Document:

Employment Agreement

 Exhibit 10.1 

EMPLOYMENT AGREEMENT 

THIS AGREEMENT made as of the
12th day of July 2010, by and between UNIVERSAL
STAINLESS & ALLOY PRODUCTS, INC., a Delaware corporation (the “Company”), and Douglas M. McSorley (the “Executive”). 

WITNESSETH: 

In consideration of the covenants and agreements herein contained, and intending to be legally bound hereby, the Company and Executive
agree as follows: 
 Article 1. - Employment 

1.1. Employment. The Company agrees to employ Executive, and Executive agrees to serve the Company, for the period stated in
Article 2 hereof (the “Term of Employment”) and upon the other terms and conditions herein provided. 
 1.2.
Position and Responsibilities. The Company employs Executive, and Executive agrees to serve as Vice President of Finance, Chief Financial Officer and Treasurer of the Company and to accept such other responsibilities as may be assigned to
Executive by the Company from time to time during the Term of Employment. 
 1.3. Duties. During the Term of Employment,
Executive shall devote all of his business time, attention, skill and efforts to the faithful performance of his duties hereunder. 

Article 2. - Term 

The Term of Employment shall commence as of July 19, 2010 (the “Effective Date”), and shall continue until July 31,
2011 (the “Initial Term”). Thereafter, subject to the termination provisions of this Agreement, this Agreement will be automatically extended for successive one year terms unless either party provides written notice to the other party on
or before June 1 of any year, of his or its election not to extend the term of this Agreement. 
 Article 3. -
Compensation 
 3.1. Salary. As compensation to the Executive for the performance of services hereunder, the
Company shall pay to the Executive a base salary (the “Salary”) of $215,000.00. Installments of the Salary shall be paid to the Executive in accordance with the standard procedure of the Company, which at the present time is once every two
weeks. During the period of this Agreement, Executive’s salary shall be reviewed at least annually and may be increased if the Board of Directors of the Company acting after approval of the Compensation Committee, determines that an increase is
appropriate on the basis of the types of factors it generally takes into account in increasing the salaries of employees similarly situated in the Company. 
  

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 3.2. Reimbursement of Expenses. The Company will reimburse the Executive for those
customary and necessary business expenses incurred by him in the performance of his duties and activities on behalf of the Company. Except as provided in this Agreement, such expenses will be reimbursed only on presentation by the Executive of
appropriate documentation to substantiate such expenses pursuant to the policies and procedures of the Company governing reimbursement of business expenses to its executives. 

3.3. Participation in Plans. The Executive shall be entitled to participate in any life, medical, dental, health, hospitalization,
travel, accident and/or disability insurance plans and in any sick leave and/or salary continuation plan, vacation (which shall not be less than three (3) weeks per calendar year), holiday pay, retirement or employee benefit plan or program
generally offered by the Company to its salaried employees. In addition, Executive shall be entitled to participate in the variable incentive compensation plan and the perquisites described on Schedule A attached hereto. 

Article 4. - Termination of Employment 

4.1. Definitions. For the purposes hereof: 

(a) “Disability” shall be deemed to have occurred when the Executive is eligible, due to a health condition, to collect
benefits under the Company’s short term disability plan and has been determined by the Board of Directors to be unable to perform substantially the duties associated with the Executives position for a period of three months. 

(b) “Cause” shall mean any of the following: (i) Executive’s personal dishonesty or willful misconduct;
(ii) Executive’s willful violation of any law or material rule or regulation, provided that such violation is demonstrably injurious to the assets, operations or business prospects of the Company; (iii) the conversion or embezzlement
for the personal benefit of the Executive of corporate funds or property or a material business opportunity of the Company; (iv) the misuse by the Executive for his personal benefit of any trade secrets or other information of the Company in
violation of the provisions of Article 7 of this Agreement; or (v) Executive’s material breach of any other provision of this Agreement which is not cured within thirty (30) days of receipt of notice of such breach from Company.

 (c) “Good Reason” shall, absent the Executive’s consent to such action, mean the occurrence of any one
of the following: (i) following a Change of Control, the removal of the Executive as Vice President of Finance, Chief Financial Officer and Treasurer (by reason other than death, Disability or Cause); (ii) any breach by the Company of a
material obligation under this Agreement; (iii) a substantial and material alteration in the nature or status of Executive’s duties and responsibilities that renders the Executive’s position to be of substantially less responsibility
or scope; (iv) a material reduction by the Company in the Executive’s Salary, except for proportional across-the-board salary reductions similarly affecting all senior executives of the Company; or (v) any material reduction by the
Company of the benefits, taken as a whole, enjoyed by the Executive on the date of this Agreement under any savings, life insurance, medical, health and accident, disability or other employee welfare benefit plans or programs, including vacation
programs, provided that this paragraph (v) shall not apply to any proportional across the board reduction or action similarly affecting all senior executives of the Company. 

