Document:

exv10w1

Exhibit 10.1

 

CUSTODY AGREEMENT

 

dated as of January 31, 2011

by and between

FIFTH STREET FINANCE CORP.

(“Company”)

and

U.S. BANK NATIONAL ASSOCIATION

(“Custodian”)

 

 

Exhibit 10.1

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	1.
	 	DEFINITIONS	 	 	1	 
	2.
	 	APPOINTMENT OF CUSTODIAN	 	 	6	 
	3.
	 	DUTIES OF CUSTODIAN	 	 	7	 
	4.
	 	REPORTING	 	 	15	 
	5.
	 	DEPOSIT IN U.S. SECURITIES SYSTEMS	 	 	15	 
	6.
	 	RESERVED.	 	 	16	 
	7.
	 	CERTAIN GENERAL TERMS	 	 	16	 
	8.
	 	COMPENSATION OF CUSTODIAN	 	 	17	 
	9.
	 	RESPONSIBILITY OF CUSTODIAN	 	 	18	 
	10.
	 	SECURITY CODES	 	 	21	 
	11.
	 	TAX LAW	 	 	21	 
	12.
	 	EFFECTIVE PERIOD, TERMINATION AND AMENDMENT	 	 	21	 
	13.
	 	REPRESENTATIONS AND WARRANTIES	 	 	22	 
	14.
	 	PARTIES IN INTEREST; NO THIRD PARTY BENEFIT	 	 	23	 
	15.
	 	NOTICES	 	 	23	 
	16.
	 	CHOICE OF LAW AND JURISDICTION	 	 	24	 
	17.
	 	ENTIRE AGREEMENT; COUNTERPARTS	 	 	24	 
	18.
	 	AMENDMENT; WAIVER	 	 	24	 
	19.
	 	SUCCESSOR AND ASSIGNS	 	 	24	 
	20.
	 	SEVERABILITY	 	 	25	 
	21.
	 	INSTRUMENT UNDER SEAL; HEADINGS	 	 	25	 
	22.
	 	REQUEST FOR INSTRUCTIONS	 	 	25	 
	23.
	 	OTHER BUSINESS	 	 	25	 
	24.
	 	REPRODUCTION OF DOCUMENTS	 	 	25	 
	25.
	 	MISCELLANEOUS	 	 	26	 
	SCHEDULES	 	 	 	 
	 
	 	SCHEDULE A --  Initial Authorized Persons	 	 	 	 

 i 

 

 

THIS CUSTODY AGREEMENT (this “Agreement”) is dated as of January 31, 2011 and is by and
between Fifth Street Finance Corp. (and any successor or permitted assign), a corporation organized
under the laws of Delaware, having its principal place of business at 10 Bank Street,
12th Floor, White Plains, New York 10606, and U.S. BANK NATIONAL ASSOCIATION (or any
successor or permitted assign acting as custodian hereunder, the “Custodian”), a national
banking association having a place of business at One Federal Street, Boston, MA 02110.

RECITALS

          WHEREAS, Fifth Street Finance Corp. is a closed-end management investment company, which has
elected to do business as a business development company under the Investment Company Act of 1940,
as amended (the “1940 Act”), and is authorized to issue shares of common stock;

          WHEREAS, the Company (as defined below) desires to retain U.S. Bank National Association to
act as custodian for the Company;

          WHEREAS, the Company desires that the Company’s Securities (as defined below) and cash be held
and administered by the custodian pursuant to this Agreement; and

          NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:

	1.	 	DEFINITIONS
	 
	 	 	1.1 Defined Terms. In addition to terms expressly defined elsewhere herein, the following
words shall have the following meanings as used in this Agreement:
	 
	 	 	“Account” or “Accounts” means the Cash Account, the Securities Account, any
Subsidiary Cash Account and any Subsidiary Securities Account, collectively.
	 
	 	 	“Agreement” means this Custody Agreement (as the same may be amended from time to
time in accordance with the terms hereof).
	 
	 	 	“Authorized Person” has the meaning set forth in Section 7.4.
	 
	 	 	“Business Day” means a day on which the Custodian is open for business in the market
or country in which a transaction is to take place.
	 
	 	 	“Cash Account” means the trust account to be established at the Custodian to which
the Custodian shall deposit and hold any cash Proceeds received by it from time to time from
or with respect to the Securities or the sale of the common stock of the Company, as
applicable, which deposit account shall be designated the “Fifth Street Finance Corp. Cash
Proceeds Account”.
	 
	 	 	“Company” means Fifth Street Finance Corp., its successors or permitted assigns.

1

 

	 	 	“Confidential Information” means any databases, computer programs, screen formats,
screen designs, report formats, interactive design techniques, and other similar or related
information that may be furnished to the Company by the Custodian from time to time pursuant
to this Agreement.
	 
	 	 	“Custodian” has the meaning set forth in the first paragraph of this Agreement.
	 
	 	 	“Document Custodian” means the Custodian when acting in the role of a document
custodian hereunder.
	 
	 	 	“Eligible Investment” means any investment that at the time of its acquisition is
one or more of the following:

     (a) United States government and agency obligations;

     (b) commercial paper having a rating assigned to such commercial paper by Standard &
Poor’s Rating Services or Moody’s Investor Service, Inc. (or, if neither such organization
shall rate such commercial paper at such time, by any nationally recognized rating
organization in the United States of America) equal to one of the two highest ratings
assigned by such organization, it being understood that as of the date hereof such ratings
by Standard & Poor’s Rating Services are “A1+” and “A1” and such ratings by Moody’s Investor
Service, Inc. are “P1” and “P2”;

     (c) interest bearing deposits in United States dollars in United States or Canadian
banks with an unrestricted surplus of at least U.S. $250,000,000, maturing within one year;
and

     (d) money market funds (including funds of the bank serving as Custodian or its
affiliates) or United States government securities funds designed to maintain a fixed share
price and high liquidity.

	 	 	“Eligible Securities Depository” has the meaning set forth in Section (b)(1) of Rule
17f-7 under the 1940 Act.
	 
	 	 	“Federal Reserve Bank Book-Entry System” means a depository and securities transfer
system operated by the Federal Reserve Bank of the United States on which are eligible
to be held all United States Government direct obligation bills, notes and bonds.
	 
	 	 	“Loan” means any U.S. dollar denominated commercial loan, or participation therein,
made by a bank or other financial institution that by its terms provides for payments of
principal and/or interest, including discount obligations and payment- in-kind obligations,
acquired by the Company from time to time.
	 
	 	 	“Loan Checklist” means a list delivered to the Document Custodian in connection with
delivery of a Loan to the Custodian that identifies the items contained in the related Loan
File.

2

 

	 	 	“Loan File” means, with respect to each Loan delivered to the Document Custodian,
each of the Required Loan Documents identified on the related Loan Checklist.
	 
	 	 	“Noteless Loan” means a Loan with respect to which (i) the related loan agreement
does not require the obligor to execute and deliver an Underlying Note to evidence the
indebtedness created under such Loan and (ii) no Underlying Notes are outstanding with
respect to the portion of the Loan transferred to the Company.
	 
	 	 	“Participation” means an interest in a Loan that is acquired indirectly by way of a
participation from a selling institution.
	 
	 	 	“Person” means any individual, corporation, partnership, limited liability company,
joint venture, association, joint stock company, trust (including any beneficiary thereof)
unincorporated organization, or any government or agency or political subdivision thereof.
	 
	 	 	“Proceeds” means, collectively, (i) the net cash proceeds to the Company of the
initial public offering by the Company and any subsequent offering by the Company of any
class of securities issued by the Company, (ii) all cash distributions, earnings, dividends,
fees and other cash payments paid on the Securities (or, as applicable, Subsidiary
Securities) by or on behalf of the issuer or obligor thereof, or applicable paying agent,
(iii) the net cash proceeds of the sale or other disposition of the Securities (or, as
applicable, Subsidiary Securities) pursuant to the terms of this Agreement (and any
Reinvestment Earnings from investment of the foregoing, as defined in Section 3.6(b) hereof)
and (iv) the net cash proceeds to the Company of any borrowing or other financing by the
Company.
	 
	 	 	“Proper Instructions” means instructions (including Trade Confirmations) received by
the Custodian in form acceptable to it, from the Company, or any Person duly authorized by
the Company in any of the following forms acceptable to the Custodian:

     (a) in writing signed by the Authorized Person (and delivered by hand, by mail, by
overnight courier or by telecopier);

     (b) by electronic mail from an Authorized Person;

     (c) such other means as may be agreed upon in writing from time to time by the
Custodian and the party giving such instructions.

