Document:

Exhibit

Exhibit 4.2
DESCRIPTION OF SECURITIES
Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Annual Report on Form 10-K to which this Description of Securities is an exhibit.
		
	(a)
	Common Stock, $0.01 par value per share 

Our authorized capital stock consists of 150,000,000 shares of common stock, par value $0.01 per share, of which 29,466,768 shares were outstanding as of September 30, 2019.

Our common stock is listed on the Nasdaq Global Select Market under the ticker symbol “OCSI.” No stock has been authorized for issuance under any equity compensation plans.  Under Delaware law, our stockholders generally will not be personally liable for our debts or obligations.

Under the terms of our restated certificate of incorporation, as amended, or our certificate of incorporation, all shares of our common stock have equal rights as to earnings, assets, dividends and voting and, when they are issued, are duly authorized, validly issued, fully paid and nonassessable.  Distributions may be paid to the holders of our common stock if, as and when authorized by our Board of Directors and declared by us out of funds legally available therefore.  Shares of our common stock have no preemptive, exchange, conversion or redemption rights and are freely transferable, except where their transfer is restricted by federal and state securities laws or by contract.  In the event of our liquidation, dissolution or winding up, each share of our common stock would be entitled to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities.  Each share of our common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of directors.  The holders of our common stock possess exclusive voting power.  There is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock are able to elect all of our directors, and holders of less than a majority of such shares are unable to elect any director.

		
	(b)
	Provisions of our Certificate of Incorporation or Bylaws that may have the effect of delaying, deferring or preventing a change of control

Limitation on Liability of Directors and Officers; Indemnification and Advance of Expenses 
Under our certificate of incorporation, we will fully indemnify any person who was or is involved in any actual or threatened action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person is or was one of our directors or officers or is or was serving at our request as a director or officer of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, against expenses (including attorney’s fees), judgments, fines and amounts paid or to be paid in settlement actually and 

112332261v2

reasonably incurred by such person in connection with such action, suit or proceeding.  Our certificate of incorporation also provides that our directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, except for a breach of their duty of loyalty to us or our stockholders, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or for any transaction from which the director derived an improper personal benefit.  So long as we are regulated under the Investment Company Act, the above indemnification and limitation of liability will be limited by the Investment Company Act or by any valid rule, regulation or order of the SEC thereunder.  The Investment Company Act provides, among other things, that a company may not indemnify any director or officer against liability to it or its stockholders to which he or she might otherwise be subject by reason of his or her willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office unless a determination is made by final decision of a court, by vote of a majority of a quorum of directors who are disinterested, non-party directors or by independent legal counsel that the liability for which indemnification is sought did not arise out of the foregoing conduct.
Delaware law also provides that indemnification permitted under the law shall not be deemed exclusive of any other rights to which the directors and officers may be entitled under the corporation’s bylaws, any agreement, a vote of stockholders or otherwise.
Our certificate of incorporation permits us to secure insurance on behalf of any person who is or was or has agreed to become a director or officer or is or was serving at our request as a director or officer of another enterprise for any liability arising out of his or her actions, regardless of whether the Delaware General Corporation Law would permit indemnification.  We have obtained liability insurance for our officers and directors.
Delaware Law and Certain Certificate of Incorporation and Bylaw Provisions; Anti-Takeover Measures 
We are subject to the provisions of Section 203 of the Delaware General Corporation Law.  In general, the statute prohibits a publicly held Delaware corporation from engaging in a “business combination” with “interested stockholders” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.  A “business combination” includes certain mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder.  Subject to exceptions, an “interested stockholder” is a person who, together with his, her or its affiliates and associates, owns, or within three years did own, 15% or more of the corporation’s voting stock.
   Our certificate of incorporation and amended and restated bylaws, or bylaws, provide that:
		
	•
	the Board of Directors be divided into three classes, as nearly equal in size as possible, with staggered three-year terms;

		
	•
	directors may be removed only for cause by the affirmative vote of the holders of two-thirds of the shares of our capital stock entitled to vote; and

112332261v2

		
	•
	any vacancy on the Board of Directors, however the vacancy occurs, including a vacancy due to an enlargement of the Board of Directors, may only be filled by vote of the directors then in office.

The classification of our Board of Directors and the limitations on removal of directors and filling of vacancies could have the effect of making it more difficult for a third party to acquire us, or of discouraging a third party from acquiring us.

Our certificate of incorporation and bylaws also provide that:

		
	•
	any action required or permitted to be taken by the stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting; and

		
	•
	special meetings of the stockholders may only be called by our Board of Directors, chairman or chief executive officer.

Our bylaws provide that, in order for any matter to be considered “properly brought” before a meeting, a stockholder must comply with requirements regarding advance notice to us.  These provisions could delay until the next stockholders’ meeting stockholder actions which are favored by the holders of a majority of our outstanding voting securities.  These provisions may also discourage another person or entity from making a tender offer for our common stock, because such person or entity, even if it acquired a majority of our outstanding voting securities, would be able to take action as a stockholder (such as electing new directors or approving a merger) only at a duly called stockholders meeting, and not by written consent.
The Delaware General Corporation Law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or bylaws, unless a corporation’s certificate of incorporation or bylaws requires a greater percentage.  Under our certificate of incorporation and bylaws, the affirmative vote of the holders of at least 66 2/3% of the shares of our capital stock entitled to vote will be required to amend or repeal any of the provisions of our bylaws. 
The vote of at least 66 2/3% of the shares of our capital stock then outstanding and entitled to vote in the election of directors, voting together as a single class, will be required to amend or repeal any provision of our certificate of incorporation pertaining to the Board of Directors, limitation of liability, indemnification, stockholder action or amendments to our certificate of incorporation.  In addition, our certificate of incorporation permits our Board of Directors to amend or repeal our bylaws by a majority vote.

