Document:

Exhibit 10.1

 

EXECUTED COPY

 

AMENDMENT NO. 4 TO SALE AND
SERVICING AGREEMENT
(Ares Capital CP Funding LLC)

 

THIS AMENDMENT NO. 4 TO THE SALE AND SERVICING AGREEMENT,
dated as of November 14, 2005 (this “Amendment”),
is entered into in connection with that certain Sale and Servicing Agreement, dated
as of November 3, 2004 (as amended, modified, waived, supplemented or restated
from time to time, the “Sale and Servicing Agreement”), by and among Ares
Capital CP Funding LLC, as the borrower (the “Borrower”), Ares Capital
Corporation, as the originator and as the servicer (in such capacity, the “Servicer”),
each of the Conduit Purchasers and Institutional Purchasers from time to time
party thereto, each of the Purchaser Agents from time to time party thereto, Wachovia
Capital Markets, LLC, as the administrative agent, U.S. Bank National
Association, as the trustee, and Lyon Financial Services, Inc. (d/b/a U.S.
Bank Portfolio Services), as the backup servicer.  Capitalized terms used and not otherwise
defined herein shall have the meanings given to such terms in the Sale and
Servicing Agreement.

 

R E  C  I
T  A  L  S

 

WHEREAS,
the above-named parties have entered into the Sale and Servicing Agreement, and,
pursuant to and, in accordance with Section 13.1 thereof, the parties
hereto desire to amend the Sale and Servicing Agreement in certain respects as
provided herein;

 

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

 

SECTION 1.                                            AMENDMENT.

 

(a)                                  Section 1.1
of the Sale and Servicing Agreement is hereby amended by deleting in their
entirety the following defined terms: (i) LOT Loan, (ii) RIC/BDC
Requirements, (iii) RIC/BDC Sale, (iv) RIC/BDC Sale Date, (v) RIC/BDC
Sale Notice, (vi) Senior Secured Loan, and (vii) Stretch Senior
Secured Loan.

 

(b)                                 Section 1.1
of the Sale and Servicing Agreement is hereby amended by adding the following
defined terms in the proper alphabetical order:

 

“Broadly Syndicated Loan”: 
Any Loan that is a Term Loan or a Revolving Loan that (i) arises
under an Underlying Instrument where at least four lending financial institutions
or other lender institutions (including Ares Capital Corporation) will be
parties thereto within 15 days from the closing date of the Underlying
Instrument, (ii) is made to an Obligor with EBITDA of at least $40,000,000
on a trailing 12 month basis, (iii) has a public rating of such Loan by
either S&P or Moody’s and (iv) is secured by a valid and perfected
first priority Lien on all of the Obligor’s assets constituting Related
Property for the Loan, subject to such exceptions that are

 

 

generally acceptable to lending institutions
in connection with their regular commercial lending activities, and such other
exceptions to which similar Related Property is commonly subject and which do
not individually, or in the aggregate, materially and adversely affect the
benefits of the security intended to be provided by the related Underlying
Instruments and UCC financing statements.  For avoidance of doubt, (i) Broadly
Syndicated Loans may include multiple tranches of a single facility and (ii) a
Broadly Syndicated Loan that satisfies some but not all of the foregoing
provisions of this definition may still be eligible for purchase by the
Borrower as another loan type, subject to such Loan’s satisfaction of the
criteria set forth in the definitions of those Loans and in the definition of
Eligible Loan.

 

“Canadian Dollar”: The lawful currency of Canada.

 

“Discretionary Sale”: 
Defined in Section 2.20(a).

 

“Discretionary Sale Date”: The Business Day identified by the
Borrower to the Administrative Agent and the Trustee in a Discretionary Sale
Notice as the proposed date of a Discretionary Sale.

 

“Discretionary Sale Notice”: 
Defined in Section 2.20(a)(i).

 

“Euro”:  The lawful
currency of Participating Member States.

 

“First Lien Loan”:  Any
Loan that is a Term Loan or Revolving Loan that (i) is secured by a valid
and first priority Lien on all of the Obligor’s assets constituting Related
Property for the Loan, (ii) has a Loan-to-Value Ratio not greater than (a) 60%
where the Loan is not a Material Mortgage Loan or the Related Property is not
primarily real estate and (b) 75% where the Loan is a Material Mortgage
Loan or the Related Property is primarily real estate, and (iii) provides
that the payment obligation of the Obligor on such Loan is either senior to, or
pari passu with, all other
Indebtedness of such Obligor.

 

“Group I Country”:  Any of
The Netherlands, the United Kingdom, Australia and New Zealand.

 

“Group II Country”:  Any
of Germany, Ireland, Sweden and Switzerland.

 

“Group III Country”:  Any
of Austria, Belgium, Denmark, Finland, France, Iceland, Liechtenstein,
Luxembourg, Norway and Spain.

 

“Participating Member States”: 
Means any member state of the European Community that adopts or has
adopted the Euro as its lawful currency in accordance with legislation of the
European Community relating to Economic and Monetary Union.