 

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 Notwithstanding the foregoing, no event of “Good Reason” shall be deemed to have occurred unless
Executive provides to the Chairman of the Compensation Committee of the Board of Directors of the Company written notice of the facts and circumstances which Executive believes constitutes Good Reason under this Section 4.1(c) within 30 days of
such initial occurrence and such facts and circumstances are not corrected or otherwise cured by the Company within thirty (30) days of receipt thereof. Termination by Executive for Good Reason must occur within 90 days of the initial
occurrence of the Good Reason event. 
 For purposes of this Agreement, a Change of Control shall be deemed to have occurred on the earlier of
(x) if, in any transaction or series of related transactions consummated in a ninety day period, more than fifty percent (50%) of the then outstanding voting common stock of the Company is sold to a person or group; (y) a merger or
consolidation of the Company and another entity in which the Company is not the surviving corporation or in which more than fifty percent(50%) of the equity ownership of the Company changes, or (z) the sale of 50% or more of all of the assets
of the Company. 
 (d) “Notice of Termination” shall mean written notice which shall indicate the specific
termination or resignation provisions in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination or resignation under the provision so indicated and the Company
shall submit to the Executive a certified statement signed by the Chairman of the Compensation Committee of the Board of Directors of the Company approving such termination in the case of a Termination by the Company for Cause or Without Cause.

 (e) “Date of Termination” shall mean the date specified in the Notice of Termination as the effective date
the Executive’s employment is terminated for any reason or the Executive’s effective date of resignation, whichever is earlier. 

Article 5. - Compensation Upon Termination 

5.1. Death. If the Executive’s employment hereunder terminates by reason of his death, his beneficiaries shall be entitled to
receive from the Company such amounts as are then provided pursuant to plans, programs or arrangements currently in effect or as approved from time to time by the Board of Directors. 

5.2. Disability. If the Executive’s employment hereunder terminates by reason of his Disability, the Executive shall be
entitled to receive such amounts as are then provided pursuant to Company’s then existing disability plans, programs or arrangements. Notwithstanding any provisions herein to the contrary, the Executive shall be entitled to receive all benefits
to which the Executive is entitled as a terminated employee under the terms of any of the Company’s qualified employee benefit plans and any other plan, program or arrangement relating to retirement or other benefits including, without
limitation, any employee stock ownership plan or any plan now in effect or which is established (with approval of the Board of Directors) as a supplement to any of the forenamed plans, except as otherwise provided in such plans as a result of the
Executive’s termination of employment. 
  

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 5.3. Cause. If the Executive’s employment hereunder is terminated by the Company
for Cause, the Company shall pay to the Executive his full base Salary through the Date of Termination but at a rate no greater than that in effect at the time Notice of Termination is given, and the Company shall have no further obligations to the
Executive under this Agreement. 
 5.4. By the Company Without Cause or by the Executive by Resignation for Good Reason.
If the Executive’s employment hereunder is terminated by the Company without Cause or is terminated by the Executive pursuant to his resignation for Good Reason, then the Executive shall be entitled to the benefits provided below, which shall
constitute complete satisfaction of the obligations of the Company to the Executive under this Agreement: 
 (a) The Company
shall pay the Executive his prorated annual base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given. 

(b) Subsequent to the Date of Termination: if the Executive has been employed by the Company for less than twelve
full months the Company shall pay as severance pay to the Executive, a lump sum severance payment equal to the number of full months that the Executive was employed by the Company at the rate in effect at the time Notice of Termination is
given; if the Executive was employed by the Company for twelve full months or more, the Company shall pay as severance pay to the Executive, a lump sum severance payment equal to 18 months of the Executive’s base monthly Salary at the rate
in effect at the time Notice of Termination is given. Any such payment referred to in this section shall be less applicable taxes and mandatory deductions, paid on or before the
30th calendar day after the Date of Termination.

 (c) The Company will provide health care benefits under the group policies covering the other corporate employees covering
Medical, Dental, Vision and Prescription Drugs, subject to any changes made to the group policies, as provided prior to the Date of Termination for the Executive and eligible dependents, that were covered prior to any Date of Termination, for a
period of : if the Executive has been employed by the Company for less than twelve full months the Company, the number of full months that the Executive was employed by the Company at no cost to the Executive; if the Executive was employed by the
Company for twelve full months or more, eighteen (18) months at no cost to the Executive. This period of coverage will not reduce the eligible COBRA period. 

(d) The Executive shall not be required to mitigate the amount of any payments provided for in this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by the Executive as the result of employment by another employer, or otherwise. 

