  Equity  Interests  owned  by  any  Obligor  on  the  Restatement  Effective Date (or owned by a Subsidiary Guarantor on the date it becomes a party hereto  pursuant to a Guarantee Assumption Agreement) and on the date hereof or thereof such  Pledged  Equity  Interests  constitute  the  percentage  of  issued  and  outstanding  shares  of  stock,  percentage  of  membership  interests,  percentage  of  partnership  interests  or  percentage  of  beneficial  interest  of  the  respective  issuers  thereof  indicated  on  Annex  2.07; (ii) on the date hereof or thereof, the Obligors listed on Annex 2.07 are the record  and beneficial owners of the Pledged Equity Interests free of all Liens, rights or claims of  other Persons and there are no outstanding warrants, options or other rights to purchase,  or shareholder, voting trust or similar agreements outstanding with respect to, or property  that  is  convertible  into,  or  that  requires  the  issuance  or  sale  of,  any  Pledged  Equity  Interests;  and  (iii)  no  consent  of  any  Person  including  any  other  general  or  limited  partner, any other member of a limited liability company, any other shareholder or any  other  trust  beneficiary  is  necessary  in  connection  with  the  creation,  perfection  or  first  priority (subject to Eligible Liens on the Collateral included in the Borrowing Base and  subject  to  Permitted  Liens  on  all  other  Collateral)  status  of  the  security  interest  of  the  Collateral Agent in any Pledged Equity Interests or the exercise by the Collateral Agent  of the voting or other rights provided for in this Agreement or the exercise  of remedies in  respect thereof.               2.08  Promissory  Notes.  Annex 2.08 sets forth a complete and correct  list of all Promissory Notes (other than any previously Delivered to the Custodian or held  in  a  Securities  Account  referred  to  in  Annex  2.09)  held  by  any  Obligor  on  the  Restatement Effective Date (or held by a Subsidiary Guarantor on the date it becomes a  party hereto pursuant to a Guarantee Assumption Agreement) that are either included in  the Borrowing Base or have an aggregate unpaid principal amount in excess of $75,000.               2.09  Deposit Accounts and Securities Accounts.  Annex 2.09 sets forth  a complete and correct list of all Deposit Accounts, Securities Accounts and Commodity  Accounts  of  the  Obligors  on  the  Restatement  Effective  Date  (and  of  any  Subsidiary  Guarantor  on  the  date  it  becomes  a  party  hereto  pursuant  to  a  Guarantee  Assumption  Agreement), except for any Deposit Account specially and exclusively used for payroll,  payroll taxes and other employee wage and benefit payments.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            2.10  Commercial  Tort  Claims.   Annex 2.10  sets  forth  a  complete  and  correct list of all Commercial Tort Claims of the Obligors on the Restatement Effective  Date (and of any Subsidiary Guarantor on the date it becomes a party hereto pursuant to a  Guarantee Assumption Agreement).               2.11  Intellectual Property and Licenses.                 (a)   Annex 2.11 sets forth a true and complete list on the date hereof        (or  on  the  date  a  Subsidiary  Guarantor  becomes  a  party  hereto  pursuant  to  a        Guarantee  Assumption  Agreement)  of  (i)  all  United  States,  state  and  foreign        registrations of and applications for Patents, Trademarks, and Copyrights owned        by each Obligor  and (ii) all  Patent  Licenses,  Trademark  Licenses,  Trade  Secret        Licenses and Copyright Licenses;               (b)   on  the  date  hereof  or  thereof,  each  Obligor  is  the  sole  and        exclusive  owner  of  the  entire  right,  title,  and  interest  in  and  to  all  Intellectual        Property listed on Annex 2.11, free and clear of all Liens, claims, encumbrances        and licenses, except for Permitted Liens and the licenses set forth on Annex 2.11,        and it owns or has the valid right to use all other Intellectual Property used in or        necessary to conduct its business;               (c)   as of the date hereof or thereof, all Intellectual Property owned by        the Obligors is subsisting and has not been adjudged invalid or unenforceable, in        whole or in part, and as of the date hereof or thereof each Obligor has performed        all acts and has paid all renewal, maintenance, and other fees and taxes required to        maintain each  and every registration and application of Copyrights, Patents and        Trademarks in full force and effect;               (d)   on the date hereof or thereof, all Intellectual Property owned by or        exclusively licensed to the Obligors is valid and enforceable; on the date hereof or        thereof, no holding, decision, or judgment has been rendered against any Obligor        in  any  action  or  proceeding  before  any  court  or  administrative  authority        challenging the validity of, any Obligor’s right to register, or any Obligor’s rights        to  own  or  use,  any  Intellectual  Property  and  no  such  action  or  proceeding  is        pending or, to each Obligor’s knowledge, threatened;               (e)   on the date hereof or thereof, all registrations and applications for        Copyrights,  Patents  and  Trademarks  owned by  the  Obligors  are standing in  the        name of an Obligor, and none of the Trademarks, Patents, Copyrights  or Trade        Secrets owned by the Obligors has been licensed by any Obligor to any Affiliate        or third party, except as disclosed in Annex 2.11;               (f)   as  of  the  date  hereof  or  thereof,  each  Obligor  has  been  using        appropriate statutory notice of registration in connection with its use of registered        Trademarks, proper marking practices in connection with the use of Patents, and        appropriate notice of copyright in connection with the publication of Copyrights,        in each case if material to the business of such Obligor;    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            (g)   as  of  the  date  hereof  or  thereof,  each  Obligor  uses  adequate        standards of quality in the manufacture, distribution, and sale of all products sold        in  the  provision  of  all  services  rendered  under  or  in  connection  with  all        Trademarks  owned  by  or  licensed  to  such  Obligor  and  has  taken  all  action        reasonably  necessary  to  ensure  that  all  licensees  of  such  Trademarks  use  such        adequate standards of quality;               (h)   to the knowledge of each Obligor, as of the date hereof or thereof,        the  conduct  of  each  Obligor’s  business  does  not  infringe  upon  or  otherwise        misappropriate or violate any trademark, patent, copyright, trade secret  or other        intellectual property right owned or controlled by a third party; and no claim has        been made, in writing or, to such Obligor’s knowledge, threatened, that the use of        any Intellectual Property owned or used by any Obligor (or any of its respective        licensees) or the conduct of any Obligor’s business infringes, misappropriates, or        violates the asserted rights of any third party;               (i)   to the best of each Obligor’s knowledge, as of the date hereof or        thereof, no third party is infringing upon or otherwise violating any rights in any        Intellectual  Property  owned  or  used  by  such  Obligor,  or  any  of  its  respective        licensees;               (j)   as  of  the  date  hereof  or  thereof,  no  settlement  or  consents,        covenants not to sue, nonassertion assurances, or releases have been entered into        by  any  Obligor  or  to  which  any  Obligor  is  bound  that  adversely  affect  any        Obligor’s rights to own or use any Intellectual Property; and               (k)   as of the date hereof or  thereof, no Obligor has  made a previous        assignment,  sale,  transfer  or  agreement  constituting  a  present  or  future        assignment, sale, transfer or agreement of any Intellectual Property that  has not        been terminated or released, and there is no effective financing statement or other        document or instrument now executed, or on file or recorded in any public office,        granting  a  security  interest  in  or  otherwise  encumbering  any  part  of  the        Intellectual Property, other than in favor of the Collateral Agent.               Section 3.  Guarantee.               3.01  The  Guarantee.   The  Subsidiary  Guarantors  hereby  jointly  and  severally guarantee to the Collateral Agent for the benefit of each of the Secured Parties  and  their  respective  successors  and  assigns  the  prompt  payment  in  full  when  due  (whether at stated maturity, by acceleration or otherwise) of the Guaranteed Obligations.  The Subsidiary Guarantors hereby further jointly and severally agree that if the Borrower  shall fail to pay in full when due (whether at stated or extended maturity, by acceleration  or otherwise) any of the Guaranteed Obligations, the Subsidiary Guarantors will jointly  and severally pay the same without any demand or notice whatsoever, and that in the case  of any extension of time of payment or renewal of any of the Guaranteed Obligations, the  same  will  be  promptly  paid  in  full  when  due  (whether  at  extended  maturity,  by  acceleration or otherwise) in accordance with the terms of such extension or renewal.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            3.02  Obligations  Unconditional.   The  obligations  of  the  Subsidiary  Guarantors  under  Section  3.01  are  irrevocable,  absolute  and  unconditional,  joint  and  several, irrespective of the value, genuineness, validity, regularity or enforceability of the  obligations  of  the  Borrower  under  this  Agreement,  the  other  Debt  Documents  or  any  other agreement or instrument referred to herein or therein, or any substitution, release or  exchange of any other  guarantee of or security  for any of the Guaranteed Obligations,  and,  to  the  fullest  extent  permitted  by  applicable  law,  irrespective  of  any  other  circumstance whatsoever that might otherwise constitute a legal or equitable discharge or  defense  of  a  surety  or  guarantor  (other  than  the  satisfaction  in  full  of  the  Guaranteed  Obligations), it being the intent of this Section  3 that the obligations of the Subsidiary  Guarantors  hereunder  shall  be  absolute  and  unconditional  under  any  and  all  circumstances.   Without  limiting  the  generality  of  the  foregoing,  it  is  agreed  that  the  occurrence of any one or more of the following shall not alter or impair the liability of the  Subsidiary  Guarantors  hereunder,  which  shall  remain  absolute  and  unconditional  as  described above:               (a)   at any time or from time to time, without notice to the Subsidiary        Guarantors,  the  time  for  any  performance  of  or  compliance  with  any  of  the        Guaranteed  Obligations  shall  be  extended,  or  such  performance  or  compliance        shall be waived;               (b)   any  of  the  acts  mentioned  in  any  of  the  provisions  of  this        Agreement,  the  other  Debt  Documents  or  any  other  agreement  or  instrument        referred to herein or therein shall be done or omitted;               (c)   the  maturity  of  any  of  the  Guaranteed  Obligations  shall  be        accelerated,  or  any  of  the  Guaranteed  Obligations  shall  be  modified,        supplemented or amended in any respect, or any right under this Agreement, the        other Debt Documents or any other agreement or instrument referred to herein or        therein  shall  be  waived  or  any  other  guarantee  of  any  of  the  Guaranteed        Obligations or any security therefor shall be released or exchanged in whole or in        part or otherwise dealt with; or               (d)   any Lien or security interest granted to, or in favor of, any Secured        Party as security for any of the Guaranteed Obligations shall fail to be perfected.   The  Subsidiary  Guarantors  hereby  expressly  waive  diligence,  presentment,  demand  of  payment,  protest  and  all  notices  whatsoever  (except  as  expressly  required  by  this  Agreement  or  any other  Debt  Document), and any requirement that  any Secured Party  exhaust  any  right,  power  or  remedy  or  proceed  against  the  Borrower  under  this  Agreement, the other Debt Documents or any other agreement or instrument referred to  herein or therein, or against any other Person under any other guarantee of, or security  for, any of the Guaranteed Obligations.               3.03  Reinstatement.   The  obligations  of  the  Subsidiary  Guarantors  under  this  Section  3  shall  be  automatically  reinstated  if  and  to  the  extent  that  for  any  reason  any  payment  by  or  on  behalf  of  the  Borrower  in  respect  of  the  Guaranteed    522144.000028 21651939.2  25323438.4.BUSINESS 

 

Obligations  is  rescinded  or  must  be  otherwise  restored  by  any  holder  of  any  of  the  Guaranteed  Obligations,  whether  as  a  result  of  any  proceedings  in  bankruptcy  or  reorganization  or  otherwise,  and  the  Subsidiary  Guarantors  jointly  and  severally  agree  that  they  will  indemnify  the  Secured  Parties  on  demand  for  all  reasonable  and  documented out-of-pocket costs and expenses (including reasonable and documented fees  and  other  charges  of  counsel  (but  excluding  the  allocated  costs  of  internal  counsel))  incurred  by  the  Secured  Parties  in  connection  with  such  rescission  or  restoration,  including any such costs and expenses incurred in defending against any claim alleging  that such payment constituted a preference, fraudulent transfer or similar payment under  any bankruptcy, insolvency or similar law.               3.04  Subrogation.   The  Subsidiary  Guarantors  hereby  jointly  and  severally agree that until the payment and satisfaction in full in cash of all Guaranteed  Obligations  (other  than  unasserted  contingent  indemnification  obligations),  and  the  expiration  and  termination  of  all  commitments  to  extend  credit  under  all  Debt  Documents,  they  shall  not  exercise  any  right  or  remedy  arising  by  reason  of  any  performance  by  them  of  their  guarantee  in  Section  3.01,  whether  by  subrogation  or  otherwise,  against  the  Borrower  or  any  other  guarantor  of  any  of  the  Guaranteed  Obligations or any security for any of the Guaranteed Obligations.               3.05  Remedies.  The Subsidiary Guarantors jointly and severally agree  that,  as  between  the  Subsidiary  Guarantors  and  the  Secured  Parties,  a  Guaranteed  Obligation may be declared to be forthwith due and payable as provided in the respective  Debt Document therefor including, in the case of the Revolving Credit Agreement, the  provisions specifying the existence of an event of default (and shall be deemed to have  become automatically due and payable in the circumstances provided therein including,  in the case of the Revolving Credit Agreement, such provisions) for purposes of Section  3.01 notwithstanding any stay, injunction or other prohibition preventing such declaration  (or  such  obligations  from  becoming  automatically  due  and  payable)  as  against  the  Borrower or any Subsidiary Guarantors and that, in the event of such declaration (or such  obligations  being  deemed  to  have  become  automatically  due  and  payable),  such  obligations (whether or not due and payable by the Borrower) shall forthwith become due  and payable by the Subsidiary Guarantors for purposes of Section 3.01.               3.06  Continuing  Guarantee.   The  guarantee  in  this  Section  3  is  a  continuing  guarantee  of  payment  (and  not  of  collection),  and  shall  apply  to  all  Guaranteed Obligations whenever arising.               3.07  Instrument for the Payment of Money.  Each Subsidiary Guarantor  hereby acknowledges that the guarantee in this Section 3 constitutes an instrument for the  payment of money, and consents and agrees that any Secured Party, at its sole option, in  the event of a dispute by such Subsidiary Guarantor in the payment of any moneys due  hereunder,  shall  have  the  right  to  bring  motion  action  under  New  York  CPLR  Section 3213.               3.08  Rights  of  Contribution.   The  Obligors  hereby  agree,  as  between  themselves, that if any Subsidiary Guarantor shall become an Excess Funding Guarantor   522144.000028 21651939.2  25323438.4.BUSINESS 

 