 

“Qualified Second Lien Loan”: All of the following:

 

2

 

(a)                                  Any
First Lien Loan or Second Lien Loan which has a Loan-to-Value Ratio of not
greater than (i) 70% where the Loan is not a Material Mortgage Loan or the
Related Property is not primarily real estate and (ii) 80% where the Loan
is a Material Mortgage Loan or Related Property is primarily real estate;

 

(b)                             Any
Second Lien Loan as to which the ratio, for the related Obligor, of (x) the sum
of (i) the maximum availability (as provided in the applicable loan
documentation) of such Loan as of the date of its origination plus (ii) the
maximum availability under all other indebtedness of the related Obligor which
ranks either senior to, or pari passu with, such Loan to (y) such Obligor’s
earnings before interest, taxes, depreciation and amortization for the twelve
calendar months preceding such date shall not exceed (I) in the case of Obligors
in the media and telecommunications industries, 6.5:1.0 and (II) in the case of
all other Obligors, 4.5:1.0, provided,
that for the avoidance of doubt, an Obligor’s earnings before interest, taxes,
depreciation and amortization shall be calculated in accordance with the Credit
and Collection Policy; and

 

(c)                                  Any
Second Lien Loan with respect to which the underlying loan agreement (i) contains
a limit on the amount of indebtedness senior to such Loan which may be incurred
by the related Obligor, (ii) preserves enforcement rights for the lender
of such Loan after a default under the related underlying loan agreement, and (iii) contains
either or both (x) a standstill period applicable to the holders of such Loan
of not longer than 180 days following a default under the loan agreement
governing the senior indebtedness of such Obligor, and (y) provisions requiring
the consent of the holders of such Loan to release all or substantially all of
the Related Property securing such Loan unless the majority of the proceeds of
the disposition of such Related Property are used to repay the indebtedness
which is senior to or pari passu with such Loan, or to repay such Loan.

 

“Sterling”:  The lawful
currency of the United Kingdom.

 

(c)                                  The
definition of “Advance Rate” in Section 1.1 of the Sale and Servicing
Agreement is hereby amended by replacing the table in the definition with the
following:

 

	
  Type of Loan

  	
   

  	
  Advance Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Broadly Syndicated Loan

  	
   

  	
  90%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Secured ABL

  	
   

  	
  85%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First Lien Loan

  	
   

  	
  80%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Qualified Second Lien Loan

  	
   

  	
  75%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Second Lien Loan

  	
   

  	
  70%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Subordinated Loan

  	
   

  	
  63%

  	
   

  

 

3

 

	
  Type of Loan

  	
   

  	
  Advance Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Junior Subordinated Loan

  	
   

  	
  50%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DIP Loan

  	
   

  	
  70%

  	
   

  

 

(d)                                 The  definition of “Concentration Limits” in Section 1.1
of the Sale and Servicing Agreement is hereby amended by deleting clause (a) thereof
in its entirety and replacing it with the following:

 

(a)                                  [Reserved];

 

(e)                                  The  definition of “Concentration Limits” in Section 1.1
of the Sale and Servicing Agreement is hereby amended by amending and restating
clauses (b), (c), (d), (e), (f), (g) and (h) thereof in their
entirety as follows:

 

(b)                                 the
sum of the Outstanding Loan Balances of Eligible Loans that are Loans to a
single Obligor (including any Affiliates thereof) shall not exceed $30,000,000;

 

(c)                                  the
sum of the Outstanding Loan Balances of all Eligible Loans divided by the
number of Eligible Obligors (including Affiliates thereof) shall not exceed the
greater of 5% or $13,500,000;

 

(d)                                 the
sum of the Outstanding Loan Balances of Eligible Loans that are Loans to
Eligible Obligors in the same Moody’s Industry Classification Group shall not
exceed the greater of 20% or $40,000,000;

 

(e)                                          the sum of
the Outstanding Loan Balances of Eligible Loans that are DIP Loans shall not
exceed the greater of 5% or $10,000,000;

 

(f)                                            the sum of
the Outstanding Loan Balances of Eligible Loans that are Revolving Loans shall
not exceed the greater of 20% or $40,000,000;

 

(g)                                         the sum of the
Outstanding Loan Balances of Eligible Loans that have a Risk Rating of (i) 1,
shall not exceed 0%, and (ii) 2, shall not exceed the greater of 10% or $12,500,000;

 

(h)                                         the sum of the
Outstanding Loan Balances of Eligible Loans that are PIK Loans with a current
annual cash coupon of less than (i) the Ares LIBOR Rate + 5.0%, if such
Loan is a Floating Rate Loan with an interest rate based on Ares LIBOR Rate, (ii) the
Ares Prime Rate + 3.0%, if such Loan is a Floating Rate Loan with an interest
rate based on the Ares Prime Rate, and (iii) 8.0% if such Loan is a Fixed
Rate Loan, shall not exceed 0%;

 

4

 

(f)                                    The
definition of “Concentration Limits” in Section 1.1 of the Sale and
Servicing Agreement is hereby amended by deleting the word “and” from the end
of clause (g) thereof, by replacing the period at the end of clause (h) with
“; and” and by adding the following clause (i), thereto:

 

“(i)                               the
sum of the Outstanding Loan Balances of Eligible Loans that are Loans to
Obligors organized under the laws of, or all or substantially all of the assets
of which are located in, Canada, any Group I Country, Group II Country or Group
III Country shall not exceed the greater of 10% or $20,000,000; provided that the sum of the Outstanding
Loan Balances of Eligible Loans to Obligors that are organized under the laws
of, or all or substantially all of the assets of which are located in, any
Group I Country, Group II Country or Group III Country shall not exceed the
greater of 5% or $10,000,000.

