Document:

EX-4.1

 Exhibit 4.1 

MEI PHARMA, INC. 
 2021
INDUCEMENT GRANT EQUITY COMPENSATION PLAN 
 Section 1. Purpose 

The Plan is intended to assist the Company and its Affiliates, in attracting and retaining selected individuals to serve as employees who are
expected to contribute to the Company’s success, by providing an inducement material for such individuals to enter into employment with the Company or any of its Affiliates, and to achieve long-term objectives that will benefit stockholders of
the Company through the additional incentives inherent in the Grants hereunder. All Grants under the Plan are intended to qualify as employment inducement grants as described in Rule 5635(c)(4), or any successor provision, of the Nasdaq Listing
Rules. 
 Section 2. Definitions 

Capitalized terms used herein shall have the meanings set forth in this Section. 

(a) “Affiliate” shall mean any Person which is included as a member with the Company in a controlled group of corporations, within
the meaning of Code section 414(b), or which is a trade or business (whether or not incorporated) included with the Company in a group of trades or business under common control, within the meaning of Code section 414(c); provided, however, that in
applying Code sections 1563(a)(1), (2) and (3) for purposes of determining a controlled group of corporations under Code section 414(b), the language “at least 20 percent” is used instead of “at least 80 percent” each place
it appears in Code sections 1563(a)(1), (2) and (3), and in applying Treas. Reg. section 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control
for purposes of Code section 414(c), the language “at least 20 percent” is used instead of “at least 80 percent” each place it appears in Treas. Reg. section 1.414(c)-2. (c)
“Board” shall mean the Board of Directors of the Company. 
 (b) “Cause” shall have the meaning ascribed thereto in any
effective employment agreement between the Company and the Grantee, or if no employment agreement is in effect that contains a definition of cause, then Cause shall mean a finding by the Compensation Committee, in its sole and absolute discretion,
that the Grantee has (i) committed a felony or a crime involving moral turpitude, (ii) committed any act of gross negligence or fraud, (iii) failed, refused or neglected to substantially perform his duties (other than by reason of a
physical or mental impairment) or to implement the directives of the Company, (iv) materially violated any policy of the Company, or (v) engaged in conduct that is materially injurious to the Company, monetarily or otherwise. 

(c) “Change in Control” shall be deemed to have occurred if: 

(i) Any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) becomes a “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided
that a Change in Control shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the stockholders of the Company, immediately prior to the transaction, will beneficially
own, immediately after the transaction, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the parent corporation would be entitled in the election of directors. 

 (ii) The consummation of (A) a merger or consolidation of the Company with another
corporation where the stockholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such stockholders to more than 50% of all votes to which
all stockholders of the surviving corporation would be entitled in the election of directors, or where the members of the Board, immediately prior to the merger or consolidation, would not, immediately after the merger or consolidation, constitute a
majority of the board of directors of the surviving corporation, (B) a sale or other disposition of all or substantially all of the assets of the Company, or (C) a liquidation or dissolution of the Company. 

Notwithstanding the foregoing, if a Grant constitutes deferred compensation subject to Code section 409A and the Grant provides for payment
upon a Change in Control, then, for purposes of such payment provisions, no Change in Control shall be deemed to have occurred upon an event described in items (i) and (ii) above unless the event would also constitute a change in ownership or
effective control of, or a change in the ownership of a substantial portion of the assets of, the Company under Code section 409A. 
 (d)
“Code” shall mean the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder. 
 (e)
“Company” shall mean MEI Pharma, Inc., a corporation organized under the laws of the State of Delaware. 
 (f) “Compensation
Committee” shall mean the members of the Board appointed by the Board to serve as the Compensation Committee with responsibility for the administration of the Plan, or if no such members of the Board are appointed, then the Compensation
Committee shall consist of all of the members of the Board. The members of the Board appointed to serve as the Compensation Committee, if applicable, should consist of two or more Persons who are
“non-employee directors” as defined under Rule 16b-3 under the Exchange Act. To the extent that the Board or a subcommittee administers the Plan, references in
the Plan to the “Compensation Committee” shall be deemed to refer to the Board or such subcommittee. 
 (g) “Disability”
or “Disabled” shall mean a Grantee’s becoming disabled within the meaning of Code section 22(e)(3) or as otherwise determined by the Compensation Committee. 

(h) “Effective Date” shall mean May 4, 2021. 

(i) “Employee” shall mean any individual that is providing, or has agreed to provide, services to the Company or an Affiliate of the
Company as an employee. 
 (j) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 

  
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 (k) “Exercise Price” shall mean the purchase price of a Share subject to an
Option, which shall not be less than the Fair Market Value of a Share as of the date an Option is granted. 
 (l) “Fair Market
Value” of a Share on any given date, unless the Compensation Committee determines otherwise with respect to a particular Grant, shall mean (i) if the principal trading market for the Shares is a national securities exchange, the last
reported sale price during regular trading hours thereof of a Share on the relevant date or (if there were no trades on that date) the last reported sales price during regular trading hours on the latest preceding date upon which a sale was
reported, (ii) if the Shares are not principally traded on such exchange, the mean between the last reported “bid” and “asked” prices of a Share during regular trading hours on the relevant date, as reported on the OTC
Bulletin Board, or (iii) if the Shares are not publicly traded or, if publicly traded, are not so reported, the Fair Market Value per share shall be as determined by the Compensation Committee pursuant to any reasonable valuation method
authorized under the Code. 
 (m) “Full Value Award” shall mean a Grant other than an Option or SAR, and which is settled in
Shares. 
 (n) “Grant” shall mean a grant of Options, SARs, Stock Awards, Stock Units or Other Stock-Based Awards under the Plan.

 (o) “Grant Letter” shall mean a letter, certificate or other agreement accepted by the Grantee (which may also be in electronic
form), evidencing the making of a Grant hereunder and containing such terms and conditions, not inconsistent with the express provisions of the Plan, as the Compensation Committee shall approve. 

(p) “Grantee” shall mean an Employee who is selected by the Compensation Committee to receive a Grant under the Plan in accordance
with Rule 5635(c)(4), or any successor provision, of the Nasdaq Listing Rules. 
 (q) “Nonqualified Option” shall mean any Option
granted pursuant to Section 5 of the Plan that is not an option which, when granted, is intended to qualify as an “incentive stock option” within the meaning of Code section 422. 

(r) “Option” shall mean a Nonqualified Option to purchase Shares granted pursuant to the Plan and subject to the Plan. 

(s) “Other Stock-Based Award” shall mean any Grant based on, measured by or payable in Shares (other than those described in
Sections 5, 6, 7 and 8 of the Plan), as described in Section 9. 
 (t) “Performance Goals” shall mean objectively
determinable performance goals that may be based on one or more of the following criteria: stock price, earnings per share, net earnings, operating earnings, earnings before income taxes, EBITDA (earnings before income tax expense, interest expense,
and depreciation and amortization expense), return on assets, shareholder return, return on equity, growth in assets, unit volume, sales or market share, or strategic business criteria consisting of one or more objectives based on meeting specified
revenue goals, market penetration goals, geographic business expansion goals, cost targets or 

  
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goals relating to acquisitions or divestitures; pre- or after-tax income or loss (before or after allocation of
corporate overhead and bonus); appreciation in and/or maintenance of the price of the Shares or any other publicly-traded securities of the Company; improvement in or attainment of expense levels or working capital levels, including cash, inventory
and accounts receivable; general and administrative expense savings; year-end cash; regulatory achievements (including submitting or filing applications or other documents with regulatory authorities or
receiving approval of any such applications or other documents and passing pre-approval inspections (whether of the Company or the Company’s third-party manufacturer) and validation of manufacturing
processes (whether the Company’s or the Company’s third-party manufacturer’s); clinical achievements (including initiating clinical studies, initiating enrollment, completing enrollment or enrolling particular numbers of subjects in
clinical studies, completing phases of a clinical study (including the treatment phase), or announcing or presenting preliminary or final data from clinical studies, in each case, whether on particular timelines or generally); strategic partnerships
or transactions (including in-licensing and out-licensing of intellectual property); establishing relationships with commercial entities with respect to the marketing,
distribution and sale of the Company’s products (including with group purchasing organizations, distributors and other vendors); co-development, co-marketing,
profit sharing, joint venture or other similar arrangements; financing and other capital raising transactions (including sales of the Company’s equity or debt securities); debt level year-end cash
position; competitive market metrics; timely completion of new product roll-outs; sales or licenses of the Company’s assets (including its intellectual property, whether in a particular jurisdiction or territory or globally, or through
partnering transactions); royalty income; implementation, completion or attainment of measurable objectives with respect to research, development, manufacturing, commercialization, products or projects, acquisitions and divestitures, or such other
criteria as the Compensation Committee determines. The business criteria may relate to the performance of the Company, or the performance of a parent company, a subsidiary, division, business segment or business unit of the Company or a subsidiary,
or based upon performance relative to performance of other companies or upon comparisons or any of the indicators of performance relative to performance of other companies, or any combination of the foregoing. Any performance goals that are
financial metrics, may be determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), in accordance with accounting principles established by the International Accounting Standards Board (“IASB
Principles”), or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP or under IASB Principles. The Compensation Committee may provide for exclusion of the impact of an event or
occurrence which the Compensation Committee determines should appropriately be excluded, including (A) restructurings, discontinued operations, and other unusual, infrequently occurring or non-recurring
charges, (B) an event either not directly related to the operations of the Company, Company subsidiary, division, business segment or business unit or not within the reasonable control of management, or (C) the cumulative effects of tax or
accounting changes in accordance with U.S. generally accepted accounting principles. 
 (u) “Person” shall mean an individual,
partnership, corporation, limited liability company or partnership, trust, unincorporated organization, joint venture, government (or agency or political subdivision thereof) or any other entity of any kind. 