	 	 	“Required Loan Documents” means, for each Loan:

     (a) other than in the case of a Participation, an executed copy of the Assignment for
such Loan, as identified on the Loan Checklist;

     (b) with the exception of Noteless Loans and Participations, the original executed
Underlying Note endorsed by the issuer or the prior holder of record in blank or to the
Company;

3

 

     (c) an executed copy of the Underlying Loan Agreement (which may be included in the
Underlying Note if so indicated in the Loan Checklist), together with a copy of all
amendments and modifications thereto, as identified on the Loan Checklist;

     (d) a copy of each related security agreement (if any) signed by the applicable
Obligor(s), as identified on the Loan Checklist;

     (e) a copy of the Loan Checklist, and

     (f) a copy of each related guarantee (if any) then executed in connection with such
Loan, as identified on the Loan Checklist.

	 	 	“Securities” means, collectively, the (i) investments, including Loans, acquired by
the Company and delivered to the Custodian by the Company from time to time during the term
of, and pursuant to the terms of, this Agreement and (ii) all dividends in kind (e.g.,
non-cash dividends) from the investments described in clause (i), all of which shall be in
U.S. denomination.
	 
	 	 	“Securities Account” means the segregated trust account to be established at the
Custodian to which the Custodian shall deposit or credit and hold the Securities (other than
Loans) received by it pursuant to this Agreement, which account shall be designated the
“Fifth Street Finance Corp. Securities Custody Account”.
	 
	 	 	“Securities Custodian” means the Custodian when acting in the role of a securities
custodian hereunder.
	 
	 	 	“Securities Depository” means The Depository Trust Company and any other clearing
agency registered with the Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934, as amended (the “1934 Act”), which acts as a system
for the central handling of Securities where all Securities of any particular class or
series of an issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of the Securities.
	 
	 	 	“Securities System” means the Federal Reserve Book-Entry System, a clearing agency
which acts as a Securities Depository, or another book entry system for the central handling
of securities (including an Eligible Securities Depository).
	 
	 	 	“Shares” means the shares of common stock issued by Fifth Street Finance Corp., a
Delaware corporation.
	 
	 	 	“Street Delivery Custom” means a custom of the United States securities market to
deliver securities which are being sold to the buying broker for examination to determine
that the securities are in proper form.

4

 

	 	 	“Street Name” means the form of registration in which the securities are held by a
broker who is delivering the securities to another broker for the purposes of sale, it being
an accepted custom in the United States securities industry that a security in Street Name
is in proper form for delivery to a buyer and that a security may be re-registered by a
buyer in the ordinary course.
	 
	 	 	“Subsidiary Cash Account” shall have the meaning set forth in Section 3.13(b).
	 
	 	 	“Subsidiary Securities” collectively, the (i) investments, including Loans, acquired
by a Subsidiary and delivered to the Custodian from time to time during the term of, and
pursuant to the terms of, this Agreement and (ii) all dividends in kind (e.g., non-cash
dividends) from the investments described in clause (i).
	 
	 	 	“Subsidiary Securities Account” shall have the meaning set forth in Section 3.13(a).
	 
	 	 	“Subsidiary” means, collectively, any wholly owned subsidiary of the Company, except
for those wholly-owned subsidiaries whose assets are held in custody by a custodian other
than the Custodian.
	 
	.	 	“Trade Confirmation” means a confirmation to the Custodian from the Company of the
Company’s acquisition of a Loan, and setting forth applicable information with respect to
such Loan, which confirmation may be in such form as may be agreed to by the Custodian and
the Company from time to time.
	 
	 	 	“Underlying Loan Agreement” means, with respect to any Loan, the document or
documents evidencing the commercial loan agreement or facility pursuant to which such Loan
is made.
	 
	 	 	“Underlying Loan Documents” means, with respect to any Loan, the related Underlying
Loan Agreement together with any agreements and instruments (including any Underlying Note)
executed or delivered in connection therewith.
	 
	 	 	“Underlying Note” means the one or more promissory notes executed by an obligor
evidence a Loan.
	 
	 	 	1.2 Construction. In this Agreement unless the contrary intention appears:

	 	(a)	 	any reference to this Agreement or another agreement or instrument refers to
such agreement or instrument as the same may be amended, modified or otherwise
rewritten from time to time;
	 
	 	(b)	 	a reference to a statute, ordinance, code or other law includes regulations and
other instruments under it and consolidations, amendments, re-enactments or
replacements of any of them;

5

 

	 	(c)	 	any term defined in the singular form may be used in, and shall include, the
plural with the same meaning, and vice versa;
	 
	 	(d)	 	a reference to a Person includes a reference to the Person’s executors,
Custodian, successors and permitted assigns;
	 
	 	(e)	 	an agreement, representation or warranty in favor of two or more Persons is for
the benefit of them jointly and severally;
	 
	 	(f)	 	an agreement, representation or warranty on the part of two or more Persons
binds them jointly and severally;
	 
	 	(g)	 	a reference to the term “including” means “including, without limitation,” and
	 
	 	(h)	 	a reference to any accounting term is to be interpreted in accordance with
generally accepted principles and practices in the United States, consistently applied,
unless otherwise instructed by the Company.

	 	 	1.3 Headings. Headings are inserted for convenience and do not affect the interpretation
of this Agreement.

	2.	 	APPOINTMENT OF CUSTODIAN 
	 
	 	 	2.1 Appointment and Acceptance. The Company hereby appoints the Custodian as custodian of
all Securities and cash owned by the Company and the Subsidiaries (as applicable) at any
time during the period of this Agreement, on the terms and conditions set forth in this
Agreement (which shall include any addendum hereto which is hereby incorporated herein and
made a part of this Agreement), and the Custodian hereby accepts such appointment and
agrees to perform the services and duties set forth in this Agreement with respect to it
subject to and in accordance with the provisions hereof.
	 
	 	 	2.2 Instructions. The Company agrees that it shall from time to time provide, or cause to
be provided, to the Custodian all necessary instructions and information, and shall respond
promptly to all inquiries and requests of the Custodian, as may reasonably be necessary to
enable the Custodian to perform its duties hereunder.
	 
	 	 	2.3 Company Responsible For Directions. The Company is solely responsible for directing
the Custodian with respect to deposits to, withdrawals from and transfers to or from the
Account. Without limiting the generality of the foregoing, the Custodian has no
responsibility for compliance with any restrictions, covenants, limitations or obligations
to which the Company may be subject or for which it may have obligations to third-parties
in respect of the Account, and the Custodian shall have no liability for the application of
any funds made at the direction of the Company. The Company shall be solely responsible
for properly instructing all applicable payors to make all appropriate payments to the
Custodian for deposit to the Account, and for properly instructing the Custodian with
respect to the allocation or application of all such deposits.

6

 

	 	 	2.4 Appointment of Sub-Custodian. With prior written notice to the Company, the Custodian
may from time to time employ one or more sub-custodians located in the United States, but
only in accordance with the approval of the board of directors of the Company. The
Custodian shall not appoint a sub-custodian unless the agreement between the Custodian and
such sub-custodian requires the sub-custodian to: (i) at a minimum, exercise due care in
accordance with reasonable commercial standards in discharging its duty as a sub-custodian
to obtain and thereafter maintain such financial assets; (ii) provide, promptly upon
request by the Company, such reports as are available concerning the internal accounting
controls and financial strength of the sub-custodian; and (iii) at a minimum, exercise due
care in accordance with reasonable commercial standards in discharging its duty as a
sub-custodian to obtain and thereafter maintain financial assets corresponding to the
security entitlements of its entitlement holders.

	3.	 	DUTIES OF CUSTODIAN
	 
	 	 	3.1 Segregation. All Securities and non-cash property held by the Custodian, as
applicable, for the account of the Company (other than Securities maintained in a
Securities Depository or Securities System) shall be physically segregated from other
Securities and non-cash property in the possession of the Custodian (including the
Securities and non-cash property of the other series of the Company, if applicable) and
shall be identified as subject to this Agreement.
	 
