Document:

Exhibit 10.1

 

TENTH AMENDMENT TO LOAN AND SECURITY
AGREEMENT

 

This TENTH AMENDMENT TO LOAN AND SECURITY
AGREEMENT dated as of November 30, 2020 (this “Amendment”) to the Loan and Security Agreement dated as of August
17, 2016 (as amended by the First Amendment dated as of December 12, 2016, the Second Amendment dated as of November 13, 2017 (including
the Allonge dated November 13, 2017 pursuant thereto to the Revolving Note and the Term Note), the Third Amendment dated as of
January 16, 2018, the Fourth Amendment dated as of April 27, 2018, the Fifth Amendment dated as of November 14, 2018 and a Joinder
Agreement dated as of November 20, 2018, the Sixth Amendment dated as of November 6, 2019, the Seventh Amendment dated as of December
17, 2019, the Eighth Amendment dated as of April 1, 2020, the Ninth Amendment dated as of September 29, 2020 and as it may be further
amended, restated, supplemented, modified or otherwise changed from time to time, the “Loan Agreement”), is
by and among Creative Realities, Inc., a Minnesota corporation (“CRI”), Creative Realities, LLC, a Delaware
limited liability company (“CRLLC”), Conexus World Global, LLC, a Kentucky limited liability company (“Conexus”),
and Allure Global Solutions, Inc. a Georgia corporation (“Allure” and collectively referred to together with
CRI, CRLLC and Conexus as the “Borrower”), and Slipstream Communications, LLC, an Anguillan limited liability
company (the “Lender”). All terms used herein that are defined in the Loan Agreement and not otherwise defined
herein shall have the respective meanings assigned to them in the Loan Agreement.

 

WHEREAS, Lender is the holder of that certain
Secured Convertible Special Loan Promissory Note issued on December 30, 2019 (the “Special Loan”) by the Borrower;

 

WHEREAS, the Special Loan automatically
converts to New Preferred (as defined in the Loan Agreement) on November 30, 2020 and the Lender and Borrower desire to extend
the conversion date as set forth herein.

 

NOW THEREFORE, in consideration
of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower
and the Lender, intending to be legally bound, hereby agree as follows:

 

1. Amendments. The Loan Agreement is hereby amended as
follows:

 

a) The first
sentence of Section 1.7 is hereby amended to replace “November 30, 2020” with “December 31, 2020”.

 

b) Schedule A
is hereby amended by adding the following definitions, in appropriate alphabetical order:

 

i)
“Tenth Amendment’ means the Tenth Amendment to Loan and Security Agreement dated as of November 30, 2020,
among Borrower and the Lender.”; and

 

ii)
“Tenth Amendment Effective Date” shall have the meaning specified therefor in Section 3 of the Tenth
Amendment.”.

 

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2. Representations and Warranties. Borrower hereby represents
and warrants to Lender as follows:

 

a) Representations
and Warranties; No Event of Default. The representations and warranties herein, in Article 3 of the Loan Agreement and in each
other Loan Document, certificate or other writing delivered by or on behalf of Borrower to the Lender pursuant to this Amendment,
the Loan Agreement or any other Loan Document on or prior to the Tenth Amendment Effective Date (as defined below) are true and
correct in all material respects (except that such materiality qualifier shall not be applied to any representations or warranties
that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof,
which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of the
Tenth Amendment Effective Date as though made on and as of such date (unless such representations or warranties (after taking
into account this Amendment) are stated to relate to an earlier date, in which case such representations and warranties shall
be true and correct on and as of such earlier date in all material respects (except that such materiality qualifier shall not
be applicable to any representations or warranties that already are qualified or modified as to “materiality” or “Material
Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject
to such qualification), and no Default or Event of Default has occurred and is continuing as of the Tenth Amendment Effective
Date or would result from this Amendment becoming effective in accordance with its terms.

 

b) Authorization,
Etc. The execution, delivery and performance by Borrower of this Amendment and the other Loan Documents being executed concurrently
herewith, and the performance of the Loan Agreement, as amended hereby, and the other Loan Documents, (i) have been duly authorized
by all necessary action, (ii) do not and will not contravene any of the governing documents of any Borrower or any applicable Requirement
of Law, (iii) do not and will not contravene any Contractual Obligation binding on or otherwise affecting any Borrower or any of
its properties (except for those the conflict with which could not reasonably be expected to result in a Material Adverse Effect),
(iv) do not and will not result in or require the creation of any Lien (other than pursuant to any Loan Document) upon or with
respect to any properties of any Borrower, and (v) do not and will not result in any default, noncompliance, suspension, revocation,
impairment, forfeiture or non-renewal of any permit, license, authorization or approval applicable to its operations or any of
its properties, except in each case to the extent that such default, noncompliance, contravention, suspension, revocation, impairment,
forfeiture or non-renewal could not reasonably be expected to result in a Material Adverse Effect.