(v) “Plan” shall mean this MEI Pharma, Inc. 2021 Inducement Grant Equity Compensation Plan as set forth herein and as amended from
time to time. 

  
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 (w) “SAR” shall mean a stock appreciation right with respect to a Share. 

(x) “Share” shall mean a share of common stock of the Company. 

(y) “Stock Award” shall mean an award of Shares, with or without restrictions. 

(z) “Stock Unit” shall mean a unit that represents a hypothetical Share. 

(aa) “Substitute Awards” shall mean Grants made or Shares issued by the Company in assumption of, or in substitution or exchange
for, awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or any Company subsidiary or with which the Company or any subsidiary combines. 

Section 3. Shares Available under the Plan 

(a) Shares Authorized. Subject to adjustments as provided in Sections 3(b) and 12 below, as of the Effective Date, a total of 2,500,000
Shares shall be authorized for Grants under the Plan. Any Shares issued hereunder may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares purchased in the open market or otherwise. 

(b) Share Counting. 
 (i)
If any Shares subject to a Grant are forfeited, a Grant expires or a Grant is settled for cash (in whole or in part), then the Shares subject to such Grant shall, to the extent of such forfeiture, expiration or cash settlement, be added to the
Shares available for Grants under the Plan. 
 (ii) Notwithstanding anything to the contrary contained herein, the following Shares shall
not be added to the Shares that may be subject to Grants under the Plan: (A) Shares tendered by the Grantee or withheld by the Company in payment of the Exercise Price of an Option, (B) Shares tendered by the Grantee or withheld by the
Company to satisfy any tax withholding obligation with respect to Grants, (C) Shares subject to a SAR that are not issued in connection with its stock settlement on exercise thereof, and (D) Shares reacquired by the Company on the open
market or otherwise using cash proceeds from the exercise of Options. 
 (c) Substitute Awards. Substitute Awards shall not reduce
the Shares authorized for grant under the Plan, nor shall Shares subject to a Substitute Award be added to the Shares available for issuance or transfer under the Plan as provided in Sections 3(a) and (b) above. Additionally, in the event that
a company acquired by the Company or any Company subsidiary or with which the Company or any subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in
contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Grants under the Plan
and shall not reduce the Shares authorized for Grants under the Plan (and Shares subject to such Grants shall not be added to the Shares available for Grants under the Plan as provided in Sections 3(a) and (b) above); provided that Grants using
such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to
individuals who were not Employees or directors prior to such acquisition or combination. 

  
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 Section 4. Administration of the Plan 

(a) Authority of the Compensation Committee. The Plan shall be administered by the Compensation Committee. The Compensation Committee
shall have full and final authority to take the following actions, in each case subject to and consistent with the provisions of the Plan: 

(i) to select the Employees to whom Grants may be made; 

(ii) to determine the number of Shares subject to each such Grant; 

(iii) to determine the terms and conditions of any Grant made under the Plan; 

(iv) to determine whether to accelerate the exercisability of any or all applicable outstanding Grants at any time for any reason; 

(v) to determine the restrictions or conditions related to the delivery, holding and disposition of Shares acquired pursuant to a Grant; 

(vi) to prescribe the form of each Grant Letter; 

(vii) to adopt, amend, suspend, waive and rescind such rules and regulations and appoint such agents as the Compensation Committee may deem
necessary or advisable to administer the Plan; 
 (viii) to correct any defect or supply any omission or reconcile any inconsistency in the
Plan and to construe and interpret the Plan and any Grant, Grant Letter or other instrument hereunder; and 
 (ix) to make all other
decisions and determinations as may be required under the terms of the Plan or as the Compensation Committee may deem necessary or advisable for the administration of the Plan, including to comply with Rule 5635(c)(4), or any successor provision, of
the Nasdaq Listing Rules. 
 All Grants shall be made conditional upon the Grantee’s acknowledgement, in writing or by acceptance of the Grant, that
all decisions and determinations of the Compensation Committee shall be final and binding on the Grantee, his or her beneficiaries and any other Person having or claiming an interest under such Grant. 

(b) Manner of Exercise of Compensation Committee Authority. Any action of the Compensation Committee with respect to the Plan shall be
final, conclusive and binding on all Persons, including the Company, its Affiliates, Grantees, or any Person claiming any rights under the Plan from or through any Grantee, except to the extent the Compensation Committee may subsequently modify, or
take further action not inconsistent with, its prior action. If not specified in the Plan, the time at which the Compensation Committee must or may make any 

  
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determination shall be determined by the Compensation Committee, and any such determination may thereafter be modified by the Compensation Committee. The express grant of any specific power to
the Compensation Committee, and the taking of any action by the Compensation Committee, shall not be construed as limiting any power or authority of the Compensation Committee. The Compensation Committee may delegate to officers or managers of the
Company or any Affiliate of the Company the authority, subject to such terms as the Compensation Committee shall determine, to perform such functions as the Compensation Committee may determine, to the extent permitted under applicable law and the
Nasdaq Listing Rules. 
 (c) Limitation of Liability. Each member of the Compensation Committee shall be entitled to, in good faith,
rely or act upon any report or other information furnished to him by any officer or other employee of the Company or any of its Affiliates, the Company’s independent certified public accountants or any executive compensation consultant, legal
counsel or other professional retained by the Company to assist in the administration of the Plan. To the fullest extent permitted by applicable law, no member of the Compensation Committee, nor any officer or employee of the Company acting on
behalf of the Compensation Committee, shall be personally liable for any action, determination or interpretation taken or made in good faith with respect to the Plan, and all members of the Compensation Committee and any officer or employee of the
Company acting on its behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action, determination or interpretation. 

Section 5. Options 
 The Compensation
Committee may grant Options to a Grantee upon such terms as the Compensation Committee deems appropriate. The following provisions are applicable to Options: 

(a) Number of Shares. The Compensation Committee shall determine the number of Shares that will be subject to each Grant of Options to
a Grantee. 
 (b) Type of Option and Price. 

(i) The Compensation Committee may grant Nonqualified Stock Options in accordance with the terms and conditions set forth herein. 

(ii) The Exercise Price of Shares subject to an Option shall be determined by the Compensation Committee and may be equal to or greater than
the Fair Market Value of a Share on the date the Option is granted. 
 (c) Option Term. The Compensation Committee shall determine
the term of each Option. Notwithstanding the foregoing, the term of any Option shall not exceed ten years from the date of grant. 
 (d)
Option Termination. Except as provided below, an Option may only be exercised while the Grantee is employed or engaged by the Company or any Affiliate. Unless otherwise determined by the Compensation Committee and set forth in a Grant Letter,
Options shall terminate on the earliest of: 

  
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 (i) the date on which the Grantee is no longer employed or engaged by the Company and any
Affiliate on account of the Grantee’s termination for Cause. In addition, notwithstanding any other provisions of this Section 5, if the Compensation Committee determines that the Grantee has engaged in conduct that constitutes Cause at
any time while the Grantee is employed or engaged by the Company and any Affiliate or after the Grantee’s termination of employment or engagement, any Option held by the Grantee shall immediately terminate and the Grantee shall automatically
forfeit all Shares underlying any exercised portion of an Option for which the Company has not yet delivered the Share certificates, upon refund by the Company of the Exercise Price paid by the Grantee for such Shares. Upon any exercise of an
Option, the Company may withhold delivery of Share certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture; 

(ii) the 91st day following the date the Grantee is no longer employed or engaged by the Company and any Affiliate for any reason other than
Cause, death, or Disability; provided, however, that in all cases the portion of any Option that is not vested on the date of termination of employment or engagement shall terminate immediately upon such termination; 

(iii) the first anniversary of the date the Grantee’s employment or engagement by the Company and any Affiliate terminates on account of
the Grantee’s death or Disability; provided, however, that the portion of any Option that is not vested on the date of such termination of employment or engagement shall terminate immediately upon such termination; 

(iv) the tenth anniversary of the date of grant as set forth in the Grant Letter; and 

(v) cancellation, termination or expiration of the Options pursuant to action taken by the Compensation Committee in accordance with
Section 12. 
 Notwithstanding the foregoing, in the event that on the last business day of the term of an Option (i) the exercise
of the Option is prohibited by applicable law or (ii) Shares may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option shall be extended for a period of 30 days following the end of the legal prohibition, black-out period or lock-up agreement, to the extent permitted under Code section 409A. 