	 	 	3.2 Securities Custody Account. The Custodian shall open and maintain in its trust
department a segregated trust account in the name of the Company, subject only to order of
the Custodian, in which the Custodian shall enter and carry, subject to Section 3.3(b), all
Securities (other than Loans), cash and other assets of the Company which are delivered to
it in accordance with this Agreement. For avoidance of doubt, the Custodian shall not be
required to credit or deposit Loans in the Securities Account but shall instead maintain a
register (in book-entry form or in such other form as it shall deem necessary or desirable)
of such Loans, containing such information as the Company and the Custodian may reasonably
agree; provided that, with respect to such Loans, all Required Loan Documents shall be held
in safekeeping by the Document Custodian, individually segregated from the securities and
investments of any other person and marked so as to clearly identify them as the property
of the Company in a manner consistent with this Agreement.
	 
	 	 	3.3 Delivery of Securities to Custodian.

	 	(a)	 	The Company shall deliver, or cause to be delivered, to the Custodian all of
the Company’s Securities, cash and other investment assets, including (a) all payments
of income, payments of principal and capital distributions received by the Company with
respect to such Securities, cash or other assets owned by the Company at any time
during the period of this Agreement, and (b) all cash received by the Company for the
issuance, at any time during such period, of Shares or other securities or in
connection with a borrowing by the Company. With respect to Loans, the Required Loan
Documents and other underlying loan

7

 

	 	 	 	documents shall be delivered to the Custodian in its role as, and at the address
identified for, the Document Custodian. With respect to assets other than Loans,
such assets shall be delivered to the Custodian in its role as, and (where relevant)
at the address identified for, the Securities Custodian. Except to the extent
otherwise expressly provided herein, delivery of Securities to the Custodian shall
be in Street Name or other good delivery form. The Custodian shall not be
responsible for such Securities, cash or other assets until actually delivered to,
and received by it.
	 
	 	(b)	 	(i) In connection with its acquisition of a Loan or other delivery of a
Security constituting a Loan, the Company shall deliver or cause to be delivered to the
Custodian (in its roles as, and at the address identified for, the Custodian and
Document Custodian) a properly completed Trade Confirmation containing such information
in respect of such Loan as the Custodian may reasonably require in order to enable the
Custodian to perform its duties hereunder in respect of such Loan and on which the
Custodian may conclusively rely without further inquiry or investigation, in such form
and format as the Custodian reasonably may require, and shall deliver to the Document
Custodian (in its role as, and at the address identified for, the Document Custodian)
the Required Loan Documents for all Loans, including the Loan Checklist.
	 
	 	 	 	(ii) Notwithstanding anything herein to the contrary, delivery of Loans acquired by
the Company (or, if applicable, Subsidiary thereof) which constitute Noteless Loans
or Participations or which are otherwise not evidenced by a “security” or
“instrument” as defined in Section 8-102 and Section 9-102(a)(47) of the UCC,
respectively, shall be made by delivery to the Document Custodian of (i) in the case
of a Noteless Loan, a copy of the loan register with respect to such Noteless Loan
evidencing registration of such Loan on the books and records of the applicable
obligor or bank agent to the name of the Company or, if applicable, a Subsidiary
(or, in either case, its nominee) or a copy (which may be a facsimile copy) of an
assignment agreement in favor of the Company (or the applicable Subsidiary) as
assignee, and (ii) in the case of a Participation, a copy of the related
participation agreement. Any duty on the part of the Custodian with respect to the
custody of such Loans shall be limited to the exercise of reasonable care by the
Custodian in the physical custody of any such documents delivered to it, and any
related instrument, security, credit agreement, assignment agreement and/or other
agreements or documents, if any (collectively, “Financing Documents”), that may be
delivered to it. Nothing herein shall require the Custodian to credit to the
Securities Account or to treat as a financial asset (within the meaning of Section
8-102(a)(9) of the UCC) any such Loan or other asset in the nature of a general
intangible (as defined in Section 9-102(a)(42) of the UCC) or to “maintain” a
sufficient quantity thereof.
	 
	 	 	 	(iii) The Custodian may assume the genuineness of any such Financing Document it may
receive and the genuineness and due authority of any signatures

8

 

	 	 	 	appearing thereon, and shall be entitled to assume that each such Financing Document
it may receive is what it purports to be. If an original “security” or “instrument”
as defined in Section 8-102 and Section 9-102(a)(47) of the UCC, respectively, is or
shall be or become available with respect to any Loan to be held by the Custodian
under this Agreement, it shall be the sole responsibility of the Company to make or
cause delivery thereof to the Document Custodian, and the Custodian shall not be
under any obligation at any time to determine whether any such original security or
instrument has been or is required to be issued or made available in respect of any
Loan or to compel or cause delivery thereof to the Custodian.
	 
	 	 	 	(iv) Contemporaneously with the acquisition of any Loan, the Company shall (i) cause
the Required Loan Documents evidencing such Loan to be delivered to the Document
Custodian; (ii) if requested by the Custodian, provide to the Custodian an
amortization schedule of principal payments and a schedule of the interest payable
date(s) identifying the amount and due dates of all scheduled principal and interest
payments for such Loan and (iii) a properly completed Trade Confirmation containing
such information in respect of such Loan as the Custodian may reasonably require in
order to enable the Custodian to perform its duties hereunder in respect of such
Loan on which the Custodian may conclusively rely without further inquiry or
investigation, in such form and format as the Custodian reasonably may require; (iv)
take all actions necessary for the Company to acquire good title to such Loan; and
(v) take all actions as may be necessary (including appropriate payment notices and
instructions to bank agents or other applicable paying agents) to cause (A) all
payments in respect of the Loan to be made to the Custodian and (B) all notices,
solicitations and other communications in respect of such Loan to be directed to the
Company. The Custodian shall have no liability for any delay or failure on the part
of the Company to provide necessary information to the Custodian, or for any
inaccuracy therein or incompleteness thereof, or for any delay or failure on the
part of the Company to give such effective payment instruction to bank agents and
other paying agents, in respect of the Loans. With respect to each such Loan, the
Custodian shall be entitled to rely on any information and notices it may receive
from time to time from the related bank agent, obligor or similar party with respect
to the related Loan Asset, and shall be entitled to update its records (as it may
deem necessary or appropriate), or from the Company, on the basis of such
information or notices received, without any obligation on its part independently to
verify, investigate or recalculate such information.

	 	3.4	 	Release of Securities.
	 
	 	(a)	 	The Custodian shall release and deliver, or direct its agents or sub-custodian
to release and deliver, as the case may be, Securities or Required Loan Documents of
the Company held by the Custodian, its agents or its sub-custodian from time to time
upon receipt of Proper Instructions (which shall, among other things,

9

 

	 	 	 	specify the Securities or Required Loan Documents to be released, with such delivery
and other information as may be necessary to enable the Custodian to perform), which
may be standing instructions (in form acceptable to the Custodian) in the following
cases:

	 	(i)	 	upon sale of such Securities by or on behalf of the Company
and, unless otherwise directed by Proper Instructions:

	 	(A)	 	in accordance with the customary or established
practices and procedures in the jurisdiction or market where the
transactions occur, including delivery to the purchaser thereof or to a
dealer therefor (or an agent of such purchaser or dealer) against
expectation of receiving later payment; or
	 
	 	(B)	 	in the case of a sale effected through a
Securities System, in accordance with the rules governing the
operations of the securities System;

	 	(ii)	 	upon the receipt of payment in connection with any repurchase
agreement related to such securities;
	 
	 	(iii)	 	to a depositary agent in connection with tender or other
similar offers for securities;
	 
	 	(iv)	 	to the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable (unless otherwise
directed by Proper Instructions, the cash or other consideration is to be
delivered to the Custodian, its agents or its sub-custodian);
	 
	 	(v)	 	to an issuer thereof, or its agent, for transfer into the name
of the Custodian or of any nominee of the Custodian or into the name of any of
its agents or sub-custodian or their nominees or for exchange for a different
number of bonds, certificates or other evidence representing the same aggregate
face amount or number of units;
	 
	 	(vi)	 	to brokers clearing banks or other clearing agents for
examination in accordance with the Street Delivery Custom;
	 
	 	(vii)	 	for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to any deposit
agreement (unless otherwise directed by Proper Instructions, the new securities
and cash, if any, are to be delivered to the Custodian, its agents or its
sub-custodian);
	 
	 	(viii)	 	in the case of warrants, rights or similar securities, the surrender thereof
in the exercise of such warrants, rights or similar securities or the surrender
of interim receipts or temporary securities for definitive

10

 

	 	 	 	securities (unless otherwise directed by Proper Instructions, the new
securities and cash, if any, are to be delivered to the Custodian, its
agents or its sub-custodian); and/or
	 
	 	(ix)	 	for any other purpose, but only upon receipt of Proper
Instructions and an officer’s certificate signed by an officer of the Company
(which officer shall not have been the Authorized Person providing the Proper
Instructions) stating (i) the specified securities to be delivered, (ii) the
purpose for such delivery, (iii) that such purpose is a proper corporate
purpose and (iv) naming the person or persons to whom delivery of such
securities shall be made and attaching a certified copy of a resolution of the
board of directors of Fifth Street Finance Corp. or an authorized committee
thereof approving the delivery of such Proper Instructions.