 

c) Enforceability
of Loan Documents. This Amendment, the Loan Agreement as amended by this Amendment, and each other Loan Document to which any
Borrower is or will be a party, when delivered hereunder, will be, a legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws and by general principles of equity .

 

3. Conditions to Effectiveness.
This Amendment shall become effective only upon satisfaction in full, in a manner reasonably satisfactory to the Lender and its
counsel, of the following conditions precedent (the first date upon which all such conditions shall have been satisfied (or waived)
being herein called the “Tenth Amendment Effective Date”):

 

a) Representations
and Warranties. The representations and warranties contained in this Amendment and in Article 3 of the Loan Agreement and in
each other Loan Document, certificate or other document delivered to Lender pursuant to this Amendment, the Loan Agreement or any
other Loan Document on or prior to the Tenth Amendment Effective Date are true and correct in all material respects (except that
such materiality qualifier shall not be applied to any representations or warranties that already are qualified or modified as
to “materiality” or “Material Adverse Effect” in the text thereof (which representations and warranties
shall be true and correct in all respects subject to such qualification), on and as of the Tenth Amendment Effective Date as though
made on and as of such date, except to the extent that any such representation or warranty (after taking into account this Amendment)
expressly relates solely to an earlier date (in which case such representation or warranty shall be true and correct on and as
of such earlier date in all material respects (except that such materiality qualifier shall not be applicable to any representations
or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in
the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification)
on and as of such earlier date).

 

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b) No
Default; Event of Default. No Default or Event of Default shall have occurred and be continuing on the Tenth Amendment Effective
Date or result from this Amendment becoming effective in accordance with its terms.

 

c) Delivery
of Documents. The Lender shall have received on or before the Tenth Amendment Effective Date the following, each in form and
substance reasonably satisfactory to the Lender and, unless indicated otherwise, dated the Tenth Amendment Effective Date:

 

i) this Amendment, duly
executed by each Borrower; and

 

ii) a certificate of an
authorized officer of each Borrower, certifying as to the matters set forth in subsections (a) and (b) of this Section 3.

 

4. Continued Effectiveness of the Loan
Agreement and Other Loan Documents. Each Borrower hereby (i) confirms and agrees that the Loan Agreement and each other Loan
Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in
all respects except that on and after the Tenth Amendment Effective Date all references in any such Loan Document to “the
Loan Agreement,” the “Agreement,” “thereto,” “thereof,” “thereunder” or words
of like import referring to the Loan Agreement shall mean the Loan Agreement as amended by this Amendment, and (ii) confirms and
agrees that to the extent that any Loan Document purports to assign or pledge to the Lender, or to grant to the Lender a security
interest in or Lien on, any Collateral as security for the Obligations of any Borrower from time to time existing in respect of
the Loan Agreement (as amended hereby) and the other Loan Documents, such pledge, assignment and/or grant of the security interest
or Lien is hereby ratified and confirmed in all respects. This Amendment does not and shall not affect any of the obligations of
any Borrower, other than as expressly provided herein, including, without limitation, the Borrower's obligations to repay the Loans
in accordance with the terms of the Loan Agreement, or the obligations of any Borrower under any Loan Document to which it is a
party, all of which obligations shall remain in full force and effect. Except as expressly provided herein, the execution, delivery
and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Lender under the Loan Agreement
or any other Loan Document, nor constitute a waiver of any provision of the Loan Agreement or any other Loan Document.

 