112332261v2Exhibit

EXECUTION VERSION

AMENDMENT NO. 3 TO LOAN FINANCING AND SERVICING AGREEMENT, dated as of September 20, 2019 (this “Amendment”), among OCSI Senior Funding Ltd., as borrower (the “Borrower”), Oaktree Strategic Income Corporation, as servicer (the “Servicer”) and Deutsche Bank AG, New York Branch (“DBNY”), as facility agent (in such capacity, the “Facility Agent”) and as a committed lender (in such capacity, a “Lender”).

WHEREAS,  the  Borrower,  Oaktree  Strategic  Income  Corporation,  as equityholder, the Servicer, Wells Fargo Bank, National Association, as collateral agent and collateral custodian, the Facility Agent and each Lender party thereto are party to the Loan Financing   and   Servicing   Agreement,   dated   as   of   September   24,   2018   (as   amended, supplemented, amended and restated and otherwise modified from time to time, the “Loan Agreement”); and

WHEREAS, the Borrower, the Servicer and the Facility Agent have agreed to amend the Loan Agreement in accordance with Section 17.2 of the Loan Agreement and subject to the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the foregoing premises and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.1.    Defined Terms.   Terms used but not defined herein have the respective meanings given to such terms in the Loan Agreement.

ARTICLE II

Amendments to the Loan Agreement

SECTION 2.1.      As of the date of this Amendment, the Loan Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the bold and double-underlined text (indicated textually in the same manner as the following example:  bold and double-underlined text) as set forth on the pages of the Loan Agreement attached as Appendix A hereto.

USActive 54079990.3                                                            - 1 -

ARTICLE III

Conditions to Effectiveness

SECTION 3.1.    This Amendment shall become effective as of the date hereof upon satisfaction of the following conditions:

(a)             the execution and delivery of this Amendment by each party hereto; 
        and
(b)       the Facility Agent’s receipt of (i) the signed legal opinion of Walkers, counsel to the Borrower, in form and substance acceptable to the Facility Agent in its reasonable  discretion,  (ii)  a  good  standing  certificate  for  the  Borrower  issued  by  the applicable Official Body of its jurisdiction of organization and (iii) satisfactory evidence that the  Borrower  has  obtained  all  required  consents  and  approvals  of  all  Persons  to  the execution, delivery and performance of this Amendment and the consummation of the transactions contemplated hereby.

ARTICLE IV

Representations and Warranties

SECTION 4.1.      The Borrower hereby represents and warrants to the Facility Agent that, as of the date first written above, (i) no Event of Default, Unmatured Event of Default, Servicer Default or Unmatured Servicer Default has occurred and is continuing and (ii) the representations and warranties of the Borrower contained in the Loan Agreement are true and correct in all material respects on and as of such day (other than any representation and warranty that is made as of a specific date).

ARTICLE V

Miscellaneous

SECTION 5.1.      Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED  BY, AND CONSTRUED AND  INTERPRETED  IN ACCORDANCE  WITH, THE LAW OF THE STATE OF NEW YORK.

SECTION 5.2.      Severability Clause.  In case any provision in this Amendment shall  be  invalid,  illegal  or  unenforceable,  the  validity,  legality,  and  enforceability  of  the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 5.3.      Ratification.  Except as expressly amended and waived hereby, the Loan Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.

USActive 54079990.3                                                            - 2 -

SECTION 5.4.      Counterparts.  The parties hereto may sign one or more copies of this Amendment in counterparts, all of which together shall constitute one and the same agreement.   Delivery of an executed signature page of this Amendment by facsimile or email transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 5.5.      Headings.   The headings of the Articles and Sections in this Amendment are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

SECTION 5.6.    No Proceedings; Limited Recourse.  The provisions of Sections
17.11 and 17.12 of the Loan Agreement are incorporated herein mutatis mutandis.
 [Signature pages follow]

USActive 54079990.3                                                            - 3 -

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

OCSI SENIOR FUNDING LTD., as Borrower
By:   /s/ Dianne Farjallah                      
Name: Dianne Farjallah 
Title: Director

[Signature  Page to Amendment No. 3 to Loan Financing and Servicing  Agreement]

OAKTREE STRATEGIC INCOME CORPORATION, as Servicer
		
	By:
	   /s/ Mary Gallegly                      
Name: Mary Gallegly 
Title: Secretary

[Signature  Page to Amendment No. 3 to Loan Financing and Servicing  Agreement]

DEUTSCHE BANK AG, NEW YORK BRANCH, as Facility Agent
		
	By:
	   /s/ Steven Flowers                      
Name: Steven Flowers 
Title: Director

		
	By:
	   /s/ Andrew Goldsmith                
Name: Andrew Goldsmith 
Title: Vice President

[Signature  Page to Amendment No. 3 to Loan Financing and Servicing  Agreement]