(as  defined  below)  by  reason  of  the  payment  by  such  Subsidiary  Guarantor  of  any  Guaranteed Obligations, then each other Subsidiary Guarantor shall, on demand of such  Excess Funding Guarantor (but subject to the next sentence), pay to such Excess Funding  Guarantor  an amount equal  to such Subsidiary  Guarantor’s  Pro  Rata Share (as  defined  below  and  determined,  for  this  purpose,  without  reference  to  the  properties,  debts  and  liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined below)  in  respect  of  such  Guaranteed  Obligations.   The  payment  obligation  of  a  Subsidiary  Guarantor to any Excess Funding Guarantor under this Section 3.08 shall be subordinate  and  subject  in right  of payment  to  the  prior  payment  in  full of the  obligations  of  such  Subsidiary  Guarantor  under  the  other  provisions  of  this  Section  3  and  such  Excess  Funding  Guarantor  shall  not  exercise  any  right  or  remedy  with  respect  to  such  excess  until payment and satisfaction in full of all of such obligations.               For purposes of this Section 3.08, (i) “Excess Funding Guarantor” means,  in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an amount  in excess of its Pro Rata Share of such Guaranteed Obligations, (ii) “Excess Payment”  means, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding  Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and (iii) “Pro  Rata Share” means, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of  (x)  the  amount  by  which  the  aggregate  fair  saleable  value  of  all  properties  of  such  Subsidiary Guarantor (excluding any shares of stock or other equity interest of any other  Subsidiary  Guarantor)  exceeds  the  amount  of  all  the  debts  and  liabilities  of  such  Subsidiary  Guarantor  (including  contingent,  subordinated,  unmatured  and  unliquidated  liabilities, but excluding the obligations of such Subsidiary Guarantor hereunder and any  obligations  of  any  other  Subsidiary  Guarantor  that  have  been  Guaranteed  by  such  Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable value of all  properties of the Borrower and all of the Subsidiary Guarantors exceeds the amount of all  the debts and liabilities (including contingent, subordinated, unmatured and unliquidated  liabilities, but excluding the obligations of the Obligors hereunder) of the Borrower and  all  of  the  Subsidiary  Guarantors,  determined  (A)  with  respect  to  any  Subsidiary  Guarantor that is a party hereto on the date hereof, as of the date hereof, and (B) with  respect  to  any  other  Subsidiary  Guarantor,  as  of  the  date  such  Subsidiary  Guarantor  becomes a Subsidiary Guarantor hereunder.               3.09  General  Limitation  on  Guarantee  Obligations.   In  any  action  or  proceeding involving any state corporate or other law, or any Federal or state bankruptcy,  insolvency, reorganization or other law affecting the rights of creditors generally, if the  obligations of any Subsidiary Guarantor under Section 3.01 would otherwise, taking into  account  the  provisions  of  Section  3.08,  be  held  or  determined  to  be  void,  invalid  or  unenforceable,  or  subordinated  to  the  claims  of  any  other  creditors,  on  account  of  the  amount  of  its  liability  under  Section  3.01,  then,  notwithstanding  any  other  provision  hereof to the contrary, the amount of such liability shall, without any further action by  such  Subsidiary  Guarantor,  any  Secured  Party  or  any  other  Person,  be  automatically  limited  and  reduced  to  the  highest  amount  that  is  valid  and  enforceable  and  not  subordinated to the claims of other creditors as determined in such action or proceeding.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            3.10  Indemnity by Borrower.  In addition to all such rights of indemnity  and subrogation as the Subsidiary Guarantors may have under applicable law (but subject  to Section 3.04), the Borrower agrees that (a) in the event a payment shall be made by  any  Subsidiary  Guarantor  under  this  Agreement,  the  Borrower  shall  indemnify  such  Subsidiary Guarantor for the full amount of such payment and such Subsidiary Guarantor  shall be subrogated to the rights of the Person to whom such payment shall have been  made  to  the  extent  of  such  payment  and  (b)  in  the  event  any  assets  of  any  Subsidiary  Guarantor shall be sold pursuant to this Agreement or any other Security Document to  satisfy in whole or in part the Guaranteed Obligations, the Borrower shall indemnify such  Subsidiary  Guarantor  in  an  amount  equal  to  the  greater  of  the  book  value  or  the  fair  market value of the assets so sold.               3.11  Keepwell.   Each  Qualified  ECP  Guarantor  hereby  jointly  and  severally absolutely, unconditionally and irrevocably undertakes to provide such funds or  other support as may be needed from time to time by each other Obligor to honor all of  its  obligations  under  the  guarantee  contained  in  this  Section  3  in  respect  of  Swap  Obligations (provided, however that each Qualified ECP Guarantor shall only be liable  under  this  Section  3.11  for  the  maximum  amount  of  such  liability  that  can  be  hereby  incurred without rendering its obligations under this Section 3.11, or otherwise under the  guarantee contained in this Section 3, as it relates to such other Obligor, voidable under  applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any  greater amount).   The  obligations  of  each Qualified  ECP  Guarantor  under this  Section  3.11  shall  remain  in  full  force  and  effect  until  payment  in  full  of  all  the  Secured  Obligations (other than in respect of indemnities and contingent Obligations not then due  and payable).  Each Qualified ECP Guarantor intends that this Section  3.11 constitute,  and  this  Section  3.11  shall  be  deemed  to  constitute,  a  “keepwell,  support,  or  other  agreement”  for  the  benefit  of  each  other  Obligor  for  all  purposes  of  Section  1a(18)(A)(v)(II) of the Commodity Exchange Act.               Section 4.  Collateral.   As  collateral  security  for  the  payment  in  full  when  due  (whether  at  stated  maturity,  by  acceleration  or  otherwise),  of  its  Secured  Obligations,  each  Obligor  hereby  pledges  and  grants  to  the  Collateral  Agent  for  the  benefit  of  the  Secured  Parties  as  hereinafter  provided  a  security  interest  in  all  of  such  Obligor’s right, title and interest in, to and under all of the following property and assets,  in each case whether tangible or intangible, wherever located, and whether now owned  by such Obligor or hereafter acquired and whether now existing or hereafter coming into  existence  (all  of  the  property  described  in  this  Section  4  being  collectively  referred  to  herein as “Collateral”):               (a)   all  Accounts,  all  Chattel  Paper,  all  Deposit  Accounts,  all        Documents,  all  General  Intangibles  (including  all  Intellectual  Property),  all        Instruments  (including  all  Promissory  Notes),  all  Portfolio  Investments,  all        Pledged Debt, all Pledged Equity  Interests, all Investment Property not covered        by the foregoing (including all Securities, all Securities Accounts and all Security        Entitlements  with  respect  thereto  and  Financial  Assets  carried  therein,  all        Commodity Accounts and Commodity Contracts, and, for the avoidance of doubt,    522144.000028 21651939.2  25323438.4.BUSINESS 

 

      all  of  such  Obligor’s  interest  in  the  limited  liability  company  or  membership        interests of each Subsidiary owned by such Obligor, all of such Obligor’s right to        participate in the management of the business and affairs of each such issuer or        otherwise  control  each  such  Subsidiary,  and  all  of  such  Obligor’s  rights  as  a        member of each such Subsidiary), all letters of credit and Letter-of-Credit Rights,        all  Money  and  all  Goods  (including  Inventory  and  Equipment),  and  all        Commercial Tort Claims;               (b)   to the extent related to any Collateral, all Supporting Obligations;               (c)   to the extent related to any of the foregoing Collateral, all books,        correspondence,  credit  files,  records,  invoices  and  other  papers  (including  all        tapes, cards, computer runs and other papers and documents in the possession or        under  the  control  of  such  Obligor  or  any  computer  bureau  or  service  company        from time to time acting for such Obligor); and               (d)   all Proceeds of any of the foregoing Collateral.   IT BEING UNDERSTOOD, HOWEVER, that (A) in no event shall the security interest  granted  under  this  Section  4  attach  to  (1)  any  contract,  property  rights,  obligation,  instrument or agreement to which an Obligor is a party (or to any of its rights or interests  thereunder) if the grant of such security interest would constitute or result in either (i) the  abandonment,  invalidation  or  unenforceability  of  any  right,  title  or  interest  of  such  Obligor therein or (ii) a breach or termination pursuant to the terms of, or a default under,  any such contract, property rights, obligation, instrument or agreement (other than to the  extent that any such terms would be rendered ineffective by Section 9-406, 9-407, 9-408  or 9-409 of the Uniform Commercial Code as in effect in the relevant jurisdiction), or (2)  any  Excluded  Assets,  and  notwithstanding  anything  to  the  contrary  provided  in  this  Agreement, the term “Collateral” shall not include, and the Obligors shall not be deemed  to have granted a security interest in, any Excluded Assets and (B) the Obligors, may by  notice  to  the  Collateral  Agent,  exclude  from  the  grant  of  a  security  interest  provided  above  in  this  Section  4,  any  Special  Equity  Interest  designated  by  the  Borrower  in  reasonable  detail  to  the  Collateral  Agent  in  such  notice  (it  being  understood  that  the  Borrower  may  at  any  later  time  rescind  any  such  designation  by  similar  notice  to  the  Collateral Agent).               Each Obligor hereby authorizes the Collateral Agent at any time and from  time  to  time  (and  reaffirms  its  authorization  given  prior  to  the  Restatement  Effective  Date)  to  file  or  record  financing  statements,  amendments  thereto  and  other  filing  or  recording  documents  or  instruments  with  respect  to  the  Collateral  in  such  form  and  in  such  offices  as  the  Collateral  Agent  determines,  in its sole  discretion,  are necessary or  advisable to perfect the security interests of the Collateral Agent under this Agreement.   Each  Obligor  also  authorizes  the  Collateral  Agent  to  use  the  collateral  description  “all  personal property of the debtor” or “all assets of the debtor,” in each case “whether now  owned or hereafter acquired or arising” or words of similar meaning in such financing  statements    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            Section 5.  Certain  Agreements  Among  Secured  Parties.   Neither  the  Borrower nor any of its Subsidiaries shall have any rights under this Section 5 and no  Secured Party shall have any obligations to the Borrower or any of its Subsidiaries under  this Section 5.               5.01  Priorities; Additional Collateral.               (a)   Pari  Passu  Status  of  Obligations.   Each  Secured  Party  by        acceptance of the benefits of this Agreement and the other Security Documents        agrees that their respective interests in the Security Documents and the Collateral        shall rank pari passu and that the Secured Obligations shall be equally and ratably        secured by the Security Documents subject to the terms hereof and the priority of        payment established in Section 8.06.               (b)   Sharing  of  Guaranties  and  Liens.   Each  Secured  Party  by        acceptance of the benefits of this Agreement and the other Security Documents        agrees  that  (i)  such  Secured  Party  will  not  accept  from  any  Subsidiary  of  the        Borrower  any  guarantee  of  any  of  the  Guaranteed  Obligations  unless  such        guarantor  simultaneously  guarantees  the  payment  of  all  of  the  Guaranteed        Obligations owed to all Secured Parties, and (ii) such Secured Party will not hold,        take, accept or obtain any Lien upon any assets of any Obligor or any Subsidiary        of  the  Borrower  to  secure  the  payment  and  performance  of  the  Secured        Obligations except and to the extent that such Lien is in favor of the Collateral        Agent  pursuant  to  this  Agreement  or  another  Security  Document  to  which  the        Collateral Agent is a party for the benefit of all of the Secured Parties as provided        herein.               Anything in this Section 5, or any other provision of this Agreement, to  the  contrary  notwithstanding,  this  Agreement  shall  be  inapplicable  to  any  debtor-in- possession financing that may be provided by any Secured Party to the Borrower or any  of its Subsidiaries in any Federal or state bankruptcy or insolvency proceeding, and no  consent  or  approval of  any other  Secured  Party  shall  be required  as  a  condition  to  the  provision by any Secured Party of any such financing, and no other Secured Party shall  be  entitled  to  share  in  any  Lien  upon  any  Collateral  granted  to  any  Secured  Party  to  secure repayment of such debtor-in-possession financing; provided, that no Secured Party  shall be barred from objecting to any such financing on the basis of adequate protection  or any other grounds.               5.02  Turnover  of  Collateral.   If  a  Secured  Party  acquires  custody,  control or possession of any Collateral or the Proceeds therefrom, other than pursuant to  the terms of this Agreement or on account of any payment that is not expressly prohibited  hereby,  such  Secured  Party  shall  promptly  (but  in  any  event  within  five  (5)  Business  Days)  cause  such  Collateral  or  Proceeds  to  be  Delivered  in  accordance  with  the  provisions of this Agreement.  Until such time as such Secured Party shall have complied  with the provisions of the immediately preceding sentence, such Secured Party shall be  deemed  to  hold  such  Collateral  and  Proceeds  in  trust  for  the  benefit  of  the  Collateral  Agent.   522144.000028 21651939.2  25323438.4.BUSINESS 

 

            5.03  Cooperation of Secured Parties.  Each Secured Party will cooperate  with the Collateral Agent and with each other Secured Party in the enforcement of the  Liens  upon  the  Collateral  and  otherwise  in  order  to  accomplish  the  purposes  of  this  Agreement and the Security Documents.               5.04  Limitation upon Certain  Independent Actions by Secured Parties.   No Secured Party shall have any right to institute any action or proceeding to enforce any  term or provision of the Security Documents or to enforce any of its rights in respect of  the Collateral or to exercise any other remedy pursuant to the Security Documents or at  law or in equity, for the purpose of realizing on the Collateral, or by reason of jeopardy of  any  Collateral,  or  for  the  execution  of  any  trust  or  power  hereunder  (collectively,  the  “Specified  Actions”),  unless  the  Required  Secured  Parties  have  delivered  written  instructions to the Collateral Agent and the Collateral Agent shall have failed to act in  accordance with such instructions within thirty (30) days thereafter.  In such case but not  otherwise, the Required Secured Parties may appoint one Person to act on behalf of the  Secured Parties solely to take any of the Specified Actions (the “Appointed Party”), and,  upon the acceptance of its appointment as Appointed Party, the Appointed Party shall be  entitled to commence proceedings in any court of competent jurisdiction or to take any  other  Specified  Actions  as  the  Collateral  Agent  might  have  taken  pursuant  to  this  Agreement or the Security Documents (in accordance with the directions of the Required  Secured  Parties).   All  parties  hereto  hereby  acknowledge  and  agree  that should  the  Appointed  Party  act  in  accordance  with  this  provision,  the  Appointed  Party  shall  be  delegated  the  authority  to  take  such  Specified  Actions  (without  any  further  action  necessary  on  the  part  of  any  Person),  and  that  such  Appointed  Party  will  have  all  the  rights,  remedies,  benefits  and  powers  as  are  granted  to  the  Collateral  Agent  pursuant  hereto or pursuant to any Security Documents with respect to such Specified Actions, in  each  case,  to  the  extent  permitted  by  applicable  law;  provided,  that,  notwithstanding  anything  to  the  contrary  herein  or  in  any  other  Loan  Document,  in  no  event  shall  the  Collateral Agent be liable to any Person or be responsible for any loss, claim, damage,  liability and/or expense arising out of, related to, in connection with, or as a result of any  actions taken by such Appointed Party and in no event shall this provision limit any of  the rights, powers, privileges, remedies or benefits of the Collateral Agent under the Loan  Documents in any respect.               5.05  No  Challenges.   In  no  event  shall  any  Secured  Party  take  any  action to challenge, contest or dispute the validity,  extent, enforceability, or priority of  the  Collateral  Agent’s  Liens  hereunder  or  under  any  other  Security  Document  with  respect to any of the Collateral, or that would have the effect of invalidating  any such  Lien  or  support  any  Person  who  takes  any  such  action.   Each  of  the  Secured  Parties  agrees  that  it  will  not  take  any  action  to  challenge,  contest  or  dispute  the  validity,  enforceability or secured status of any other Secured Party’s claims against any Obligor  (other than any such claim resulting from a breach of this Agreement by a Secured Party,  or any challenge, contest or dispute alleging arithmetical error in the determination of a  claim),  or  that  would  have  the  effect  of  invalidating  any  such  claim,  or  support  any  Person who takes any such action.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            5.06  Rights  of  Secured  Parties  as  to  Secured  Obligations.   Notwithstanding any other provision of this Agreement, the right of each Secured Party  to  receive  payment  of  the  Secured  Obligations  held  by  such  Secured  Party  when  due  (whether at the stated maturity thereof, by acceleration or otherwise), as expressed in any  instrument evidencing or agreement governing such Secured Obligations, or to institute  suit for the enforcement of such payment on or after such due date, and the obligation of  the Obligors to pay their respective Secured Obligations when due, shall not be impaired  or affected without the consent of such Secured Party as required in accordance with the  Debt Documents to which such Secured Party is a party or its Secured Obligations are  bound;  provided  that,  notwithstanding  the  foregoing,  each  Secured  Party  agrees  that  it  will not attempt to exercise remedies with respect to any Collateral except as provided in  this Agreement or, in the case of the Revolving Administrative Agent, law.               5.07  General  Application.   This  Section  5  shall  be  applicable  both  before and after the institution of any Insolvency Proceeding involving Borrowers or any  other Obligor, including without limitation, the filing of any petition by or against any  Borrower or any other Obligor under the Bankruptcy Code, or any other Insolvency Law,  and all converted or succeeding cases in respect thereof, and all references herein to any  Borrower or any other Obligor shall be deemed to apply to the trustee for such Borrower  or such other Obligor and such Borrower or such other Obligor as debtor-in-possession.  The relative rights of the Secured Parties in or to any distributions from or in respect of  any  Collateral  or  proceeds  of  Collateral  shall  continue  after  the  institution  of  any  Insolvency Proceeding involving any Borrower or any other Obligor on the same basis as  prior to the date of such institution. This Section 5 is a “subordination agreement” under  section  510(a)  of  the  Bankruptcy  Code  and  shall  be  enforceable  in  any  Insolvency  Proceeding.   Notwithstanding  anything  to  the  contrary  contained  herein,  the  Secured  Parties  agree  that  they  will  not  propose,  support  or  vote  in  favor  of  any  plan  of  reorganization or similar dispositive restructuring plan in connection with an Insolvency  Proceeding unless more than two-thirds in amount of allowed claims held by the Secured  Parties holding Revolving Credit Agreement Obligations agree to vote for any such plan.               Section 6.  Designation  of  Designated  Indebtedness;  Recordkeeping,  Etc.               6.01  Designation of Other Indebtedness.  The Borrower may at any time  designate  as  “Designated  Indebtedness”  hereunder  any  other  Indebtedness  intended  by  the Borrower to be secured by the Collateral, provided that such Designated Indebtedness  satisfies  at  the time  of  incurrence thereof the terms  and  conditions  of the definition  of  “Secured  Longer-Term  Indebtedness”  in  the  Revolving  Credit  Agreement,  Section  6.01(b)(ii) of the Revolving Credit Agreement and the other provisions of the Revolving  Credit Agreement, such designation to be effected by delivery to the Collateral Agent of  a  notice  substantially  in  the  form  of  Exhibit  A  or  in  such  other  form  approved  by  the  Collateral  Agent  (a  “Notice  of  Designation”),  which  notice  shall  identify  such  Indebtedness, provide that such Indebtedness be designated as “Designated Indebtedness”  hereunder  and  be  accompanied  by  a  certificate  of  a  Financial  Officer  of  the  Borrower    522144.000028 21651939.2  25323438.4.BUSINESS 