(e) Notwithstanding any provisions herein to the contrary, the Executive shall be entitled to receive all benefits to which the
Executive is entitled as a terminated employee under the terms of any of the Company’s qualified employee benefit plans and any other plan, program or arrangement relating to retirement or other benefits including, without limitation, any
employee stock ownership plan or any plan now in effect or which is established (with approval of the Board of Directors) as a supplement to any of the forenamed plans, except as otherwise provided in such plans as a result of the Executive’s
termination of employment. 
  

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 Article 6. - Duties of Executive After 

Termination of Employment 

Following any termination of Executive’s employment and for a period of ninety (90) days thereafter, the Executive shall fully
cooperate with the Company in all matters relating to the winding up and orderly transfer of the Executive’s work on behalf of the Company. Not later than the effective date of any termination of the employment, the Executive will immediately
deliver to the Company any and all of the Company’s property of any kind or nature whatsoever in the Executive’s possession, custody or control, including, without limitation any and all Confidential Information as that term is defined in
Section 7 of this Agreement. 
 Article 7. - Confidential Information; Invention Assignment 

7.1. Confidential Relationship. Executive understands and agrees that all company manuals, company policies, marketing plans and
surveys, product designs, schematics, specifications and product location and installation data, formulae, processes, methods, machines, compositions, customer information, ideas, inventions, financial information and plans of the Company and all
records, correspondence, files, customer lists, data and other information pertaining to or concerning the Company, its principals, vendors and customers (collectively the “Confidential Information”) contain valuable confidential
information that is owned by the Company, and, therefore, that during the period of employment hereunder and at all times thereafter, Executive shall not utilize such Confidential Information for his own benefit or for the benefit of any person or
entity other than the Company, nor shall he divulge or communicate any such Confidential Information to any person or entity without the express authorization of the Company. Confidential Information shall not include any information that is or
becomes generally available to the public other than as a result of a disclosure by Executive. The Executive agrees that, on the termination of his employment, he will immediately surrender to the Company any and all Confidential Information in his
possession pertaining to the Company and its business. 
 7.2. Assignment of Rights. All inventions, discoveries,
designs, developments, technology, computer programs, writings and reports that are made or conceived of by the Executive in the course of his employment with the Company, whether or not patentable or copyrightable, shall become and remain the sole
property of the Company without additional compensation to Executive. The Executive recognizes that all such works shall be considered works-for-hire and hereby transfers and assigns any right, title, copyright and interest that Executive acquires
in such works to the Company and will, from time to time, give the Company all reasonable assistance, execute all papers and do all things that may reasonably be required to protect and preserve the rights of the Company in such works. 

7.3. No Breach of Other Obligations. The Executive represents that, in the course of performing services for the Company, he will
not breach any agreement he may have with others with respect to confidential information, and will not bring to the Company or use in any way any materials or documents obtained from others under an agreement of confidentiality. 

 

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 Article 8. - Source of Payments 

All payments provided for under this Agreement shall be paid in cash from the general funds of the Company and no special or separate
fund shall be established and no other segregation of assets shall be made to assure payment. No trust or fiduciary relationship with respect to payments shall be deemed created hereby and, to the extent that any person acquires a right to receive
payments hereunder, such right shall be no greater than the rights of a general creditor of the Company. 
 Article 9. -
Miscellaneous 
 9.1. Indulgences, Etc. Neither the failure nor any delay on the part of either party to exercise
any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right,
remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. 

9.2. Notices. All notices or communications hereunder shall be in writing, addressed as follows: 

To the Company: 

Dennis M. Oates, 

Chairman, CEO and President 

Universal Stainless & Alloy Products, Inc. 

600 Mayer Street 

Bridgeville, PA 15017 

To the Executive: 

Mr. Douglas M. McSorley 

129 Kingston Drive 

Aurora, OH 44202 

Any such notice or communication shall be sent by certified or registered mail, return receipt requested, postage prepaid, addressed as above (or to such
other address as such party may designate in writing from time to time), and the actual date of receipt, as shown by the receipt therefore, shall determine the time at which notice was given. 

9.3. Assignment; Agreement. This Agreement shall be binding upon and inure to the benefit of the heirs and personal
representatives of the Executive and the successors and assigns of the Company, but neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation by the Executive. 

 

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 9.4. Entire Agreement; Amendment. This Agreement represents the entire agreement of
the parties with respect to the subject matter hereof. This Agreement may be amended or any provision hereof waived at any time only by written agreement of the parties hereto. 