Appendix A

EXECUTION VERSION Conformed through Amendment No. 23

LOAN FINANCING AND SERVICING AGREEMENT

dated as of September 24, 2018

OCSI SENIOR FUNDING LTD. as Borrower

OAKTREE STRATEGIC INCOME CORPORATION
as Equityholder,

OAKTREE STRATEGIC INCOME CORPORATION
as Servicer,

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

DEUTSCHE BANK AG, NEW YORK BRANCH, as Facility Agent

THE OTHER AGENTS PARTIES HERETO,

and

USActive  49316845.1049316845.11

TABLE OF CONTENTS

                                                                                                                                                                                 Page

ARTICLE I    DEFINITIONS     ________________________________________1

Section 1.1    Defined Terms     1

Section 1.2    Other Definitional Provisions     50

ARTICLE II    THE FACILITY, ADVANCE PROCEDURES AND 
NOTES                                                                                               51

Section 2.1    Advances _    51

Section 2.2    Funding of Advances     5152

Section 2.3    Notes     _________________________________________53

Section 2.4    Repayment and Prepayments     53

Section 2.5    Permanent Reduction of Facility Amount     54

Section 2.6    Extension of Revolving Period     54

Section 2.7    Calculation of Discount Factor     54

Section 2.8    Increase in Facility Amount     5556

Section 2.9    Defaulting Lenders     56

ARTICLE III    YIELD, UNDRAWN FEE, ETC                                                    57

Section 3.1    Yield and Undrawn Fee     57

Section 3.2    Yield Distribution Dates     57

Section 3.3    Yield Calculation     57

Section 3.4    Computation of Yield, Fees, Etc     5758

USActive  49316845.1049316845.11                                                        - i -

ARTICLE IV    PAYMENTS; TAXES     58

Section 4.1    Making of Payments     58

Section 4.2    Due Date Extension     58

Section 4.3    Taxes                                                                                       58

ARTICLE V    INCREASED COSTS, ETC     62

Section 5.1    Increased Costs, Capital Adequacy     62

ARTICLE VI    EFFECTIVENESS; CONDITIONS TO ADVANCES     64

Section 6.1    Effectiveness     64

Section 6.2    Advances and Reinvestments     66

Section 6.3    Transfer of Collateral Obligations and Permitted 
Investments     68

ARTICLE VII    ADMINISTRATION AND SERVICING OF COLLATERAL 
OBLIGATIONS     ______________________________________69

Section 7.1    Retention and Termination of the Servicer____________69

Section 7.2    Resignation and Removal of the Servicer; Appointment of
Successor Servicer     69

Section 7.3    Duties of the Servicer     71

Section 7.4    Representations and Warranties of the Servicer     72

Section 7.5    Covenants of the Servicer     7475

Section 7.6    Servicing Fees; Payment of Certain Expenses by
Servicer                                                                           7778

Section 7.7    Collateral Reporting     ____  _78

Section 7.8    Notices ____________________ ___________________78

Section 7.9    Procedural Review of Collateral Obligations; Access to
Servicer and Servicer’s Records     78

USActive  49316845.1049316845.11                                                        - ii -

Section 7.10    Optional Sales     7980

Section 7.11    Repurchase or Substitution of Warranty Collateral 
Obligations     81

Section 7.12    Servicing of REO Assets     8182

ARTICLE VIII    ACCOUNTS; PAYMENTS     83

Section 8.1    Accounts       83

Section 8.2    Excluded Amounts     85

Section 8.3    Distributions, Reinvestment and Dividends     8586

Section 8.4    Fees                                                                                     8889

Section 8.5    Monthly Report     8889

ARTICLE IX    REPRESENTATIONS AND WARRANTIES OF THE 
BORROWER                                                                                 8990

Section 9.1    Organization and Good Standing     8990

Section 9.2    Due Qualification     90

Section 9.3    Power and Authority     90

Section 9.4    Binding Obligations     90

Section 9.5    Security Interest     90

Section 9.6    No Violation     91

Section 9.7    No Proceedings     9192

Section 9.8    No Consents     9192

Section 9.9    Solvency                     92

Section 9.10    Compliance with Laws     92

Section 9.11    Taxes                                                                                       92

Section 9.12    Monthly Report     9293

Section 9.13    No Liens, Etc     9293

USActive  49316845.1049316845.11                                                        - iii -

Section 9.14    Information True and Correct     93

Section 9.15    Bulk Sales     9394

Section 9.16    Collateral                                                                            9394

Section 9.17    Selection Procedures     9394

Section 9.18    Indebtedness     9394

Section 9.19    No Injunctions     94

Section 9.20    No Subsidiaries     94

Section 9.21    ERISA Compliance     94

Section 9.22    Investment Company Status     94

Section 9.23    Set-Off, Etc     9495

Section 9.24    Collections     9495

Section 9.25    Value Given     95

Section 9.26    Use of Proceeds     95

Section 9.27    Separate Existence     95

Section 9.28    Transaction Documents     95

Section 9.29    Anti-Terrorism, Anti-Money Laundering     9596

Section 9.30    Anti-Bribery and Corruption     9697

ARTICLE X    COVENANTS                                                                                    97

Section 10.1    Protection of Security Interest of the Secured Parties     97

Section 10.2    Other Liens or Interests     98

Section 10.3    Costs and Expenses     98

Section 10.4    Reporting Requirements     9899

Section 10.5    Separate Existence     99

Section 10.6    Hedging Agreements     101

USActive  49316845.1049316845.11                                                        - iv -