 

delivered  to  the  Revolving  Administrative  Agent,  each  Financing  Agent  (if  any),  each  Designated Indebtedness Holder party hereto and the Collateral Agent:               (a)   certifying  that  such  Indebtedness  satisfies  the  conditions  of  this        Section 6.01 and the Revolving Credit Agreement, and that after giving effect to        such designation and the incurrence of such Designated Indebtedness, no Default,        Event of Default or Trigger Event shall have occurred and be continuing and that        both immediately before and immediately after giving effect to such designation        and  the  incurrence  of  such  Designated  Indebtedness,  the  Borrower  is  in        compliance  with  Sections  6.01(b)  and  6.07(a),  (b),  (c),  (e)  and  (f)  of  the        Revolving Credit Agreement;               (b)   attaching  (and  certifying  as  true  and  complete)  copies  of  the        Designated Indebtedness Documents for such Designated Indebtedness (including        all schedules and exhibits, and all amendments or supplements, thereto); and               (c)    identifying  the  Financing  Agent,  if  any,  for  such  Designated        Indebtedness  (or,  if  there  is  no  Financing  Agent  for  such  Designated        Indebtedness, identifying each holder of such Designated Indebtedness).               No such designation shall be effective unless and until the Borrower and  such  Financing  Agent  (or,  if  there  is  no  Financing  Agent,  each  such  Designated  Indebtedness Holder) shall have executed and delivered to the Collateral Agent a joinder  agreement  in  form  and  substance  satisfactory  to  the  Collateral  Agent,  appropriately  completed and duly executed and delivered by each party thereto, pursuant to which such  Financing Agent (or, if there is no Financing Agent, each such Designated Indebtedness  Holder)  shall  have  become  a  party  hereto  and  assumed  the  obligations  of  a  Financing  Agent (or Designated Indebtedness Holder) hereunder, as applicable.               6.02  Recordkeeping.   The  Collateral  Agent  will  maintain  books  and  records  necessary  to  enable  it  to  determine  at  any  time  all  transactions  under  this  Agreement which have occurred on or prior to such time.  Each Obligor agrees that such  books and records maintained in good faith by the Collateral Agent shall be conclusive as  to the matters contained therein absent manifest error.  Each Obligor shall have the right  to inspect such books and records at any time upon reasonable prior notice.  In the event  of any conflict between the books and records maintained by any Secured Party and the  books  and  records  of  the  Collateral  Agent  in  respect  of  such  matters,  the  books  and  records of the Collateral Agent shall control in the absence of manifest error.               Section 7.  Covenants of the Obligors.  In furtherance of the grant of  the security interest pursuant to Section 4, each Obligor hereby agrees with the Collateral  Agent for the benefit of the Secured Parties as follows:               7.01  Delivery and Other Perfection.                     (a)   With respect to any Portfolio Investment or other Collateral  as to which physical possession by the Collateral Agent, the Custodian or the Document    522144.000028 21651939.2  25323438.4.BUSINESS 

 

Custodian is required in order for such Portfolio Investment or Collateral to have been  “Delivered”, such Obligor shall take such actions as shall be necessary to effect Delivery  thereof  on  or  prior  to  the  Original  Effective  Date  and  within  ten  (10)  days  after  the  acquisition  thereof  by  an  Obligor  with  respect  to  any  such  Portfolio  Investment  or  Collateral  acquired  after  the  Effective  Date.   Notwithstanding  anything  to  the  contrary  contained herein, if any instrument, promissory note, agreement, document or certificate  held by the Custodian or the Document Custodian is destroyed or lost not as a result of  any action of the Borrower, then: (i) in the case of any Investment in Indebtedness other  than  a  Noteless  Assigned  Loan,  if  such  destroyed  or  lost  document  is  an  original  promissory note registered in the name of an Obligor, such original promissory note shall  constitute an “Undelivered Note” and the Borrower shall have up to twenty (20) Business  Days from  the  date  when  the  Borrower  has  knowledge  of  such  loss  or  destruction  to  deliver  to  the  Custodian  or  the  Document  Custodian,  as  applicable,  a  replacement  promissory  note  and  comply  with  the  requirements  of  paragraph  (1)(c)(x)  of  Schedule  1.01(d)  to  the  Revolving  Credit  Agreement;  provided,  that  during  such  twenty  (20)  Business Day period the limitations under paragraph (1)(a)(i) and (ii) of Schedule 1.01(d)  to  the  Revolving  Credit  Agreement  shall  apply;  and  (ii)  in  the  case  of  any  Noteless  Assigned  Loans,  if  such  destroyed  instrument  or  document  is  an  original  transfer  document  or  instrument  relating  to  such  Noteless  Assigned  Loan,  the  Borrower  shall  have up to twenty (20) Business Days from the date when the Borrower has knowledge  of  such  loss  or  destruction  to  deliver  to  the  Document  Custodian  a  replacement  instrument  or  document  and  comply  with  the  requirements  of  paragraph  (1)(c)(x)  of  Schedule  1.01(d)  to  the  Revolving  Credit  Agreement.   As  to  all  other  Collateral,  such  Obligor  shall  cause  the  same  to  be  Delivered  within  three (3)  Business  Days  of  the  acquisition  thereof,  provided  that  Delivery  shall  not  be  required  with  respect  to  (1)  accounts of the type described in clauses (A) – (E) of Section 7.06 to the extent set forth  therein,  and  (2)  immaterial  assets  so  long  as  (x)  such  assets  are  not  included  in  the  Borrowing  Base,  (y)  the  Collateral  Agent  has  a  perfected  first  priority  lien  (subject  to  Eligible Liens) on such assets and no other Person exercises Control over such assets and  such  assets  have  not  been  otherwise  “Delivered”  to  any  other  Person,  and  (z) the  aggregate value of all such assets collectively described in this Section 7.01(a)(2) does  not at any time exceed $75,000.  In addition, and without limiting the generality of the  foregoing,  each  Obligor  shall  promptly  from  time  to  time  give,  execute,  deliver,  file,  record, authorize or obtain all such financing statements, continuation statements, notices,  instruments, documents, account control agreements or any other agreements or consents  or other papers as may be necessary or as may be reasonably requested by the Collateral  Agent  to  create,  preserve,  perfect,  maintain  the  perfection  of  or  validate  the  security  interest granted pursuant hereto or to enable the Collateral Agent to exercise and enforce  its  rights  hereunder  with  respect  to  such  security  interest,  and  without  limiting  the  foregoing, shall:               (i)   keep full and accurate books and records relating to the Collateral        in all material respects and (to the extent reasonably necessary to create, perfect or        maintain  the  priority  of  any  liens  granted  to  the  Collateral  Agent  in  such        Collateral) stamp or otherwise mark such books and records in such a manner as        the  Collateral  Agent  may  reasonably  require  in  order  to  reflect  the  security        interests granted by this Agreement);    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            (ii)  permit  representatives  of  the  Collateral  Agent,  upon  reasonable        notice, at any time during normal business hours, to inspect and make abstracts        from its books and records pertaining to the Collateral, and permit representatives        of the Collateral Agent to be present at such Obligor’s place of business to receive        copies of communications and remittances relating to the Collateral, and forward        copies of any notices or communications received by such Obligor with respect to        the Collateral, all in such manner as the Collateral Agent may reasonably require;               (iii) take all actions necessary to ensure the recordation of appropriate        evidence  of  the  liens  and  security  interest  granted  hereunder  in  the  Intellectual        Property with any Intellectual Property registry in which said Intellectual Property        is  registered  or  in  which  an  application  for  registration  is  pending  including,        without limitation, the United States Patent and Trademark Office and the United        States Copyright Office; and               (iv)  at the Collateral Agent’s request, appear in and defend any action        or  proceeding  that  may  affect  such  Obligor’s  title  to  or  the  Collateral  Agent’s        security  interest  in  all  or  any  part  of  the  Intellectual  Property  included  in  the        Collateral.                     (b)   Unless  released  from  the  Collateral  pursuant  to  Section 10.03(e)  or  (f),  once  any  Collateral  has  been  Delivered,  the  Obligors  shall  not  take or permit any action that would result in such Collateral no longer being Delivered  hereunder  and  shall  promptly  from  time  to  time  give,  execute,  deliver,  file,  record,  authorize  or  obtain  all  such  financing  statements,  continuation  statements,  notices,  instruments, documents, account control agreements or any other agreements or consents  or other papers as may be necessary or desirable in the judgment of the Collateral Agent  to continue the Delivered status of any Collateral.  Without limiting the generality of the  foregoing,  the  Obligors  shall  not  terminate  any  arrangement  with  the  Custodian  or  the  Document  Custodian  unless  and  until  a  successor  Custodian  or  successor  Document  Custodian, as applicable, in each case reasonably satisfactory to the Collateral Agent has  been appointed and has executed all documentation necessary to continue the Delivered  status of the Collateral, which documentation shall be in form and substance satisfactory  to the Collateral Agent.               7.02  Name; Jurisdiction of Organization, Etc.  Each Obligor agrees that  (a) without providing at least twenty (20) days prior written notice to the Collateral Agent  (or such shorter period as may be approved by the Collateral Agent in its sole discretion),  such Obligor will not change its name, its place of business or, if more than one, chief  executive office, or its mailing address or organizational identification number if it has  one, (b) if such Obligor does not have an organizational identification number and later  obtains  one,  such  Obligor  will  forthwith  notify  the  Collateral  Agent  of  such  organizational  identification  number,  and  (c)  such  Obligor  will  not  change  its  type  of  organization,  jurisdiction  of  organization or other  legal  structure unless  such change is  specifically  permitted  hereby  or  by  the  Revolving  Credit  Agreement  and  such  Obligor  provides the Collateral Agent with at least twenty (20) days prior written notice of such    522144.000028 21651939.2  25323438.4.BUSINESS 

 

permitted change (or such shorter period as may be approved by the Collateral Agent in  its sole discretion).               7.03  Other  Liens,  Financing  Statements  or  Control.   Except  as  otherwise  permitted  under  Section  6.02  of  the  Revolving  Credit  Agreement  and  the  applicable provisions of each other Debt Document, the Obligors shall not (a) create or  suffer to exist any Lien upon or with respect to any Collateral, (b) file or suffer to be on  file, or authorize or permit to be filed or to be on file, in any jurisdiction, any financing  statement or like instrument with respect to any of the Collateral in which the Collateral  Agent is not named as the sole Collateral Agent for the benefit of the Secured Parties, or  (c) cause or permit any Person other than the Collateral Agent to have NYUCC Control  of  any  Deposit  Account,  Electronic  Chattel  Paper,  Investment  Property  or  Letter-of- Credit Right constituting part of the Collateral.               7.04  Transfer  of  Collateral.   Except  as  otherwise  permitted  under  Section 6.03 of the Revolving Credit Agreement and the applicable provisions of each  other  Debt  Document,  the  Obligors  shall  not  sell,  transfer,  assign,  license  or  grant  an  option or otherwise dispose of any Collateral.               7.05  Additional  Subsidiary  Guarantors.   As  contemplated  by  Section  5.08  of  the  Revolving  Credit  Agreement,  new  Subsidiaries  (other  than  an  SBIC  Subsidiary) of the Borrower formed or acquired by the Borrower after the date hereof,  existing Subsidiaries of the Borrower that after the date hereof cease to constitute SBIC  Subsidiaries under the Revolving Credit Agreement, and any other Person that otherwise  becomes  a  Subsidiary  (other  than  an  SBIC  Subsidiary)  within  the  meaning  of  the  definition  thereof,  are  required  to  become  a  “Subsidiary  Guarantor”  under  this  Agreement, by executing and delivering to the Collateral Agent a Guarantee Assumption  Agreement  in  the  form  of  Exhibit  B  hereto.   Accordingly,  upon  the  execution  and  delivery  of  any  such  Guarantee  Assumption  Agreement  by  any  such  Subsidiary,  such  Subsidiary  shall  automatically  and  immediately,  and  without  any  further  action  on  the  part of any Person, become a “Subsidiary Guarantor” and an “Obligor” for all purposes  of this Agreement, and Annexes 2.05, 2.06, 2.07, 2.08, 2.09, 2.10 and 2.11 hereto shall be  deemed  to  be  supplemented  in  the  manner  specified  in  such  Guarantee  Assumption  Agreement.  In addition, upon execution and delivery of any such Guarantee Assumption  Agreement, the new Subsidiary Guarantor makes the representations and warranties set  forth in Section 2 as of the date of such Guarantee Assumption Agreement and shall be  permitted to update the Annexes with respect to such Subsidiary.               7.06  Control  Agreements.   No  Obligor  shall  open  or  maintain  any  account with any bank, securities intermediary or commodities intermediary (other than  (A) any Agency Account (as defined in the Revolving Credit Agreement), (B) any such  accounts  which  hold  solely  money  or  financial  assets  of  an  SBIC  Subsidiary,  (C)  any  payroll account so long as such payroll account is coded as such, (D) withholding tax and  fiduciary  accounts  or  any  trust  account  maintained  solely  on  behalf  of  a  Portfolio  Investment,  and  (E)  any  account  in  which  the  aggregate  value  of  deposits  therein,  together with all other such accounts under this clause (E), does not at any time exceed    522144.000028 21651939.2  25323438.4.BUSINESS 