For purposes of the Plan, employment or engagement by the Company and any Affiliate shall mean employment or other service engagement (so
that, for purposes of exercising Options, a Grantee shall not be considered to have terminated his employment or engagement until the Grantee ceases to be an Employee or otherwise provide service), unless the Compensation Committee determines
otherwise. 

  
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 (e) Exercise of Options. Only the vested portion of any Option may be exercised. A
Grantee may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee shall pay the Exercise Price for an Option as specified by the Compensation Committee (i) in cash,
(ii) unless the Compensation Committee determines otherwise, by delivering Shares owned by the Grantee and having a Fair Market Value on the date of exercise at least equal to the Exercise Price or by attestation (on a form prescribed by the
Compensation Committee) to ownership of Shares having a Fair Market Value on the date of exercise at least equal to the Exercise Price, (iii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal
Reserve Board, or (iv) by such other method as the Compensation Committee may approve. In addition, in the event the Compensation Committee so determines, to the extent an Option is at the time exercisable for vested shares of Company Stock,
all or any part of that vested portion may be surrendered to the Company for an appreciation distribution payable in Shares with a Fair Market Value at the time of the Option surrender equal to the dollar amount by which the then Fair Market Value
of the Shares subject to the surrendered portion exceeds the aggregate Exercise Price payable for those Shares. Shares used to exercise an Option shall have been held by the Grantee for the requisite period of time necessary to avoid adverse
accounting consequences to the Company with respect to the Option. Payment for the Shares to be issued or transferred pursuant to the Option, and any applicable withholding taxes, must be received by the Company by the time specified by the
Compensation Committee depending on the type of payment being made, but in all cases prior to the issuance or transfer of such Shares. 

Notwithstanding the foregoing, a Grant Letter may provide that if on the last day of the term of an Option the Fair Market Value of one Share
exceeds the Exercise Price per Share, the Grantee has not exercised the Option (or a tandem SAR, if applicable) and the Option has not expired, the Option shall be deemed to have been exercised by the Grantee on such day with payment made by
withholding Shares otherwise issuable in connection with the exercise of the Option. In such event, the Company shall deliver to the Grantee the number of Shares for which the Option was deemed exercised, less the number of Shares required to be
withheld for the payment of the total Exercise Price and applicable withholding taxes; provided, however, any fractional Share shall be settled in cash. 

(f) Grants to Non-Exempt Employees. Notwithstanding the foregoing, Options granted to persons
who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such Options may become exercisable, as
determined by the Compensation Committee, upon the Grantee’s death, Disability or retirement, or upon a Change in Control or other circumstances permitted by applicable regulations). 

Section 6. Stock Awards 
 The
Compensation Committee may issue or transfer Shares to a Grantee under a Stock Award, upon such terms as the Compensation Committee deems appropriate. The following provisions are applicable to Stock Awards: 

(a) General Requirements. Shares issued or transferred pursuant to Stock Awards may be issued or transferred for consideration or for
no consideration, and subject to restrictions or no restrictions, as determined by the Compensation Committee. The Compensation Committee may, but shall not be required to, establish conditions under which restrictions on Stock Awards shall lapse
over a period of time or according to such other criteria as the Compensation Committee deems appropriate, including, without limitation, restrictions based upon the achievement of specific Performance Goals. The period of time during which the
Stock Awards will remain subject to restrictions will be designated in the Grant Letter as the “Restriction Period.” 

  
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 (b) Number of Shares. The Compensation Committee shall determine the number of Shares
to be issued or transferred pursuant to a Stock Award and the restrictions applicable to such Shares. 
 (c) Requirement of Employment or
Service. If the Grantee is no longer employed or engaged by the Company or any Affiliate during a period designated in the Grant Letter as the Restriction Period, or if other specified conditions are not met, the Stock Award shall terminate as
to all Shares covered by the Grant as to which the restrictions have not lapsed, and those Shares must be immediately returned to the Company. The Compensation Committee may, however, provide for complete or partial exceptions to this requirement as
it deems appropriate. 
 (d) Restrictions on Transfer and Legend on Stock Certificate. During the Restriction Period, a Grantee may
not sell, assign, transfer, pledge or otherwise dispose of the Shares of a Stock Award except under Section 13(b) below. Unless otherwise determined by the Compensation Committee, the Company will retain possession of certificates for Shares of
Stock Awards until all restrictions on such Shares have lapsed. Each certificate for a Stock Award, unless held by the Company, shall contain a legend giving appropriate notice of the restrictions in the Grant. The Grantee shall be entitled to have
the legend removed from the stock certificate covering the Shares subject to restrictions when all restrictions on such Shares have lapsed. The Compensation Committee may determine that the Company will not issue certificates for Stock Awards until
all restrictions on such Shares have lapsed. 
 (e) Right to Vote and to Receive Dividends. Unless the Compensation Committee
determines otherwise, during the Restriction Period, the Grantee shall have the right to vote Shares of Stock Awards and to receive any dividends or other distributions paid on such Shares, subject to any restrictions deemed appropriate by the
Compensation Committee, including, without limitation, the achievement of specific Performance Goals. Notwithstanding the provisions of this Section, any cash dividends, stock and any other property (other than cash) distributed as a dividend or
otherwise with respect to any unvested Stock Award shall either (i) not be paid or credited or (ii) be accumulated and subject to restrictions and risk of forfeiture to the same extent as the Shares underlying the Stock Award with respect
to which such cash, stock or other property has been distributed and shall not be paid unless and until the time such restrictions and risk of forfeiture lapse. 

(f) Lapse of Restrictions. All restrictions imposed on Stock Awards shall lapse upon the expiration of the applicable Restriction
Period and the satisfaction of all conditions, if any, imposed by the Compensation Committee. The Compensation Committee may determine, as to any or all Stock Awards, that the restrictions shall lapse without regard to any Restriction Period. 

  
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 Section 7. Stock Units 

The Compensation Committee may grant Stock Units, each of which shall represent one hypothetical Share, to a Grantee upon such terms and
conditions as the Compensation Committee deems appropriate. The following provisions are applicable to Stock Units: 
 (a) Crediting of
Units. Each Stock Unit shall represent the right of the Grantee to receive a Share or an amount of cash based on the value of a Share, if and when specified conditions are met. All Stock Units shall be credited to bookkeeping accounts
established on the Company’s records for purposes of the Plan. 
 (b) Terms of Stock Units. The Compensation Committee may grant
Stock Units that are payable if specified Performance Goals or other conditions are met, or under other circumstances. Stock Units may be paid at the end of a specified performance period or other period, or payment may be deferred to a date
authorized by the Compensation Committee. The Compensation Committee shall determine the number of Stock Units to be granted and the requirements applicable to such Stock Units. 