9.5. Governing Law. This Agreement and its validity, interpretation, performance and enforcement shall be governed by the laws of
the Commonwealth of Pennsylvania, other than the conflict of laws provisions of such laws. 
 9.6. Severability. If, for
any reason, any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, and each such other provision shall to the full extent consistent with law continue in full
force and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the remainder of such provision that is not held so invalid, and the remainder of such provision, together with all other
provisions of this Agreement, shall to the full extent consistent with law continue in full force and effect. 
 9.7.
Headings. The Article and Section headings in this Agreement are for convenience of reference only; they form no part of this Agreement and shall not affect its interpretation. 

9.8. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all
of which together shall constitute one and the same instrument. 
 IN WITNESS WHEREOF, the Company and the Executive have
duly executed this Agreement as of the day and year first written above. 
  

			
	 UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

		
	By:	 	 /s/ Dennis M. Oates

		 	Dennis M. Oates
		 	Chairman, CEO and President
	
	EXECUTIVE
	
	 /s/ Douglas M. McSorely

	Douglas M. McSorley

  

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		 		 		 	Schedule A
		 		 		 	Incentive Compensation
		 		 		 	And Perquisites

 1. Incentive Compensation. Executive
will be entitled to participate in the Company’s variable incentive compensation plan. The maximum award under such plan for the Executive shall be 100% of his annual base Salary. A guaranteed minimum incentive compensation award for 2010 based
commencing employment on or prior to July 26, 2010 and continued employment until the payout is made on or before March 15, 2011, for Executive shall be $50,000.00. 

2. Stock Options. Executive shall be granted 15,000 stock options pursuant to the Company’s stock option plan. The exercise price of the
stock options will be the closing price of the Company’s common stock on the Effective Date. One fourth of the stock options will vest on each of the first four anniversaries of the Effective Date. All stock options shall be subject to the
terms and conditions of a separate stock option agreement to be entered into by Executive and the Company. 
 4. Moving Expenses. A
moving and relocation allowance will be provided as follows: $100,000 (subject to mandatory withholdings) to be paid upon Executive’s closing, within eighteen months of the start of employment, on a residence in the Greater Pittsburgh
metropolitan area. 
 The relocation allowance amount of $100,000 is subject to your agreeing to work for Universal Stainless & Alloy
Products, Inc., as the Vice President of Finance, Chief Financial Officer and Treasurer for a period of at least two (2) years. Should you voluntarily terminate your employment before that time, the relocation allowance amount of $100,000 is to
be returned to Universal Stainless & Alloy Products, Inc. 
 5. Club Membership. The Company shall pay the membership dues for
Executive at Southpointe Golf Club. Charges related to the use of the Club shall be the responsibility of the Executive. 
 6. Temporary
Living Expense. Universal will pay for the temporary living expenses of a motel/hotel facility (with prior approval of Universal), for a period of up to four (4) weeks. Universal will also pay $25.00 per day for meals for the first month.

 Universal will pay for the temporary rental expense of an extended stay motel/hotel facility (with prior approval of Universal), up to a
maximum of $1,500/month, for a period of up to five (5) months. 
 ************************ 

 

 - 8 -First Amendment to Credit Agreement

 Exhibit 10.1 

FIRST AMENDMENT TO CREDIT AGREEMENT AND TO SECURITY AGREEMENT 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND TO SECURITY AGREEMENT, dated as of July 13, 2010 (together with all schedules and
exhibits hereto, this “First Amendment”), is entered into by and among BROAD STREET FUNDING LLC, a Delaware limited liability company (the “Borrower”), and DEUTSCHE BANK AG, NEW YORK BRANCH (the
“Lender”). Capitalized terms used herein and not otherwise defined herein have the meanings assigned to such terms in the Credit Agreement described below. 

RECITALS: 

A. The Borrower and Lender are parties to a Credit Agreement dated as of March 10, 2010 (the “Credit Agreement”),
which provides, among other things, for revolving Loans to be made by the Lenders to the Borrower in an aggregate principal amount not exceeding $140,000,000 and to a Security Agreement dated as of March 10, 2010 (the “Security
Agreement”) which, inter alia, secures the Borrower’s obligations to the Lender under the Credit Agreement. 
 B.
The Borrower and the Lender desire, among other things, to (i) increase the aggregate amount of the Lender’s Maximum Commitment to $240,000,000, (ii) change the dates for certain reports to be delivered, (iii) change the
Additional Margin Requirement for certain Securities, and (iv) make certain other related amendments that are set forth herein. 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows: 
 Section 1. Amendment of Credit Agreement. Effective as of the date hereof, the Credit Agreement is
hereby amended as follows: 
 (a) The preamble of the Credit Agreement is amended by replacing “This Credit Agreement,
dated as of March 10, 2010 (this “Agreement”)” with “This Credit Agreement, dated as of March 10, 2010 (as amended from time to time, this “Agreement”)”. 