 

(g)                                 The
definition of “Eligible Loan” in Section 1.1 of the Sale and Servicing
Agreement is hereby amended by amending and restating clause (B)(d) thereof
in its entirety with the following:

 

(d)                                 such
Loan is denominated and payable only in Dollars in the United States and does
not permit the currency or country in which such Loan is payable to be changed
provided that certain Loans may be denominated in Sterling, Euros or Canadian
dollars but payable in Dollars subject to currency hedging approved by the
Administrative Agent (in its sole discretion);

 

(h)                                 The
definition of “Eligible Loan” in Section 1.1 of the Sale and Servicing
Agreement is hereby amended by amending and restating clause (B)(f) thereof
in its entirety with the following:

 

(f)                                    such
Loan (i) if a Broadly Syndicated Loan, Senior Secured ABL, First Lien
Loan, Qualified Second Lien Loan, Second Lien Loan or DIP Loan has an original
term to maturity that does not exceed 96 months and (ii) if a Senior
Subordinated Loan or Junior Subordinated Loan, has an original term to maturity
that does not exceed 120 months;

 

(i)                                     The
definition of “Eligible Obligor” in Section 1.1 of the Sale and Servicing
Agreement is hereby amended by amending and restating clause (vi) thereof
in its entirety as follows:

 

(vi)                              such
Obligor’s principal office is located in the United States, Canada, any Group I
Country, any Group II Country or any Group III Country;

 

(j)                                     The
definition of “Measurement Date” in Section 1.1 of the Sale and Servicing
Agreement is hereby amended by deleting the words “RIC/BDC Sale Date” in clause
(x) thereof and replacing them with the words “Discretionary Sale Date”
thereto.

 

5

 

(k)                                  Section 1.1
of the Sale and Servicing Agreement is hereby amended by amending and restating
in their entirety the following defined terms:

 

“Facility Amount”:  The
lesser of (a) $350,000,000, as such amount may vary from time to time upon
the written agreement of the parties hereto, and (b) the aggregate Commitments
then in effect; provided that, on
or after the Termination Date, the Facility Amount shall be equal to the
Advances Outstanding.

 

“Junior Subordinated Loan”: 
Any Term Loan that (i) may or may not be secured by a Lien on the
Obligor’s assets constituting Related Property for the Loan, (ii) has a
Loan-to-Value Ratio not greater than (a) 80% where the Loan is not a
Material Mortgage Loan or the Related Property is not primarily real estate,
and (b) 90% where the Loan is a Material Mortgage Loan or the Related
Property is primarily real estate, and (iii) that contains terms which,
upon the occurrence of an event of default under the Underlying Instruments or
in the case of any liquidation or foreclosure on the Related Property, provide
that the Borrower’s portion of such Loan would be paid only after the other
lenders party to such Loan (including any lender party making any Broadly
Syndicated Loan, Senior Secured ABL, First Lien Loan, Qualified Second Lien
Loan, Second Lien Loan or Senior Subordinated Loan whose right to payment is
contractually senior to the Borrower) is paid in full.

 

“Large Obligor Coverage Amount”: 
As of any Measurement Date, an amount equal to the product of (i) 1.5
and (ii) the sum of the Outstanding Loan Balances of all Eligible Loans to
the Obligor representing the highest aggregate Outstanding Loan Balance included
in the Borrowing Base on such date (net of amounts in excess of the
Concentration Limits).

 

“Loan”:  Any Broadly
Syndicated Loan, DIP Loan, First Lien Loan, Junior Subordinated Loan, Qualified
Second Lien Loan, Second Lien Loan, Senior Secured ABL or Senior Subordinated
Loan originated or acquired by the Originator in the ordinary course of its
business, which loan includes, without limitation, (i) the Required Loan
Documents and Loan File, and (ii) all right, title and interest of the
Originator in and to the loan and any Related Property, but excluding, in each
case, the Retained Interest, any Attached Equity and Excluded Amounts.

 

“Senior Subordinated Loan”: 
Any Term Loan that (i) has a Loan-to-Value Ratio not greater than (a) 75%
where the Loan is not a Material Mortgage Loan or the Related Property is not
primarily real estate, and (b) 85% where the Loan is a Material Mortgage
Loan or the Related Property is primarily real estate, and (ii) contains
terms which, upon the occurrence of an event of default under the Loan
Documents or in the case of any liquidation or foreclosure on the Related
Property, provide that the Borrower’s portion of such Loan would be paid only
after the other lender party to such Loan (including any lender party making
any Broadly Syndicated Loan, Senior Secured ABL, First Lien Loan, Qualified
Second Lien Loan or Second Lien Loan whose right to payment is contractually
senior to the Borrower) is paid in full.

 

6

 

(l)                                     Section 5.2(c) of
the Sale and Servicing Agreement is hereby amended by deleting the words “RIC/BDC
Sale” in the third line thereof and replacing them with the words “Discretionary
Sale” thereto.

 

(m)                               Section 8.9(f) of
the Sale and Servicing Agreement is hereby amended by deleting the words “RIC/BDC
Sale” thereof and replacing them with the words “Discretionary Sale” thereto.

 

(n)                                 Section 9.2(v) of
the Sale and Servicing Agreement is hereby amended by deleting the words “RIC/BDC
Sale” thereof and replacing them with the words “Discretionary Sale” thereto.

 

(o)                                 Section 10.1(j)
of the Sale and Servicing Agreement is hereby deleted in its entirety and
replaced with the following:

 

(j)                                     [Reserved];

 

(p)                                 Section 2.20
is hereby amended and restated in its entirety as follows:

 

Section 2.20.              Discretionary
Sales.