	 	 	3.5 Registration of Securities. Securities held by the Custodian, its agents or its
sub-custodian (other than bearer securities, securities held in a Securities System or
Securities that are Noteless Loans or Participations) shall be registered in the name of
the Company or its nominee; or, at the option of the Custodian, in the name of the
Custodian or in the name of any nominee of the Custodian, or in the name of its agents or
its sub-custodian or their nominees; or if directed by the Company by Proper Instruction,
may be maintained in Street Name. The Custodian, its agents and its sub-custodian shall not
be obligated to accept Securities on behalf of the Company under the terms of this
Agreement unless such Securities are in Street Name or other good deliverable form.

	 	3.6	 	Bank Accounts, and Management of Cash
	 
	 	(a)	 	Proceeds from the Securities received by the Custodian from time to time shall
be credited to the Cash Account. All amounts credited to the Cash Account shall be
subject to clearance and receipt of final payment by the Custodian.
	 
	 	(b)	 	Amounts held in the Cash Account from time to time may be invested in Eligible
Investments pursuant to specific written Proper Instructions (which may be standing
instructions) received by the Custodian from an Authorized Person acting on behalf of
the Company. Such investments shall be subject to availability and the Custodian’s
then applicable transaction charges (which shall be at the Company’s expense). The
Custodian shall have no liability for any loss incurred on any such investment. Absent
receipt of such written instruction from the Company, the Custodian shall have no
obligation to invest (or otherwise pay interest on) amounts on deposit in the Cash
Account. In no instance will the Custodian have any obligation to provide investment
advice to the Company. Any earnings from such investment of amounts held in the Cash
Account from time to time (collectively, “Reinvestment Earnings”) shall be
redeposited in the Cash Account (and may be reinvested at the written direction of the
Company).

11

 

	 	(c)	 	In the event that the Company shall at any time request a withdrawal of amounts
from the Cash Account, the Custodian shall be entitled to liquidate, and shall have no
liability for any loss incurred as a result of the liquidation of, any investment of
the funds credited to such account as needed to provide necessary liquidity. Investment
instructions may be in the form of standing instructions (in the form of Proper
Instructions acceptable to Custodian).
	 
	 	(d)	 	The Company acknowledges that cash deposited or invested with any bank
(including the bank acting as Custodian) may make a margin or generate banking income
for which such bank shall not be required to account to the Company.
	 
	 	3.7	 	[Reserved]

	 	 	3.8 Collection of Income. The Custodian, its agents or its sub-custodian shall use
reasonable efforts to collect on a timely basis all income and other payments with respect
to the Securities held hereunder to which the Company shall be entitled, to the extent
consistent with usual custom in the securities custodian business in the United States.
Such efforts shall include collection of interest income, dividends and other payments with
respect to registered domestic securities if on the record date with respect to the date of
payment by the issuer the Security is registered in the name of the Custodian or its
nominee (or in the name of its agent or sub-custodian, or their nominee); and interest
income, dividends and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer such securities are held by the Custodian or its
sub-custodian or agent; provided, however, that in the case of Securities held in Street
Name, the Custodian shall use commercially reasonable efforts only to timely collect
income. In no event shall the Custodian’s agreement herein to collect income be construed
to obligate the Custodian to commence, undertake or prosecute any legal proceedings.

	 	3.9	 	Payment of Moneys.
	 
	 	(a)	 	Upon receipt of Proper Instructions, which may be standing instructions, the
Custodian shall pay out from the Cash Account (or remit to its agents or its
sub-custodian, and direct them to pay out) moneys of the Company on deposit therein in
the following cases:

	 	(i)	 	upon the purchase of Securities for the Company pursuant to
such Proper Instruction; and such purchase may, unless and except to the extent
otherwise directed by Proper Instructions, be carried out by the Custodian:

	 	(A)	 	in accordance with the customary or established
practices and procedures in the jurisdiction or market where the
transactions occur, including delivering money to the seller thereof or
to a dealer therefor (or any agent for such seller or dealer) against
expectation of receiving later delivery of such securities; or

12

 

	 	(B)	 	in the case of a purchase effected through a
Securities System, in accordance with the rules governing the operation
of such Securities System;

	 	(ii)	 	[reserved]; and
	 
	 	(iii)	 	for any other purpose directed by the Company, but only upon
receipt of Proper Instructions specifying the amount of such payment, and
naming the Person or Persons to whom such payment is to be made.

	 	(b)	 	At any time or times, the Custodian shall be entitled to pay (i) itself from
the Cash Account, whether or not in receipt of express direction or instruction from
the Company, any amounts due and payable to it pursuant to Section 8 hereof, and (ii)
as otherwise permitted by Section 7.5, 9.4 or Section 12.5 below, provided, however,
that in each case all such payments shall be accounted for to the Company.

	 	 	3.10 Voting and Other Action. The Custodian shall promptly deliver any notices, proxies,
or proxy soliciting materials to the Company, but without indicating the manner in which
any such proxies are to be voted. Neither the Custodian nor any nominee of the Custodian
shall vote any of the securities held hereunder by or for the account of the Company,
except in accordance with Proper Instructions of the Company. In the absence of such
Proper Instructions, or in the event that such Proper Instructions are not received in a
timely fashion, the Custodian shall be under no duty to act with regard to such proxies.
	 
	 	 	3.11 Communications Relating to Securities. The Custodian shall transmit promptly to the
Company all written information (including pendency of calls and maturities of Securities
and expirations of rights in connection therewith) received by the Custodian, from its
agents or its sub-custodian or from issuers of the Securities being held for the Company.
The Custodian shall have no obligation or duty to exercise any right or power, or otherwise
to preserve rights, in or under any Securities unless and except to the extent it has
received timely Proper Instruction from the Company in accordance with the next sentence.
The Custodian will not be liable for any untimely exercise of any right or power in
connection with Securities at any time held by the Custodian, its agents or sub-custodian
unless:

	 	(i)	 	the Custodian has received Proper Instructions with regard to
the exercise of any such right or power; and
	 
	 	(ii)	 	the Custodian, or its agents or sub-custodian are in actual
possession of such Securities,

	 	 	in each case, at least three (3) Business Days prior to the date on which such right or
power is to be exercised. It will be the responsibility of the Company to notify the

13

 

	 	 	Custodian of the Person to whom such communications must be forwarded under this Section.
	 
	 	 	3.12 Records. The Custodian shall create and maintain complete and accurate records
relating to its activities under this Agreement with respect to the Securities, cash or
other property held for the Company under this Agreement, with particular attention to
Section 31 of the 1940 Act, and Rules 31a-1 and 32a-2 thereunder. To the extent that the
Custodian, in its sole opinion, is able to do so, the Custodian shall provide assistance to
the Company (at the Company’s reasonable request made from time to time) by providing
sub-certifications regarding certain of its services performed hereunder to the Company in
connection with the Company’s certification requirements pursuant to the Sarbanes-Oxley Act
of 2002, as amended. All such records shall be the property of the Company and shall at
all times during the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Company or its affiliates and employees and
agents of the Securities and Exchange Commission, upon reasonable request and prior notice
and at the Company’s expense. The Custodian shall, at the Company’s request, supply the
Company with a tabulation of securities owned by the Company and held by the Custodian and
shall, when requested to do so by the Company and for such compensation as shall be agreed
upon between the Company and the Custodian, include, to the extent applicable, the
certificate numbers in such tabulations, to the extent such information is available to the
Custodian.

	 	3.13	 	Custody of Subsidiary Securities.
	 
	 	(a)	 	With respect to each Subsidiary identified to the Custodian by the Company,
there shall be established at the Custodian a segregated trust account to which the
Custodian shall deposit and hold any Subsidiary Securities (other than Loans) received
by it (and any Proceeds received by it in the form of dividends in kind) pursuant to
this Agreement, which account shall be designated the “[INSERT NAME OF SUBSIDIARY]
Securities Account” (the “Subsidiary Securities Account”).
	 