Section 10.7    Tangible Net Worth     103

Section 10.8    Taxes                                                                                     103

Section 10.9    Merger, Consolidation, Etc     103104

Section 10.10    Deposit of Collections     103104

Section 10.11    Indebtedness; Guarantees     104

Section 10.12    Limitation on Purchases from Affiliates     104

Section 10.13    Documents     104

Section 10.14    Preservation of Existence     104

Section 10.15    Limitation on Investments     104105

Section 10.16    Distributions     104105

Section 10.17    Performance of Borrower Assigned Agreements     105

Section 10.18    Reserved                     105

Section 10.19    Further Assurances; Financing Statements     105

Section 10.20    Obligor Payment Instructions     106

Section 10.21    Delivery of Collateral Obligation Files     106

Section 10.22    Collateral Obligation Schedule     106107

Section 10.23    Notice to Specified Obligors     106107

Section 10.24    Risk Retention     106107

Section 10.25    Moody’s RiskCalc     109

Section 10.26    Repurchase of Preference Shares     109

Section 10.27    Ineligible Collateral     109

ARTICLE XI    THE COLLATERAL AGENT     109

Section 11.1    Appointment of Collateral Agent     109

Section 11.2    Monthly Reports     109110

USActive  49316845.1049316845.11                                                        - v -

Section 11.3    Collateral Administration     110

Section 11.4    Removal or Resignation of Collateral Agent     113

Section 11.5    Representations and Warranties     114

Section 11.6    No Adverse Interest of Collateral Agent     114

Section 11.7    Reliance of Collateral Agent     114

Section 11.8    Limitation of Liability and Collateral Agent Rights     115

Section 11.9    Tax Reports     117

Section 11.10    Merger or Consolidation     117118

Section 11.11    Collateral Agent Compensation     118

Section 11.12    Anti-Terrorism Laws     118

ARTICLE XII    GRANT OF SECURITY INTEREST     118

Section 12.1    Borrower’s Grant of Security Interest     118

Section 12.2    Borrower Remains Liable     120

Section 12.3    Release of Collateral     120

ARTICLE XIII    EVENTS OF DEFAULT     121

Section 13.1    Events of Default     121

Section 13.2    Effect of Event of Default     123

Section 13.3    Rights upon Event of Default     123

Section 13.4    Collateral Agent May Enforce Claims Without Possession of
Notes                                                                                     124

Section 13.5    Collective Proceedings     124125

Section 13.6    Insolvency Proceedings     125

Section 13.7    Delay or Omission Not Waiver     126

Section 13.8    Waiver of Stay or Extension Laws     126

USActive  49316845.1049316845.11                                                        - vi -

Section 13.9    Limitation on Duty of Collateral Agent in Respect of 
Collateral                                                                              126

Section 13.10    Power of Attorney     127

ARTICLE XIV    THE FACILITY AGENT     127

Section 14.1    Appointment     127

Section 14.2    Delegation of Duties     128

Section 14.3    Exculpatory Provisions     128

Section 14.4    Reliance by Note Agents     128

Section 14.5    Notices     129

Section 14.6    Non-Reliance on Note Agents     129

Section 14.7    Indemnification     130

Section 14.8    Successor Note Agent     130

Section 14.9    Note Agents in their Individual Capacity     131

ARTICLE XV    ASSIGNMENTS                                                                              131

Section 15.1    Restrictions on Assignments by the Borrower and the 
Servicer                                                                                 131

Section 15.2    Documentation     131

Section 15.3    Rights of Assignee     131

Section 15.4    Assignment by Lenders     131

Section 15.5    Registration; Registration of Transfer and Exchange     132

Section 15.6    Mutilated, Destroyed, Lost and Stolen Notes     133

Section 15.7    Persons Deemed Owners     133

Section 15.8    Cancellation     133134

Section 15.9    Participations; Pledge     134

USActive  49316845.1049316845.11                                                        - vii -

ARTICLE XVI    INDEMNIFICATION     135

Section 16.1    Borrower Indemnity     135

Section 16.2    Servicer Indemnity     135136

Section 16.3    Contribution     136

Section 16.4    Risk Retention Indemnity     136

ARTICLE XVII    MISCELLANEOUS     137

Section 17.1    No Waiver; Remedies     137

Section 17.2    Amendments, Waivers     137

Section 17.3    Notices, Etc     138

Section 17.4    Costs and Expenses     138

Section 17.5    Binding Effect; Survival     139

Section 17.6    Captions and Cross References     139

Section 17.7    Severability     139

Section 17.8    GOVERNING LAW     140

Section 17.9    Counterparts     140

Section 17.10    WAIVER OF JURY TRIAL     140

Section 17.11    No Proceedings     140

Section 17.12    Limited Recourse     141

Section 17.13    ENTIRE AGREEMENT     142

Section 17.14    Confidentiality     142

Section 17.15    Non-Confidentiality of Tax Treatment     143

Section 17.16    Replacement of Lenders     144

Section 17.17    Consent to Jurisdiction     145

USActive  49316845.1049316845.11                                                        - viii -

“Applicable Margin Step-Up Date” means, if the Pricing Date has not occurred on or prior to such date,  the date that is the three (3) month anniversary of the Second Amendment  Effective Date.December 31, 2019.

“Appraised Value” means, with respect to any Asset Based Loan, the most recently calculated appraised value of the pro rata portion of the underlying collateral securing such Collateral Obligation as determined by an Approved Valuation Firm.