 

$75,000, provided that in the case of each of the foregoing clauses (A) through (E), no  other Person (other than the depository institution at which such account is maintained)  shall  have  NYUCC  Control  over  such  account  and  such  account  shall  not  have  been  otherwise  “Delivered”  to  any  other  Person)  unless  such  Obligor  has  notified  the  Collateral Agent of such account and the Collateral Agent has NYUCC Control over such  account pursuant to a control agreement in form and substance reasonably satisfactory to  the Collateral Agent.               7.07  Revolving  Credit  Agreement.   Each  Subsidiary  Guarantor  agrees  to  perform,  comply  with  and  be  bound  by  the  covenants  of  the  Revolving  Credit  Agreement  (which provisions  are incorporated  herein by  reference), applicable  to such  Subsidiary Guarantor as if each Subsidiary Guarantor were a signatory to the Revolving  Credit Agreement.               7.08  Pledged Equity Interests.                 (a)   In  the  event  any  Obligor  acquires  rights  in  any  Pledged  Equity        Interest after the date hereof or any Excluded Equity Interest held by any Obligor        becomes  a  Pledged  Equity  Interest  after  the  date  hereof  because  it  ceases  to        constitute an Excluded Equity Interest, such Obligor shall promptly deliver to the        Collateral Agent a completed Pledge Supplement, together with all supplements        to  Annexes  thereto,  reflecting  such  new  Pledged  Equity  Interests.        Notwithstanding  the  foregoing,  it  is  understood  and  agreed  that  the  security        interest  of  the  Collateral  Agent  shall  attach  to  all  Pledged  Equity  Interests        immediately  upon  any  Obligor’s  acquisition  of  rights  therein  and  shall  not  be        affected by the failure of any Obligor to deliver a supplement to Annex 2.07 as        required hereby;                (b)   Without  the  prior  written  consent  of  the  Collateral  Agent,  no        Obligor shall vote to enable or take any other action to: (a) amend or terminate        any  partnership  agreement,  limited  liability  company  agreement,  certificate  of        incorporation,  by-laws  or  other  organizational  documents  in  any  way  that        materially and adversely changes the rights of such Obligor with respect to any        Pledged Equity Interest or that adversely affects the validity, perfection or priority        of the Collateral Agent’s security interest or the ability of the Collateral Agent to        exercise  its  rights  and  remedies  under  this  Agreement  with  respect  to  such        Pledged Equity  Interest, (b) other than as permitted under the Revolving Credit        Agreement  and  each  other  Debt  Document,  permit  any  issuer  of  any  Pledged        Equity Interest to dispose of all or a material portion of their assets, or (c) cause        any issuer of any Pledged Equity Interests which are interests in a partnership or        limited  liability  company  and  which  are  not  securities  (for  purposes  of  the        NYUCC) on the date hereof or the date acquired (if later) to elect or otherwise        take any action to cause such Pledged Equity Interests to be treated as securities        for  purposes  of  the  NYUCC;  except  if  such  Obligor  shall  promptly  notify  the        Collateral Agent in writing of any such election or action and, in such event, shall        take  all  steps  necessary  or  advisable  in  the  Collateral  Agent’s  reasonable        discretion to establish the Collateral Agent’s NYUCC Control thereof;   522144.000028 21651939.2  25323438.4.BUSINESS 

 

            (c)   Each  Obligor  consents  to  the  grant  by  each  other  Obligor  of  a        security  interest  in  all  Pledged  Equity  Interests  to  the  Collateral  Agent  and,        without  limiting  the  foregoing,  consents  to  the  transfer  of  any  Pledged  Equity        Interest  to  the  Collateral  Agent  or  its  nominee  following  the  occurrence  and        during  the  continuation  of  an  Event  of  Default  and  to  the  substitution  of  the        Collateral Agent or its nominee as a partner in any partnership or as a member in        any limited liability company with all the rights and powers related thereto; and               (d)   All Pledged Interests that are Equity Interests of Subsidiaries shall        at all times be Delivered.               7.09  Voting Rights, Dividends, Etc. in Respect of Pledged Interests.                 (a)   So  long  as  no  Event  of  Default  or  Trigger  Event  shall  have        occurred and be continuing:               (i)   each Obligor may exercise any and all voting and other consensual        rights pertaining to any Pledged Interests for any purpose not inconsistent with the        terms of this Agreement or any Debt Document; provided, however, that (A) each        Obligor will give the Collateral Agent at least five (5) Business Days’ notice of        the  manner  in  which  it  intends  to  exercise,  or  the  reasons  for  refraining  from        exercising, any such right that could reasonably be expected to adversely affect in        any material respect the value, liquidity or marketability of any Collateral or the        creation, perfection and priority of the Collateral Agent’s Lien; and (B) none of        the Obligors will exercise or refrain from exercising any such right, as the case        may  be,  if  the  Collateral  Agent  gives  an  Obligor  notice  that,  in  the  Collateral        Agent’s  judgment,  such  action  (or  inaction)  could  reasonably  be  expected  to        adversely affect in any material respect the value, liquidity or marketability of any        Collateral or the creation, perfection and priority of the Collateral Agent’s Lien or        the ability of the Collateral Agent to exercise its rights and remedies under this        Agreement with respect to such Pledged Interest;                (ii)  each of the Obligors may receive and retain any and all dividends,        interest or other distributions paid in respect of the Pledged Interests to the extent        permitted by the Debt Documents; provided, however, that (except with respect to        any Pledged Interest that is also a Portfolio Investment) any and all (A) dividends        and interest paid or payable other than in cash in respect of, and Instruments and        other  property  received,  receivable  or  otherwise  distributed  in  respect  of  or  in        exchange for, any Pledged Interests, (B) dividends and other distributions paid or        payable in cash in respect of any Pledged Interests in connection with a partial or        total liquidation or dissolution or in connection with a reduction of capital, capital        surplus or paid-in surplus, and (C) cash paid, payable or otherwise distributed in        redemption  of,  or  in  exchange  for,  any  Pledged  Interests,  together  with  any        dividend,  interest  or  other  distribution  or  payment  which  at  the  time  of  such        payment was not permitted by the Debt Documents, shall constitute Collateral, be        Delivered  hereunder  and  remain  subject  to  the  Lien  of  the  Collateral  Agent  to        hold  as  Pledged  Interests,  and  shall,  if  received  by  any  of  the  Obligors,  be    522144.000028 21651939.2  25323438.4.BUSINESS 

 

      received in trust for the benefit of the Collateral Agent, shall be segregated from        the other property or funds of the Obligors, and shall be forthwith delivered to the        Collateral  Agent  in  the  exact  form  received  with  any  necessary  indorsement        and/or  appropriate  stock  powers  duly  executed  in  blank,  to  be  held  by  the        Collateral  Agent  as  Pledged  Interests  and  as  further  collateral  security  for  the        Secured  Obligations;  provided  that  the  Obligors  shall  be  permitted  to  take  any        action with respect to cash described in clauses (B) and (C) not prohibited by the        other Debt Documents; and               (iii) the  Collateral  Agent  will  execute  and  deliver  (or  cause  to  be        executed and delivered) to any Obligor all such proxies and other instruments as        such Obligor may reasonably request for the purpose of enabling such Obligor to        exercise  the  voting  and  other  rights  which  it  is  entitled  to  exercise  pursuant  to        Section  7.09(a)(i)  hereof  and  to  receive  the  dividends,  interest  and/or  other        distributions  which  it  is  authorized  to  receive  and  retain  pursuant  to  Section        7.09(a)(ii) hereof.               (b)   Automatically upon the occurrence and during the continuance of        an Event of Default or a Trigger Event:               (i)   all  rights  of  each  Obligor  to  exercise  the  voting  and  other        consensual  rights  which  it  would  otherwise  be  entitled  to  exercise  pursuant  to        Section 7.09(a)(i) hereof, and to receive the dividends, distributions, interest and        other  payments  that  it  would  otherwise  be  authorized  to  receive  and  retain        pursuant  to  Section  7.09(a)(ii)  hereof,  shall  cease,  and  all  such  rights  shall        thereupon become vested in the Collateral Agent, which shall thereupon have the        sole right to exercise such voting and other consensual rights and to receive and        hold as Pledged Interests such dividends, distributions and interest payments;               (ii)  the  Collateral  Agent  is  authorized  to  notify  each  debtor  with        respect  to  the  Pledged  Debt  or  other  Portfolio  Investments  to  make  payment        directly  to  the  Collateral  Agent  (or  its  designee)  and  may  collect  any  and  all        moneys due or to become due to any Obligor in respect of the Pledged Debt or        other Portfolio Investments, and each of the Obligors hereby authorizes each such        debtor  to  make  such  payment  directly  to  the  Collateral  Agent  (or  its  designee)        without any duty of inquiry;               (iii) without  limiting  the  generality  of  the  foregoing,  the  Collateral        Agent  may  at  its  option  exercise  any  and  all  rights  of  conversion,  exchange,        subscription  or  any  other  rights,  privileges  or  options  pertaining  to  any  of  the        Pledged  Interests  or  any  Portfolio  Investments  as  if  it  were  the  absolute  owner        thereof,  including  the  right  to  exchange,  in  its  discretion,  any  and  all  of  the        Pledged  Interests  or  any  Portfolio  Investments  upon  the  merger,  consolidation,        reorganization, recapitalization or other adjustment of any issuer thereof, or upon        the exercise by any such issuer of any right, privilege or option pertaining to any        Pledged  Interests  or any Portfolio  Investments,  and,  in connection  therewith, to        deposit  and  deliver  any  and  all  of  the  Pledged  Interests  or  any  Portfolio    522144.000028 21651939.2  25323438.4.BUSINESS 

 

      Investments  with  any  committee,  depository,  transfer  agent,  registrar  or  other        designated agent upon such terms and conditions as it may determine; and               (iv)  all  dividends,  distributions,  interest  and  other  payments  that  are        received by any of the Obligors contrary to the provisions of Section 7.09(b)(i)        hereof shall be received in trust for the benefit of the Collateral Agent, shall be        segregated from other funds of the Obligors, and shall be forthwith paid over to        the  Collateral  Agent  as  Pledged  Interests  in  the  exact  form  received  with  any        necessary indorsement and/or appropriate stock powers duly executed in blank, to        be  held  by  the  Collateral  Agent  as  Pledged  Interests  and  as  further  collateral        security for the Secured Obligations.               7.10  Commercial Tort Claims.  Each Obligor agrees that with respect to  any Commercial Tort Claim in excess of $100,000 individually hereafter arising it shall  deliver  to  the  Collateral  Agent  a  completed  Pledge  Supplement,  together  with  all  supplements to Annexes thereto, identifying such new Commercial Tort Claims.               7.11  Intellectual Property.  Each Obligor hereby covenants and agrees  as follows:               (a)   it shall  not do  any act  or  omit  to do  any act  whereby  any  of the        Intellectual  Property  which  such  Obligor  determines  in  its  reasonable  business        judgment  is  material  to  the  business  of  such  Obligor  may  lapse,  or  become        abandoned, dedicated to the public, or unenforceable, or which would adversely        affect the validity, grant, or enforceability of the security interest granted therein;               (b)   it  shall  not,  with  respect  to  any  Trademarks  which  such  Obligor        determines  in  its  reasonable  business  judgment  are  material  to  the  business  of        such Obligor, cease the use of any of such Trademarks or fail to maintain the level        of the quality of products sold and services rendered under any such Trademarks        at a level which such Obligor determines in its reasonable business judgment to        be appropriate to maintain the value of such Trademarks, and each Obligor shall        take all  steps  reasonably necessary  to ensure  that  licensees  of such Trademarks        use such consistent standards of quality;               (c)   it  shall  promptly  notify  the  Collateral  Agent  if  it  knows  or  has        reason to know that  any item of the  Intellectual  Property  that is material to the        business of any Obligor may become (a) abandoned or dedicated to the public or        placed in  the public domain, (b) invalid  or  unenforceable, or (c)  subject  to  any        adverse  determination  or  development  (including  the  institution  of  proceedings)        in any action or proceeding in the United States Patent and Trademark Office, the        United States Copyright Office, any state registry, any foreign counterpart of the        foregoing, or  any court, other than in the ordinary  course of prosecuting and/or        maintaining the applications or registrations of such Intellectual Property;               (d)   it  shall  take  all  reasonable  steps  in  the  United  States  Patent  and        Trademark Office, the United States Copyright Office, any state registry or any    522144.000028 21651939.2  25323438.4.BUSINESS 

 

      foreign counterpart of the foregoing, to pursue any application and maintain any        registration of each Trademark, Patent, and Copyright owned by any Obligor that        such  Obligor  determines  in  its  reasonable  business  judgment  is  material  to  its        business  which  is  now  or  shall  become  included  in  the  Intellectual  Property        Collateral;               (e)   in  the  event  that  it  has  knowledge  that  any  Intellectual  Property        owned by or exclusively licensed to any Obligor is infringed, misappropriated, or        diluted by a third party, such Obligor shall, except as it determines otherwise in its        reasonable business judgment, promptly take all reasonable actions to stop such        infringement,  misappropriation,  or  dilution  and  protect  its  rights  in  such        Intellectual  Property  including,  but  not  limited  to,  the  initiation  of  a  suit  for        injunctive relief and to recover damages;               (f)   it shall promptly (but in no event more than thirty (30) days after        any  Obligor  obtains  knowledge  thereof)  report  to  the  Collateral  Agent  (i)  the        filing  by  or  on  behalf  of  such  Obligor  of  any  application  to  register  any        Intellectual  Property  with  the  United  States  Patent  and  Trademark  Office,  the        United States Copyright Office, or any state registry or foreign counterpart of the        foregoing  and  (ii)  the  registration  of  any  Intellectual  Property  owned  by  such        Obligor  by  any  such  office,  in  each  case  by  executing  and  delivering  to  the        Collateral Agent a completed Pledge Supplement, together with all supplements        to Annexes thereto;               (g)   it  shall,  promptly  upon  the  reasonable  request  of  the  Collateral        Agent,  execute  and  deliver  to  the  Collateral  Agent  any  document  required  to        acknowledge, confirm, register, record, or perfect the Collateral Agent’s interest        in any part of the Intellectual Property Collateral, whether now owned or hereafter        acquired by or on behalf of such Obligor, including intellectual property security        agreements in the form of Exhibit C hereto;               (h)   it shall hereafter use commercially reasonable efforts so as not to        permit the inclusion in any contract to which it hereafter becomes a party of any        provision that  could  reasonably be  expected  to  materially impair  or prevent  the        creation of a security interest in, or the assignment of, such Obligor’s rights and        interests  in  any  property  included  within  the  definitions  of  any  Intellectual        Property acquired under such contracts;               (i)   it shall take all steps reasonably necessary to protect the secrecy of        all  Trade  Secrets,  including  entering  into  confidentiality  agreements  with  its        employees  and  labeling  and  restricting  access  to  secret  information  and        documents; and               (j)   it shall continue to collect, at its own expense, all amounts due or        to become due to such Obligor in respect of the Intellectual Property Collateral or        any portion thereof.  In connection with such collections, each Obligor may take        (and,  while  an  Event  of  Default  exists,  at  the  Collateral  Agent’s  reasonable    522144.000028 21651939.2  25323438.4.BUSINESS 