	 	(b)	 	With respect to each Subsidiary identified to the Custodian by the Company,
there shall be established at the Custodian a segregated trust account to which the
Custodian shall deposit and hold any cash Proceeds received by it from time to time
from or with respect to Subsidiary Securities, which account shall be designated the
“[INSERT NAME OF SUBSIDIARY] Cash Proceeds Account” (the “Subsidiary Cash Account”)
	 
	 	(c)	 	To the maximum extent possible, the provisions of this Agreement regarding
Securities of the Company, the Securities Account and the Cash Account shall be
applicable to any Subsidiary Securities, Subsidiary Securities Account and Subsidiary
Cash Account, respectively. The parties hereto agree that the Company shall notify the
Custodian in writing as to the establishment of any Subsidiary as to which the
Custodian is to serve as custodian pursuant to the terms

14

 

	 	 	 	of this Agreement; and identify in writing any accounts the Custodian shall be
required to establish for such Subsidiary as herein provided.

	4.	 	REPORTING

	 	(a)	 	The Custodian shall render to the Company a monthly report of an itemized
statement of the Securities held pursuant to this Agreement as of the end of each
month.
	 
	 	(b)	 	For each Business Day, the Custodian shall render to the Company a daily report
of all deposits to and withdrawals from the Cash Account for such Business Day and the
outstanding balance as of the end of such Business Day.
	 
	 	(c)	 	The Custodian shall have no duty or obligation to undertake any market
valuation of the Securities under any circumstance.
	 
	 	(d)	 	The Custodian shall provide the Company with such reports as are reasonably
available to it and as the Company may reasonably request from time to time, on the
internal accounting controls and procedures for safeguarding securities, which are
employed by the Custodian.

	5.	 	DEPOSIT IN U.S. SECURITIES SYSTEMS

The Custodian may deposit and/or maintain Securities in a Securities System within the United
States in accordance with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, including Rule 17f-4 under the 1940 Act, and subject to the following
provisions:

	 	(a)	 	The Custodian may keep domestic Securities in a U.S. Securities System provided
that such Securities are represented in an account of the Custodian in the U.S.
Securities System which shall not include any assets of the Custodian other than assets
held by it as a fiduciary, custodian or otherwise for customers;
	 
	 	(b)	 	The records of the Custodian with respect to Securities which are maintained in
a U.S. Securities System shall identify by book-entry those Securities belonging to the
Company;
	 
	 	(c)	 	If requested by the Company, the Custodian shall provide to the Company copies
of all notices received from the U.S. Securities System of transfers of Securities for
the account of the Company; and
	 
	 	(d)	 	Anything to the contrary in this Agreement notwithstanding, the Custodian shall
not be liable to the Company for any direct loss, damage, cost, expense, liability or
claim to the Company resulting from use of any Securities System (other than to the
extent resulting from the gross negligence, misfeasance or misconduct of the Custodian
itself, or from failure of the Custodian to enforce effectively such rights as it may
have against the U.S. Securities System.)

15

 

	6.	 	RESERVED.
	 
	7.	 	CERTAIN GENERAL TERMS
	 
	 	 	7.1 No Duty to Examine Underlying Instruments. Nothing herein shall obligate the Custodian
to review or examine the terms of any underlying instrument, certificate, credit agreement,
indenture, loan agreement, promissory note, or other financing document evidencing or
governing any Security to determine the validity, sufficiency, marketability or
enforceability of any Security (and shall have no responsibility for the genuineness or
completeness thereof), or otherwise.
	 
	 	 	7.2 Resolution of Discrepancies. In the event of any discrepancy between the information
set forth in any report provided by the Custodian to the Company and any information
contained in the books or records of the Company, the Company shall promptly notify the
Custodian thereof and the parties shall cooperate to diligently resolve the discrepancy.
	 
	 	 	7.3 Improper Instructions. Notwithstanding anything herein to the contrary, the Custodian
shall not be obligated to take any action (or forebear from taking any action), which it
reasonably determines (at its sole option) to be contrary to the terms of this Agreement or
applicable law. In no instance shall the Custodian be obligated to provide services on any
day that is not a Business Day.
	 
	 	 	7.4 Proper Instructions

	 	(a)	 	The Company will give a notice to the Custodian, in form acceptable to the
Custodian, specifying the names and specimen signatures of persons authorized to give
Proper Instructions (collectively, “Authorized Persons” and each is an “Authorized
Person”) which notice shall be signed by an Authorized Person previously certified
to the Custodian. The Custodian shall be entitled to rely upon the identity and
authority of such persons until it receives written notice from an Authorized Person of
the Company to the contrary. The initial Authorized Persons are set forth on
Schedule A attached hereto and made a part hereof (as such Schedule A
may be modified from time to time by written notice from the Company to the Custodian).
	 
	 	(b)	 	The Custodian shall have no responsibility or liability to the Company (or any
other person or entity), and shall be indemnified and held harmless by the Company, in
the event that a subsequent written confirmation of an oral instruction fails to
conform to the oral instructions received by the Custodian. The Custodian shall not
have an obligation to act in accordance with purported instructions to the extent that
they conflict with applicable law or regulations, local market practice or the
Custodian’s operating policies and practices. The Custodian shall not be liable for any
loss resulting from a delay while it obtains clarification of any Proper Instructions.

16

 

	 	 	7.5 Actions Permitted Without Express Authority. The Custodian may, at its discretion,
without express authority from the Company:

	 	(a)	 	make payments to itself as described in or pursuant to Section 3.9(b), or to
make payments to itself or others for minor expenses of handling securities or other
similar items relating to its duties under this agreement, provided that all such
payments shall be accounted for to the Company;
	 
	 	(b)	 	surrender Securities in temporary form for Securities in definitive form;
	 
	 	(c)	 	endorse for collection cheques, drafts and other negotiable instruments; and
	 
	 	(d)	 	in general attend to all nondiscretionary details in connection with the sale,
exchange, substitution, purchase, transfer and other dealings with the securities and
property of the Company.

	 	 	7.6 Evidence of Authority. The Custodian shall be protected in acting upon any
instructions, notice, request, consent, certificate instrument or paper reasonably believed
by it to be genuine and to have been properly executed or otherwise given by or on behalf
of the Company by an Authorized Officer. The Custodian may receive and accept a
certificate signed by any Authorized Officer as conclusive evidence of:

	 	(a)	 	the authority of any person to act in accordance with such certificate; or
	 
	 	(b)	 	any determination or of any action by the Company as described in such
certificate,

	 	 	and such certificate may be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary from an Authorized Officer of the Company.
	 
	 	 	7.7 Receipt of Communications. Any communication received by the Custodian on a day which
is not a Business Day or after 3:30 p.m., Eastern time (or such other time as is agreed by
the Company and the Custodian from time to time), on a Business Day will be deemed to have
been received on the next Business Day (but in the case of communications so received after
3:30 p.m., Eastern time, on a Business Day the Custodian will use its best efforts to
process such communications as soon as possible after receipt).
	 
	8.	 	COMPENSATION OF CUSTODIAN
	 
	 	 	8.1 Fees. The Custodian shall be entitled to compensation for its services in accordance
with the terms of that certain fee letter dated January 14, 2011, between the Company and
the Custodian.
	 
	 	 	8.2 Expenses. The Company agrees to pay or reimburse to the Custodian upon its request
from time to time all costs, disbursements, advances, and expenses (including reasonable
fees and expenses of legal counsel) incurred, and any disbursements and

17

 

	 	 	advances made (including any account overdraft resulting from any settlement or assumed
settlement, provisional credit, chargeback, returned deposit item, reclaimed payment or
claw-back, or the like), in connection with the preparation or execution of this Agreement,
or in connection with the transactions contemplated hereby or the administration of this
Agreement or performance by the Custodian of its duties and services under this Agreement,
from time to time (including the reasonable costs and expenses of any action deemed
necessary by the Custodian to collect any amounts owing to it under this Agreement).
	 
	9.	 	RESPONSIBILITY OF CUSTODIAN
	 
	 	 	9.1 General Duties. The Custodian shall have no duties, obligations or responsibilities
under this Agreement or with respect to the Securities or Proceeds except for such duties
as are expressly and specifically set forth in this Agreement, and the duties and
obligations of the Custodian shall be determined solely by the express provisions of this
Agreement. No implied duties, obligations or responsibilities shall be read into this
Agreement against, or on the part of, the Custodian.
	 
	 	 	9.2 Instructions

	 	(a)	 	The Custodian shall be entitled to refrain from taking any action unless it has
such instruction (in the form of Proper Instructions) from the Company as it reasonably
deems necessary, and shall be entitled to require, upon notice to the Company, that
Proper Instructions to it be in writing. The Custodian shall have no liability for any
action (or forbearance from action) taken pursuant to the Proper Instruction of the
Company.
	 