(b) Section 6.01(a)(i) of the Credit Agreement is hereby replaced in its entirety with the following: 

“On the 20th day of each calendar month (or, if such date is not a Business Day, then the next following Business Day), the Borrower shall furnish
to the Lender a written statement (a “Collateral Report”) certified by the Manager on behalf of the Borrower, in each case as of the Reporting Date which shall include among other things (to the extent applicable):” 

(c) The definition of “Applicable Margin” in Annex I to the Credit Agreement is hereby amended by replacing “2.50% per
annum” with “2.23% per annum.” 

 (d) The definition of “Commitment Fee” in Annex I to the Credit Agreement is
hereby replaced in its entirety by the following: 
 ““Commitment Fee” means, (a) for any day occurring from
the date that is four (4) months after the Closing Date to, but excluding, the date that is four (4) months after the First Amendment Closing Date, the greater of (i) (1) the Unused Amount as of such day less $100,000,000
multiplied by (2) a fraction, the numerator of which is 0.75% and the denominator of which is 360, and (ii) zero; and (b) for each day thereafter (i) the Unused Amount as of such day multiplied by (ii) a fraction, the
numerator of which is 0.75% and the denominator of which is 360.” 
 (e) The definition of “Credit Document” in
Annex I to the Credit Agreement is hereby amended by inserting the following after “instrument or document”: “(including amendments from time to time of any of the foregoing).” 

(f) The definition of “Maximum Commitment” in Annex I to the Credit Agreement is hereby amended by replacing
“$140,000,000” with “240,000,000”. 
 (g) The definition of “Reporting Date” in Annex I to the
Credit Agreement is hereby replaced in its entirety by the following: 
 ““Reporting Date” means the
seventh Business Day prior to the 20th day of each calendar month, commencing on May 11, 2010.” 
 (h) The following
definition is hereby added to Annex I to the Credit Agreement in the applicable alphabetical location: 
 ““First
Amendment Closing Date” means July 13, 2010”. 
 (i) The definition of “Additional Margin
Requirements” in the Collateral Valuation Schedule is hereby amended as follows: 
 (1) Subsection (vii) is hereby
replaced in its entirety by the following: 
 “(vii) in the case of each Bank Loan or Security for which (i) the Number
of Pricing Sources equals 2 or (ii) the Outstanding Facility Size is greater than or equal to $75,000,000 and less than $150,000,000, the percentage specified in Annex II-B-7 determined based upon the Market Value of all such Bank Loans and
Securities;” 
 (2) Subsection (ix) is hereby amended by deleting the “and” at the end thereof; 

 

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 (3) Subsection (x) is hereby amended by replacing the period at the end thereof with
the following “; and”; and 
 (4) The following is added as a new Subsection (xi): 

“(xi) in the case of Securities with any Number of Pricing Sources, the percentage specified in Annex II-C-4.”

 (j) The definition of “Number of Pricing Sources” in the Collateral Valuation Schedule is hereby replaced in its
entirety with the following: 
 ““Number of Pricing Sources” means, as of any date of determination,
(i) for each Bank Loan, the arithmetic average, over the five Business Days immediately preceding such date of determination, of the Maximum Number of Price Indications on such Business Day, and (ii) for Securities, the number of unique
daily bid-side quotations that the Lender receives directly from the list of Approved Bond Dealers, except that (x) if the Lender believes in its sole discretion that quotations reported on FT Interactive Data or TRACE is duplicative of another
quoting dealer, then that quote will be excluded from the calculation, and (y) if any of the quoting dealers’ 5 Year Ask CDS Spread is greater than 350 basis points, then their quotes will also be excluded from the analysis. On each date
of determination, the Number of Pricing Sources shall be rounded up to the nearest whole number. 
 If the Lender is the source
of one of the price indications for Bank Loans or is the source of one of the bid-side daily quotations for Securities and (i) there is only one other price indication or quotation, as applicable, then the Number of Pricing Sources will count
as 3 instead of 2, or (ii) there is no other price indication or quotation, as applicable, then the Number of Pricing Sources will count as two instead of one, provided that the Lender can change the margin requirement for these
positions in its sole discretion upon 8 business days notice to the Borrower.” 
 (k) The following definitions are hereby
added to the Collateral Valuation Schedule at their applicable alphabetical location: 
 ““Approved Bond
Dealers” means each of dealers as set forth in Schedule 8 as revised by the lender from time to time. 

“FT Interactive Data” means the [price/quotation] reporting service provided by the Interactive Data Corporation or any
successor service thereto as determined by Lender. 
 “TRACE” means the Trade Reporting and Compliance Engine
developed by the Financial Industry Regulatory Authority (“FINRA”) or any successor service thereto as determined by Lender.” 
  

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 (l) Annex II-B-7 is hereby amended as follows: 

(1) The heading is hereby replaced in its entirety with “Additional Margin Requirements – Bank Loans and Securities.”