 

      direction,  shall  take)  such  action  as  such  Obligor  or  the  Collateral  Agent  may        deem  reasonably  necessary  or  advisable  to  enforce  collection  of  such  amounts.         Notwithstanding  the  foregoing,  while  an  Event  of  Default  exists,  the  Collateral        Agent shall have the right at any time, to notify, or require any Obligor to notify,        any  obligors  with  respect  to  any  such  amounts  of  the  existence  of  the  security        interest created hereby.               Section 8.  Acceleration Notice; Remedies; Distribution of Collateral.               8.01  Notice of Acceleration.  Upon receipt by the Collateral Agent of a  written notice from any Secured Party which (i) expressly refers to this Agreement, (ii)  describes an event or condition which has occurred and is continuing and (iii) expressly  states  that  such  event  or  condition  constitutes  an  Acceleration  as  defined  herein,  the  Collateral Agent shall promptly  notify  each other party hereto (other than Obligors) of  the receipt and contents thereof (any such notice is referred to herein as a “Acceleration  Notice”).               8.02  Preservation of Rights.  The Collateral Agent shall not be required  to take steps necessary to preserve any rights against prior parties to any of the Collateral.                8.03  Events of Default, Etc.  During the period during which an Event  of Default or a Trigger Event shall have occurred and be continuing:               (a)   each Obligor shall, at the request of the Collateral Agent, assemble        the Collateral owned by it at such place or places, reasonably convenient to both        the  Collateral  Agent  and  such  Obligor,  designated  in  the  Collateral  Agent’s        request;               (b)   the  Collateral  Agent  may  make  any  reasonable  compromise  or        settlement deemed desirable with respect to any of the Collateral and may extend        the time of payment, arrange for payment in installments, or otherwise modify the        terms of, any of the Collateral;               (c)   the Collateral Agent shall have all of the rights and remedies with        respect to the Collateral of a secured party under the Uniform Commercial Code        (whether  or  not  the  Uniform  Commercial  Code  is  in  effect  in  the  jurisdiction        where  the  rights  and  remedies  are  asserted)  and  such  additional  rights  and        remedies  to  which  a  secured  party  is  entitled  under  the  laws  in  effect  in  any        jurisdiction where any rights and remedies hereunder may be asserted, including        the right, to the fullest extent permitted by applicable law, to exercise all voting,        consensual and other powers  of  ownership pertaining to  the  Collateral  as  if  the        Collateral  Agent  were  the  sole  and  absolute  owner  thereof  (and  each  Obligor        agrees to take all such action as may be appropriate to give effect to such right);               (d)   the  Collateral  Agent  in  its  discretion  may,  in  its  name  or  in  the        name of any Obligor or otherwise, demand, sue for, collect or receive any money    522144.000028 21651939.2  25323438.4.BUSINESS 

 

      or property at any time payable or receivable on account of or in exchange for any        of the Collateral, but shall be under no obligation to do so; and               (e)   the Collateral Agent may, upon reasonable prior notice (provided        that  at  least  ten  (10)  Business  Days’  prior  notice  shall  be  deemed  to  be        reasonable) to the Obligors of the time and place (or, if such sale is to take place        on the NYSE or any other established  exchange or market, prior to the time of        such sale or other disposition), with respect to the Collateral or any part thereof        which  shall  then  be  or  shall  thereafter  come  into  the  possession,  custody  or        control of the Collateral Agent, the other Secured Parties or any of their respective        agents, sell, assign or otherwise dispose of all or any part of such Collateral, at        such place or places as the Collateral Agent deems appropriate, and for cash or for        credit or for future delivery (without thereby assuming any credit risk), at public        or private sale, without demand of performance or notice of intention to effect any        such disposition or of the time or place thereof (except such notice as is required        above or by applicable statute and cannot be waived), and the Collateral Agent or        any  other  Secured  Party  or  anyone  else  may  be  the  purchaser,  assignee  or        recipient of any or all of the Collateral so disposed of at any public sale (or, to the        extent permitted by law, at any private sale) and thereafter, to the fullest extent        permitted  by  law,  hold  the  same  absolutely,  free  from  any  claim  or  right  of        whatsoever  kind,  including  any  right  or  equity  of  redemption  (statutory  or        otherwise),  of  the  Obligors,  any  such  demand,  notice  and  right  or  equity  being        hereby expressly waived and released, to the fullest extent permitted by law.               The  Collateral  Agent  may,  without  notice  or  publication,  adjourn  any        public  or  private  sale  or  cause  the  same  to  be  adjourned  from  time  to  time  by        announcement at the time and place fixed for the sale, and such sale may be made        at any time or place to which the sale may be so adjourned.   The proceeds of each collection, sale or other disposition under this Section 8.03 shall be  applied in accordance with Section 8.06.               The Obligors recognize that, by reason of certain prohibitions contained in  the  Securities  Act  of  1933,  as  amended,  and  applicable  state  securities  laws,  the  Collateral  Agent  may  be  compelled,  with  respect  to  any  sale  of  all  or  any  part  of  the  Collateral, to limit purchasers to those who will agree, among other things, to acquire the  Collateral for their own account, for investment and not with a view to the distribution or  resale thereof.  The Obligors acknowledge that any such private sales may be at prices  and on terms less favorable to the Collateral Agent than those obtainable through a public  sale without such restrictions, and, notwithstanding such circumstances, agree that to the  extent  any  such  private  sale  is  conducted  by  the  Collateral  Agent  in  a  commercially  reasonable  manner,  the  Collateral  Agent  shall  have  no  obligation  to  engage  in  public  sales and no obligation to delay the sale of any Collateral for the period of time necessary  to permit the Obligors, or the issuer thereof, to register it for public sale.               8.04  Deficiency. If the proceeds of sale, collection or other realization  of or upon the Collateral pursuant to Section 8.03 are insufficient to cover the costs and   522144.000028 21651939.2  25323438.4.BUSINESS 

 

expenses  of  such  realization  and  the  payment  in  full  of  the  Secured  Obligations,  the  Obligors shall remain liable for any such deficiency.                8.05  Private  Sale.  The Collateral  Agent  and  the  Secured Parties  shall  incur no liability as a result of the sale of the Collateral, or any part thereof, at any private  sale  pursuant  to  Section  8.03  conducted  in  a  commercially  reasonable  manner.   Each  Obligor  hereby  waives  any  claims  against  the  Collateral  Agent  or  any  other  Secured  Party arising by reason of the fact that the price at which the Collateral may have been  sold at such a private sale was less than the price which might have been obtained at a  public sale or was less than the aggregate amount of the Secured Obligations, even if the  Collateral Agent accepts the first offer received and does not offer the Collateral to more  than  one  offeree,  so  long  as  such  private  sale  was  conducted  in  a  commercially  reasonable manner.               8.06  Application  of  Proceeds.   Except  as  otherwise  herein  expressly  provided,  after  the  occurrence  and  during  the  continuance  of  an  Event  of  Default  or  a  Trigger  Event  and  pursuant  to  the  exercise  of  any  remedies  under  this  Section  8,  the  proceeds of any collection, sale or other realization of all or any part of the Collateral of  any Obligor (including any other cash of any Obligor at the time held by the Collateral  Agent under this Agreement) shall be applied by the Collateral Agent as follows:               First, to the payment of costs and expenses of such collection, sale or other        realization,  including  reasonable  out-of-pocket  costs  and  expenses  of  the        Collateral Agent and the reasonable fees and expenses of its agents and counsel,        and  all  expenses  incurred  and  advances  made  by  the  Collateral  Agent  in        connection therewith;               Second, to the payment of any fees and other amounts then owing by such        Obligor  to  (x)  the  Collateral  Agent  in  its  capacity  as  such,  (y)  the  Revolving        Administrative Agent in its capacity as such and (z) any Financing Agent in its        capacity  as  such  (in  the  case  of  clauses  (x),  (y)  and  (z),  ratably  based  on  the        aggregate amount of such fees and other amounts);               Third, to the payment of the Secured Obligations of such Obligor then due        and payable, in each case to each Secured Party ratably in accordance with the        amount of Secured Obligations then due and payable to such Secured Party (it        being understood that, for the purposes hereof, the outstanding principal amount        of the Loans under the Revolving Credit Agreement shall be deemed then due and        payable whether or not any Acceleration of such loans has occurred); and               Fourth, after application as provided in clauses “First”, “Second”, and        “Third” above, to the payment to the respective Obligor, or their respective        successors or assigns, or as a court of competent jurisdiction may direct, of any        surplus then remaining.         For the avoidance of doubt, payments made pursuant to Section 2.08(b), (c) or (d)  of  the  Revolving  Credit  Agreement  (or  any  analogous  provisions  in  any  amendment,   522144.000028 21651939.2  25323438.4.BUSINESS 

 

modification,  supplement,  amendment,  restatement,  extension,  refinancing  or  replacement thereof) shall not be subject to this Section 8.06 or to Section 5.02, unless  the Collateral Agent, after the occurrence and continuation of an Event of Default, has  directed the actions giving rise to such payments.         In  making  the  allocations  required  by  this  Section  8,  the  Collateral  Agent  may  rely  upon  its  records  and  information  supplied  to  it  pursuant  to  Section  9.02,  and  the  Collateral  Agent  shall  have  no  liability  to  any  of  the  other  Secured  Parties  for  actions  taken  in  reliance  on  such  information,  except  to  the  extent  of  its  gross  negligence  or  willful  misconduct  as  determined  by  a  court  of  competent  jurisdiction  by  final  and  nonappealable judgment.  The Collateral Agent may, in its sole discretion, at the time of  any  application  under  this  Section  8,  withhold  all  or  any  portion  of  the  proceeds  otherwise to be applied to the Secured Obligations as provided above and maintain the  same  in  a  segregated  cash  collateral  account  in  the  name  and  under  the  exclusive  NYUCC Control of the Collateral Agent, to the extent that it in good faith believes that  the information provided to it pursuant to Section 9.02 is either incomplete or inaccurate  and that application of the full amount of such proceeds to the Secured Obligations would  be disadvantageous to any Secured Party.  All distributions made by the Collateral Agent  pursuant to this Section 8 shall be final (subject to any decree of any court of competent  jurisdiction), and the Collateral Agent shall have no duty to inquire as to the application  by the other Secured Parties of any amounts distributed to them.         Excluded Swap Obligations with respect to any Subsidiary Guarantor shall not be  paid with amounts received from such Subsidiary Guarantor or its assets, but appropriate  adjustments shall be made with respect to payments from other Obligors to preserve the  allocation to Secured Obligations otherwise set forth above in this Section 8.06.               8.07  Attorney-in-Fact.   Without  limiting  any  rights  or  powers  granted  by this Agreement to the Collateral Agent while no Event of Default or Trigger Event has  occurred and is continuing, upon the occurrence and during the continuance of any Event  of Default or Trigger Event, the Collateral Agent is hereby appointed the attorney-in-fact  of each Obligor for the purpose of carrying out the provisions of this Section 8 and taking  any  action  and  executing  any  instruments  which  the  Collateral  Agent  may  reasonably  deem  necessary or advisable  to accomplish  the  purposes  hereof, which appointment  as  attorney-in-fact  is  irrevocable  and  coupled  with  an  interest.   Without  limiting  the  generality of the foregoing, so long as the Collateral Agent shall be entitled under this  Section 8 to make collections in respect of the Collateral, the Collateral Agent shall have  the right and power to receive, endorse and collect all checks made payable to the order  of any Obligor representing any dividend, payment or other distribution in respect of the  Collateral or any part thereof and to give full discharge for the same.               8.08  Intellectual  Property.   For  the  purpose  of  enabling  the  Collateral  Agent,  upon  the  occurrence  and  during  the  continuance  of  an  Event  of  Default  or  a  Trigger Event, to exercise rights and remedies hereunder at such time as the Collateral  Agent shall be lawfully entitled to exercise such rights and remedies, each Obligor hereby  grants to the Collateral Agent, if and only to the extent of such Obligor’s rights to grant  the same, an irrevocable, non-exclusive license to use, assign, license or sublicense any   522144.000028 21651939.2  25323438.4.BUSINESS 

 

of  the  Intellectual Property Collateral (other  than  any  Excluded  Assets)  now  owned  or  hereafter  acquired  by  such  Obligor  (exercisable  without  payment  of  royalty  or  other  compensation to such Obligor).  Such license shall include access to all media in which  any of the licensed items may be recorded or stored and to all computer programs used  for the compilation or printout thereof.  If any Event of Default shall have occurred and  be  continuing,  upon  the  written  demand  of  the  Collateral  Agent,  each  Obligor  shall  execute  and  deliver  to  the  Collateral  Agent  an  assignment  or  assignments  of  any  registered  Patents,  Trademarks  (including  goodwill)  and/or  Copyrights  and  such  other  documents as are necessary or appropriate to carry out the intent and purposes hereof.               Section 9.  The Collateral Agent.               9.01  Appointment; Powers and Immunities.  Each Revolving Lender,  the  Revolving  Administrative  Agent,  each  Financing  Agent  and,  by  acceptance  of  the  benefits  of  this  Agreement  and  the  other  Security  Documents,  each  Designated  Indebtedness  Holder  hereby  irrevocably  appoints  and  authorizes  ING  to  act  as  the  collateral agent hereunder and authorizes ING to take such actions on its behalf and to  exercise  such  powers  as  are  delegated  to  the  Collateral  Agent  by  the  terms  of  this  Agreement, together with such actions and powers as are reasonably incidental thereto.   Without  limiting  the  generality  of  the  foregoing,  it  is  understood  that  such  powers  authorize  the  Collateral  Agent  to  enter  into  the  agreements  and  the  other  documents  contemplated by Section 5.08(c) of the Revolving Credit Agreement on behalf of itself  and the other Secured Parties hereunder.  The Collateral Agent (which term as used in  this  sentence  and  in  Section  9.06  and  the  first  sentence  of  Section  9.07  shall  include  reference to its Affiliates and its own and its Affiliates’ officers, directors, employees and  agents):               (a)   shall have no duties or obligations except those expressly set forth        in this Agreement and shall not by reason of this Agreement be a trustee for, a        fiduciary with respect to or subject to any other implied duties with respect to, the        Revolving Administrative Agent, any Revolving Lender, any Financing Agent or        any Designated  Indebtedness Holder regardless of whether a Default or Trigger        Event has occurred and is continuing;               (b)   shall not be responsible to the Revolving  Lenders, the Revolving        Administrative  Agent,  the  Financing  Agents  or  the  Designated  Indebtedness        Holders for or have any duty to ascertain or inquire into any recitals, statements,        representations  or  warranties  contained  in  or  made  in  connection  with  this        Agreement or in any notice delivered hereunder, or in any other certificate, report        or  other  document  referred  to  or  provided  for  in,  or  received  by  it  under,  this        Agreement, or for the value, validity, effectiveness, genuineness, enforceability or        sufficiency  of  this  Agreement  or  any  other  agreement,  instrument  or  document        referred to or provided for herein or therein or for any failure by the Obligors or        any other Person to perform or observe any of its obligations hereunder;               (c)   shall  not  be  required  to  initiate  or  conduct  any  litigation  or        collection  proceedings  hereunder  except,  subject  to  Section  9.07,  for  any  such   522144.000028 21651939.2  25323438.4.BUSINESS 