	 	(b)	 	Whenever the Custodian is entitled or required to receive or obtain any
communications or information pursuant to or as contemplated by this Agreement, it
shall be entitled to receive the same in writing, in form, content and medium
reasonably acceptable to it and otherwise in accordance with any applicable terms of
this Agreement; and whenever any report or other information is required to be produced
or distributed by the Custodian it shall be in form, content and medium reasonably
acceptable to it and the Company, and otherwise in accordance with any applicable terms
of this Agreement.

	 	 	9.3 General Standards of Care. Notwithstanding any terms herein contained to the contrary,
the acceptance by the Custodian of its appointment hereunder is expressly subject to the
following terms, which shall govern and apply to each of the terms and provisions of this
Agreement (whether or not so stated therein):

	 	(a)	 	The Custodian may rely on and shall be protected in acting or refraining from
acting upon any written notice, instruction, statement, certificate, request, waiver,
consent, opinion, report, receipt or other paper or document furnished to it (including
any of the foregoing provided to it by telecopier or electronic means), not only as to
its due execution and validity, but also as to the truth and accuracy

18

 

	 	 	 	of any information therein contained, which it in good faith believes to be genuine
and signed or presented by the proper person (which in the case of any instruction
from or on behalf of the Company shall be an Authorized Person); and the Custodian
shall be entitled to presume the genuineness and due authority of any signature
appearing thereon. The Custodian shall not be bound to make any independent
investigation into the facts or matters stated in any such notice, instruction,
statement, certificate, request, waiver, consent, opinion, report, receipt or other
paper or document, provided, however, that if the form thereof is specifically
prescribed by the terms of this Agreement, the Custodian shall examine the same to
determine whether it substantially conforms on its face to such requirements hereof.
	 
	 	(b)	 	Neither the Custodian nor any of its directors, officers or employees shall be
liable to anyone for any error of judgment, or for any act done or step taken or
omitted to be taken by it (or any of its directors, officers of employees), or for any
mistake of fact or law, or for anything which it may do or refrain from doing in
connection herewith, unless such action constitutes gross negligence, willful
misconduct or bad faith on its part and in breach of the terms of this Agreement. The
Custodian shall not be liable for any action taken by it in good faith and reasonably
believed by it to be within powers conferred upon it, or taken by it pursuant to any
direction or instruction by which it is governed hereunder, or omitted to be taken by
it by reason of the lack of direction or instruction required hereby for such action.
The Custodian shall not be under any obligation at any time to ascertain whether the
Company is in compliance with the 1940 Act, the regulations thereunder, or the
Company’s investment objectives and policies then in effect.
	 
	 	(c)	 	In no event shall the Custodian be liable for any indirect, special or
consequential damages (including lost profits) whether or not it has been advised of
the likelihood of such damages.
	 
	 	(d)	 	The Custodian may consult with, and obtain advice from, legal counsel selected
in good faith with respect to any question as to any of the provisions hereof or its
duties hereunder, or any matter relating hereto, and the advice of such counsel shall
be full and complete authorization and protection in respect of any action taken,
suffered or omitted by the Custodian in good faith in accordance with the advice of
such counsel; the reasonable cost of such services shall be reimbursed pursuant to
Section 8.2 above.
	 
	 	(e)	 	The Custodian shall not be deemed to have notice of any fact, claim or demand
with respect hereto unless actually known by an officer working in its Corporate Trust
Services group and charged with responsibility for administering this Agreement or
unless (and then only to the extent received) in writing by the Custodian at the
applicable address(es) as set forth in Section 15 and specifically referencing this
Agreement.

19

 

	 	(f)	 	No provision of this Agreement shall require the Custodian to expend or risk
its own funds, or to take any action (or forbear from action) hereunder which might in
its judgment involve any expense or any financial or other liability unless it shall be
furnished with acceptable indemnification. Nothing herein shall obligate the Custodian
to commence, prosecute or defend legal proceedings in any instance, whether on behalf
of the Company or on its own behalf or otherwise, with respect to any matter arising
hereunder, or relating to this Agreement or the services contemplated hereby.
	 
	 	(g)	 	The permissive right of the Custodian to take any action hereunder shall not be
construed as duty.
	 
	 	(h)	 	The Custodian may act or exercise its duties or powers hereunder through agents
or attorneys, and the Custodian shall not be liable or responsible for the actions or
omissions of any such agent or attorney appointed and maintained with reasonable due
care.
	 
	 	(i)	 	All indemnifications contained in this Agreement in favor of the Custodian
shall survive the termination of this Agreement.

	 	 	9.4 Indemnification; Custodian’s Lien.

	 	(a)	 	The Company shall and does hereby indemnify and hold harmless the Custodian for
and from any and all costs and expenses (including reasonable attorney’s fees and
expenses), and any and all losses, damages, claims and liabilities, that may arise, be
brought against or incurred by the Custodian, and any advances or disbursements made by
the Custodian (including in respect of any Account overdraft, returned deposit item,
chargeback, provisional credit, settlement or assumed settlement, reclaimed payment,
claw-back or the like), as a result of, relating to, or arising out of this Agreement,
or the administration or performance of the Custodian’s duties hereunder, or the
relationship between the Company (including, for the avoidance of doubt, any
Subsidiary) and the Custodian created hereby, other than such liabilities, losses,
damages, claims, costs and expenses as are directly caused by the Custodian’s own
actions constituting gross negligence or willful misconduct.
	 
	 	(b)	 	If the Company requires the Custodian, its affiliates, subsidiaries or agents,
to advance cash or securities for any purpose (including but not limited to securities
settlements, foreign exchange contracts and assumed settlement), or in the event that
the Custodian or its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Agreement, except such as may arise from its or its nominee’s own negligent action,
negligent failure to act or willful misconduct, or if the Company fails to compensate
the Custodian pursuant to Section 8 hereof, any cash at any time held for the account
of the Company shall be security therefor and should the

20

 

	 	 	 	Company fail to repay the Custodian promptly, the Custodian shall be entitled to
utilize available cash to the extent necessary to obtain reimbursement.

	 	 	9.5 Force Majeure. Without prejudice to the generality of the foregoing, the Custodian
shall be without liability to the Company for any damage or loss resulting from or caused
by events or circumstances beyond the Custodian’s reasonable control including (a)
nationalization, expropriation, currency restrictions, the interruption, disruption or
suspension of the normal procedures and practices of any securities market, power,
mechanical, communications or other technological failures or interruptions, computer
viruses or the like, fires, floods, earthquakes or other natural disasters, civil and
military disturbance, acts of war or terrorism, riots, revolution, acts of God, work
stoppages, strikes, national disasters of any kind, or other similar events or acts; (b)
errors by the Company (including any Authorized Person) in its instructions to the
Custodian; or (c) changes in applicable law, regulation or orders.
	 
	10.	 	SECURITY CODES

If the Custodian issues to the Company, security codes, passwords or test keys in order that it may
verify that certain transmissions of information, including Proper Instructions, have been
originated by the Company, the Company shall safeguard any security codes, passwords, test keys or
other security devices which the Custodian shall make available.

	11.	 	TAX LAW
	 
	 	 	11.1 Domestic Tax Law. The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Company or the Custodian as custodian of the
Securities or the Proceeds, by the tax law of the United States or any state or political
subdivision thereof. The Custodian shall be kept indemnified by and be without liability
to the Company for such obligations including taxes, (but excluding any income taxes
assessable in respect of compensation paid to the Custodian pursuant to this agreement)
withholding, certification and reporting requirements, claims for exemption or refund,
additions for late payment interest, penalties and other expenses (including legal
expenses) that may be assessed against the Company, or the Custodian as custodian of the
Securities or Proceeds.
	 
	 	 	11.2 [Reserved].
	 
	12.	 	EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
	 
	 	 	12.1 Effective Date. This Agreement shall become effective as of its due execution and
delivery by each of the parties. This Agreement shall continue in full force and effect
until terminated as hereinafter provided. This Agreement may only be amended by mutual
written agreement of the parties hereto. This Agreement may be terminated by the Custodian
or the Company pursuant to Section 12.2.
	 
	 	 	12.2 Termination. This Agreement shall terminate upon the earliest of (a) the effective
date of termination specified in any written notice of termination given by either party to

21

 

	 	 	the other which effective date shall be not less than ninety (90) days from the date that
such notice is given in accordance with Section 15, and (b) such other date of termination
as may be mutually agreed upon by the parties in writing.
	 