 (2) The heading of the first column is hereby replaced in its entirety by the following: 

“Aggregate Market Value for all Bank Loan or Security for which the Number of Pricing Sources equals 2 or the Outstanding Facility
Size is greater than or equal to $75,000,000 and less than $150,000,000 as a percentage of the aggregate Market Value of all Eligible Investments” 

(m) The following is hereby added to the Credit Agreement as “Annex II-C-4”: 

Additional Margin Requirement – Securities 
  

				
	 Securities with the following Approved Pricing Sources
	  	Additional Margin
Requirement	 
		
	 Fewer than 2 Approved Pricing Sources
	  	100	% 
		
	 2 Approved Pricing Sources
	  	13	% 
		
	 Greater than 2 Approved Pricing Sources
	  	0	% 

 (n) The
following list of Approved Bond Dealers is hereby added as Schedule 8 of the Credit Agreement: 
 APPROVED BOND DEALERS 

 ABN 

Barclays Bank PLC 

BNP Paribas SA 

Bank of NY Mellon (BNYM Capital Markets) 

Citigroup, Inc. 

Credit Suisse AG 

Deutsche Bank 

Fidelity Capital Markets 

FT Interactive Data 

Goldman Sachs 

HSBC 
 JP Morgan
Chase & Co. 
 Merrill Lynch & Co., Inc. 

Morgan Stanley 
  

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 RBC Capital Markets 

Royal Bank of Scotland Group Plc 

Societe General 

TRACE trades 

UBS AG 
 Wachovia

 Section 2. Amendment of Security Agreement. Effective as of the date hereof, the Security Agreement is hereby amended
as follows: 
 (a) The preamble of the Security Agreement is amended by replacing “This Security Agreement (this
“Agreement”), dated as of March 10, 2010” with “This Security Agreement, dated as of March 10, 2010 (as amended from time to time, this “Agreement”)” 

(b) Section 1 of the Security Agreement is hereby amended by adding the following to the end of the definition of Credit Agreement
(immediately before the period): “as amended” 
 Section 3. Conditions Precedent. It shall be a condition
precedent to the effectiveness of this First Amendment that each of the following conditions are satisfied: 
 (a) Agreements.
The Lender shall have received executed counterparts of this First Amendment and the Amendment Fee Agreement dated as of July 13, 2010 by and among Borrower and Lender (the “Amendment Fee Agreement”), each duly executed and delivered
by an Authorized Representative of the Borrower. 
 (b) Evidence of Authority. The Lender shall have received: 

(1) a certificate of an Authorized Representative of the Borrower and a Responsible Officer (which could be the same person as the
Authorized Representative), dated the First Amendment Closing Date, as to: 
 (i) the authority of the Borrower to execute and
deliver this First Amendment and the Amendment Fee Agreement and to perform its obligations under the Credit Agreement, the Note, the Security Agreement, in each case as amended by this First Amendment and each other instrument, agreement (including
the Amendment Fee Agreement) or other document to be executed in connection with the transactions contemplated in connection herewith and therewith; 

(ii) the authority and signatures of those Persons authorized on behalf of the Borrower to execute and deliver this First Amendment, the
Amendment Fee Agreement and the other Credit Documents to be executed and delivered in connection with this First Amendment and to act with respect to this First Amendment and each other Credit Document executed or to be executed by the Borrower,
upon which certificate the Lender, 
  

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including each assignee (whether or not it shall have then become a party hereto), may conclusively rely until it shall have received a further certificate of the Borrower canceling or amending
such prior certificates; and 
 (iii) the absence of any changes in the Organic Documents of the Borrower since the copies
delivered to Lender in connection with the Closing of the Credit Agreement; and 
 (2) such other instruments, agreements or
other documents (certified if requested) as the Lender may reasonably request. 
 (c) Note. The Lender shall have received an
amended and restated Note (including a Schedule 1 for such Note that is accurate as of First Amendment Closing Date) substantially identical to Exhibit A hereunder duly executed and delivered by an Authorized Representative of the Borrower. Upon the
Lender’s receipt of such amended and restated Note, the Lender shall promptly return to the Borrower the Note delivered by the Borrower to the Lender in connection with the transactions consummated on the Closing Date. 

(d) Contribution Agreement. The Lender shall have received copies of the First Amendment to Asset Contribution Agreement dated as of
June 17, 2010 between FS Investment Corporation (the “Contributor”) and Borrower, duly executed and delivered by the Contributor and by an Authorized Representative of the Borrower and all deliverables of Contributor thereunder.