 

      litigation or proceedings relating to the enforcement of the guarantee set forth in        Section 3, or the Liens created pursuant to Section 4; and               (d)   shall  not  be  responsible  for  any  action  taken  or  not  taken  by  it        hereunder or under any other document or instrument referred to or provided for        herein or therein or in connection herewith or therewith, except for its own gross        negligence  or  willful  misconduct  as  determined  by  a  court  of  competent        jurisdiction by final and nonappealable judgment.               9.02  Information Regarding Secured Parties.  The Borrower will at such  times  and  from  time  to  time  as  shall  be  reasonably  requested  by  the  Collateral  Agent  supply  a  list  in  form  and  detail  reasonably  satisfactory  to  the  Collateral  Agent  setting  forth the amount of the Secured Obligations held by each Secured Party (excluding, so  long as  ING is both the Collateral Agent and the Revolving Administrative Agent, the  Revolving  Credit  Agreement  Obligations)  as  at  a  date  specified  in  such  request.   The  Collateral  Agent  shall  provide  any  such  list  to  any  Secured  Party  upon  request.   The  Collateral Agent shall be entitled to rely upon, and shall not incur any liability for relying  upon,  such  information,  and  such  information  shall  be  conclusive  and  binding  for  all  purposes  of  this  Agreement,  except  to  the  extent  the  Collateral  Agent  shall  have  been  notified by a Secured Party in writing that such information as set forth on any such list is  inaccurate or in dispute between such Secured Party and the Borrower.               9.03  Reliance  by  Collateral  Agent.   The  Collateral  Agent  shall  be  entitled  to  rely  upon,  and  shall  not  incur  any  liability  for  relying  upon,  any  notice,  request,  certificate,  consent,  statement,  instrument,  document  or  other  communication  (including any thereof by telephone, telecopy, telex, telegram, cable or electronic mail)  believed by it to be genuine and to have been signed or sent by or on behalf of the proper  Person  or  Persons,  and  upon  advice  and  statements  of  legal  counsel,  independent  accountants  and other experts  selected  by  the  Collateral  Agent.   As  to  any matters  not  expressly provided for by this Agreement, the Collateral Agent shall in all cases be fully  protected in acting, or in refraining from acting, hereunder or thereunder in accordance  with  instructions  given  by  (i)  the  Required  Secured  Parties  or  (ii)  where  expressly  permitted  for  in  Section  10.03,  the  Required  Revolving  Lenders  and  the  Required  Designated Indebtedness Holders, as applicable, and such instructions of the (i) Required  Secured  Parties  or  (ii)  where  expressly  permitted  for  in  Section  10.03,  the  Required  Revolving Lenders and the Required Designated Indebtedness Holders, as applicable, and  any action taken or failure to act pursuant thereto shall be binding on all of the Secured  Parties.  If in one or more instances the Collateral Agent takes any action or assumes any  responsibility  not  specifically  delegated  to  it  pursuant  to  this  Agreement,  neither  the  taking of such action nor the assumption of such responsibility shall be deemed to be an  express or implied undertaking on the part of the Collateral Agent that it will take the  same or similar action or assume the same or similar responsibility in any other instance.               9.04  Rights as a Secured Party.  With respect to its obligation to extend  credit  under  the  Revolving  Credit  Agreement,  ING  (and  any  successor  acting  as  Collateral  Agent)  in  its  capacity  as  a  Revolving  Lender  under  the  Revolving  Credit    522144.000028 21651939.2  25323438.4.BUSINESS 

 

Agreement shall have the same rights and powers hereunder as any other Secured Party  and may exercise the same as though it were not acting as Collateral Agent, and the term  “Secured  Party”  or  “Secured  Parties”  shall,  unless  the  context  otherwise  indicates,  include the Collateral Agent in its individual capacity.  ING (and any successor acting as  Collateral Agent) and its Affiliates may (without having to account therefor to any other  Secured Party) accept deposits from, lend money to, make investments in and generally  engage in any kind of banking, trust or other business with any of the Obligors (and any  of their Subsidiaries or Affiliates) as if it were not acting as Collateral Agent, and ING  and its Affiliates may accept fees and other consideration from any of the Obligors for  services in connection with this Agreement or otherwise without having to account for  the same to the other Secured Parties.               9.05  Indemnification.   Each  Revolving  Lender,  the  Revolving  Administrative Agent (but only to the extent the Revolving Administrative Agent and the  Collateral Agent are not the same Person), each Financing Agent and, by acceptance of  the  benefits  of  this  Agreement  and  the  other  Security  Documents,  each  Designated  Indebtedness Holder, severally agrees to indemnify the Collateral Agent and each Related  Party  of  the  Collateral  Agent  (each  such  Person  being  called  an  “Indemnitee”)  (to  the  extent  not  reimbursed  under  Section  10.04,  but  without  limiting  the  obligations  of  the  Obligors  under  Section  10.04)  ratably  in  accordance  with  the  aggregate  Secured  Obligations held by the Revolving Lenders and the Designated Indebtedness Holders, for  any and all liabilities, obligations, losses, claims, damages, penalties, actions, judgments,  suits, costs, expenses or disbursements of any kind and nature whatsoever that may be  imposed  on,  incurred  by  or  asserted  against  any  Indemnitee  (including  by  any  other  Secured Party) arising out of, in connection with, or by reason of any actual or probable  claim, litigation, investigation or proceeding, whether based in contract, tort or any other  theory and regardless of whether any Indemnitee is a party thereto, in connection with or  in any way relating to or arising out of this Agreement, any other Debt Documents, or  any other documents contemplated by or referred to herein or therein or the transactions  contemplated hereby or thereby (including the costs and expenses that the Obligors are  obligated  to  pay  under  Section  10.04,  but  excluding,  unless  an  Event  of  Default  or  a  Trigger Event has occurred and is continuing, normal administrative costs and expenses  incident to the performance of its agency duties hereunder) or the enforcement of any of  the terms hereof or thereof or of any such other documents; provided, that such indemnity  shall not as to any Indemnitee, be available to the extent that such liabilities, obligations,  losses,  claims,  damages,  penalties  or  related  expenses  are  determined  by  a  court  of  competent  jurisdiction  by  final  and  nonappealable  judgment  to  have  resulted  from  the  gross negligence or willful misconduct of such Indemnitee.               9.06  Non-Reliance on Collateral Agent and Other Secured Parties.  The  Revolving Administrative Agent and each Financing Agent (and each Revolving Lender  and  each  Designated  Indebtedness  Holder  by  acceptance  of  the  benefits  of  this  Agreement  and  the  other  Security  Documents)  agrees  that  it  has,  independently  and  without reliance on the Collateral Agent or any other Secured Party, and based on such  documents and information as it has deemed appropriate, made its own credit analysis of  the  Borrower,  the  Subsidiary  Guarantors  and  their  Subsidiaries  and  decision  to  extend    522144.000028 21651939.2  25323438.4.BUSINESS 

 

credit to the Borrower in reliance on this Agreement and that it will, independently and  without reliance upon the Collateral Agent or any other Secured Party, and based on such  documents and information as it shall deem appropriate at the time, continue to make its  own  analysis  and  decisions  in  taking  or  not  taking  action  under  or  based  on  this  Agreement and any Debt Document to which it is a party.  Except as otherwise expressly  provided herein, the Collateral Agent shall not be required to keep itself informed as to  the  performance  or  observance  by  any  Obligor  of  this  Agreement,  any  other  Debt  Document  or  any  other  document  referred  to  or  provided  for  herein  or  therein  or  to  inspect the properties or books of any Obligor.  The Collateral Agent shall not have any  duty  or  responsibility  to  disclose,  and  shall  not  be  liable  for  failure  to  disclose,  any  information relating to any Obligor or any of its Subsidiaries (or any of their Affiliates)  that may come into the possession of the Collateral Agent or any of its Affiliates, except  for  notices,  reports  and  other  documents  and  information  expressly  required  to  be  furnished to the other Secured Parties by the Collateral Agent hereunder.               9.07  Failure  to  Act.   Except  for  action  expressly  required  of  the  Collateral  Agent  hereunder,  the  Collateral  Agent  shall  in  all  cases  be  fully  justified  in  failing  or  refusing  to  act  hereunder  unless  it  shall  receive  further  assurances  to  its  satisfaction  from  the  other  Secured  Parties  of  their  indemnification  obligations  under  Section 9.05 against any and all liability and expense that may be incurred by it by reason  of  taking  or  continuing  to  take  any  such  action.   The  Collateral  Agent  shall  not  be  required to take any action that in the judgment of the Collateral Agent would violate any  applicable law.               9.08  Resignation of Collateral Agent.  Subject to the appointment and  acceptance of a successor Collateral Agent as provided below, the Collateral Agent may  resign at any time  by notifying the other Secured Parties  and  the  Obligors.   Upon  any  such resignation, the Required Secured Parties shall have the right, with the consent of  the Borrower not to be unreasonably withheld, conditioned or delayed provided that no  such consent shall be required if an Event of Default or a Trigger Event has occurred and  is continuing to appoint a successor Collateral Agent.  If no successor Collateral Agent  shall have  been so  appointed by the  Required  Secured  Parties  and shall have accepted  such appointment within thirty (30) days after the retiring Collateral Agent gives notice  of its resignation, then the retiring Collateral Agent may, on behalf of the other Secured  Parties, appoint a successor Collateral Agent, that shall be a financial institution that has  an office in New York, New York and has a combined capital and surplus and undivided  profits of at least $1,000,000,000.  Upon the acceptance of its appointment as Collateral  Agent hereunder by a successor Collateral Agent, such successor Collateral Agent shall  succeed  to  and  become  vested  with  all  the  rights,  powers,  privileges  and  duties  of  the  retiring Collateral Agent, and the retiring Collateral Agent shall be discharged from its  duties  and  obligations  hereunder.   After  any  retiring  Collateral  Agent’s  resignation  hereunder as Collateral  Agent, the provisions of this Section 9 and Section 10.04 shall  continue in effect for its benefit in respect of any actions taken or omitted to be taken by  it while it was acting as the Collateral Agent.  The Borrower shall pay to any successor  Collateral  Agent  the  fees  and  charges  necessary  to  induce  such  successor  Collateral    522144.000028 21651939.2  25323438.4.BUSINESS 

 

Agent  to  accept  its  appointment  hereunder,  such  payment  to  be  made  as  and  when  invoiced by the successor Collateral Agent.               9.09  Agents and Attorneys-in-Fact.  The Collateral Agent may employ  agents and attorneys-in-fact in connection herewith and shall not be responsible in any  way for such agents or attorneys-in-fact selected by it in good faith.               Section 10. Miscellaneous.               10.01 Notices.   All  notices,  requests,  consents  and  other  demands  hereunder  and  other  communications  provided  for  herein  shall  be  given  or  made  in  writing, (a) to any party hereto, telecopied (to the extent provided in the Revolving Credit  Agreement), emailed or delivered to the intended recipient at the “Address for Notices”  specified below its name on the signature pages to this Agreement or, in the case of any  Financing  Agent  or  Designated  Indebtedness  Holder  that  shall  become  a  party  hereto  after the date hereof, at such “Address for Notices” as shall be specified pursuant to or in  connection with the joinder agreement executed and delivered by such Financing Agent  or Designated Indebtedness Holder pursuant to Section 6.01 (provided that notices to any  Subsidiary Guarantor shall be given to such Subsidiary Guarantor care of the Borrower at  the address for the Borrower specified herein) or (b) as to any party, at such other address  as shall be designated by such party in a written notice to each other party.  All notices to  any Revolving Lender or Designated Indebtedness Holder that is not a party hereto shall  be  given  to  the  Revolving  Administrative  Agent  for  such  Revolving  Lender  or  the  Financing Agent for such Designated Indebtedness Holder (or, if there is no Financing  Agent, to each Designated Indebtedness Holder).               10.02 No Waiver.  No failure on the part of the Collateral Agent or any  Secured  Party  to  exercise,  and  no  course  of  dealing  with  respect  to,  and  no  delay  in  exercising  any  right, power  or  remedy hereunder  shall  operate as  a waiver thereof nor  shall any single or partial exercise by the Collateral Agent or any Secured Party of any  right, power or remedy, or any abandonment or discontinuance of steps to enforce such  right, power or remedy, preclude any other or further exercise thereof or the exercise of  any other right, power or remedy.  The rights and remedies of the Collateral Agent and  the  Secured  Parties  hereunder  are  cumulative  and  are  not  exclusive  of  any  rights  or  remedies that they would otherwise have.  No waiver of any provision of this Agreement  or  consent  to  any  departure  by  the  Obligors  therefrom  shall  in  any  event  be  effective  unless  the  same  shall  be  permitted  by  Section  10.03,  and  then  such  waiver  or  consent  shall be effective only in the specific instance and for the purpose for which given.               10.03 Amendments  to  Security  Documents,  Etc.   Except  as  otherwise  provided in any Security Document, the terms of this Agreement and the other Security  Documents  may  be  waived,  altered,  amended  or  modified  only  by  an  agreement  or  agreements in writing duly executed and entered into by each Obligor and the Collateral  Agent, with the consent of the Required Secured Parties, the Required Revolving Lenders  and the Required Designated Indebtedness Holders; provided that:    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            (a)   no such amendment shall adversely affect the relative rights of any        Secured Party as against any other Secured Party without the prior written consent        of such first Secured Party;               (b)   without the prior written consent of each of the Revolving Lenders        under the Revolving Credit Agreement, the Collateral Agent shall not release all        or substantially all of the collateral under the Security Documents or release all or        substantially  all  of  the  Subsidiary  Guarantors  from  their  guarantee  obligations        under Section 3 hereof prior to the Termination Date (except that if any amounts        have  become  due  and  payable  in  respect  of  (x)  interest  on  or  principal  of  any        Designated Indebtedness Obligations or (y) Hedging Agreement Obligations, and        shall  have  remained  unpaid  for  thirty  (30)  or  more  days,  then  the  prior  written        consent (voting as a single group) of the holders of a majority in interest of the        Designated  Indebtedness  Obligations  and  the  Hedging  Agreement  Obligations,        whichever of such obligations are then due and payable, will also be required to        release all or substantially all of such collateral or guarantee obligations, whether        before or after the Termination Date);               (c)   without  the  consent  of  each  of  the  Secured  Parties,  no        modification,  supplement  or  waiver  shall  modify  the  definition  of  the  term        “Required  Secured  Parties”  or  modify  in  any  other  manner  the  number  of        percentage of the Secured Parties required to make any determinations or waive        any rights under any Security Document;               (d)   without  the  consent  of  the  Collateral  Agent,  no  modification,        supplement or waiver shall modify the terms of Section 9 or this Section 10.03;               (e)   to the extent not inconsistent with clause (b) above, the Collateral        Agent  is  authorized  to  release  any  Collateral  that  is  either  the  subject  of  a        disposition not prohibited under the Revolving Credit Agreement, or to which the        Required Revolving Lenders (or such higher standard provided in the applicable        Loan  Document,  and  the  Required  Designated  Indebtedness  Holders  shall  have        consented and will, at the Obligors’ expense, execute and deliver to any Obligor        such  documents  (including  any  UCC  termination  statements,  lien  releases,  re-       assignments  of  trademarks,  discharges  of  security  interests,  and  other  similar        discharge or release documents (and, if applicable, in recordable form)) as such        Obligor shall reasonably request to evidence the release of such item of Collateral        from  the  assignment  and  security  interest  granted  hereby;  notwithstanding  the        foregoing,  Portfolio  Investments  constituting  Collateral  shall  be  automatically        released  from  the  lien  of  this  Agreement,  without  any  action  of  the  Collateral        Agent, in connection with any disposition of Portfolio Investments that (i) occurs        in the ordinary course of the Borrower’s business and (ii) is not prohibited under        any of the Debt Documents;                (f)   to the extent not inconsistent with clause (b) above, the Collateral        Agent is authorized to release any Subsidiary Guarantor from any of its guarantee        obligations under Section 3 hereof to the extent such Subsidiary is (x) the subject    522144.000028 21651939.2  25323438.4.BUSINESS 