	 	 	12.3 Resignation. The Custodian may at any time resign under this Agreement by giving not
less than ninety (90) days advance written notice thereof to the Company.
	 
	 	 	12.4 Successor. Prior to the effective date of termination of this Agreement, or the
effective date of the resignation of the Custodian, as the case may be, the Company shall
give Proper Instruction to the Custodian designating a successor Custodian, if applicable.
	 
	 	 	12.5 Payment of Fees, etc. Upon termination of this Agreement or resignation of the
Custodian, the Company shall pay to the Custodian such compensation, and shall likewise
reimburse the Custodian for its costs, expenses and disbursements, as may be due as of the
date of such termination or resignation (or removal, as the case may be). All
indemnifications in favor of the Custodian under this Agreement shall survive the
termination of this Agreement, or any resignation or removal of the Custodian.
	 
	 	 	12.6 Final Report. In the event of any resignation or removal of the Custodian, the
Custodian shall provide to the Company a complete final written report or data file
transfer of any Confidential Information as of the date of such resignation or removal.
	 
	13.	 	REPRESENTATIONS AND WARRANTIES
	 
	 	 	13.1 Representations of the Company. The Company represents and warrants to the Custodian
that:

	 	(a)	 	it has the power and authority to enter into and perform its obligations under
this Agreement, and it has duly authorized and executed this Agreement so as to
constitute its valid and binding obligation; and
	 
	 	(b)	 	in giving any instructions which purport to be “Proper Instructions” under this
Agreement, the Company will act in accordance with the provisions of its certificate of
incorporation and bylaws and any applicable laws and regulations.

	 	 	13.2 Representations of the Custodian. The Custodian hereby represents and warrants to the
Company that:

	 	(a)	 	it is qualified to act as a custodian pursuant to Section 26(a)(1) of the 1940
Act;
	 
	 	(b)	 	it has the power and authority to enter into and perform its obligations under
this Agreement;
	 
	 	(c)	 	it has duly authorized and executed this Agreement so as to constitute its
valid and binding obligations; and

22

 

	 	(d)	 	that it maintains business continuity policies and standards that include data
file backup and recovery procedures that comply with all applicable regulatory
requirements.

	14.	 	PARTIES IN INTEREST; NO THIRD PARTY BENEFIT

This Agreement is not intended for, and shall not be construed to be intended for, the benefit of
any third parties and may not be relied upon or enforced by any third parties (other than
successors and permitted assigns pursuant to Section 19).

	15.	 	NOTICES

Any Proper Instructions shall be given to the following address (or such other address as either
party may designate by written notice to the other party), and otherwise any notices, approvals and
other communications hereunder shall be sufficient if made in writing and given to the parties at
the following address (or such other address as either of them may subsequently designate by notice
to the other), given by (i) certified or registered mail, postage prepaid, (ii) recognized courier
or delivery service, or (iii) confirmed telecopier or telex, with a duplicate sent on the same day
by first class mail, postage prepaid:

	 	(a)	 	if to the Company, to

	 	 	 	Fifth Street Finance Corp.

10 Bank Street

12th Floor

White Plains, NY 10606

Attention: William H. Craig, Chief Financial Officer

Fax: (914) 328-4214

	 	(b)	 	if to the Custodian (other than in its role as Document Custodian), to

	 	 	 	U.S. Bank National Association

Corporate Trust Services

One Federal Street, 3rd Floor

Boston, MA 02110

Ref: Fifth Street Finance Corp.

Attention: Donald Higgins

Email: donald.higgins@usbank.com

Fax: 866.592.7151

	 	(c)	 	if to the Custodian solely in its role as Document Custodian, to

	 	 	 	U.S. Bank National Association

1719 Range Way

Florence, South Carolina 29501

Mail Code: Ex — SC — FLOR

23

 

	 	 	 	Ref: Fifth Street Finance Corp.

Attn: Steven Garrett

E-mail: steven.garrett@usbank.com

Facsimile No.: 843-673-0162

	16.	 	CHOICE OF LAW AND JURISDICTION

This Agreement shall be construed, and the provisions thereof interpreted under and in accordance
with and governed by the laws of The Commonwealth of Massachusetts for all purposes (without regard
to its choice of law provisions); except to the extent such laws are inconsistent with federal
securities laws, including the 1940 Act.

	17.	 	ENTIRE AGREEMENT; COUNTERPARTS
	 
	 	 	17.1 Complete Agreement. This Agreement constitutes the complete and exclusive agreement
of the parties with regard to the matters addressed herein and supersedes and terminates as
of the date hereof, all prior agreements, agreements or understandings, oral or written
between the parties to this Agreement relating to such matters.
	 
	 	 	17.2 Counterparts. This Agreement may be executed in any number of counterparts and all
counterparts taken together shall constitute one and the same instrument.
	 
	 	 	17.3 Facsimile Signatures. The exchange of copies of this Agreement and of signature pages
by facsimile transmission shall constitute effective execution and delivery of this
Agreement as to the parties and may be used in lieu of the original Agreement for all
purposes. Signatures of the parties transmitted by facsimile shall be deemed to be their
original signatures for all purposes.

	18.	 	AMENDMENT; WAIVER
	 
	 	 	18.1 Amendment. This Agreement may not be amended except by an express written instrument
duly executed by each of the Company and the Custodian.
	 
	 	 	18.2 Waiver. In no instance shall any delay or failure to act be deemed to be or effective
as a waiver of any right, power or term hereunder, unless and except to the extent such
waiver is set forth in an expressly written instrument signed by the party against whom it
is to be charged.
	 
	19.	 	SUCCESSOR AND ASSIGNS
	 
	 	 	19.1 Successors Bound. The covenants and agreements set forth herein shall be binding upon
and inure to the benefit of each of the parties and their respective successors and
permitted assigns. Neither party shall be permitted to assign their rights under this
Agreement without the written consent of the other party; provided, however, that the
foregoing shall not limit the ability of the Custodian to delegate certain duties or

24

 

	 	 	services to or perform them through agents or attorneys appointed with due care as
expressly provided in this Agreement.
	 
	 	 	19.2 Merger and Consolidation. Any corporation or association into which the Custodian may
be merged or converted or with which it may be consolidated, or any corporation or
association resulting from any merger, conversion or consolidation to which the Custodian
shall be a party, or any corporation or association to which the Custodian transfers all or
substantially all of its corporate trust business, shall be the successor of the Custodian
hereunder, and shall succeed to all of the rights, powers and duties of the Custodian
hereunder, without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
	 
	20.	 	SEVERABILITY

The terms of this Agreement are hereby declared to be severable, such that if any term hereof is
determined to be invalid or unenforceable, such determination shall not affect the remaining terms.

	21.	 	INSTRUMENT UNDER SEAL; HEADINGS

This Agreement is intended to take effect as, and shall be deemed to be, an instrument under seal.

	22.	 	REQUEST FOR INSTRUCTIONS

If, in performing its duties under this Agreement, the Custodian is required to decide between
alternative courses of action, the Custodian may (but shall not be obliged to) request written
instructions from the Company as to the course of action desired by it. If the Custodian does not
receive such instructions within two (2) days after it has requested them, the Custodian may, but
shall be under no duty to, take or refrain from taking any such courses of action. The Custodian
shall act in accordance with instructions received from the Company in response to such request
after such two-day period except to the extent it has already taken, or committed itself to take,
action inconsistent with such instructions.

	23.	 	OTHER BUSINESS

Nothing herein shall prevent the Custodian or any of its affiliates from engaging in other
business, or from entering into any other transaction or financial or other relationship with, or
receiving fees from or from rendering services of any kind to the Company or any other Person.
Nothing contained in this Agreement shall constitute the Company and/or the Custodian (and/or any
other Person) as members of any partnership, joint venture, association, syndicate, unincorporated
business or similar assignment as a result of or by virtue of the engagement or relationship
established by this Agreement.

25

 

	24.	 	REPRODUCTION OF DOCUMENTS

This Agreement and all schedules, exhibits, attachments and amendment hereto may be reproduced by
any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar
process. The parties hereto each agree that any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding, whether or not the original is
in existence and whether or not such reproduction was made by a party in the regular course of
business, and that any enlargement, facsimile or further production shall likewise be admissible in
evidence.

	25.	 	MISCELLANEOUS

The Company acknowledges receipt of the following notice:

“ IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT.