 

(a)                                  Prior
to the occurrence of an Unmatured Termination Event, a Termination Event, on
any Discretionary Sale Date, the Borrower shall have the right to prepay all or
a portion of the Advances Outstanding in connection with the sale and
assignment to the Borrower by the Trustee, for the benefit of the Secured
Parties, of one or more Loans (each, a “Discretionary
Sale”), subject to the following terms and conditions:

 

(i)                                     At
least one Business Day prior to such Discretionary Sale Date, the Borrower
shall have recommended to the Administrative Agent in writing that the related
Loan should be sold and shall have given the Administrative Agent (with a copy
to the Trustee) written notice of its intent to effect a Discretionary Sale
(each such notice, a “Discretionary Sale Notice”), specifying the Discretionary
Sale Date, including a list of all Loans to be sold and assigned pursuant to
such Discretionary Sale;

 

(ii)                                  Any
Discretionary Sale shall be made by the Borrower to an unaffiliated third party
purchaser in a transaction (w) in accordance with the Servicing Standard, (x)
reflecting arms-length market terms, (y) in which the Borrower makes no
representations, warranties or covenants and provides no indemnification for
the benefit of any other party to the Discretionary Sale (other than any
representations, warranties or covenants relating to the Borrower’s ownership
of or title to the Loan that is the subject of the Defaulted Loan Sale that are
standard and customary in connection with such a sale or for which the
Originator has agreed to fully indemnify the Borrower) and (z) the primary

 

7

 

purpose of
which is other than to maximize gain or minimize loss on the Borrower’s assets
and such purpose of the transaction shall be set forth in writing by Borrower
in the notice delivered pursuant to sub-clause (i) above;

 

(iii)                               The
Servicer shall deliver to the Administrative Agent (with a copy to the Trustee)
a completed Borrowing Base Certificate and other evidence to the reasonable
satisfaction of the Administrative Agent that (x) the Borrower shall have
sufficient funds on the related Discretionary Sale Date to effect the
contemplated Discretionary Sale in accordance with this Agreement (unless a Discretionary
Sale is to be effected on a Payment Date, in which case there must be
sufficient Available Funds to effect the contemplated Discretionary Sale in
accordance with the terms of this Agreement), and (y) the sum of the
Outstanding Loan Balances of all Loans that have been sold pursuant to Discretionary
Sales during the 12 month period immediately preceding the proposed date of
sale (or such lesser number of months as shall have elapsed as of such date)
does not exceed 20% of the Facility Amount;

 

(iv)                              After
giving effect to the Discretionary Sale and the assignment to the Borrower of
the related Collateral on any Discretionary Sale Date, (a) each of the
Availability and the Pre-Funded Availability shall be equal to or greater than
zero, (b) the representations and warranties contained in Section 4.1
hereof shall continue to be correct in all material respects, except to the
extent relating to an earlier date, and (c) neither an Unmatured
Termination Event nor a Termination Event shall have resulted; and

 

(v)                                 On
the related Discretionary Sale Date, the Trustee on behalf of the Secured
Parties shall have received, into the Collection Account, in immediately
available funds, an amount equal to the sum of (a) the portion of the
Advances Outstanding to be prepaid that are attributable to the Collateral to
be sold by the Borrower pursuant to this Section 2.20  plus (b) an amount equal to all unpaid
Interest to the extent reasonably determined by the Administrative Agent and
the Purchaser Agents to be attributable to that portion of the Advances
Outstanding to be paid in connection with the Discretionary Sale plus (c) an aggregate amount equal to the
sum of all other amounts due and owing to the Administrative Agent, the Trustee
and the Backup Servicer, the Purchaser Agents, the applicable Purchaser, any
other Affected Parties and the Hedge Counterparties, as applicable, under this
Agreement and the other Transaction Documents, to the extent accrued to such
date and to accrue to the next Payment Date (including, without limitation,
Breakage Costs, Hedge Breakage Costs and any other payments owing to the Hedge
Counterparties in respect of the termination of any Hedge Transaction) in each
case, to the extent attributable to the Collateral to be sold by the Borrower
pursuant to this Section 2.20; provided that the Trustee,
the Administrative Agent and each Purchaser Agent shall have the right to
determine whether the amount paid (or proposed to be paid) by the Borrower on
the

 

8

 

Discretionary
Sale Date is sufficient to satisfy such requirements and is sufficient to
reduce the Advances Outstanding to the extent requested by the Borrower in
connection with the Discretionary Sale; provided,
further, that any proceeds of
such Discretionary Sale in excess of the amount so deposited into the
Collection Account also shall be deposited into the Collection Account and used
to prepay Advances Outstanding on such Discretionary Sale Date.

 

(b)                                 In
connection with any Discretionary Sale, following receipt by the Purchaser
Agents of the amounts referred to in clause (v) above,
there shall be sold and assigned to the Borrower (for further sale to a
third-party unaffiliated with the Borrower, the Originator or the Servicer)
without recourse, representation or warranty all of the right, title and
interest of the Administrative Agent, the Trustee, the Purchaser Agents, the
Purchasers and the Secured Parties in, to and under the portion of the
Collateral subject to such Discretionary Sale and such portion of the
Collateral so transferred shall be released from the Lien of this Agreement
(subject to the requirements of clauses (iii) and
(iv) above).

 

(c)                                  The
Originator hereby agrees to pay the reasonable legal fees and expenses of the
Administrative Agent, the Trustee, each Purchaser Agent and the Secured Parties
in connection with any Discretionary Sale (including, but not limited to,
expenses incurred in connection with the release of the Lien of the
Administrative Agent, the Trustee, the Secured Parties and any other party
having an interest in the Collateral in connection with such Discretionary
Sale).

 

(d)                                 In
connection with any Discretionary Sale, on the related Discretionary Sale Date,
the Trustee shall, at the expense of the Borrower (i) execute such
instruments of release with respect to the portion of the Collateral to be
retransferred to the Borrower, in recordable form if necessary, in favor of the
Borrower as the Borrower may reasonably request, (ii) deliver any portion
of the Collateral to be retransferred to the Borrower in its possession to the
Borrower and (iii) otherwise take such actions, and cause or permit the
Trustee to take such actions, as are necessary and appropriate to release the
Lien of the Trustee and the Secured Parties on the portion of the Collateral to
be retransferred to the Borrower and release and deliver to the Borrower such
portion of the Collateral to be retransferred to the Borrower.