5. Release. (a) Each Borrower hereby
acknowledges and agrees that: (i) no Borrower has any claim or cause of action against the Lender (or any of its Affiliates or
its or their officers, directors, employees, managers, members, partner, shareholders, attorneys or consultants) in connection
with the Loan Documents and (ii) the Lender has heretofore properly performed and satisfied in a timely manner all of its obligations
to Borrower under the Loan Agreement and the other Loan Documents that are required to have been performed on or prior to the date
hereof. Notwithstanding the foregoing, the Lender wishes (and Borrower agrees) to eliminate any possibility that any past conditions,
acts, omissions, events or circumstances would impair or otherwise adversely affect any of the Lender's rights, interests, security
and/or remedies under the Loan Agreement and the other Loan Documents. Accordingly, for and in consideration of the agreements
contained in this Amendment and other good and valuable consideration, each Borrower (for itself and each other Borrower and the
successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does
hereby fully, finally, unconditionally and irrevocably release and forever discharge Lender and each of its Affiliates and its
and their managers, members, partners, officers, directors, employees, shareholders attorneys and consultants in their capacities
as or for the Lender (collectively, the “Released Parties”) from any and all debts, claims, obligations, damages,
costs, attorneys' fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or
unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under
contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against
any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done directly arising out of, connected
with or related to this Amendment, the Loan Agreement or any other Loan Document, or any act, event or transaction related or attendant
thereto, or the agreements of the Lender contained therein, or the possession, use, operation or control of any of the assets of
any Borrower, or the making of any Loans or other Advances, or the management of such Loans or Advances or the Collateral, in each
case, solely to the extent arising from any act, omission or thing whatsoever done or omitted to be done on or prior to the Tenth
Amendment Effective Date.

 

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6. Miscellaneous.

 

a) Borrower
will pay on demand all reasonable and documented out-of-pocket fees, costs and expenses of the Lender in connection with the structuring,
preparation, negotiation, execution and delivery of this Amendment and the transactions and all documents contemplated herein and
therein, and related transactions, and all documents with respect thereto.

 

b) Section and paragraph
headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other
purpose.

 

c) Borrower
hereby acknowledges and agrees that this Amendment constitutes a “Loan Document” under the Loan Agreement. Accordingly,
it shall be an Event of Default under the Loan Agreement if (i) any representation or warranty made by a Borrower under or in connection
with this Amendment shall have been incorrect in any material respect when made, or (ii) any Borrower shall fail to perform or
observe any term, covenant or agreement contained in this Amendment.

 

d) All
representations, warranties, acknowledgements, agreements and other covenants of the Borrowers in this Amendment are made on a
joint and several basis and are made by each Borrower with respect to itself and all other Borrowers.

 

e) Any
provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.

 

f) In
the case of any conflict between the terms of this Amendment and any Loan Document (including any promissory notes and allonges),
the terms of this Amendment shall control.

 

7. Covenant by Borrower. Borrower
covenants and agrees that at any time upon the request of Lender, Borrower will cause Creative Realities Canada, Inc., a Canadian
company and subsidiary of CRI to become a party to the Agreement.

 

8. Counterparts. This Amendment
may be entered into in any number of separate counterparts by any one or more of the parties hereto, and all of said counterparts
taken together shall constitute one and the same instrument. Valid and binding signatures to this Amendment may be delivered in
original ink, by facsimile or by email or other means of electronic transmission.

 

9. Governing Law. This Amendment
and the obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State
of New York applicable to contracts made and performed in such state, without regard to the principles thereof regarding conflicts
of laws.

 

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10. Submission To Jurisdiction; Waiver Of Jury Trial.

 

a) 
BORROWER HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK CITY, NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER AND THE LENDER PERTAINING TO THIS AMENDMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, HOWEVER, THAT
NOTHING IN THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE LENDER FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR
THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE LENDER. BORROWER EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANYACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION THAT
IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS.

 

b) THE
PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING
IN CONTRACT, TORT, OR OTHERWISE BETWEEN LENDER AND BORROWER ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AMENDMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO.

 

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blank

 

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IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be executed and delivered as of the date set forth on the first page hereof.

 

	BORROWER:	 	LENDER:
	 	 	 
	CREATIVE REALITIES, INC. 	 	SLIPSTREAM COMMUNICATIONS, LLC
	CREATIVE REALITIES, LLC 	 	 
	CONEXUS WORLD GLOBAL, LLC	 	 
	ALLURE GLOBAL SOLUTIONS, INC.	 	 
	 	 	 
	By:	/s/ Richard C. Mills	 	By:	/s/ Brian Friedman
	Name:	RICHARD C. MILLS	 	Name:	BRIAN FRIEDMAN
	Title:	Chief Executive Officer	 	Title: 	General Counsel & Secretary
	 	 	 
	Address for Notice (for all Borrowers): Creative

 Realities, Inc.	 	Address for Notice:

750 E. Main St., Suite 600
	Attention: Chief Financial Officer 13100 Magisterial

 Drive, Ste 100	 	Stamford, CT 06902 Attn: Mr. Brian Friedman
	Louisville, KY 40223	 	

 

Signature Page to Tenth Amendment to
Loan and Security AgreementDocument

Exhibit 4.8
DESCRIPTION OF SECURITIES

As of September 30, 2020, Golub Capital BDC, Inc. (“we,” “our,” “us” or the “Company”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): our common stock, par value $0.001 per share.