(c) Requirement of Employment or Service. If the Grantee is no longer employed or engaged by the Company or any Affiliate prior to the
vesting of Stock Units, or if other conditions established by the Compensation Committee are not met, the Grantee’s Stock Units shall be forfeited. The Compensation Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate. 
 (d) Payment With Respect to Stock Units. Payments with respect to Stock Units shall be made
in cash, Shares or any combination of the foregoing, as the Compensation Committee shall determine. 
 Section 8. Stock Appreciation Rights 

The following provisions are applicable to SARs: 

(a) General Requirements. The Compensation Committee may grant SARs to a Grantee separately or in tandem with any Option (for all or a
portion of the applicable Option). Tandem SARs may be granted either at the time the Option is granted or at any time thereafter while the Option remains outstanding. The Compensation Committee shall establish the base amount of the SAR at the time
the SAR is granted, which shall be equal to or greater than the Fair Market Value of a Share as of the date of grant of the SAR. The base amount of each SAR shall be equal to the per Share Exercise Price of the related Option, provided such Exercise
Price is equal to or greater than the Fair Market Value of a Share as of the date of grant of the SAR or, if there is no related Option, an amount equal to or greater than the Fair Market Value of a Share as of the date of grant of the SAR. No SAR
shall have a term that is greater than ten years. 
 Notwithstanding the foregoing, in the event that on the last business day of the term
of a SAR (x) the exercise of the SAR is prohibited by applicable law or (y) Shares may not be purchased or sold by certain employees or directors of the Company due to the “black-out
period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term shall be extended for a period of 30 days following the end
of the legal prohibition, black-out period or lock-up agreement, to the extent permitted under Code section 409A. 

  
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 (b) Tandem SARs. In the case of tandem SARs, the number of SARs granted to a Grantee
that shall be exercisable during a specified period shall not exceed the number of Shares that the Grantee may purchase upon the exercise of the related Option during such period. Upon the exercise of an Option, the SARs relating to the Shares
covered by such Option shall terminate. Upon the exercise of SARs, the related Option shall terminate to the extent of an equal number of Shares. 

(c) Exercisability. A SAR shall be exercisable during the period specified by the Compensation Committee in the Grant Letter and shall
be subject to such vesting and other restrictions as may be specified in the Grant Letter. SARs may only be exercised while the Grantee is employed or engaged by the Company or Affiliate or during the applicable period after termination of
employment or engagement as described in Section 5(d) above. A tandem SAR shall be exercisable only during the period when the Option to which it is related is also exercisable. 

A Grant Letter may provide that if on the last day of the term of a SAR the Fair Market Value of one Share exceeds the base amount per Share
of the SAR, the Grantee has not exercised the SAR or the tandem Option (if applicable), and the SAR has not otherwise expired, the SAR shall be deemed to have been exercised by the Grantee on such day. In such event, the Company shall make payment
to the Grantee in accordance with this Section, reduced by the number of Shares (or cash) for applicable withholding taxes; any fractional Share shall be settled in cash. 

(d) Grants to Non-Exempt Employees. Notwithstanding the foregoing, SARs granted to persons who
are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such SARs may become exercisable, as
determined by the Compensation Committee, upon the Grantee’s death, Disability or retirement, or upon a Change in Control or other circumstances permitted by applicable regulations). 

(e) Value of SARs. When a Grantee exercises SARs, the Grantee shall receive in settlement of such SARs an amount equal to the value of
the stock appreciation for the number of SARs exercised. The stock appreciation for a SAR is the amount by which the Fair Market Value of the underlying Share on the date of exercise of the SAR exceeds the base amount of the SAR as described in
subsection (a) above. 
 (f) Form of Payment. The appreciation in a SAR shall be paid in Shares, cash or any combination of the
foregoing, as the Compensation Committee shall determine. For purposes of calculating the number of Shares to be received, Shares shall be valued at their Fair Market Value on the date of exercise of the SAR. 

Section 9. Other Stock-Based Awards 

The Compensation Committee may grant Other Stock-Based Awards to a Grantee on such terms and conditions as the Compensation Committee shall
determine. Other Stock-Based Awards may be awarded subject to the achievement of Performance Goals or other conditions and may be payable in cash, Company Stock or any combination of the foregoing, as the Compensation Committee shall determine. 

  
 12 

 Section 10. Dividend Equivalents 

The Compensation Committee may grant Dividend Equivalents in connection Stock Units or Other Stock-Based Awards. No Dividend Equivalents or
dividends may be granted in connection with Options or SARs. Dividend Equivalents may be accrued as contingent cash obligations and may be payable in cash or Shares, and upon such terms as the Compensation Committee may establish, including, without
limitation, the achievement of specific Performance Goals. Notwithstanding the foregoing in this Section 10, any Dividend Equivalents granted in connection with unvested Stock Units or Other Stock-Based Awards shall be payable only if and to
the extent the underlying Stock Units or Other Stock-Based Awards are payable, as determined by the Compensation Committee. 
 Section 11.
Deferrals 
 The Compensation Committee may permit or require a Grantee to defer receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Grantee in connection with any Stock Units or Other Stock-Based Awards. If any such deferral election is permitted or required, the Compensation Committee shall establish rules and procedures for such
deferrals and may provide for interest or other earnings to be paid on such deferrals. The rules and procedures for any such deferrals shall be consistent with applicable requirements of Code section 409A. 

Section 12. Adjustment Upon Changes in Capitalization. 

In the event any recapitalization, forward or reverse split, reorganization, merger, consolidation,
spin-off, combination, repurchase, exchange or issuance of Shares or other securities, any stock dividend or other special and nonrecurring dividend or distribution (whether in the form of cash, securities or
other property other than a regular cash dividend), liquidation, dissolution, or other similar transactions or events, affects the Shares or the value thereof, then the Compensation Committee shall make such adjustment, in such manner as the
Compensation Committee deems appropriate, in order to prevent dilution or enlargement of the rights of Grantees under the Plan, including adjustment in (i) the number and kind of Shares deemed to be available thereafter for Grants under
Section 3, (ii) the number and kind of Shares that may be delivered or deliverable in respect of outstanding Grants, and (iii) the price per share or the applicable market value of such Grants. In addition, the Compensation Committee shall
make such adjustments as are appropriate in the terms and conditions of, and the criteria included in, Grants (including, without limitation, cancellation of Grants in exchange for the
in-the-money value, if any, of the vested portion thereof, cancellation of unvested Grants for no consideration, cancellation of out-of-the-money Grants for no consideration, substitution of Grants using securities of a successor or other entity, acceleration of the time that Grants expire, or
adjustment of performance targets) in recognition of unusual or nonrecurring events (including, without limitation, a Change in Control or an event described in the preceding sentence) affecting the Company or any Affiliate of the Company or the
financial statements of the Company or any Affiliate of the Company, or in response to changes in applicable laws, regulations or accounting principles. Any adjustments to outstanding Grants shall be consistent with Code section 409A or 424, to the
extent applicable. Any adjustments determined by the Compensation Committee shall be final, binding and conclusive. 

  
 13 

 Section 13. Restrictions on Shares. 

(a) Restrictions on Issuing Shares. No Shares shall be issued or transferred under the Plan unless and until all applicable legal
requirements have been complied with to the satisfaction of the Compensation Committee. The Compensation Committee shall have the right to condition any Grant on the Grantee’s undertaking in writing to comply with such restrictions on any
subsequent disposition of the Shares issued or transferred thereunder as the Compensation Committee shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof. 

(b) Transfer Restrictions. 

(i) Nontransferability of Grants. Except as provided below, only the Grantee may exercise rights under a Grant during the
Grantee’s lifetime. No Grant under the Plan and no Shares that have not been issued or as to which any applicable restriction, performance or deferral period has not lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered,
except (A) by will or by the laws of descent and distribution or (B) pursuant to a domestic relations order. When a Grantee dies, the personal representative or other Person entitled to succeed to the rights of the Grantee may exercise
such rights. Any such successor must furnish proof satisfactory to the Company of his or her right to receive the Grant under the Grantee’s will or under the applicable laws of descent and distribution. 

(ii) Transfer of Nonqualified Stock Options. Notwithstanding (i) above, the Compensation Committee may provide, in a Grant Letter,
that a Grantee may transfer Nonqualified Options to family members, or one or more trusts or other entities for the benefit of or owned by family members, consistent with the applicable securities laws, according to such terms as the Compensation
Committee may determine; provided that the Grantee receives no consideration for the transfer of the Nonqualified Option and the transferred Nonqualified Option shall continue to be subject to the same terms and conditions as were applicable to the
Nonqualified Option immediately before the transfer. 
 (c) Requirements for Issuance or Transfer of Shares. No Shares shall be
issued or transferred in connection with any Grant made hereunder unless and until all legal requirements applicable to the issuance or transfer of such Shares have been complied with to the satisfaction of the Compensation Committee. The
Compensation Committee shall have the right to condition any Grant on the Grantee’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of the Shares as the Compensation Committee shall deem necessary or
advisable, and certificates representing such Shares may be legended to reflect any such restrictions. Certificates representing Shares issued or transferred under the Plan may be subject to such stop-transfer orders and other restrictions as the
Compensation Committee deems appropriate to comply with applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon. 

  
 14 

 Section 14. Withholding of Taxes. 