 

(q)                                 The
following Section 4.6 is hereby added to Article IV of the Sale and
Servicing Agreement in its appropriate numerical order:

 

Section 4.6.                Representations
and Warranties of the Purchasers.

 

Each Purchaser hereby represents and warrants
that it is a “Qualified Purchaser” within the meaning of Section 2(a)(51)
of the 1940 Act, as amended.

 

(r)                                    Annex
B is hereby amended and restated in its entirety by replacing the figure “$225,000,000”
therein with the figure “$350,000,000” under the “Commitment” heading.

 

9

 

SECTION 2.                                            AGREEMENT IN FULL FORCE AND EFFECT AS AMENDED.

 

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

 

SECTION 3.                                            REPRESENTATIONS.

 

Each of the Borrower and Servicer represent and warrant as of the date
of this Amendment as follows:

 

(i)                                     it
is duly incorporated or organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization;

 

(ii)                                  the
execution, delivery and performance by it of this Amendment are within its
powers, have been duly authorized, and do not contravene (A) its charter,
by-laws, or other organizational documents, or (B) any Applicable Law;

 

(iii)                               no
consent, license, permit, approval or authorization of, or registration, filing
or declaration with any governmental authority, is required in connection with
the execution, delivery, performance, validity or enforceability of this Amendment
by or against it;

 

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

 

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

 

(vi)                              it
is not in default under the Sale and Servicing Agreement; and

 

(vii)                           there
is no Termination Event, Unmatured Termination Event, or Servicer Default.

 

SECTION 4.                                            CONDITIONS TO EFFECTIVENESS.

 

The effectiveness of this Amendment is conditioned upon (i) delivery
of executed signature pages by all parties hereto to the Administrative Agent,
(ii) execution and delivery of the Second Amended and Restated VFCC Fee
Letter, (iii) execution and delivery of the Second Amended, Restated and
Substituted VFCC Certificate and (iv) payment to the Administrative

 

10

 

Agent of the Facility Increase Structuring
Fee in connection with this Amendment as required by the Second Amended and
Restated VFCC Fee Letter.

 

SECTION 5.                                            MISCELLANEOUS.

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)                                 THIS
AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS.

 

[Remainder of Page Intentionally Left
Blank]

 

11

 

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

 

 

	
  VFCC:

  	
  VARIABLE FUNDING CAPITAL

  COMPANY LLC (f/k/a Variable
  Funding Capital Corporation)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wachovia Capital Markets, LLC,

  as attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Douglas R. Wilson, Sr.

  	
   

  
	
   

  	
   

  	
  Name: 
  Douglas R. Wilson, Sr.

  
	
   

  	
   

  	
  Title:   
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  THE ADMINISTRATIVE AGENT

  AND THE VFCC AGENT:

  	
  WACHOVIA CAPITAL MARKETS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Paul A. Burkhart

  	
   

  
	
   

  	
   

  	
  Name:  
  Paul A. Burkhart

  
	
   

  	
   

  	
  Title:    
  Vice President

  
					

 

 

[Signatures Continued on the Following Page]

 

 

	
  THE BORROWER:

  	
  ARES CAPITAL CP FUNDING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Daniel F. Nguyen

  	
   

  
	
   

  	
   

  	
  Name:  
  Daniel F. Nguyen

  
	
   

  	
   

  	
  Title:    
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE ORIGINATOR

  AND SERVICER:

  	
  ARES CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Michael Arougheti

  	
   

  
	
   

  	
   

  	
  Name:  
  Michael Arougheti

  
	
   

  	
   

  	
  Title:    
  PresidentExhibit 10.1

 

THIRD AMENDMENT TO

AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT

 

THIS THIRD AMENDMENT TO THE AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT, (the “Amendment”)
effective as of October 31, 2005, is entered into by and between EBIX, INC., a Delaware corporation f/k/a EBIX.COM, INC. (the “Borrower”), and LaSALLE BANK NATIONAL ASSOCATION, a national banking association (the “Bank”).

 

RECITALS

 

WHEREAS, the Bank
has previously loaned or committed to loan the Borrower the original principal
sum of up to $5,000,000.00, comprised of a certain Revolving Credit Loan
Commitment not to exceed the sum of $5,000,000.00 as evidenced, secured and
governed by, among other documentation, that certain Business Loan Agreement
dated as of October 31, 2003 by and between the Borrower and the Bank (the
“Original Revolving Credit Loan”),
which was amended and restated by that certain Amended & Restated Loan
and Security Agreement dated as of April 21, 2004, the First Amendment to Amended &
Restated Loan and Security Agreement dated as of July 1, 2004 and the
Second Amendment to Amended & Restated Loan and Security Agreement
dated as of December 31, 2004 (collectively the “Loan Agreement”) the
terms of which are incorporated by reference and made a part of this Amendment
as though fully set out herein; and

 

WHEREAS, the parties
wish to amend the terms of the Loan Agreement, according to the terms of this
Agreement.

 

AGREEMENTS

 

NOW THEREFORE, in
consideration of the above recitals, the mutual promises and agreements of the
parties et forth herein and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

 

Section 1.                                            Article I,
Definitions, is hereby amended as follows:

 

The following definitions are added to the Loan Agreement:

 

“Business Day” shall mean any day other than a Saturday, Sunday
or a legal holiday on which banks are authorized or required to be closed for
the conduct of commercial banking business in Chicago, Illinois.

 

“Interest Period” shall mean successive three month periods,
beginning and ending as provided in this Agreement.