“Approval Notice” means, with respect to any Collateral Obligation, a copy of a notice executed by the Facility Agent in the form of Exhibit E, evidencing, among other things, the approval of the Facility Agent, in its sole discretion, of such Collateral Obligation and the applicable Discount Factor, the loan type and lien priority (including the division of any unitranche Loan), the Original Leverage Multiple (including, for Advance Rate purposes, the attaching Leverage Multiple of any FILO Loan), the Original Effective LTV (if such Collateral Obligation is an Asset Based Loan) and each other item listed in Section 6.2(h).

“Approved Custodian” means Bank of New York Mellon Trust Company, National Association, State Street, Wells Fargo Bank, National Association or any other custodian mutually agreed to by the Facility Agent and the Servicer.

“Approved Valuation Firm” means, with respect to any Collateral Obligation, each of (a) Murray Devine, (b) Houlihan Lokey, (c) Lincoln International LLC, (d) Duff & Phelps and (e) any other nationally recognized valuation firm approved by the Borrower and the Facility Agent.

“Asset Approval Request” means a notice in the form of Exhibit C-3 which requests an Approval Notice with respect to one or more Collateral Obligations and shall include (among other things):

(a)    the proposed date of each related acquisition;

(b)       the Agency Rating for each such Collateral Obligation from each Rating Agency and, if such Agency Rating is determined pursuant to clause (b), as applicable, of the definition thereof, the date of the applicable credit estimate and the applicable Rating Agency;

(c)      the Original Leverage Multiple and Original Effective LTV (if such Collateral Obligation is an Asset Based Loan) for each such Collateral Obligation, measured as of the date of such notice;

(d)    a related Schedule of Collateral Obligations;

(e)    any related Permitted Working Capital Liens; and

(f)        all Obligor Information (unless (x) such information is included in the Servicer’s internal credit memo or (y) the Servicer has notified the Facility Agent that such information is not available and the Facility Agent determines, in its sole discretion, that such information is not required to obtain favorable capital treatment in connection with the related Collateral Obligation).

USActive  49316845.1049316845.11                                                          - 5 -
                                 

“ERISA Event” means (a) the occurrence with respect to a Plan of a reportable event, within the meaning of Section 4043 of ERISA, unless the thirty (30)-day notice requirement with respect thereto has been waived by the PBGC; (b) the application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such a Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of the Borrower or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by the Borrower or any ERISA Affiliate from a Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions set forth in Section 430(k) of the Code or Section 303(k)(1)(A) and (B) of ERISA to the creation of a lien upon property or assets or rights to property or assets of the Borrower or any ERISA Affiliate for failure to make a required payment to a Plan are satisfied; (g) the termination of a Plan by the PBGC pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Plan; (h) any failure by any Plan to satisfy the minimum funding standards of Sections 412 or 430 of the Code or Section 302 of ERISA, whether or not waived; (i) the determination that any Plan is or is expected to be in “at-risk” status, within the meaning of Section 430 of the Code or Section 303 of ERISA, (j) the receipt  by  the  Borrower  or  any  ERISA  Affiliate  of  any  notice,  or  the  receipt  by  any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of liability with respect to the withdrawal or partial withdrawal from a Multiemployer Plan or a determination that a Multiemployer Plan is, or is expected to be, “insolvent” (within the meaning of Section 4245 of ERISA), in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA), or terminated (within the meaning of Section
4041A or Section 4042 of ERISA); (k) the failure of the Borrower or any ERISA Affiliate to pay when due (after expiration of any applicable grace period) any installment payment with respect to withdrawal liability under Section 4201 of ERISA; (l) the Borrower or any ERISA Affiliate incurs any liability under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA); or (m) the Borrower or any ERISA Affiliate commits any act (or omission) which could give rise to the imposition of fines, penalties, taxes, or related charges under ERISA or the Code.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“EU Securitization Regulation” means Regulation (EU) 2017/2402 relating to a European 
framework for simple, transparent and standard securitisation.2402.

“EU Securitization Rules” means the EU Securitization Regulation, together with any relevant regulatory and/or implementing technical standards adopted by the European Commission in relation thereto, any relevant regulatory and/or implementing technical standards applicable in relation thereto pursuant to any transitional arrangements made pursuant to the EU Securitization Regulation, and, in each case, any relevant guidance published by the European Banking Authority, the European Securities and Markets Authority (or, in either case, any predecessor or successor authority) or by the European Commission.

USActive  49316845.1049316845.11                                                          - 20 -

(p)       the  excess,  if  any,  of  the  sum  of  the  Principal  Balances  of  all  Collateral Obligations that are in a Permitted Gaming Industry (other than in respect of hotels and resorts) over 7.5% of the Excess Concentration Measure; and

(1)       the  excess,  if  any,  of  the  sum  of  the  Principal  Balances  of  all  Collateral Obligations that are in the defense industry (other than a Prohibited Defense Asset) over 7.5% of the Excess Concentration Measure.

“Excess Concentration Measure” means the sum of (i) the Principal Balances for all Eligible  Collateral  Obligations  plus  (ii)  all  amounts  on  deposit  in  the  Principal  Collection Account plus (iii) all amounts on deposit in the Unfunded Exposure Account.

“Excess Funds” means, as of any date of determination and with respect to any Conduit Lender, funds of such Conduit Lender not required, after giving effect to all amounts on deposit in its commercial paper account, to pay or provide for the payment of (i) all of its matured and maturing commercial paper notes on such date of such determination and (ii) the principal of and interest on all of its loans outstanding on such date of such determination.