All Grants made under the Plan shall be subject to applicable federal (including FICA), state, local and foreign tax withholding requirements.
The Company may require that the Grantee or other Person receiving or exercising Grants pay to the Company or any Affiliate the amount of any federal, state, local or foreign taxes that the Company or any Affiliate is required to withhold with
respect to such Grants, or the Company or any Affiliate may deduct from other wages paid by the Company or any Affiliate the amount of any withholding taxes due with respect to such Grants. If the Compensation Committee deems it appropriate, the
Compensation Committee shall be authorized to establish procedures that permit or require a Grantee to satisfy the applicable tax withholding obligation with respect to a Grant by having Shares that are otherwise deliverable in connection with a
Grant withheld, subject to such limitations as may be imposed by the Compensation Committee. 
 Section 15. Consequences of a Change in Control.

 The Compensation Committee may provide in a Grant Letter or otherwise terms under which Grants may vest and, as applicable, be
exercisable or payable in the event of a Change in Control or in the event of a Grantee’s termination of employment or engagement by the Company and any Affiliate in connection with, upon or within a specified time period after a Change of
Control. In addition, in the event of a Change in Control, the Compensation Committee may take one or more of the following actions with respect to any or all outstanding Grants: the Compensation Committee may (i) require that Grantees
surrender their outstanding vested Options and SARs in exchange for one or more payments by the Company, in cash or Shares as determined by the Compensation Committee, in an amount equal to the amount by which the then Fair Market Value of the
Shares subject to the Grantee’s unexercised, vested Options and SARs exceeds the Exercise Price of the vested Options or the base amount of the vested SARs, as applicable, (ii) provide for the cancellation of unvested Grants for no
consideration, (iii) provide for the cancellation of out-of-the-money Grants for no consideration, (iv) after giving
Grantees an opportunity to exercise their outstanding Options and SARs, terminate any or all unexercised Options and SARs at such time as the Compensation Committee deems appropriate, or (v) determine that outstanding Options and SARs that are
not exercised shall be assumed by, or replaced with comparable options or rights by, the surviving corporation, (or a parent or subsidiary of the surviving corporation), and other outstanding Grants that remain in effect after the Change in Control
shall be converted to similar grants of the surviving corporation (or a parent or subsidiary of the surviving corporation). Such surrender or termination shall take place as of the date of the Change in Control or such other date as the Compensation
Committee may specify (subject to consummation of the Change in Control). 
 Section 16. General Provisions 

(a) Grant Letter. Each Grant shall be evidenced by a Grant Letter. The terms and provisions of such Grant Letters may vary among
Grantees and among different Grants made to the same Grantee. 

  
 15 

 (b) No Right to Employment. The making of a Grant in any year shall not give the
Grantee any right to similar grants in future years, any right to continue such Grantee’s employment relationship with the Company or its Affiliates, or, until Shares are issued, any rights as a stockholder of the Company. All Grantees shall
remain subject to discharge to the same extent as if the Plan were not in effect. For purposes of the Plan, a sale of any Affiliate of the Company that employs or engages a Grantee shall be treated as the termination of such Grantee’s
employment or engagement, unless the Grantee shall otherwise continue to provide services to the Company or an Affiliate of the Company. 

(c) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Grant. Except as otherwise
provided under the Plan, the Compensation Committee shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or
otherwise eliminated. 
 (d) No Funding. No Grantee, and no beneficiary or other Persons claiming under or through the Grantee, shall
have any right, title or interest by reason of any Option to any particular assets of the Company or Affiliates of the Company, or any Shares allocated or reserved for the purposes of the Plan or subject to any Grant except as set forth herein. The
Company shall not be required to establish any fund or make any other segregation of assets to assure satisfaction of the Company’s obligations under the Plan. 

(e) Governing Law; Jurisdiction. The Plan shall be governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. To the
extent the Grantee is a party to an employment agreement with the Company or any of its subsidiaries that provides for binding arbitration of employment disputes, then any disputes between the Company and such Grantee arising under the Plan shall be
arbitrated in accordance with the procedures set forth in such employment agreement. 
 (f) Compliance with Law. The Plan, the
exercise of Options and SARs and the obligations of the Company to issue or transfer Shares under Grants shall be subject to all applicable laws and regulations, and to approvals by any governmental or regulatory agency as may be required. With
respect to Persons subject to section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its
successors under the Exchange Act. In addition, it is the intent of the Company that, to the extent applicable, Grants be exempt from or comply with the requirements of Code section 409A. Notwithstanding the foregoing, the Compensation Committee
makes no representation that the Grants awarded under the Plan shall be exempt from or comply with Code section 409A and makes no undertaking to preclude Code section 409A from applying to Grants awarded under the Plan. To the extent that any legal
requirement of section 16 of the Exchange Act or Code section 409A as set forth in the Plan ceases to be required under section 16 of the Exchange Act or Code section 409A, that Plan provision shall cease to apply. To the extent applicable, if on
the date of a Grantee’s “separation from service” (as such term is defined under Code section 409A), Shares (or shares of any other company required to be aggregated with the Company for purposes of Code section 409A and its
corresponding regulations) are publicly-traded on an established securities market or otherwise and the Grantee is a “specified employee” (as such term is defined in Code section 

  
 16 

 
409A(a)(2)(B)(i) and its corresponding regulations) as determined by the Compensation Committee (or its delegate) in its discretion in accordance with the requirements of Code sections 409A and
416, then all Grants that are deemed to be deferred compensation subject to the requirements of Code section 409A and payable within six months following such Grantee’s “separation from service” shall be postponed for a period of six
months following the Grantee’s “separation from service” with the Company, to the extent necessary to avoid the imposition of penalty taxes thereunder. The Compensation Committee may revoke any Grant if it is contrary to law or modify
a Grant to bring it into compliance with any valid and mandatory government regulation. The Compensation Committee may, in its sole discretion, agree to limit its authority under this Section. 

(g) Grants made in Connection with Corporate Transactions and Otherwise. Nothing contained in the Plan shall be construed to
(i) limit the right of the Compensation Committee to make Grants under the Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of any corporation, firm or association,
including Grants to employees thereof who become Employees, or (ii) limit the right of the Company to grant stock options or make other awards outside of the Plan. The Compensation Committee may make a Grant to an employee of another
corporation who becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or liquidation involving the Company, in substitution for awards made by such corporation. Notwithstanding anything
in the Plan to the contrary, the Compensation Committee may establish such terms and conditions of the new Grants as it deems appropriate, including setting the Exercise Price of Options at a price necessary to retain for the Grantee the same
economic value as the prior options. 
 (h) Application of Company Clawback Policy. All Grants under the Plan are subject to the
applicable provisions of the Company’s clawback or recoupment policy approved by the Board or the Compensation Committee; as such policy may be in effect from time to time, and will be subject to recoupment as may be required by applicable law,
regulation or listing exchange. 
 Section 17. Amendment or Termination. 

(a) Amendment. The Board may amend or terminate the Plan at any time; provided, however, that the Board shall not amend the Plan
without stockholder approval if such approval is required in order to comply with the Code or other applicable law (including Rule 16b-3 under the Exchange Act), or to comply with applicable stock exchange
requirements; and further provided that the Board may not, without the approval of the Company’s stockholders, to the extent required by such applicable law or applicable listing exchange, amend the Plan to materially expand the class of
persons eligible to participate in the Plan. 
 (b) No Repricing Without Stockholder Approval. Notwithstanding anything in the Plan
to the contrary, and other than pursuant to Section 12, the Compensation Committee shall not without the approval of the Company’s stockholders (a) lower the Exercise Price per Share of an Option (or grant price of a SAR) after it is
granted, (b) cancel an Option or SAR in exchange for an Option or SAR with a lower Exercise Price, cash or another Grant (other than in connection with a Change in Control), or (c) take any other action with respect to an Option or SAR
that would be treated as a repricing under the rules and regulations of the principal U.S. national securities exchange on which the Shares are listed. 

  
 17 

 (c) Termination of Plan. The Plan shall terminate on May 3, 2031, unless the
Plan is terminated earlier by the Board or is extended by the Board. 
 (d) Termination and Amendment of Outstanding Grants. A
termination or amendment of the Plan that occurs after a Grant is made shall not materially impair the rights of a Grantee unless the Grantee consents or unless the Compensation Committee acts under Section 16(f) above. The termination of the
Plan shall not impair the power and authority of the Compensation Committee with respect to an outstanding Grant. Whether or not the Plan has terminated, an outstanding Grant may be terminated or amended under Section 16(f) above or may be
amended by agreement of the Company and the Grantee consistent with the Plan. 