 

      of  a  disposition  not  prohibited  under  the  Debt  Documents,  (y)  ceases  to  be  a        Subsidiary as a result of a transaction not prohibited under the Debt Documents,        or  (z)  to  which  each  of  the  Required  Secured  Parties,  the  Required  Revolving        Lenders (or such higher standard provided in the applicable Loan Document) and        the  Required  Designated  Indebtedness  Holders  shall  have  consented,  and,  upon        such release, the Collateral Agent is authorized to release any collateral security        granted  by  such  Subsidiary  Guarantor  hereunder  and  under  the  other  Security        Documents; and               (g)   this  Section  10.03  shall  be  subject  to  the  provisions  related  to        “Defaulting Lenders” in the Revolving Credit Agreement.   Any such amendment or waiver shall be binding upon the Collateral Agent, each Secured  Party and each Obligor.  In connection with any release of Collateral from the lien of this  Agreement and the other Security Documents, the Collateral Agent shall, promptly but in  any event within five (5) Business Days of written request by the Borrower (and at the  sole  cost  and  expense  of  the  Borrower),  (i) execute  and  deliver  termination  statements  and other releases and instruments (in recordable form if appropriate) that the Collateral  Agent reasonably believes is necessary to effect such release and (ii) otherwise take such  actions as the Borrower may reasonably request in order to effect the release and transfer  of  such  Collateral.   Notwithstanding  the  foregoing  to  the  contrary,  if  the  Termination  Date shall have occurred with respect to any Class, then the consent rights of such Class  (and  the  related  Required  Revolving  Lenders  or  Required  Designated  Indebtedness  Holders) under this Section 10.03 shall terminate.               10.04 Expenses; Indemnity; Damage Waiver.               (a)   Costs  and  Expenses.   The  Obligors  hereby  jointly  and  severally  agree to reimburse the Collateral Agent and each of the other Secured Parties and their  respective  Affiliates  for  all  reasonable  and  documented  out-of-pocket  fees,  costs  and  expenses incurred by them (including the reasonable fees, charges and disbursements of  one outside counsel and of any necessary special and/or local counsel for the Collateral  Agent  (other  than  the  allocated  costs  of  internal  counsel))  in  connection  with  (i)  any  Event of Default or Trigger Event and any enforcement or collection proceeding resulting  therefrom,  including  all  manner  of  participation  in  or  other  involvement  with  (w)  performance by the Collateral Agent of any obligations of the Obligors in respect of the  Collateral that the Obligors have failed or refused to perform in the time period required  under this Agreement, (x) bankruptcy, insolvency, receivership, foreclosure, winding up  or  liquidation  proceedings  of  any  Obligor,  or  any  actual  or  attempted  sale,  or  any  exchange,  enforcement,  collection,  compromise  or  settlement  in  respect  of  any  of  the  Collateral, and for the care of the Collateral and defending or asserting rights and claims  of the Collateral Agent in respect thereof, by litigation or otherwise, including expenses  of  insurance,  (y)  judicial  or  regulatory  proceedings  arising  from  or  related  to  this  Agreement and (z) workout, restructuring or other negotiations or proceedings (whether  or  not the workout,  restructuring  or  transaction contemplated  thereby is  consummated)  and (ii) the enforcement of this Section 10.04, and all such costs and expenses shall be    522144.000028 21651939.2  25323438.4.BUSINESS 

 

Secured Obligations entitled to the benefits of the collateral security provided pursuant to  Section 4.               (b)   Indemnification  by  the  Obligors.   The  Obligors  shall  indemnify  each  Indemnitee  against,  and  hold  each  Indemnitee  harmless  from,  any  and  all  losses,  claims,  damages,  liabilities  and  related  expenses  (including  the  reasonable  and  documented fees,  charges  and disbursements  of  any  counsel  for  any  Indemnitee  (other  than  the  allocated  costs  of  internal  counsel),  incurred  by  or  asserted  against  any  Indemnitee  arising  out  of,  in  connection  with,  or  as  a  result  of  (i)  the  execution  or  delivery  of  this  Agreement  or  any  agreement  or  instrument  contemplated  hereby,  the  performance  by  the  parties  hereto  of  their  respective  obligations  hereunder,  or  (ii)  any  actual or prospective claim, litigation, investigation or proceeding relating to any of the  foregoing, whether based on contract, tort or any other theory and whether brought by the  Borrower, any Indemnitee or a third party, and regardless of whether any Indemnitee is a  party thereto; provided that such indemnity shall not as to any Indemnitee, be available to  the extent that such losses, claims, damages, liabilities or related expenses are determined  by a court of competent jurisdiction by final and nonappealable judgment to have resulted  from  the  willful  misconduct  or  gross  negligence  of  such  Indemnitee.   Notwithstanding  the foregoing, it is understood and agreed that indemnification for Taxes (as defined in  the  Revolving  Credit  Agreement)  is  subject  to  the  provisions  of  Section  2.14  of  the  Revolving  Credit  Agreement  and  analogous  provisions,  if  any,  in  Designated  Indebtedness Documents.               Neither the Borrower nor any Obligor shall be liable to any Indemnitee for  any special, indirect, consequential or punitive damages (as opposed to direct or actual  damages (other than in respect of any such damages incurred or paid by an Indemnitee to  a third party)) arising out of, in connection with, or as a result of, this Agreement asserted  by an Indemnitee against the Borrower or any other Obligor; provided that the foregoing  limitation shall not be deemed to impair or affect the obligations of the Borrower under  the preceding provisions of this subsection.               10.05 Successors  and Assigns.  The provisions  of  this  Agreement  shall  be  binding  upon  and  inure  to  the  benefit  of  the  parties  hereto  and  their  respective  successors and assigns of the Obligors and the Secured Parties, except that none of the  Obligors  shall  assign  or  otherwise  transfer  any  of  its  rights  or  obligations  hereunder  without  the  prior  written  consent  of  each  of  the  Collateral  Agent,  the  Revolving  Administrative Agent and the Financing Agents, if any (or, if there are no such Financing  Agents, the Required Designated Indebtedness Holders) (and any attempted assignment  or transfer by any Obligor without such consent shall be null and void).  Nothing in this  Agreement,  expressed  or  implied,  shall  be  construed  to  confer  upon  any  Person  (other  than the parties hereto, their respective successors and assigns permitted hereby and, to  the  extent  expressly  contemplated hereby,  the  Related Parties  of  each of  the Collateral  Agent and the Secured Parties) any legal or equitable right, remedy or claim under or by  reason of this Agreement.               10.06 Counterparts; Integration; Effectiveness; Electronic Execution.    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            (a)   Counterparts; Integration; Effectiveness.  This Agreement may be  executed in counterparts (and by different parties hereto on different counterparts), each  of which shall constitute an original, but all of which when taken together shall constitute  a single contract.  This Agreement and any separate letter agreements with respect to fees  payable  to  the  Collateral  Agent  constitute  the  entire  contract  between  and  among  the  parties  relating  to  the  subject  matter  hereof  and  supersede  any  and  all  previous  agreements  and  understandings,  oral  or  written,  relating  to  the  subject  matter  hereof.   This  Agreement  shall  become  effective  when  it  shall  have  been  executed  by  the  Collateral Agent and when the Collateral Agent shall have received counterparts hereof  which, when taken together, bear the signatures of each of the other parties hereto, and  thereafter shall be binding upon and inure to the benefit of the parties  hereto and their  respective  successors  and  assigns.   Delivery  of  an  executed  counterpart  of  a  signature  page to this Agreement by telecopy or electronic mail shall be effective as delivery of a  manually executed counterpart of this Agreement.               (b)   Electronic  Execution  of  Assignments.   The  words  “execution,”  “signed,” “signature” shall be deemed to include electronic signatures or the keeping of  records  in electronic form,  each of which  shall  be  of  the  same  legal  effect, validity  or  enforceability as a manually executed signature or the use of a paper-based recordkeeping  system,  as  the  case  may  be,  to  the  extent  and  as  provided  for  in  any  applicable  law,  including the Federal Electronic Signatures in Global and National Commerce Act, the  New York State Electronic Signatures and Records Act, or any other similar state laws  based  on  the  Uniform  Electronic  Transactions  Act;  provided  that  nothing  herein  shall  require the Administrative  Agent  to accept electronic signatures  in  any form  or format  without its prior consent.               10.07 Severability.  Any provision of this Agreement held to be invalid,  illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to  the extent of such invalidity, illegality or unenforceability without affecting the validity,  legality  and  enforceability  of  the  remaining  provisions  hereof;  and  the  invalidity  of  a  particular provision in a particular jurisdiction shall not invalidate such provision in any  other jurisdiction.               10.08 Governing Law; Submission to Jurisdiction.               (a)   Governing Law.  This Agreement shall be construed in accordance  with and governed by the law of the State of New York.               (b)   Submission to Jurisdiction.  Each Obligor hereby irrevocably and  unconditionally  submits,  for  itself  and  its  property,  to  the  exclusive  jurisdiction  of  the  Supreme Court of the State of New York sitting in New York County and of the United  States District Court of the Southern District of New York, and any appellate court from  any thereof, in any action or proceeding arising out of or relating to this Agreement, or  for recognition or enforcement  of any judgment, and each  of  the  parties  hereto hereby  irrevocably  and  unconditionally  agrees  that  all  claims  in  respect  of  any  such  action  or  proceeding may be heard and determined in such New York State court or, to the extent  permitted  by  law, in  such Federal  court.   Each  of  the parties  hereto  agrees  that  a  final   522144.000028 21651939.2  25323438.4.BUSINESS 

 

judgment in any such action or proceeding shall be conclusive and may be enforced in  other  jurisdictions  by  suit  on  the  judgment  or  in  any  other  manner  provided  by  law.   Nothing in this Agreement shall affect any right that the Collateral Agent or any Secured  Party may otherwise have to bring any action or proceeding relating to this Agreement  against any Obligor or its properties in the courts of any jurisdiction.               (c)   Waiver  of  Venue.   Each  Obligor  hereby  irrevocably  and  unconditionally  waives,  to  the  fullest  extent  it  may  legally  and  effectively  do  so,  any  objection which it may now or hereafter have to the laying of venue of any suit, action or  proceeding  arising  out  of  or  relating  to  this  Agreement  in  any  court  referred  to  in  paragraph (b) of this Section 10.08.  Each of the parties hereto hereby irrevocably waives,  to  the  fullest  extent  permitted  by  law,  the  defense  of  an  inconvenient  forum  to  the  maintenance of such action or proceeding in any such court.               (d)   Service of Process.  Each party to this Agreement (i) irrevocably  consents to service of process in the manner provided for notices in Section 10.01 and (ii)  agrees  that  service  as  provided  in  the  manner  provided  for  notices  in  Section  10.01  is  sufficient to confer personal jurisdiction over such party in any proceeding in any court  and otherwise constitutes effective and binding service in every respect.  Nothing in this  Agreement will affect the right of any party to this Agreement to serve process in any  other manner permitted by law.               10.09 WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY  WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY  RIGHT  IT  MAY  HAVE  TO  A  TRIAL  BY  JURY  IN  ANY  LEGAL  PROCEEDING  DIRECTLY  OR  INDIRECTLY  ARISING  OUT  OF  OR  RELATING  TO  THIS  AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER  BASED  ON  CONTRACT,  TORT  OR  ANY  OTHER  THEORY).   EACH  PARTY  HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY  OF  ANY  OTHER  PARTY  HAS  REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT  SUCH  OTHER  PARTY  WOULD  NOT,  IN  THE  EVENT  OF  LITIGATION,  SEEK  TO  ENFORCE  THE  FOREGOING  WAIVER  AND  (B)  ACKNOWLEDGES  THAT  IT  AND  THE  OTHER  PARTIES  HERETO  HAVE  BEEN  INDUCED  TO  ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL  WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.09.               10.10 Headings.  Section headings and the Table of Contents used herein  are for convenience of reference only, are not part of this Agreement and shall not affect  the construction of, or be taken into consideration in interpreting, this Agreement.               10.11 Termination.  When all Secured Obligations have been paid in full  (other than contingent, unasserted indemnification obligations), and all commitments of  the holders thereof to extend credit that would be Secured Obligations have expired or  been terminated and any letters of credit outstanding under the Revolving Credit Facility  or any other Designated Indebtedness have expired or terminated, as applicable, in each  case in accordance with the terms of the applicable Debt Documents, the Collateral Agent  shall, on behalf of the holders of such Secured Obligations, deliver to the Obligors such   522144.000028 21651939.2  25323438.4.BUSINESS 

 

termination  statements  and  releases  and  other  documents  necessary  and  appropriate  to  evidence the termination of all agreements, obligations and liens related to such Secured  Obligations as the Obligors may reasonably request, all at the sole cost and expense of  the Obligors; provided however that the Collateral Agent shall not have any obligation to  do so under the circumstances set forth in the parenthetical provision in Section 10.03(b)  except to the extent provided therein.                10.12 Confidentiality.   The  Collateral  Agent  acknowledges  and  agrees  that Section 9.13 of the Revolving Credit Agreement will bind the Collateral Agent to the  same extent as it binds the Revolving Administrative Agent.               10.13 Amendment  and  Restatement.   The  Agreement  amends  and  restates  the  Existing  Security  Agreement.   As  between  the  Obligors  and  the  Collateral  Agent, all references to the Existing Security Agreement in any Loan Document (other  than this Agreement) or other document or instrument delivered in connection therewith  shall be deemed to refer to this Agreement and the provisions hereof.  The amendment  and  restatement  contained  herein  shall  not  in  any  manner  be  construed  to  constitute  payment of, or impair, limit, cancel or extinguish, or constitute a novation in respect of,  any  of  the  obligations  and  liabilities  of  any  Obligor  evidenced  by  or  arising  under  the  Existing Security Agreement, and the liens and security interests securing the obligations  and liabilities owed to the Collateral Agent shall not in any manner be impaired, limited,  terminated, waived or released and are deemed continuously perfected.                              [Signature page follows]    522144.000028 21651939.2  25323438.4.BUSINESS 

 

 

 

 

 

 

 

 

 

                                                              EXHIBIT A                          [Form of Notice of Designation                          for Designated Indebtedness]                                                                      [Date]   ING Capital LLC,  as Collateral Agent  1325 Avenue of the Americas  New York, New York 10019  Attention: Grace Fu   Ladies and Gentlemen:         Reference is made to the Amended and Restated Guarantee, Pledge and Security  Agreement, dated as of December 21, 2018 (as modified and supplemented and in effect  from time to time, the “Guarantee and Security Agreement”), among Capital Southwest  Corporation,  the  Subsidiary  Guarantors  referred  to  therein,  ING  Capital  LLC,  as  administrative agent for the Revolving Lenders referred to therein, the Financing Agents  or  Designated  Indebtedness  Holders  referred  to  therein  and  ING  Capital  LLC,  as  collateral agent for the Secured Parties referred to therein.  Capitalized terms used herein,  unless  otherwise  defined  herein,  shall  have  the  meanings  ascribed  thereto  in  the  Guarantee and Security Agreement.         Pursuant to Section 6.01 of the Guarantee and Security Agreement, the Borrower  hereby designates the following Indebtedness as “Designated Indebtedness” under the  Guarantee and Security Agreement:                             [Complete as appropriate]                                 CAPITAL SOUTHWEST CORPORATION                                  By:                                Name:                                Title:    522144.000028 21651939.2  25323438.4.BUSINESS 