“Excluded Amounts” means (i) any amount deposited into the Collection Account with respect to any Collateral Obligation, which amount is attributable to the reimbursement of payment by or on behalf of the Borrower of any Tax, fee or other charge imposed by any Official Body on such Collateral Obligation or on any Related Security, (ii) any interest or fees (including origination, agency, structuring, management or other up-front fees) that are for the account of the applicable Person from whom the Borrower purchased such Collateral Obligation, (iii) any reimbursement of insurance premiums, (iv) any escrows relating to Taxes, insurance and other amounts in connection with Collateral Obligations which are held in an escrow account for the benefit of the Obligor and the secured party pursuant to escrow arrangements under Underlying Instruments, (v) to the extent paid using amounts other than Collections and proceeds of Advances, any amount paid in respect of reimbursement for expenses owed in respect of any Collateral Obligation pursuant to the related Underlying Instrument or (vi) any amount deposited into the Collection Account in error (including any amounts relating to any portion of an asset sold by the Borrower and occurring after the date of such sale).

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in the Obligations pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Obligations (other than pursuant to Section 17.16(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.3, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office,

USActive  49316845.1049316845.11                                                          - 23 -

Capital Lien), in any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings, (ii) is secured by a pledge of collateral, which security interest is validly perfected and first priority under Applicable Law (subject to (x) Liens permitted under the applicable Underlying Instruments that are reasonable or customary for similar loans, (y) Permitted Working Capital Liens and (z) Liens accorded priority by law in favor of any Official Body), and (iii) the Servicer determines in good faith that the value of the collateral or the enterprise value securing the Loan on or about the time of acquisition equals or exceeds the outstanding principal balance of the Loan plus the aggregate outstanding balances of all other loans of equal or higher seniority secured by the same collateral; provided, that the portion of any FILO Loan with a Leverage Multiple that attaches in excess of 2.5x shall be deemed to be a Second  Lien  Loan  for  all  purposes  hereunder.    For  the  avoidance  of  doubt,  a  Collateral Obligation will not be a FILO Loan if the Facility Agent designates such Collateral Obligation as a First Lien Loan pursuant to the proviso at the end of the definition of such term.

“Financial Sponsor” means any Person, including any Subsidiary of such Person, whose principal business activity is acquiring, holding, and selling investments (including controlling interests) or managing or advising another Person that acquires, holds or sells investments (including controlling interests) in otherwise unrelated companies that each are distinct legal entities with separate management, books and records and bank accounts, whose operations are not integrated with one another and whose financial condition and creditworthiness are independent of the other companies so owned by such Person.

“First Lien Loan” means any Loan (including any portion of a unitranche Loan as set forth in the related Approval Notice) that (i) is not (and is not permitted by its terms become) subordinate in right of payment to any obligation of the related Obligor in any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings, (ii) is secured by a pledge of specified collateral, which security interest is validly perfected and first priority under  Applicable  Law  (subject  to  (x)  liens  permitted  under  the  applicable  Underlying Instruments, (y) Permitted Working Capital Liens and (z) liens accorded priority by law in favor of any Official Body), and (iii) the Servicer determines in good faith that the value of the collateral or the enterprise value securing the Loan on or about the time of origination or acquisition equals or exceeds the outstanding principal balance of the Loan plus the aggregate outstanding balances of all other loans of equal or higher seniority secured by the same collateral; provided that, any Loan which does not otherwise satisfy this definition shall be treated as a First Lien Loan if (a) such Loan (1) is an Asset Based Loan for which the primary collateral source is not intellectual property, (2) satisfies the definition of FILO Loan or Second Lien Loan and (3) is only subordinated to obligations of the related Obligor that have an Effective LTV that is, at all times such Loan qualifies under this clause, less than 25%, (b) such Loan (1) is an Enterprise Value Loan, (2) satisfies the definition of FILO Loan or Second Lien Loan, (3)   is only subordinated to obligations of the related Obligor that do not (collectively) exceed an amount equal to the product of (i) 25% multiplied by (ii) the aggregate principal amount of such obligations (including any obligations secured by a Permitted Working Capital Lien) and (4) is only subordinated to obligations of the related Obligor that do not represent more than 1.0x of leverage of such Obligor, as reasonably determined by the Facility Agent or (c) the Facility Agent deems such Loan to be a First Lien Loan in the related Approval Notice following the request of the Borrower (or the Servicer on its behalf) in the related Asset Approval Request.

USActive  49316845.1049316845.11                                                          - 25 -

“Revolving Period” means the period of time starting on the Effective Date and ending on the earliest to occur of (i)  November 15, 2019March 31, 2020 or, if such date is extended pursuant to Section 2.6, the date mutually agreed upon by the Borrower and each Agent, (ii) the date on which the Facility Amount is terminated in full pursuant to Section 2.5 or (iii) the occurrence of an Event of Default.

“S&P”  means  Standard  &  Poor’s  Ratings  Services,  a  Standard  &  Poor’s  Financial
Services LLC business, and any successor or successors thereto.

“S&P Industry Classification” means the industry classifications set forth in Schedule 2A hereto, as such industry classifications shall be updated at the option of the Facility Agent in its sole discretion if S&P publishes revised industry classifications.