  
 18gecc-ex101_20.htm

Exhibit 10.1

 

 

GREAT ELM CAPITAL CORP.

THE SUBSIDIARY GUARANTORS FROM TIME TO TIME PARTY HERETO

AND

CITY NATIONAL BANK

LOAN, GUARANTEE AND SECURITY AGREEMENT

 

 

PRSNL.12453

 

 

 

 

This LOAN, GUARANTEE AND SECURITY AGREEMENT dated as of May 5, 2021 is entered into by and among CITY NATIONAL BANK (“Bank”), GREAT ELM CAPITAL CORP., a Maryland corporation (“Borrower”) and the Subsidiaries of Borrower from time to time party hereto (each, a “Subsidiary Guarantor” and collectively, the “Subsidiary Guarantors”).

RECITALS

Borrower wishes to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrower.  This Agreement sets forth the terms on which Bank will advance credit to Borrower, and Borrower will repay the amounts owing to Bank.

AGREEMENT

The parties agree as follows:

1.DEFINITIONS AND CONSTRUCTION.

1.1Definitions.  As used in this Agreement, the following terms shall have the following respective definitions:

“A/R Facility” means any interest in accounts receivables which any Loan Party acquires either directly or indirectly through a participation or sub-participation, including any specialty finance participations of the Loan Parties.

“Advance” or “Advances” means a cash advance or cash advances under the Revolving Facility.

“Advance Request Date” means the date on which Borrower delivers to Bank a Loan Advance/Paydown Request Form in substantially the form of Exhibit B in connection with Borrower’s request for an Advance in accordance with Section 2.1(a).

“Affiliate” means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors, and partners, and members.

“Anti-Corruption Laws” means the FCPA and all other applicable laws and regulations or ordinances concerning or relating to bribery, money laundering or corruption in any jurisdiction in which any Loan Party or any of their respective Subsidiaries or Affiliates is located or is doing business.

“Anti-Money Laundering Laws” means the applicable laws or regulations in any jurisdiction in which any Loan Party or any of their respective Subsidiaries or Affiliates is located or is doing business that relates to money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto.

“Applicable Law” means, with respect to any Person or property of such Person, all existing and future laws, rules, regulations (including temporary and final income tax 

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regulations), statutes, treaties, codes, ordinances, permits, certificates, orders, licenses of and interpretations by any Governmental Authority applicable to such Person (including, without limitation, predatory lending laws, usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations “B” and “Z”, the Servicemembers Civil Relief Act of 2003 and state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code and all other consumer credit laws and equal credit opportunity and disclosure laws) and applicable judgments, decrees, injunctions, writs, awards or orders of any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.

“Approved Dealer” means Markit Partners, Loan Pricing Corp. or any other nationally recognized loan pricing service or nationally recognized broker/dealer that is reasonably acceptable to Bank.

“Asset Coverage” means, as of any date of determination “asset coverage” (as understood under the Investment Company Act), as determined in accordance with the terms and requirements of the Investment Company Act, including Sections 6(f), 18 and 61(a)(1) thereof, and otherwise in accordance with GAAP.

“Bank Asset Coverage” means, as of any date of termination, the result of (i) the sum of (x) the Value of all Portfolio Investments in the name of the Loan Parties and (y) the total amount of cash on deposit in the Collateral Accounts or any other account in the name of the Loan Parties that is subject to a Control Agreement, in each case, excluding the direct proceeds of any Advances hereunder divided by (ii) the total Credit Extensions. 

“Bank Expenses” means all: reasonable costs or expenses (including reasonable documented attorneys’ fees and expenses) incurred in connection with the preparation, negotiation, administration, and enforcement of the Loan Documents; and Bank’s reasonable attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.

“Base LIBOR Rate” means, with respect to each Advance, a rate per annum, rounded upwards, if necessary, to the nearest 1/16 of 1.00%, equal to the rate of interest which is identified and normally published by Bloomberg Professional Service page USD-LIBOR-BBA (BBAM) as the offered rate for loans in Dollars for the applicable Interest Period; provided that, if the LIBOR Rate shall be less than 1.00%, such rate shall be deemed 1.00% for purposes of this Agreement.  The rate is set by the ICE Benchmark Administration or any successor determining administrator as of 11:00 a.m. (London time) on the second Eurodollar Business Day preceding the first day of each Interest Period.  If Bloomberg Professional Service (or another nationally-recognized rate reporting source acceptable to the Bank) no longer reports such rate or Bank determines in good faith that the rate so reported no longer accurately reflects the rate available to Bank in the London Interbank Market or if such index no longer exists or if page USD-LIBOR-BBA (BBAM) no longer exists or accurately reflects the rate available to Bank in the London Interbank Market, “LIBOR” shall be determined by reference to such other comparable 

3

 

 

 

 

publicly available service for displaying eurodollar rates as may be selected by Bank in its discretion.

“Base Rate” means the greater of (a) the rate most recently publicly announced by Bank at its principal office in Los Angeles, California as its “Prime Rate” and (b) the LIBOR Rate for a one month Interest Period on such day plus 1.00%.

“Base Rate Advance” means Advances the rate of interest applicable to which is based upon the Base Rate.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230. 

“Bonds” means any High Yield Securities.

“Borrower’s Books” means all of Borrower’s books and records including: ledgers; records concerning Borrower’s assets or liabilities, business operations or financial condition; and all computer programs, tape files, and the equipment containing such information.

“Borrowing Base” means at any time an amount equal to: 

(i) 65 percent (65%) of the aggregate Value of the Eligible Portfolio Investments provided by the Loan Parties in accordance with Section 6.3(d) that are First Lien Loans or First Lien Bonds, in each case that are Broadly Syndicated Portfolio Investments that are not High Leverage Loans, plus 

(ii) 40 percent (40%) of the aggregate Value of the Eligible Portfolio Investments provided by the Loan Parties in accordance with Section 6.3(d) that are First Lien Loans or First Lien Bonds, in each case that are Broadly Syndicated Portfolio Investments that are High Leverage Loans plus 

(iii) 55 percent (55%) of the aggregate Value of the Eligible Portfolio Investments provided by the Loan Parties in accordance with Section 6.3(d) that are First Lien Loans that are Middle Market Loans plus

(iv) 35 percent (35%) of the aggregate Value of the Eligible Portfolio Investments provided by the Loan Parties in accordance with Section 6.3(d) that are Second Lien Loans that are Broadly Syndicated Portfolio Investments plus 

(v) 20 percent (20%) of the aggregate Value of the Eligible Portfolio Investments provided by the Loan Parties in accordance with Section 6.3(d) that are Second Lien Loans that are Middle Market Loans plus

(vi) 35 percent (35%) of the aggregate Value of the Eligible Portfolio Investments provided by the Loan Parties in accordance with Section 6.3(d) that are Bonds (other than First Lien Bonds that are Broadly Syndicated Portfolio Investments) plus 

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(vii) 40 percent (40%) of the aggregate Value of the Eligible Portfolio Investments provided by the Loan Parties in accordance with Section 6.3(d) that are DIP Loans plus 

(viii) 80 percent (80%) of the aggregate Value of the Eligible Portfolio Investments provided by the Loan Parties in accordance with Section 6.3(d) that are A/R Facilities included in accordance with clause (j) of the definition of “Eligible Portfolio Investments” plus 

(ix) 40 percent (40%) of the aggregate Value of the Eligible Portfolio Investments provided by the Loan Parties in accordance with Section 6.3(d) that are A/R Facilities that are included in accordance with clause (k) of the definition of “Eligible Portfolio Investments” plus 

(x) 30 percent (30%) of the aggregate Value of the Eligible Portfolio Investments provided by the Loan Parties in accordance with Section 6.3(d) that are Preferred Equity; 

provided that: (i) the portion of the Borrowing Base attributable to Eligible Portfolio Investments that are Second Lien Loans shall not exceed 15% of the Borrowing Base, (ii) the portion of the Borrowing Base attributable to Eligible Portfolio Investments that are Bonds shall not exceed 15% of the Borrowing Base (other than First Lien Bonds that are Broadly Syndicated Portfolio Investments), (iii) the portion of the Borrowing Base attributable to Eligible Portfolio Investments that are Second Lien Loans and Bonds (other than First Lien Bonds that are Broadly Syndicated Portfolio Investments) shall not exceed 25% of the Borrowing Base in the aggregate, (iv) the portion of the Borrowing Base attributable to Eligible Portfolio Investments that are Preferred Equity shall not exceed $3,500,000, (v) the advance rate applicable to that portion of the Value of the Eligible Portfolio Investments issued by a single portfolio company exceeding 15% of the aggregate Value of all Eligible Portfolio Investments included in the Borrowing Base (for the avoidance of doubt, the calculation of Value for purposes of this sub-clause shall be made without taking into account any advance rate), shall be 0%, (vi) the advance rate applicable to the aggregate Value of all Eligible Portfolio Investments in their entirety shall be 0% at any time when the Borrowing Base is composed entirely of Eligible Portfolio Investments issued by fewer than 10 Eligible Obligors in the aggregate, (vii) the portion of the Borrowing Base attributable to Eligible Portfolio Investments that are not First Lien Loans that are Broadly Syndicated Portfolio Investments, First Lien Bonds that are Broadly Syndicated Portfolio Investments, First Lien Loans that are Broadly Syndicated High Leverage Loans or A/R Facilities included in accordance with clause (j) of the definition of “Eligible Portfolio Investments” shall not exceed 50% of the Borrowing Base in the aggregate and (viii) the portion of the Borrowing Base attributable to Eligible Portfolio Investments in the “Oil, Gas & Consumable Fuels” S&P industry classification group shall not exceed 12.5% of the Borrowing Base in the aggregate. 