For purposes of this exhibit, references to “we,” “our” and “us” refer only to Golub Capital BDC, Inc. and not to any of its current or future subsidiaries and references to “subsidiaries” refer only to consolidated subsidiaries of and exclude any investments held by Golub Capital BDC, Inc. in the ordinary course of business which are not, under GAAP, consolidated on the financial statements of Golub Capital BDC, Inc. and its subsidiaries.

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 attached as an exhibit.

               The following description is based on relevant portions of the Delaware General Corporation Law (the “DGCL”) and on our certificate of incorporation and bylaws, each of which is filed as an exhibit to our Annual Report on Form 10-K of which this Exhibit 4.8 is a part. This summary is not necessarily complete, and we refer you to the DGCL and our certificate of incorporation and bylaws for a more detailed description of the provisions summarized below.

Capital Stock

Our authorized stock currently consists of 100,000,000 shares of common stock, par value $0.001 per share, and 1,000,000 shares of preferred stock, par value $0.001 per share. Our common stock is traded on The Nasdaq Global Select Market under the ticker symbol “GBDC”. There are no outstanding options or warrants to purchase our stock. No stock has been authorized for issuance under any equity compensation plans. Under Delaware law, our stockholders generally are not personally liable for our debts or obligations.

The following are our outstanding classes of securities as of September 30, 2020:

																																																										
	Title of Class
			(2) Amount authorized
			(3) Amount held by us or for Our Account
			(4) Amount Outstanding Exclusive of Amounts shown Under (3)
	
	Common Stock
			100,000,000
			—
			167,259,511.00	
	Preferred Stock
			1,000,000
			—
			—
	

All shares of our common stock have equal rights as to earnings, assets, dividends and other distributions and voting and, when they are issued, will be 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 therefrom. Shares of our common stock have no preemptive, exchange, conversion or redemption rights and are freely transferable, except when 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 and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time. 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. Except as provided with respect to any other class or series of stock, the holders of our common stock will 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 can elect all of our directors, and holders of less than a majority of such shares will not be able to elect any directors.

Provisions of the DGCL and Our Certificate of Incorporation and Bylaws

Limitation on Liability of Directors and Officers; Indemnification and Advance of Expenses

The indemnification of our officers and directors is governed by Section 145 of the DGCL, and our certificate of incorporation and bylaws. Subsection (a) of DGCL Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if (1) such person acted in good faith, (2) in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and (3) with respect to any criminal action or proceeding, such person had no reasonable cause to believe the person’s conduct was unlawful.

Subsection (b) of DGCL Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of the corporation, and except that no indemnification may be made in respect of any claim, issue or matter as to which such person has been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court deems proper.

DGCL Section 145 further provides that to the extent that a present or former director or officer is successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to in subsections (a) and (b) of Section 145, or in defense of any claim, issue or matter therein, such person will be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with such action, suit or proceeding. In all cases in which indemnification is permitted under subsections (a) and (b) of Section 145 (unless ordered by a court), it will be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the applicable standard of conduct has been met by the party to be indemnified. Such determination must be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (4) by the stockholders. The statute authorizes the corporation to pay expenses incurred by an officer or director in advance of the final disposition of a proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it is ultimately determined that such person is not entitled to be indemnified by the corporation as authorized. DGCL Section 145 also provides that indemnification and advancement of expenses permitted under such Section are not to be exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise. DGCL Section 145 also authorizes the corporation to purchase and maintain liability insurance on behalf of its directors, officers, employees and agents regardless of whether the corporation would have the statutory power to indemnify such persons against the liabilities insured.

Our certificate of incorporation provides that our directors will not be liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the current DGCL or as the 

DGCL may hereafter be amended. DGCL Section 102(b)(7) provides that the personal liability of a director to a corporation or its stockholders for breach of fiduciary duty as a director may be eliminated except for liability (1) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) under Section 174 of the DGCL, relating to unlawful payment of dividends or unlawful stock purchases or redemption of stock or (4) for any transaction from which the director derives an improper personal benefit.

Our certificate of incorporation and bylaws provide for the indemnification of any person to the full extent permitted, and in the manner provided, by the current DGCL or as the DGCL may hereafter be amended. In addition, we have entered into indemnification agreements with each of our directors and officers in order to effect the foregoing except to the extent that such indemnification would exceed the limitations on indemnification under Section 17(h) of the 1940 Act.

Delaware Anti-Takeover Law

The DGCL and our certificate of incorporation and bylaws contain provisions that could make it more difficult for a potential acquirer to acquire us by means of a tender offer, proxy contest or otherwise. These provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with our board of directors. These measures may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders. We believe, however, that the benefits of these provisions outweigh the potential disadvantages of discouraging any such acquisition proposals because the negotiation of such proposals may improve their terms.