 (e) Collateral Documents. The Lender shall have received evidence satisfactory to the Lender that all actions that are
necessary or, in the reasonable opinion of the Lender, are desirable to perfect and protect the Liens in the Collateral created or purported to be created by the Collateral Documents have been taken (including delivery to the Custodian of assignment
or transfer agreements executed in blank by an Authorized Representative of the Borrower with respect to each Bank Loan). 
 (f)
No Litigation, etc. No litigation, arbitration, governmental investigation, proceeding or inquiry shall, on the First Amendment Closing Date, be pending or, to the knowledge of the Borrower, threatened in writing with respect to any of the
transactions contemplated hereby which could, in the reasonable opinion of the Lender, be adverse in any material respect to the Borrower. 

(g) Certificate as to Conditions, Warranties, No Default, Agreements etc. The Lender shall have received a certificate of an Authorized
Representative of the Borrower and a Responsible Officer (which could be the same person as the Authorized Representative), in each case on behalf of the Borrower dated as of the First Amendment Closing Date, in form and substance reasonably
satisfactory to the Lender (which shall be deemed to have been given under the Credit Agreement), to the effect that, as of such date: 

(1) all conditions set forth in this Section 3 (CONDITIONS PRECEDENT) have been fulfilled; 

 

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 (2) all representations and warranties of the Borrower set forth in Article 5 of the Credit
Agreement (REPRESENTATIONS AND WARRANTIES) are true and correct in all material respects as if made on the First Amendment Closing Date (unless expressly made as of a certain date, in which case it shall be true and correct in all material respects
as of such date); 
 (3) all representations and warranties set forth in each of the Collateral Documents are true and correct
in all material respects; and 
 (4) no Default or Event of Default shall be continuing. 

(h) Custodial Account and Fund Investments. 

(1) The Lender shall have received reasonably satisfactory evidence that (A) all Fund Investments listed on the Schedule of Fund
Investments that constitute Certificated Securities, Uncertificated Securities or negotiable Instruments (or security entitlements in respect thereof) or Cash have been credited to the Custodial Account in accordance with the Collateral Documents,
(B) the settlement date for all Fund Investments listed on the Schedule of Fund Investments that constitute Bank Loans has occurred, all transfer or assignment documents relating thereto have been fully executed and delivered by authorized
signatories for the Borrower and the transferor or assignor thereof and any other required parties (including the administrative agent and, if applicable, the Obligor under such Bank Loan) and delivered, together with any accompanying promissory
note, to the Custodian and instruments or agreements of transfer in respect thereof, duly executed in blank by an Authorized Representative of the Borrower, have been duly delivered to the Custodian in accordance with the Collateral Documents and
(C) all Obligors relating to all Fund Investments listed on the Schedule of Fund Investments have been instructed to make all payments in connection with such Fund Investments to the Custodial Account. 

(i) Opinions of Counsel. The Lender shall have received the following customary opinion letters, each dated as of the First Amendment
Closing Date, and addressed to the Lender, which shall be reasonably satisfactory in form and substance to the Lender: 
 (1)
Sutherland Asbill & Brennan LLP, counsel to the Borrower, the Manager and FB Income, addressing the matters set forth in Exhibit B hereto; 

(2) Richards, Layton & Finger, P.A., special Delaware counsel to the Lender, in such form and addressing such matters as the
Lender may reasonably require. 
 (j) Equity Owner Letter. The Lender shall have received from the Equity Owner a letter in the
form of Exhibit C hereto addressed to the Lender amending and restating the Equity Owner Letter entered into in connection with the Credit Agreement. 

(k) FB Income Letter. The Lender shall have received from FB Income a letter in the form of Exhibit D hereto addressed to the Lender
amending and restating the FB Income Letter entered into in connection with the Credit Agreement. 
  

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 (l) Manager Letter. The Lender shall have received from the Manager a letter in the form of
Exhibit E hereto addressed to the Lender amending and restating the Manager Letter entered into in connection with the Credit Agreement. 

(m) Closing Fees, Expenses, etc. The Lender shall have received all fees, costs and expenses then due and payable to it under the
Agreement and the Amendment Fee Agreement. 
 (n) Federal Reserve Form U-1. The Lender shall have received a Federal Reserve
Form U-1 duly completed and executed by the Borrower and the Lender reflecting the Maximum Commitment as amended by this First Amendment. 

(o) Certificate of the Borrower Regarding Collateral; Certificate of the Manager Regarding Collateral. 