“Sale Agreement” means the Sale and Contribution Agreement, dated as of the date hereof, by and between the Equityholder, as seller, and the Borrower, as purchaser.
“Sanctions” has the meaning set forth in Section 9.29(a). “Sanctioned Countries” has the meaning set forth in Section 9.29(a). “Schedule of Collateral Obligations” means the  list or lists of Collateral Obligations
attached to each Asset Approval Request and each Reinvestment Request.  Each such schedule shall identify the assets that will become Collateral Obligations, shall set forth such information with respect to each such Collateral Obligation as the Borrower or the Facility Agent may reasonably require and shall supplement any such schedules attached to previously-delivered Asset Approval Requests and Reinvestment Requests.

“Scheduled Collateral Obligation Payment” means each periodic installment payable by an Obligor under a Collateral Obligation for principal, interest and/or unutilized/commitment fees (as applicable) in accordance with the terms of the related Underlying Instrument.

“Second Amendment Effective Date” means June 27, 2019.

“Second Lien Loan” means any Loan (including any portion of a unitranche Loan as set forth in the related Approval Notice) that (i) is not (and that by its terms is not permitted to become) subordinate in right of payment to any other obligation of the related Obligor other than a First Lien Loan with respect to the liquidation of such Obligor or the collateral for such Loan and (ii) is secured by a valid second priority perfected Lien to or on specified collateral securing the related Obligor’s obligations under the Loan, which Lien is not subordinate to the Lien securing any other debt for borrowed money other than a First Lien Loan on such specified collateral and any Permitted Liens.  For the avoidance of doubt, a Collateral Obligation will not be  a  Second  Lien  Loan  (i)  solely because  such  Collateral  Obligation  is  subordinated  to  a Permitted Working Capital Lien or (ii) if the Facility Agent designates such Collateral Obligation as a First Lien Loan pursuant to the proviso at the end of the definition of such term.

USActive  49316845.1049316845.11                                                          - 44 -

Underlying Instruments and (iii) the Servicing Standard.  The Borrower hereby appoints the Servicer, from time to time designated pursuant to Section 7.1, as agent for itself and in its name to enforce and administer its rights and interests in the Collections and the related Collateral Obligations.

(b) The  Servicer  shall  administer  the  Collections  in  accordance  with  the procedures described herein.  The Servicer shall deposit all Collections received directly by it into the Collection Account within one (1) Business Day of receipt thereof.  The Servicer shall identify all Collections as either Principal Collections or Interest Collections, as applicable. The Servicer shall make such deposits or payments by electronic funds transfer through the Automated Clearing House system, or by wire transfer.

(c) The Servicer shall maintain for the Borrower and the Secured Parties in accordance with their respective interests all Records that evidence or relate to the Collections not previously delivered to the Collateral Agent and shall, as soon as reasonably practicable upon demand of the Facility Agent, make available, or, upon the Facility Agent’s demand following the occurrence and during the continuation of a Servicer Default, deliver to the Facility Agent and the Collateral Agent (with a copy to each Agent) copies of all Records in its possession which evidence or relate to the Collections.

(d) The Servicer shall, as soon as practicable following receipt thereof, turn over to the applicable Person any cash collections or other cash proceeds received with respect to each Collateral Obligation that does not constitute a Collateral Obligation or was paid in connection with a Retained Interest.

(e) On each Measurement Date, the Servicer (on behalf of the Borrower) shall re-determine the status of each Collateral Obligation as of such calculation date and to provide notice of any change in the status of any Eligible Collateral Obligation to the Collateral Agent and, as a consequence thereof, Collateral Obligations that were previously Eligible Collateral Obligations on a prior Measurement Date may be excluded from the Aggregate Eligible Collateral Obligation Amount on such Measurement Date and, to the extent a new Approval Notice is provided by the Facility Agent, Collateral Obligations that were previously excluded from the Aggregate Eligible Collateral Obligation Amount may be included on such Measurement Date.

(f) The Servicer, with prior written notice to the Facility Agent (with a copy to the Collateral Agent) may execute any of its duties under this Agreement and the other Transaction Documents by or through its subsidiaries, affiliates, agents or attorneys in fact; provided that, it shall remain liable for all such duties as if it performed such duties itself.
Section 7.4 Representations and Warranties of the Servicer.  The Servicer represents, warrants and covenants as of the Effective Date and each Funding Date as to itself:

(a) Organization  and  Good  Standing.     It  has  been  duly organized  and  is validly existing as a corporation in good standing under the laws of its jurisdiction of organization, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted;

USActive  49316845.1049316845.11                                                          - 72 -

(e) Notwithstanding any of the foregoing in this Section 7.10, the Borrower shall have the right to sell any Collateral Obligation that meets the criteria in Section 10.27 at any time, without restriction.
 