 

                                                              EXHIBIT B                    [Form of Guarantee Assumption Agreement]                    GUARANTEE ASSUMPTION AGREEMENT               GUARANTEE ASSUMPTION AGREEMENT dated as of _______, ___,  ____  by  [NAME  OF  ADDITIONAL  SUBSIDIARY  GUARANTOR],  a  ___________  (the “Additional Subsidiary Guarantor”), in favor of ING Capital LLC, as collateral agent  for the Secured Parties under and as defined in the Guarantee and Security Agreement  referred  to  below  (in  such  capacity,  together  with  its  successors  in  such  capacity,  the  “Collateral Agent”).               Capital  Southwest  Corporation  (the  “Borrower”),  the  Subsidiary  Guarantors  referred  to  therein,  ING  Capital  LLC,  as  administrative  agent  for  the  Revolving Lenders referred to therein, the Financing Agents or Designated Indebtedness  Holders  referred  to  therein,  and  ING  Capital  LLC,  as  collateral  agent  for  the  Secured  Parties  referred  to therein,  are parties  to the  Amended and  Restated  Guarantee, Pledge  and Security Agreement, dated as of December 21, 2018 (as modified and supplemented  and  in effect  from  time  to time,  the  “Guarantee  and  Security  Agreement”)  pursuant  to  which  such  Subsidiary  Guarantors  have  guaranteed  the  “Guaranteed  Obligations”  (as  defined therein), and the Borrower and such Subsidiary Guarantors have granted liens in  favor  of  the  Collateral  Agent  as  collateral  security  for  the  “Secured  Obligations”  (as  defined  therein).   Capitalized  terms  used  herein,  unless  otherwise  defined  herein,  shall  have the meanings ascribed thereto in the Guarantee and Security Agreement.               Pursuant  to  Section  7.05  of  the  Guarantee  and  Security  Agreement,  the  Additional Subsidiary Guarantor hereby agrees to become a “Subsidiary Guarantor” and  an “Obligor”, under and for all purposes of the Guarantee and Security Agreement, and  each  of  the  Annexes  to  the  Guarantee  and  Security  Agreement  shall  be  deemed  to  be  supplemented  in  the  manner  specified  in  Appendix  A  hereto.   Without  limiting  the  foregoing, (a) the Additional Subsidiary Guarantor hereby, jointly and severally with the  other  Subsidiary  Guarantors,  guarantees  to  each  Secured  Party  and  their  respective  successors and assigns the prompt payment in full when due (whether at stated maturity,  by acceleration or otherwise) of the Guaranteed Obligations in the same manner and to  the same extent as is provided in Section 3 of the Guarantee and Security Agreement and  (b) as collateral security for the payment in full when due (whether at stated maturity, by  acceleration  or  otherwise)  of  the  Secured  Obligations  of  the  Additional  Subsidiary  Guarantor,  the  Additional  Subsidiary  Guarantor  hereby  pledges  and  grants  to  the  Collateral Agent for the benefit of the Secured Parties as provided in the Guarantee and  Security Agreement a security interest in all of such Additional Subsidiary Guarantor’s  right, title and interest in, to and under the Collateral.               In  addition,  the  Additional  Subsidiary  Guarantor  hereby  makes  the  representations  and  warranties  set  forth  in  Section  2  of  the  Guarantee  and  Security  Agreement  with  respect  to  itself  and  its  obligations  under  this  Agreement,  as  if  each    522144.000028 21651939.2  25323438.4.BUSINESS 

 

reference in such Sections to the Guarantee and Security Agreement included reference to  this Agreement and Annexes hereto.               The  Additional  Subsidiary  Guarantor  hereby  instructs  its  counsel  to  deliver any opinions to the Secured Parties required to be delivered in connection with  the execution and delivery hereof.               IN  WITNESS  WHEREOF,  the  Additional  Subsidiary  Guarantor  has  caused this Guarantee Assumption Agreement to be duly executed and delivered as of the  day and year first above written.                                       [NAME OF ADDITIONAL SUBSIDIARY                                      GUARANTOR]                                        By:                                      Name:                                      Title:   Accepted and agreed:   ING CAPITAL LLC, as  Collateral Agent    By:  _____________________________  Name:  Title:    By:  _____________________________  Name:  Title:    522144.000028 21651939.2  25323438.4.BUSINESS 

 

                                                              Appendix A                        SUPPLEMENTS TO ANNEXES TO                  GUARANTEE AND SECURITY AGREEMENT    Supplement to Annex 2.05:               [to be completed]   Supplement to Annex 2.06:               [to be completed]   Supplement to Annex 2.07:               [to be completed]   Supplement to Annex 2.08:               [to be completed]   Supplement to Annex 2.09:               [to be completed]   Supplement to Annex 2.10:               [to be completed]   Supplement to Annex 2.11:               [to be completed]    522144.000028 21651939.2  25323438.4.BUSINESS 

 

                                                                   EXHIBIT C                   [Form of Intellectual Property Security Agreement]                               NOTICE OF GRANT OF         SECURITY INTEREST IN [COPYRIGHTS] [PATENTS] [TRADEMARKS]               NOTICE  OF  GRANT  OF  SECURITY  INTEREST  IN  [COPYRIGHTS]  [PATENTS]  [TRADEMARKS]  (the  “Notice”),  dated  as  of  __________,  made  by  Capital  Southwest  Corporation,  a  Texas  corporation  (the “Borrower”),  and the other direct  or  indirect  subsidiaries  of  the  Borrower  party  hereto  from  time  to  time  (collectively  the  “Subsidiary  Guarantors” and, together with the Borrower, the “Obligors”), in favor of ING CAPITAL LLC,  as Collateral Agent (the “Secured Party”).                 WHEREAS,  the  Obligors  are  the  owners  of  certain  [“Copyrights”]  [“Patents”]  [“Trademarks”]  (as  defined  in  the  Guarantee  and  Security  Agreement  referenced  below),  including the [copyright registrations and applications] [issued patents and patent applications]  [trademark and service mark registrations and trademark and service mark applications] set forth  on Schedule I attached hereto;               WHEREAS, pursuant to the terms and conditions of the Amended and Restated  Guarantee,  Pledge  and  Security  Agreement,  dated  as  of  December  21,  2018  (as  modified  and  supplemented and in effect from time to time), by and among the Obligors, ING Capital LLC, as  administrative  agent  for  the  Revolving  Lenders  referred  to  therein,  the  Financing  Agents  or  Designated Indebtedness Holders referred to therein, and ING Capital LLC, as collateral agent  for  the  Secured  Parties  referred  to  therein  (the  “Guarantee  and  Security  Agreement”),  the  Obligors granted, assigned and conveyed to the Secured Party a security interest in, and lien on,  certain  Intellectual  Property  (and  all  associated  rights  and  interests  therewith)  owned  by  the  Obligors, including the [Copyrights] [Patents] [Trademarks] now existing or hereafter acquired  and  all  products  and  proceeds  of  the  foregoing  (collectively,  the  [“Copyright  Collateral”]  [“Patent Collateral”] [“Trademark Collateral”]); and               WHEREAS,  pursuant  to  the  Guarantee  and  Security  Agreement,  the  Obligors  agreed to execute and deliver to the Secured Party this Notice for purposes of filing the same  with  the  [United  States  Copyright  Office  (the  “Copyright  Office”)]  [United  States  Patent  and  Trademark  Office  (the  “PTO”)]  to  confirm,  evidence  and  perfect  the  security  interest  in  the  [Copyright  Collateral]  [Patent  Collateral]  [Trademark  Collateral]  granted  pursuant  to  the  Guarantee and Security Agreement.               NOW,  THEREFORE,  for  good  and  valuable  consideration,  the  receipt  and  sufficiency of which are hereby acknowledged, and subject to the terms and conditions of the  Guarantee and Security Agreement, the Obligors hereby grant, assign and convey to the Secured  Party a security interest in, and lien, on the [Copyright Collateral] [Patent Collateral] [Trademark  Collateral] , provided that the grant of security interest shall not include any Excluded Assets (as  defined in the Guarantee and Security Agreement ).    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            The Obligors hereby acknowledge the sufficiency and completeness of this Notice  to  create  the  security  interest  in  the  [Copyright  Collateral]  [Patent  Collateral]  [Trademark  Collateral]  and  to  grant  the  same  to  the  Secured  Party,  and  the  Obligors  hereby  request  the  [Copyright Office] [PTO] to file and record the same together with the annexed Schedule I.               The  Obligors  and  the  Secured  Party  hereby  acknowledge  and  agree  that  the  security interest in the Copyright Collateral may only be terminated in accordance with the terms  of the Guarantee and Security Agreement.                       [Remainder of Page Intentionally Left Blank]    522144.000028 21651939.2  25323438.4.BUSINESS 

 

            IN  WITNESS  WHEREOF,  the  undersigned  has  caused  this  Notice  to  be  duly  executed and delivered as of the date first above written.                                 [____________________]                                By:                                 Name:                                  Title:     522144.000028 21651939.2  25323438.4.BUSINESS 

 

STATE OF                )                          )  ss.:  COUNTY OF               )               On this __ day of __________, ____, before me personally came _________, to  me known to be the person who signed the foregoing instrument and who being duly sworn by  me did depose and state that such person is the [_______________] of [____________]; such  person signed the instrument in the name of [_____________]; and such person had the authority  to sign the instrument on behalf of [______________].                                  Notary Public    522144.000028 21651939.2  25323438.4.BUSINESS 

 

                                                                     Schedule I                           [Copyrights] [Patents] [Trademarks]                                    [See attached]    522144.000028 21651939.2  25323438.4.BUSINESS 

 

                                                                   EXHIBIT D                             [Form of Pledge Supplement]                               PLEDGE SUPPLEMENT               This  Pledge  Supplement,  dated  [mm/dd/yy],  is  delivered  by  [NAME  OF  OBLIGOR]  a  [NAME  OF  STATE  OF  INCORPORATION]  [corporation]  (the  “Obligor”)  pursuant to the Amended and Restated Guarantee, Pledge and Security Agreement, dated as of  December  21,  2018  (as  modified  and  supplemented  and  in  effect  from  time  to  time,   the  “Guarantee  and  Security  Agreement”),  among  Capital  Southwest  Corporation,  the  other  Subsidiary  Guarantors  referred  to  therein,  ING  Capital  LLC,  as  administrative  agent  for  the  Revolving Lenders referred to therein, the Financing Agents or Designated Indebtedness Holders  referred to therein, and ING Capital LLC, as collateral agent for the Secured Parties referred to  therein.   Capitalized  terms  used  herein  not  otherwise  defined  herein  shall  have  the  meanings  ascribed thereto in the Guarantee and Security Agreement.               The  Obligor  represents  and  warrants  that  the  supplements  to  Annexes  to  the  Guarantee and Security Agreement attached hereto as Appendix A accurately and completely set  forth all additional information required pursuant to the Guarantee and Security Agreement and  hereby  agrees  that  such  supplements  to  Annexes  shall  constitute  part  of  the  Annexes  to  the  Guarantee and Security Agreement.               IN WITNESS WHEREOF, the Obligor has caused this Pledge Supplement to be  duly executed and delivered by its duly authorized officer as of [mm/dd/yy].                                 [NAME OF OBLIGOR]                                 By:   ______________________________                                      Name:                                      Title:    522144.000028 21651939.2  25323438.4.BUSINESS 

 

                                                                    Appendix A                          SUPPLEMENTS TO ANNEXES TO                    GUARANTEE AND SECURITY AGREEMENT    [Supplement to Annex 2.05:]               [to be completed]   [Supplement to Annex 2.06:]               [to be completed]    [Supplement to Annex 2.07:]               [to be completed]   [Supplement to Annex 2.08:]               [to be completed]   [Supplement to Annex 2.09:]               [to be completed]   [Supplement to Annex 2.10:]               [to be completed]   [Supplement to Annex 2.11:]               [to be completed]    522144.000028 21651939.2  25323438.4.BUSINESS 

 

                                       ANNEX 2.05                                CORPORATE INFORMATION         Name             Type of    Jurisdiction of Organizational    Place of Business                       Organization Organization   ID Number Capital Southwest     corporation     Texas        17385700         5400 LBJ Freeway Corporation                                                        Lincoln Center Tower                                                                        Suite 1300                                                                     Dallas, TX 75240 Capital Southwest     corporation    Delaware       5916759         5400 LBJ Freeway Equity Investments,                                                Lincoln Center Tower Inc.                                                                   Suite 1300                                                                     Dallas, TX 75240 Capital Southwest     corporation    Nevada     NV19861024293       5400 LBJ Freeway Management                                                         Lincoln Center Tower Corporation                                                            Suite 1300                                                                     Dallas, TX 75240 

 

                                 ANNEX 2.06                                NAME CHANGES           Obligor                Date of Change          Description of Change                                                        Changed name from CSWC Capital Southwest Equity          July 6, 2016       Chandler Signs Holdings, Inc. Investments, Inc.                                     to Capital Southwest Equity                                                           Investments, Inc. 

 

                                        ANNEX 2.07                                     PLEDGED INTERESTS      Grantor        Issuer and Type of   Certificate Percent of    Number of     Percent of                       Organization       Number   Equity Interest Outstanding Equity Interest                                                      Owned         Shares     Owned that is                                                                                  Pledged Capital         Capital Southwest Equity Southwest       Investments, Inc., a      R-1         100%           10          100% Corporation     Delaware corporation Capital         Capital Southwest Southwest       Management Corporation,    1          100%          1,000        100% Corporation     a Nevada corporation 

 

                                 ANNEX 2.08                              PROMISSORY NOTES  None. 

 

                                 ANNEX 2.09                                   ACCOUNTS  Owner of Account     Bank Name      Account No.    Account type     Bank Address Capital Southwest Texas Capital     1111087464  Operating Account 2350 Lakeside Corporation       Bank, N.A.                                      Blvd. Suite 800                                                                   Richardson, Texas                                                                   75082 Capital Southwest Texas Capital     1513001519  Money Market      2350 Lakeside Corporation       Bank, N.A.                    Account           Blvd. Suite 800                                                                   Richardson, Texas                                                                   75082 Capital Southwest Texas Capital     1511014787  Agency Account    2350 Lakeside Corporation       Bank, N.A.                                      Blvd. Suite 800                                                                   Richardson, Texas                                                                   75082 Capital Southwest U.S. Bank National 184543-201 Interest Cash     8 Greenway Plaza, Corporation       Association                   Account           Suite 1100                                                                   Houston, Texas                                                                   77046 Capital Southwest Customers Bank      6589511   Checking Account  99 Bridge Street, Corporation                                                       Phoenixville,                                                                   Pennsylvania 19460 Capital Southwest Customers Bank      6645587   Money Market      99 Bridge Street, Corporation                                     Account           Phoenixville,                                                                   Pennsylvania 19460 Capital Southwest LegacyTexas Bank   70233176   Checking Account  5851 Legacy Corporation                                                       Circle, 12th Floor,                                                                   Plano, Texas 75024 Capital Southwest Texas Capital     1511014795  Checking Account  2350 Lakeside Management        Bank, N.A.                                      Blvd. Suite 800 Corporation                                                       Richardson, Texas                                                                   75082 Capital Southwest Texas Capital     1511014803  Checking Account  2350 Lakeside Management        Bank, N.A.                                      Blvd. Suite 800 Corporation                                                       Richardson, Texas                                                                   75082 

 

                                 ANNEX 2.10                          COMMERCIAL TORT CLAIMS  None. 

 

                                 ANNEX 2.11                   INTELLECTUAL PROPERTY AND LICENSES  [None.

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