“Borrowing Base Certificate” is a borrowing base certificate in form attached hereto as Exhibit C.

“Borrowing Base Portfolio Investments” means Eligible Portfolio Investments that are included in the Borrowing Base.

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“Broadly Syndicated Portfolio Investment” means, any First Lien Loan or First Lien Bond or Second Lien Loan (a)(i) that is a broadly syndicated commercial loan or bond, (ii) that is not (and cannot by its terms become) subordinate in right of payment (excluding, for the avoidance of doubt, subordination of the applicable lien on the assets of any Obligor in the case of a Second Lien Loan) to any obligation of the Obligor in any bankruptcy, reorganization, insolvency, moratorium or liquidation proceedings, (iii) that is secured by a pledge of collateral, which security interest is validly perfected and first or second priority, as applicable under Applicable Law (subject to Liens described in clause (c) of the definition of Permitted Liens), (iv) with respect to which Borrower determines in good faith that the value of the collateral securing such Loan or Bond (or the enterprise value of the underlying business) on or about the time of origination equals or exceeds the outstanding principal balance of such Loan or Bond plus the aggregate outstanding balances of all other loans or bonds of equal or higher seniority secured by the same collateral, (v) in the case of a First Lien Loan, that has an Issue Size of $250,000,000 or greater and (vi) that has at least one bid-side quote provided by an Approved Dealer or (b) that is otherwise approved by Bank in its sole discretion as a “Broadly Syndicated Portfolio Investment”.

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of New York or the New York Stock Exchange are authorized or required to close or any day on which dealings in U.S. dollar deposits are not carried on in the London interbank market. 

“CFC” has the meaning assigned to such term in the definition of “Excluded Equity”.

“CFC Holdco” has the meaning assigned to such term in the definition of “Excluded Equity”.

“Change in Control” shall mean (i) with respect to Borrower, a transaction in which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) (but excluding any employee benefit plan and/or Person acting as the trustee, agent or other fiduciary or administrator therefor) shall have acquired “beneficial ownership” (as defined under Rule 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group acting in concert shall be deemed to have “beneficial ownership” of all securities that such person or persons have the right to acquire, whether such right is exercisable immediately or only after the passage of time, directly or indirectly, of stock or other equity interests or any interest convertible into any such interest in Borrower), directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of over 50% or more of the voting power for the election of directors of Borrower, other than any such acquisition by one or more Permitted Holders and (ii) with respect to any Subsidiary Guarantor, the failure of Borrower to own and control, directly or indirectly, all of the stock or other equity interests of such Subsidiary Guarantor (except pursuant to a transaction permitted hereunder). 

“Charter Documents” means with respect to any entity, in each case to the extent applicable thereto, its certificate or articles of incorporation or organization, its bylaws or operating agreement, its partnership agreement, all other formation and/or governing documents, and all voting agreements and similar arrangements applicable to any of its authorized shares of 

6

 

 

 

 

capital stock, and any other arrangements relating to the control or management of any such entity (whether existing as corporation, a partnership, a limited liability company or otherwise).

“Closing Date” means the date of this Agreement.

“Code” means the New York Uniform Commercial Code.

“Collateral” is defined in Section 4.1(a).

“Collateral Account” is defined in Section 6.6(a). 

“Compliance Certificate” means a certificate in substantially the form attached as Exhibit D.

“Condition to Borrowing Material Adverse Effect” means (a) a material and adverse effect on the business, operations, assets, or financial condition of the Loan Parties, taken a whole, (b) a material and adverse effect on the ability of the Loan Parties, taken as a whole, to perform their payment obligations under the Loan Documents or (c) a material and adverse effect on the material rights and remedies (taken as a whole) of Bank under the Loan Documents; provided, that a Material Adverse Effect solely under clauses (a) or (b) above shall not include: (i) any event or condition resulting from or relating to changes or developments in the economy, financial markets or employment markets; (ii) changes in political conditions, including any acts of war or terrorist activities; (iii) effects of weather, meteorological or geological events; (iv) changes in general national, regional or local economic or financial conditions unless any such impacts the parties to this Agreement in a disproportionate manner relative to other similar companies operating in the United States; (v) effects of international, national, regional or local epidemics or pandemics (including from COVID-19) or (vi) any change, financial or otherwise, to the business, affairs or operations of Bank or any of its affiliates.

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards, or merchant services issued or provided for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.

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“Control Agreement” means any control agreement, in form and substance reasonably satisfactory to Bank, executed and delivered by Borrower or any Subsidiary Guarantor, Bank and the applicable bank or securities intermediary, as applicable, with respect to a deposit account or securities account.

“Continuation/Conversion Notice” means a request for continuation or conversion of a Loan as set forth in Section 2.1(b), substantially in the form of Exhibit E attached hereto.

“Credit Extension” means each Advance or any other extension of credit by Bank for the benefit of Borrower hereunder.

“Daily Balance” means the amount of the Obligations owed at the end of a given day.

“DIP Loan” means any Loan (i) with respect to which the related Obligor is a debtor‐in‐possession as defined under the Bankruptcy Code, (ii) which has the priority allowed pursuant to Section 364 of the Bankruptcy Code and (ii) the terms of which have been approved by a court of competent jurisdiction (the enforceability of which is not subject to any pending contested matter or proceeding).

“Dollars” means, and the conventional “$” signifies, the lawful currency of the United States.

“EBITDA” has the meaning set forth in the applicable Obligor’s loan or credit agreement relating to its Loan.

“Eligible Portfolio Investments” means Portfolio Investments, (i) that comply with all of the Loan Parties’ representations and warranties to Bank set forth in Section 5.3, (ii) that are either First Lien Loans, Second Lien Loans, Middle Market Loans, Bonds, DIP Loans, A/R Facilities or Preferred Equity and (iii) unless otherwise agreed to by Bank in writing, that satisfy each of the following conditions as of the date the corresponding Portfolio Investment is added to the Borrowing Base and at each other date of determination: 

(a)such Portfolio Investment has been originated, purchased or otherwise acquired by such Loan Party in the ordinary course of business;

(b)such Portfolio Investment is denominated and payable in Dollars;

(c)such Portfolio Investment is evidenced by a credit agreement or other underlying agreement containing an express promise to pay (except in the case of any Preferred Equity);

(d)with respect to First Lien Loans and First Lien Bonds that are Broadly Syndicated Portfolio Investments, (i) such Loan or Bond has a Value that is greater than or equal to 80% of the par value thereof, (ii) such Loan or Bond has a Moody’s public rating or a public rating by S&P and such public ratings are higher than or equal to “Caa1” by Moody’s or higher than or equal to “CCC+” by S&P and (iii) such Loan or Bond contains a Net Total Leverage 

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Ratio of less than or equal to 7.5x as of any Relevant Test Period; provided that any such Loan or Bond shall cease to be an Eligible Portfolio Investment at such time as (i) the Loan or Bond has a Value that is less than 60% of the par value thereof, (ii) such Loan or Bond has a Moody’s public rating that is lower than “Caa2” or a public rating by S&P that is lower than “CCC” or (iii) a Specified Obligor Event of Default has occurred with respect thereto; 