 

“LIBOR” shall mean a rate of interest equal to (a) the per
annum rate of interest at which United States dollar deposits for a period
equal to the relevant Interest Period are offered in the London Interbank
Eurodollar market at 11:00 a.m. (London time) two Business Days prior to
the commencement of such Interest Period (or three Business Days prior to the
commencement of such Interest Period if banks in London, England were not open
and

 

 

dealing in offshore United States dollars on such second preceding
Business Day), as displayed in the Bloomberg Financial
Markets system (or other authoritative source selected by the Bank
in its sole discretion), divided by (b) a number determined by subtracting
from 1.00 the then stated maximum reserve percentage for determining reserves
to be maintained by member banks of the Federal Reserve System for Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D), or as LIBOR is otherwise determined by the
Bank in its sole and absolute discretion. 
The Bank’s determination of LIBOR shall be conclusive, absent manifest
error.

 

“LIBOR Loan” or “LIBOR Loans” shall mean that portion,
and collectively those portions, of the aggregate outstanding principal balance
of the Revolving Credit Loan that bears interest at the LIBOR Rate.

 

“LIBOR Rate” shall mean a rate of interest equal to LIBOR plus
2.00% which LIBOR Rate shall remain fixed during such Interest Period.

 

“Prime Loan” or “Prime Loans” shall mean that portion,
and collectively, those portions of the aggregate outstanding principal balance
of the Revolving Credit Loan that bears interest at the Prime Rate.

 

“Regulatory Change” shall mean the introduction of, or any
change in any applicable law, treaty, rule, regulation or guideline or in the
interpretation or administration thereof by any governmental authority or any
central bank or other fiscal, monetary or other authority having jurisdiction
over the Bank or its lending office.

 

Section 2. Sections2.01(A), (B) and (C) of Article II,
The Loan, are hereby amended and restated in its entirety as follows:

 

2.01                           Subject
to the terms and conditions of this Agreement, the Bank will make a revolving
credit facility (the “Revolving Credit Loan Commitment”) available to the
Borrower, pursuant to which the Bank may from time to time make revolving
credit advances (each, a “Revolving Credit Loan”) to the Borrower.  The aggregate amount of advances outstanding
under the Revolving Credit Loan Commitment shall at no time exceed the sum of
$5,000,000.00 (the “Revolving Loan Commitment Amount”), minus the amount of all
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit).  Amounts borrowed under this Section may
be repaid and reborrowed during the term of this Agreement.  The Revolving Credit Loan Commitment shall
terminate on October 31, 2006 (the “Revolving Credit Loan Termination Date”).

 

(A)                              [Intentionally
Deleted].

 

(B)                                The
proceeds of Revolving Credit Loans shall be disbursed by deposit to the
Borrower’s account maintained at the Bank or otherwise in accordance with the
written instructions of the Borrower or the other provisions of this
Agreement.  Revolving Credit Loans shall
be used by the Borrower solely for working capital purposes.

 

2

 

(C)                                All
outstanding Revolving Credit Loans together with any accrued but unpaid
interest thereon shall be repaid in full on the Revolving Credit Loan
Termination Date.  In addition,
outstanding Revolving Credit Loans shall be repaid upon demand if and to the
extent that they exceed the limitations imposed by Section 2.01above.  Borrower may repay and reborrow under the
Revolving Credit Loan Commitment subject to the terms and conditions of this
Agreement.  Also, if the Borrower chooses
not to convert any Revolving Credit Loan which is a LIBOR Loan to a Prime Loan
as provided in Section 2.08(B) and Section 2.08(C), then such
Revolving Credit Loan shall immediately be due and payable on the last Business
Day of the then existing Interest Period or on such earlier date as required by
law, all without further demand, presentment, protest or notice of any kind,
all of which are hereby waived by the Borrower.

 

Section 3.                                            Section 2.02
of Article II, The Loan, is hereby amended and restated in its
entirety as follows:

 

2.02 (A)      Except
as provided in Section 2.02(B) below, the Revolving Credit Loans
shall bear interest as follows: (i) the proceeds of the Revolving Credit
Loans deposited into the Cash Account shall bear interest at the LIBOR Rate,
and (ii) the remaining proceeds of the Revolving Credit Loans shall bear
interest at a floating per-annum rate equal to the Prime Rate.  Accrued and unpaid interest on the unpaid
principal balance of all LIBOR Loans shall be payable on the last Business Day
of each Interest Period, commencing on the first such date to occur after the
date hereof, on the date of any principal repayment of a LIBOR Loan and on the
Revolving Credit Loan Termination Date.  Accrued
and unpaid interest on Prime Loans shall be paid monthly in arrears commencing
on November 1, 2005 and continuing on the first day of each month
thereafter.

 

(B)                                Any
Obligation of the Borrower which is not paid when due, whether at stated
maturity, by acceleration or otherwise, shall bear interest payable on demand
at an interest rate equal to the LIBOR Rate then in effect plus five percent
(5%) and the Prime Rate then in effect plus five percent (5%) until paid.  In addition, after the occurrence of any
Event of Default and delivery to the Borrower of the Bank’s notice to charge
post-default interest, all Obligations of the Borrower shall bear interest at
the highest rate provided for in the immediately preceding sentence.

 

Section 4.                                            Section 2.04
of Article II, The Loan, is hereby amended and restated in its
entirety as follows:

 

2.04                           All
payments, which are not prepayments, received from the Borrower for payment on
the Loans shall be applied by the Bank first to unpaid interest due and payable
on the Revolving Credit Loans, second to any unpaid fees or expenses incurred
by or owed to the Bank, third to any late charges or fees, and fourth to the
reduction of the principal outstanding on the Loan; provided, however,
while applying payments to unpaid interest the Bank shall have the sole
discretion to decide whether to apply such payments first to unpaid interest
due and payable on the LIBOR Loans or to unpaid interest due and payable on the
Prime Loans.