We are subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. In general, these provisions prohibit a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder, unless:

•prior to such time, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

•upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or

•on or after the date the business combination is approved by the board of directors and authorized at a meeting of stockholders, by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

•Section 203 defines “business combination” to include the following:

•any merger or consolidation involving the corporation and the interested stockholder;

•any sale, transfer, pledge or other disposition (in one transaction or a series of transactions) of

•10% or more of either the aggregate market value of all the assets of the corporation or the aggregate market value of all the outstanding stock of the corporation involving the interested stockholder;

•subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

•any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation owned by the interested stockholder; or

•the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by any of these entities or persons.

The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us.

Election of Directors

Our certificate of incorporation and bylaws provide that the affirmative vote of the holders of a majority of the votes cast by stockholders present in person or by proxy at an annual or special meeting of stockholders and entitled to vote thereat will be required to elect a director. Under our certificate of incorporation, our board of directors may amend the bylaws to alter the vote required to elect directors.

Classified Board of Directors

Our board of directors is divided into three classes of directors serving staggered three-year terms, with the term of office of only one of the three classes expiring each year. A classified board may render a change in control of us or removal of our incumbent management more difficult. We believe, however, that the longer time required to elect a majority of a classified board of directors helps to ensure the continuity and stability of our management and policies.

Number of Directors; Removal; Vacancies

Our certificate of incorporation provides that the number of directors will be set only by the board of directors by resolution or amendment to our bylaw adopted by the affirmative vote of a majority of the directors. Our bylaws provide that a majority of our entire board of directors may at any time increase or decrease the number of directors. However, unless our bylaws are amended, the number of directors may never be less than four nor more than eight. Under the DGCL, unless the certificate of incorporation provides otherwise (which our certificate of incorporation does not), directors on a classified board such as our board of directors may be removed only for cause. Under our certificate of incorporation and bylaws, any vacancy on the board of directors, including a vacancy resulting from an enlargement of the board of directors, may be filled only by vote of a majority of the directors then in office. The limitations on the ability of our stockholders to remove directors and fill vacancies could make it more difficult for a third-party to acquire, or discourage a third-party from seeking to acquire, control of us.

Action by Stockholders

Under our certificate of incorporation stockholder action can be taken only at an annual or special meeting of stockholders or by unanimous written consent in lieu of a meeting. This may have the effect of delaying consideration of a stockholder proposal until the next annual meeting.

Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals

Our bylaws provide that with respect to an annual meeting of stockholders, nominations of persons for election to the board of directors and the proposal of business to be considered by stockholders may be made only (1) by or at the direction of the board of directors, (2) pursuant to our notice of meeting or (3) by a stockholder who is entitled to vote at the meeting and who has complied with the advance notice procedures of the bylaws. Nominations of persons for election to the board of directors at a special meeting may be made only by or at the direction of the board of directors, and provided that the board of directors has determined that directors will be elected at the meeting, by a stockholder who is entitled to vote at the meeting and who has complied with the advance notice provisions of the bylaws.

The purpose of requiring stockholders to give us advance notice of nominations and other business is to afford our board of directors a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by our board of directors, to inform stockholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure for conducting meetings of stockholders. Although our bylaws do not give our board of directors any power to disapprove stockholder nominations for the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election of directors or the consideration of stockholder proposals if proper procedures are not followed and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders.

Stockholder Meetings

Our bylaws provide that any action required or permitted to be taken by stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting. In addition, in lieu of such a meeting, any such action may be taken by the unanimous written consent of our stockholders. Our certificate of incorporation and bylaws also provide that, except as otherwise required by law, special meetings of the stockholders can only be called by the chairman of the board, the chief executive officer or the board of directors. In addition, our bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of candidates for election to the board of directors. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors, or by a stockholder of record on the record date for the meeting who is entitled to vote at the meeting and who has delivered timely written notice in proper form to the secretary of the stockholder’s intention to bring such business before the meeting. These provisions could have the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of our outstanding voting securities.

Calling of Special Meetings of Stockholders

Our certificate of incorporation and bylaws provide that special meetings of stockholders may be called by our board of directors, the chairman of the board and our chief executive officer.

Conflict with 1940 Act

Our bylaws provide that, if and to the extent that any provision of the DGCL or any provision of our certificate of incorporation or bylaws conflicts with any provision of the 1940 Act, the applicable provision of the 1940 Act will control.

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