(1) A certificate by an Authorized Representative of the Borrower and a Responsible Officer (which could be the same person as the
Authorized Representative), in each case on behalf of the Borrower, dated as of the First Amendment Closing Date, to the effect that, in the case of each Fund Investment contributed by the Contributor to the Borrower in connection with this First
Amendment that has been pledged to the Lender and included in the Collateral, on the First Amendment Closing Date and immediately prior to the delivery thereof on the First Amendment Closing Date: 

(i) the Borrower has full right to Grant a security interest in and assign and pledge such Fund Investment to the Lender; 

(ii) to the best of his knowledge, the information set forth with respect to such Fund Investment listed on the Schedule of Fund
Investments is correct in all material respects; 
 (iii) to the best of his knowledge, each item contributed by the
Contributor to the Borrower in connection with this First Amendment purported to be a Fund Investment included in the Collateral satisfies the requirements of the definition of Fund Investment; 

(iv) after giving effect to any requested Borrowing on the First Amendment Closing Date (1) the aggregate principal amount of all
Loans outstanding will not exceed the Maximum Commitment and (2) the Overcollateralization Test is satisfied; and 
 (v)
the Lender has a first priority perfected security interest in all of the Collateral contributed by the Contributor to the Borrower in connection with this First Amendment (except as may otherwise be expressly permitted by the Credit Agreement or
the Collateral Documents). 
  

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 (2) A certificate of a Responsible Officer, dated as of the First Amendment Closing Date, to
the effect that, in the case of each Fund Investment contributed by the Contributor to the Borrower in connection with this First Amendment that has been pledged to the Lender for inclusion in the Collateral, on the First Amendment Closing Date and
immediately prior to the delivery thereof on the First Amendment Closing Date: 
 (i) to the best of his knowledge, the
Borrower is the owner of such Fund Investment free and clear of any liens, claims or encumbrances of any nature whatsoever except for (1) those which are being released on or prior to the First Amendment Closing Date, (2) those Granted
pursuant to the Security Agreement and (3) Permitted Liens; 
 (ii) to the best of his knowledge, the Borrower has
acquired its ownership in such Fund Investment in good faith without notice of any adverse claim, except as described in paragraph (A) above; 

(iii) to the best of his knowledge, the Borrower has not assigned, pledged or otherwise encumbered any interest in such Fund Investment
(or, if any such interest has been assigned, pledged or otherwise encumbered, it has been released) other than interests Granted pursuant to the Security Agreement or as otherwise expressly permitted by the Credit Agreement; 

(iv) to the best of his knowledge, the information set forth with respect to such Fund Investment listed on the Schedule of Fund
Investments is correct in all material respects; and 
 (v) to the best of his knowledge, each Fund Investment contributed by
the Contributor to the Borrower in connection with this First Amendment included in the Collateral satisfies the requirements of the definition of Fund Investment. 

(p) Satisfactory Legal Form. All limited liability company and other actions or proceedings taken or required to be taken in connection
with the transactions contemplated hereby and all agreements, instruments, documents and opinions of counsel executed, submitted, or delivered pursuant to or in connection with this First Amendment by or on behalf of the Borrower shall be reasonably
satisfactory in form and substance to the Lender and its counsel; all certificates and opinions delivered pursuant to First Amendment shall be addressed to the Lender, or the Lender shall be expressly entitled to rely thereon; the Lender and its
counsel shall have received all information, and such number of counterpart originals or such certified or other copies of such information, as the Lender or its counsel may reasonably request; and all legal matters incident to the transactions
contemplated by this Agreement shall be reasonably satisfactory to counsel to the Lender. 
 Section 4. Miscellaneous.

 (a) GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK INCLUDING Sections 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. 

(b) Amendments, Etc. None of the terms of this First Amendment or any other Credit Document may be changed, waived, discharged or
terminated unless such change, 
  

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waiver, discharge or termination is in writing signed by the Borrower and the Lender (or other applicable party thereto as the case may be), and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. 
 (c) Severability. If any one or more of
the covenants, agreements, provisions or terms of this First Amendment shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this First Amendment and shall in no way affect the validity or enforceability of the other provisions of this First Amendment. 

(d) Counterparts. This First Amendment may be executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. 

(e) Successors and Assigns. All covenants and agreements contained herein shall be binding upon, and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. 
 (f) Captions. The captions and section headings
appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 

(g) Entire Agreement. This First Amendment constitutes a final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall (together with the Credit Agreement and the Security Agreement) constitute the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all previous
oral statements and other writings with respect thereto. 
 [Signature pages follow] 

 

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 IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed
and delivered as of the day and year first above written. 
  

					
	 BORROWER

	
	 BROAD STREET FUNDING LLC,

as Borrower

			
		 	By:	 	 /s/ Gerald F. Stahlecker

		 		 	Name: Gerald F. Stahlecker
		 		 	Title: Executive Vice President
	
	 LENDER:

	
	 DEUTSCHE BANK AG, NEW YORK BRANCH

as Lender

		
	By:	 	 /s/ David Dirvin

		 	 Name: David Dirvin

		 	 Title: Managing Director

		
	By:	 	 /s/ Christopher Caruso

		 	 Name: Christopher Caruso

		 	 Title: Managing Director

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