 

3

 

Section 5.                                            Article II,
The Loan, is hereby amended to add the following as Section 2.08 as
follows:

 

2.08(A)         LIBOR
Loan Prepayments.  Notwithstanding
anything to the contrary contained herein, the principal balance of any LIBOR
Loan may not be prepaid in whole or in part at any time.  If, for any reason, a LIBOR Loan is paid
prior to the last Business Day of any Interest Period, whether voluntary,
involuntary, by reason of acceleration or otherwise, each such prepayment of a
LIBOR Loan will be accompanied by the amount of accrued interest on the amount
prepaid and any and all costs, expenses, penalties and charges incurred by the
Bank as a result of the early termination or breakage of a LIBOR Loan, plus the
amount, if any, by which (i) the additional interest which would have been
payable during the Interest Period on the LIBOR Loan prepaid had it not been
prepaid, exceeds (ii) the interest which would have been recoverable by
the Bank by placing the amount prepaid on deposit in the domestic certificate
of deposit market, the eurodollar deposit market, or other appropriate money
market selected by the Bank, for a period starting on the date on which it was
prepaid and ending on the last day of the Interest Period for such LIBOR
Loan.  The amount of any such loss or
expense payable by the Borrower to the Bank under this section shall be
determined in the Bank’s sole discretion based upon the assumption that the
Bank funded its loan commitment for LIBOR Loans in the London Interbank
Eurodollar market and using any reasonable attribution or averaging methods
which the Bank deems appropriate and practical, provided, however, that the
Bank is not obligated to accept a deposit in the London Interbank Eurodollar
market in order to charge interest on a LIBOR Loan at the LIBOR Rate.

 

(B)                                LIBOR
Unavailability.  If the Bank
determines in good faith (which determination shall be conclusive, absent
manifest error) prior to the commencement of any Interest Period that (i) the
making or maintenance of any LIBOR Loan would violate any applicable law, rule,
regulation or directive, whether or not having the force of law, (ii) United
States dollar deposits in the principal amount, and for periods equal to the
Interest Period for funding any LIBOR Loan are not available in the London
Interbank Eurodollar market in the ordinary course of business, (iii) by
reason of circumstances affecting the London Interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the LIBOR Rate to be
applicable to the relevant LIBOR Loan, or (iv) the LIBOR Rate does not
accurately reflect the cost to the Bank of a LIBOR Loan, the Bank shall
promptly notify the Borrower thereof and, so long as the foregoing conditions
continue, none of the Loans may be advanced as a LIBOR Loan thereafter.  In addition, at the Borrower’s option, each
existing LIBOR Loan shall be immediately (i) converted to a Prime Loan on
the last Business Day of the then existing Interest Period, or (ii) due
and payable on the last Business Day of the then existing Interest Period,
without further demand, presentment, protest or notice of any kind, all of
which are hereby waived by the Borrower.

 

(C)                                Regulatory
Change.  In addition, if, after the
date hereof, a Regulatory Change shall, in the reasonable determination of the
Bank, make it unlawful for the Bank to make or maintain the LIBOR Loans, then
the Bank shall promptly notify the Borrower and none of the Loans may be
advanced as a LIBOR Loan thereafter.  In
addition, at the Borrower’s option, each existing LIBOR Loan shall be
immediately (i) converted to a Prime Loan on the last Business Day of the
then existing Interest Period or on such earlier date as required by law, or (ii) due
and payable on the last Business Day of the then existing Interest Period or on

 

4

 

such earlier date as required by law, all without further demand,
presentment, protest or notice of any kind, all of which are hereby waived by
the Borrower.

 

(D)                               LIBOR
Indemnity.  If any Regulatory Change,
or compliance by the Bank or any Person controlling the Bank with any request
or directive of any governmental authority, central bank or comparable agency
(whether or not having the force of law) shall (a) impose, modify or deem
applicable any assessment, reserve, special deposit or similar requirement
against assets held by, or deposits in or for the account of or loans by, or
any other acquisition of funds or disbursements by, the Bank; (b) subject
the Bank or any LIBOR Loan to any tax, duty, charge, stamp tax or fee or change
the basis of taxation of payments to the Bank of principal or interest due from
the Borrower to the Bank hereunder (other than a change in the taxation of the
overall net income of the Bank); or (c) impose on the Bank any other
condition regarding such LIBOR Loan or the Bank’s funding thereof, and the Bank
shall determine (which determination shall be conclusive, absent manifest
error) that the result of the foregoing is to increase the cost to, or to
impose a cost on, the Bank or such controlling Person of making or maintaining
such LIBOR Loan or to reduce the amount of principal or interest received by
the Bank hereunder, then the Borrower shall pay to the Bank or such controlling
Person, on demand, such additional amounts as the Bank shall, from time to
time, determine are sufficient to compensate and indemnify the Bank for such
increased cost or reduced amount.

 

(E)                                 Interest
Periods.  The first Interest Period
for the LIBOR Loan shall commence on October 31, 2005.  The final Interest Period must be such that
its expiration occurs on or before the Revolving Credit Loan Maturity Date.