To help the government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify and record information
that identifies each person who opens an account. For a non-individual person such as a
business entity, a charity, a trust or other legal entity the Custodian will ask for
documentation to verify its formation and existence as a legal entity. The Custodian may
also ask to see financial statements, licenses, identification and authorization documents
from individuals claiming authority to represent the entity or other relevant
documentation.”

[PAGE INTENTIONALLY ENDS HERE. SIGNATURES APPEAR ON NEXT PAGE.]

26

 

     IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed and delivered
by a duly authorized officer, intending the same to take effect as of the 31st day of January,
2011.

	 	 	 	 	 	 	 

	Witness:	 	 	 	FIFTH STREET FINANCE CORP.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

Name:

	 	 	 	 	 	 

     Name:
	Title:

	 	 	 	 	 	     Title:
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Witness:	 	 	 	U.S. BANK NATIONAL ASSOCIATION
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

Name:

	 	 	 	 	 	 

     Name:
	Title:

	 	 	 	 	 	     Title:

27Exhibit 10.1

Exhibit 10.1

SUPPLEMENTAL INDENTURE

SUPPLEMENTAL INDENTURE dated as of January 27, 2011 (the “Supplemental Indenture”),
between NMH HOLDINGS, INC., a Delaware corporation (the “Company”) and U.S. BANK NATIONAL
ASSOCIATION, as trustee (the “Trustee”).

WHEREAS there has heretofore been executed and delivered to the Trustee an Indenture dated as
of July 5, 2007 (the “Indenture”), providing for the issuance of the Company’s Senior
Floating Rate Toggle Notes due 2014 (the “Notes”);

WHEREAS Section 9.02 of the Indenture provides that the Company and the Trustee may amend the
Indenture with the written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding;

WHEREAS, the Company has duly authorized the execution and delivery of this Supplemental
Indenture;

WHEREAS, the Company has offered to tender (the “Tender Offer”) any and all of the
outstanding Notes for cash, upon the terms and subject to the conditions set forth in the Company’s
offer to purchase and consent solicitation statement, dated as of January 19, 2011 (the “Offer
to Purchase”), as may be amended, supplemented or modified from time to time;

WHEREAS, in connection with the Tender Offer, the Company has also solicited consents from the
Holders of the Notes to certain proposed amendments (the “Proposed Amendments”) to the
Indenture as described in the Offer to Purchase and set forth in Article I of this Supplemental
Indenture, with the operation of such Proposed Amendments being subject to the satisfaction or
waiver by the Company of the conditions to the Tender Offer and the acceptance by the Company for
purchase and payment of the Notes validly tendered and not validly withdrawn pursuant to the Tender
Offer;

WHEREAS the Holders of at least a majority in aggregate principal amount of the Notes
outstanding have consented to the amendments effected by this Supplemental Indenture in accordance
with Section 9.02 of the Indenture;

WHEREAS all things necessary to make this Supplemental Indenture a valid agreement, in
accordance with its terms, have been complied with or have been performed or done; and

WHEREAS, pursuant to the terms of the Tender Offer to which this Supplemental Indenture
relates, a consent payment will be made to certain holders of the Notes who tender their Notes and
deliver their consents to the Proposed Amendments.

NOW THEREFORE, this Supplemental Indenture witnesseth that, for and in consideration of the
premises, it is mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Notes, as follows:

ARTICLE I

AMENDMENTS TO INDENTURE

	 	(a)	 	The Indenture is hereby amended to delete each of the following sections in
their entirety, and insert in lieu thereof the phrase “[Intentionally Omitted]”:

	 	(i)	 	Section 4.03. Reports and Other Information.
	 
	 	(ii)	 	Section 4.04. Compliance Certificate.
	 
	 	(iii)	 	Section 4.05. Taxes.
	 
	 	(iv)	 	Section 4.06. Stay, Extension and Usury Laws.
	 
	 	(v)	 	Section 4.07. Limitation on Restricted Payments.

 

 

	 	(vi)	 	Section 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.

	 	(vii)	 	Section 4.09. Limitation on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock.

	 	(viii)	 	Section 4.10. Asset Sales.
	 
	 	(ix)	 	Section 4.11. Transactions with Affiliates.
	 
	 	(x)	 	Section 4.12. Liens.
	 
	 	(xi)	 	Section 4.13. Corporate Existence.
	 
	 	(xii)	 	Section 4.14. Offer to Repurchase Upon Change of Control.
	 
	 	(xiii)	 	Section 4.15. Limitation on Guarantees of Indebtedness by Restricted Subsidiaries.

	 	(xiv)	 	Clauses (3) and (4) of paragraph (a) of Section 5.01 (Merger,
Consolidation or Sale of All or Substantially All Assets); and
	 
	 	(xv)	 	Clauses (3), (4) and (5) of Section 6.01 (Events of Default).

	 	(b)	 	Any definition used exclusively in the provisions of the Indenture that are
deleted pursuant to this Article I, and any definitions used exclusively within such
definitions, are hereby deleted in their entirety from the Indenture, and all
references in the Indenture to any sections or clauses set forth above in this Article
I, any and all obligations thereunder and any event of default related solely to such
sections and clauses, are hereby deleted throughout the Indenture.

ARTICLE II

MISCELLANEOUS

	 	(a)	 	Instruments To Be Read Together. This Supplemental Indenture is an indenture
supplemental to and in implementation of the Indenture, and said Indenture and this
Supplemental Indenture shall henceforth be read together.

	 	(b)	 	Confirmation. The Indenture as amended and supplemented by this Supplemental
Indenture is in all respects confirmed and preserved.

	 	(c)	 	Terms Defined. Capitalized terms used in this Supplemental Indenture have been
inserted for convenience of reference only, and are not to be considered a part hereof
and shall in no way modify or restrict any of the terms and provisions hereof.

	 	(d)	 	Trust Indenture Act Controls. If any provision of this Supplemental Indenture
limits, qualifies or conflicts with another provision that is required to be included
in this Supplemental Indenture or the Indenture by the Trust Indenture Act, the
required provision shall control.

	 	(e)	 	Headings. The headings of the Articles and Sections of this Supplemental
Indenture have been inserted for convenience of reference only, and are not to be
considered a part hereof and shall in no way modify or restrict any of the terms and
provisions hereof.

	 	(f)	 	Governing Law. The laws of the State of New York shall govern this
Supplemental Indenture.

	 	(g)	 	Counterparts. This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

 

 

	 	(h)	 	Effectiveness; Operativeness. This Supplemental Indenture will become
effective and binding upon the Company, the Trustee and the Holders of the Notes upon
execution and delivery of this Supplemental Indenture. All of the provisions of this
Supplemental Indenture other than Article I hereof will become operative on, and
simultaneously with, the time that this Supplemental Indenture becomes effective.
Article I of this Supplemental Indenture will become operative upon, and simultaneously
with, and shall have no force or effect prior to, the written notification to the
Trustee by the Company that it has accepted for purchase and payment (the “Early
Settlement Date”) Notes constituting at least a majority in aggregate principal
amount of the Notes then outstanding, pursuant to the terms of the Tender Offer.

	 	(i)	 	Termination. The provisions of this Supplemental Indenture will take effect
immediately upon its execution and delivery by the Trustee in accordance with the
provisions of Sections 9.02 and 9.06 of the Indenture; provided, that the amendments to
the Indenture set forth in Article I of this Supplemental Indenture shall become
operative as specified in Section 2(h) hereof. Prior to the Early Settlement Date, the
Company may terminate this Supplemental Indenture upon written notice to the Trustee.

	 	(j)	 	Acceptance by Trustee. The Trustee accepts the Proposed Amendments to the
Indenture effected by this Supplemental Indenture and agrees to execute the trusts
created by the Indenture as hereby amended, but only upon the terms and conditions set
forth in the Indenture.

	 	(k)	 	Responsibility of Trustee. The recitals contained herein shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or sufficiency of
this Supplemental Indenture.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed, all as of the date first written above.

	 	 	 	 	 
	 	NMH HOLDINGS, INC.

 	 
	 	By:  	/s/  Denis M. Holler
 	 
	 	 	Name:  	Denis M. Holler 	 
	 	 	Title:  	Executive Vice President,

Chief Financial Officer and Treasurer 	 

Signature Page to Supplemental Indenture

 

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee

 	 
	 	By:  	/s/  Joshua A. Hahn
 	 
	 	 	Name:  	Joshua A. Hahn 	 
	 	 	Title:  	Assistant Vice President 	 

Signature Page to Supplemental Indenture

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}]]