Section 7.11 Repurchase or Substitution of Warranty Collateral Obligations.  In
the event of a breach of Section 9.5, Section 9.13 or Section 9.26 or of a material breach of any other representation, warranty, undertaking or covenant set forth in Sections 7.14(k), 9.14,
9.15,  9.16,  9.17,  9.23,  9.25,  10.21,  10.23,  18.3  or  18.5(b)  with  respect  to  a  Collateral Obligation  that  exists  as  of the Cut-Off Date (or the Related Security and other related collateral constituting part of the Collateral related to such Collateral Obligation) (each such Collateral Obligation, a “Warranty Collateral Obligation”), no later than 30 days after the earlier  of  (x)  knowledge  of  such  breach  on  the  part  of  a  Responsible  Officer  of  the Equityholder or the Servicer and (y) receipt by the Equityholder or the Servicer of written notice thereof given by the Facility Agent (with a copy to the Collateral Agent and each Agent), the Borrower shall either (a) repay Advances outstanding in an amount equal to the aggregate  Repurchase  Amount  of  such  Warranty  Collateral  Obligation(s)  to  which  such breach relates on the terms and conditions set forth below or (b) substitute for such Warranty Collateral Obligation one or more Eligible Collateral Obligations with an aggregate Collateral Obligation Amount at least equal to the Repurchase Amount of the Warranty Collateral Obligation(s)  being  replaced;  provided,  that  no  such  repayment  or  substitution  shall  be required to be made with respect to any Warranty Collateral Obligation (and such Collateral Obligation shall cease to be a Warranty Collateral Obligation) if, on or before the expiration of such 30 day period, the representations and warranties in Article IX with respect to such Warranty Collateral Obligation shall be made true and correct in all material respects (or if such representation and warranty is already qualified by the words “material”, “materially” or “Material Adverse Effect”, then such representation and warranty shall be true and correct in all  respects)  with  respect  to  such  Warranty  Collateral  Obligation  as  if  such  Warranty Collateral  Obligation  had  become  part  of  the  Collateral  on  such  day  or  if  (during  the Revolving Period only) the Advances outstanding do not exceed the Borrowing Base.  For the avoidance of doubt, any breach of a representation or warranty set forth in the first sentence of this Section 7.11 caused solely by a failure with respect to one or more Collateral Obligations shall not constitute an Event of Default if the Servicer otherwise complies with this Section 
7.11 with respect to each such Collateral Obligation.

Section 7.12 Servicing of REO Assets.  (a)  If, in the reasonable business judgment of
the Servicer, it becomes necessary to convert any Collateral Obligation that is secured by real property into an REO Asset, the Servicer shall first cause the Borrower to transfer and assign such Collateral Obligation (or the portion thereof owned by the Borrower) to a special purpose vehicle (the “REO Asset Owner”) using a contribution agreement reasonably acceptable to the Facility Agent.   All equity interests of the REO Asset Owner acquired by the Borrower shall immediately become a part of the Collateral and be subject to the grant of a security interest under Section 12.1 and shall be promptly delivered to the Collateral Agent, each undated and duly indorsed in blank.   The REO Asset Owner shall be formed and operated pursuant to organizational documents reasonably acceptable to the Facility Agent.  After execution thereof, the Servicer shall prevent the REO Asset Owner from agreeing to any amendment or other modification of the REO Asset Owner’s organizational documents which would be materially

USActive  49316845.1049316845.11                                                          - 82 -

where the lack or failure thereof would not reasonably be expected to have a Material Adverse
Effect.
(vi) This Agreement constitutes the legal, valid, and binding obligation of the Equityholder and is enforceable against the Equityholder in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, conservatorship, receivership, and other laws of general applicability relating to or affecting, creditors’ rights and, subject as to enforceability, to equitable principles of general application.

Section 10.25 Moody’s RiskCalc.  With respect to any Collateral Obligation, at any time that the Agency Rating hereunder is determined by the use of Moody’s RiskCalc:  (1) the Borrower (or the Servicer on behalf of the Borrower) shall request a credit estimate, shadow rating or similar rating within 10 Business Days of the applicable Cut-Off Date and (2) the Borrower (or the Servicer on behalf of the Borrower) shall refresh such Moody’s RiskCalc promptly upon the occurrence of a Revaluation Event with respect to such Collateral Obligation.

Section 10.26 Repurchase of Preference Shares.  The Borrower shall not repurchase or agree to repurchase any Preference Share or redeem or agree to redeem any Preference Share except in accordance with the Preference Share Purchase Agreement.

Section 10.27 Ineligible Collateral.  At the direction of the Facility Agent (in its sole discretion), the Borrower shall, in a commercially reasonable manner, divest any asset that does not satisfy the definition of “Eligible Collateral Obligation” or “Permitted Investment”.  The Facility Agent agrees to cooperate in good faith with any waivers necessary to permit such divestiture.

ARTICLE XI

THE COLLATERAL AGENT

Section 11.1 Appointment   of   Collateral   Agent. Wells Fargo Bank, National Association is hereby appointed as Collateral Agent pursuant to the terms hereof.  The Secured Parties hereby appoint the Collateral Agent to act exclusively as the agent for purposes of perfection of a security interest in the Collateral and Collateral Agent of the Secured Parties to act as specified herein and in the other Transaction Documents to which the Collateral Agent is a party.  The Collateral Agent hereby accepts such agency appointment to act as Collateral Agent pursuant to the terms of this Agreement, until its resignation or removal as Collateral Agent or Collateral Custodian pursuant to the terms hereof.

Section 11.2 Monthly Reports.  The Collateral Agent shall prepare the Monthly Report in accordance with Section 8.5 and distribute funds in accordance with such Monthly Report in accordance with Section 8.3.

Section 11.3 Collateral Administration.  The Collateral Agent shall maintain a database of certain characteristics of the Collateral on an ongoing basis, and provide to the Borrower, the Servicer, each Agent and the Facility Agent certain reports, schedules and calculations, all as

USActive  49316845.1049316845.11                                                          - 110 -

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