 

(F)                                 Renewal.  Each LIBOR Loan shall automatically renew for
the Interest Period, at the then current LIBOR Rate unless the Borrower,
pursuant to a subsequent notice received by the Bank, shall convert all or a
portion of such LIBOR Loan to a Prime Loan. 
Each Interest Period occurring after the initial Interest Period with
respect to any LIBOR Loan shall commence on the same day of each applicable
month as the first day of the initial Interest Period.  Whenever the last day of any Interest Period
with respect to any LIBOR Loan would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be extended to occur on the
next succeeding Business Day.  Whenever
an Interest Period with respect to any LIBOR Loan would otherwise end on a day
of a month for which there is no numerically corresponding day in the calendar
month, such Interest Period shall end on the last day of such calendar month,
unless such day is not a Business Day, in which event such Interest Period
shall be extended to end on the next Business Day.  Upon receipt by the Bank of such subsequent
notice, the Borrower may, subject to the terms and conditions of this
Agreement, elect, as of the last day of the applicable Interest Period, to
continue any LIBOR Loan having an Interest Period expiring on such day for a
new Interest Period, or to convert any such LIBOR Loan to a Prime Loan.  Such notice shall, in the case of a
conversion to a Prime Loan, be given before 11:00 a.m., Chicago time, on
the proposed date of such conversion, specifying: (i) the proposed date of
conversion; (ii) the aggregate amount of Loans to be converted; and (iii) the
type of Loans resulting from the proposed conversion.   The Borrower may not elect a LIBOR Rate, and
an Interest Period for a LIBOR Loan shall not automatically renew, with respect
to any principal amount which is scheduled to be repaid before the last day of
the applicable Interest Period, and any such amounts shall bear interest at the
Prime Rate, until repaid.

 

5

 

Section 6.                                            The Pledge
Agreement delivered pursuant to Section 3.01(E) of the Loan Agreement
to secure the Cash Account is hereby cancelled and terminated.

 

Section 7.                                            Article VIII,
Financial Covenants, is hereby amended by adding a subsection (C) as
follows:

 

(C)                                Current
Assets.  As of the end of each of its
fiscal quarters the Borrower shall maintain current assets of at least Five
Million and 00/100 Dollars ($5,000,000.00).

 

Section 8.                                            Section 9.03
of Article IX, Event of Default, is hereby amended and restated in
its entirety as follows:

 

9.03                           In
exercising its right to sell, lease or otherwise dispose of the Collateral, the
Bank may sell, lease or otherwise dispose of all or any Collateral in its then
condition, or after any further manufacturing or processing thereof, at public
or private sale or sales, with such notice as may be required by law, in lots
or in bulk, all as the Bank, in its sole discretion, may deem advisable; such
sales may be adjourned from time to time with or without notice.  The Bank shall have the right to conduct such
sales on the Borrower’s premises or elsewhere and shall have the right to use
the Borrower’s premises without charge for such sales for such time or times as
the Bank may see fit.  The Bank is hereby
granted a license or other right to use, without charge, the Borrower’s labels,
patents, copyrights, rights of use of any name, trade secrets, tradenames,
trademarks, service marks and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in advertising for sale and selling
any Collateral and the Borrower’s rights under all licenses and all franchise
agreements shall inure to the Bank’s benefit. 
The Bank shall have the right to sell, lease or otherwise dispose of the
Collateral, or any part thereof, for cash, credit or any combination thereof,
and the Bank may purchase all or any part of the Collateral at public or, if
permitted by law, private sale and, in lieu of actual payment of such purchase
price, may set off the amount of such price against the Borrower’s Obligations.  The proceeds realized from the sale of any
Collateral shall be applied first to the costs, expenses and attorneys’ fees
and expenses incurred by the Bank for collection and for acquisition,
completion, protection, removal, storage, sale and delivery of the Collateral;
second to interest due upon any of the Borrower’s Obligations; and third to the
principal of the Borrower’s Obligations. 
If any deficiency shall arise, the Borrower shall remain liable to the
Bank therefor; provided, however, while applying the proceeds from the
sale of Collateral to interest due upon the Borrower’s obligations the Bank
shall have the sole discretion to decide whether to apply such proceeds first
to interest due and payable on the LIBOR Loans or to interest due and payable on
the Prime Loans.

 

Section 9.                                            Borrower
restates and reaffirms each and every representation, warranty, covenant and
agreement contained in the Loan Agreement, as amended, as fully and with the
same effect as if such representations, warranties, covenants, and agreements
were set forth in this Amendment.

 

6

 

Section 10.                                      General
Provisions:

 

a.                                       This
Amendment shall be incorporated into and made a part of the Loan Agreement, as
amended from time to time, and all other related loan documents executed by
Borrower.

 

b.                                      All
capitalized terms not defined in this Amendment shall have the meanings
ascribed to them in the Loan Agreement, as amended from time to time.

 

c.                                       Borrower
hereby agrees to execute and deliver, or cause to be executed and delivered, to
the Bank: (i) the Amended and Restated Revolving Credit Note, and (ii) 
such additional documentation as the Bank shall require in order to evidence or
effectuate the transactions contemplated hereby or in order to update
information and undertakings heretofore given to the Bank by or on behalf of
Borrower.

 

d.                                      This
Amendment shall be governed by, and construed in accordance with, the internal
laws of the State of Illinois, without giving effect to any choice of law
provisions.

 

e.                                       This
Amendment shall inure to the benefit of the Bank’s successors and assigns, and
shall be binding upon the successors and assigns of Borrower.

[Signature Page to Follow]

 

7

 

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

 

 

	
   

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EBIX, INC.,

  
	
   

  	
   

  	
  A DELAWARE CORPORATION,

  
	
   

  	
   

  	
  F/K/A EBIX.COM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Richard J. Baum

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
    Richard
  J. Baum

  
	
   

  	
   

  
	
   

  	
  Title:

  	
    CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LaSALLE BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
						

 

8

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