(e)with respect to First Lien Loans that are Broadly Syndicated Portfolio Investments that are High Leverage Loans, such Loan (i) has a Value that is greater than or equal to 80% of the par value thereof and (ii) such Loan has a Moody’s public rating or a public rating by S&P and such public ratings are higher than or equal to “Caa1” by Moody’s or higher than or equal to “CCC+” by S&P; provided that any such Loan shall cease to be an Eligible Portfolio Investment at such time as (i) the Loan has a Value that is less than 60% of the par value thereof, (ii) such Loan has a Moody’s public rating that is lower than “Caa2” or a public rating by S&P that is lower than “CCC” or (iii) a Specified Obligor Event of Default has occurred with respect thereto;

(f)with respect to First Lien Loans and Second Lien Loans that are Middle Market Loans, (i) such Loan has a Value that is greater than or equal to 80% of the par value thereof, (ii) such Loan contains a Net Total Leverage Ratio of less than or equal to 7.0x as of the Relevant Test Period most recently ended prior to the date of such Portfolio Investment being included in the Borrowing Base and (iii) if rated, such Loan has a public rating from Moody’s that is higher than or equal to “Caa1” or from S&P that is higher than or equal to “CCC+”; provided that any such Loan shall cease to be an Eligible Portfolio Investment at such time as (i) the Loan has a Value that is less than 60% of the par value thereof, (ii) if rated, such Loan has a Moody’s public rating that is lower than “Caa2” or a public rating by S&P that is lower than “CCC”, (iii) as of any Relevant Test Period, the Loan contains a Net Total Leverage Ratio of greater than 9.0x or (iv) a Specified Obligor Event of Default has occurred with respect thereto;

(g)with respect to Second Lien Loans that are Broadly Syndicated Portfolio Investments, (i) such Loan has a Value that is greater than or equal to 75% of the par value thereof, (ii) such Loan has a Moody’s public rating or a public rating by S&P and such public ratings are higher than or equal to “Caa1” by Moody’s or higher than or equal to “CCC+” by S&P and (iii) such Loan contains a Net Total Leverage Ratio of less than or equal to 7.0x as of the Relevant Test Period most recently ended prior to the date of such Portfolio Investment being included in the Borrowing Base; provided that any such Loan shall cease to be an Eligible Portfolio Investment at such time as (i) the Loan has a Value that is less than 40% of the par value thereof, (ii) such Loan has a Moody’s public rating that is lower than “Caa2” or a public rating by S&P that is lower than “CCC” or (iii) a Specified Obligor Event of Default has occurred with respect thereto;

(h)with respect to any Bond (other than any First Lien Bonds that are Broadly Syndicated Portfolio Investments but including, for the avoidance of doubt, any Second Lien Bonds), (i) such Bond has a Value that is greater than or equal to 80% of the par value thereof, (ii) such Bond has an Issue Size that is greater than $250,000,000 and (iii) such Bond has a Moody’s public rating or a public rating by S&P and such public ratings are higher than or equal to “Caa1” by Moody’s or higher than or equal to “CCC+” by S&P; provided that such Bond shall cease to be an Eligible Portfolio Investment at such time as (i) the Bond has a Value that is less 

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than 40% of the par value thereof, (ii) such Bond has a Moody’s public rating that is lower than “Caa2” or a public rating by S&P that is lower than “CCC” or (iii) a Specified Obligor Event of Default has occurred with respect thereto; 

(i)with respect to any DIP Loans, (i) such Loan has a Value that is greater than or equal to 80% of the par value thereof and (ii) if rated, such Loan has a public rating from Moody’s that is higher than or equal to “Caa1” or from S&P that is higher than or equal to “CCC+”; provided that any such Loan shall cease to be an Eligible Portfolio Investment at such time as (i) the Loan has a Value that is less than 60% of the par value thereof, (ii) if rated, such Loan has a Moody’s public rating that is lower than “Caa2” or a public rating by S&P that is lower than “CCC” or (iii) a Specified Obligor Event of Default has occurred with respect thereto;

(j)with respect to A/R Facilities the Obligor of which has a public rating from Moody’s that is higher than or equal to “Baa3” or from S&P that is higher than or equal to “BBB-”, such A/R Facility has a Value that is greater than or equal to 80% of the par value thereof; provided that any such A/R Facility shall cease to be an Eligible Portfolio Investment at such time as (i) the A/R Facility has a Value that is less than 60% of the par value thereof, (ii) the Obligor of such A/R Facility has a Moody’s public rating that is lower than “Baa3” or a public rating by S&P that is lower than “BBB-” or (iii) a Specified Obligor Event of Default has occurred with respect thereto; 

(k)with respect to A/R Facilities the Obligor of which has a public rating (i) from Moody’s that is less than “Baa3” but higher than or equal to “B2” or (ii) from S&P that less than “BBB-” higher than or equal to “BB”, such A/R Facility has a Value that is greater than or equal to 80% of the par value thereof ; provided that any such A/R Facility shall cease to be an Eligible Portfolio Investment at such time as (i) the A/R Facility has a Value that is less than 60% of the par value thereof, (ii) the Obligor of such A/R Facility has a Moody’s public rating that is lower than “B2” or a public rating by S&P that is lower than “BB” or (iii) a Specified Obligor Event of Default has occurred with respect thereto;

(l)with respect to any Preferred Equity, (i) such Preferred Equity has a Value that is greater than or equal to 75% of the par value thereof and (ii) if rated, such Preferred Equity or the applicable Obligor has a public rating from Moody’s that is higher than or equal to “Caa1” or from S&P that is higher than or equal to “CCC+” ; provided that any such Preferred Equity shall cease to be an Eligible Portfolio Investment at such time as (i) the Preferred Equity has a Value that is less than 75% of the par value thereof, (ii) if rated, such Preferred Equity or the applicable Obligor has a Moody’s public rating that is lower than “Caa2” or a public rating by S&P that is lower than “CCC”, (iii) such Preferred Equity is no longer traded on an exchange or (iv) an event of default has occurred and is continuing with respect to any insolvency, bankruptcy or reorganization of the applicable Obligor after giving effect to any applicable cure period;

(m)such Portfolio Investment does not constitute a purpose credit advanced for the acquisition of margin stock;

(n)such Portfolio Investment has been pledged to Bank as Collateral and Bank has a perfected security interest in such Portfolio Investment;

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(o)such Portfolio Investment is not a Portfolio Investment that, on or after the date such Portfolio Investment was added to the Borrowing Base, has been modified by such Loan Party in any of the following ways without Bank’s consent: (i) increasing the principal amount of the commitment, (ii) reducing in the rate of interest by more than 25%, (iii) waiving, deferring or extending any scheduled payment date of principal or interest for a period greater than (x) five (5) Business Days beyond any applicable grace period related thereto or (y) in the case of any forbearance or similar action, one fiscal quarter over the term of the underlying facility, (iv) extending the final maturity date or (v) releasing of any collateral securing such Portfolio Investment; 

(p)such Portfolio Investment does not provide the related Obligor with any right of rescission, set-off, counterclaim or defense, including the defense of usury;

(q)such Portfolio Investment does not contain confidentiality restrictions that would prohibit Bank from accessing all necessary information with regards to such Portfolio Investment so long as Bank has agreed to maintain the confidentiality of such information and to comply with customary and market confidentiality obligations;

(r)the Obligor with respect to such Portfolio Investment is an Eligible Obligor;

(s)such Portfolio Investment does not contravene in any material respect any Applicable Law except to the extent that non-compliance with any Applicable Law would not reasonably be expected, in Bank’s commercially reasonable judgment, to result in a Material Adverse Effect on such Portfolio Investment;

(t)such Portfolio Investment is eligible to be sold to such Loan Party and to have a security interest therein granted to Bank;

(u)all consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given in connection with the making, acquisition, transfer or performance of such Portfolio Investment by such Loan Party have been duly obtained, effected or given and are in full force and effect;

(v)such Portfolio Investment is not a charged-off loan and has not been placed on “non-accrual status” by such Loan Party in accordance with the internal accounting and valuation policies of such Loan Party in effect as of the Closing Date; 

(w)except in the case of any Preferred Equity that constitutes a Portfolio Investment, the maximum term to maturity of such Portfolio Investment shall not exceed 10 (ten) years from any Advance Request Date; and 

(x)except with respect to Preferred Equity that constitutes a Portfolio Investment, such Portfolio Investment (i) is not an equity security and (ii) has not been converted or exchanged into an equity security at any time on or after the date it is included as part of the Collateral.

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For purposes of determining any ratings requirement set forth herein, (i) the rating shall be based on the lower of the S&P and Moody’s rating, in the event that the ratings by S&P and Moody’s are not equivalent and (ii) in the event that there is only one rating by S&P or Moody’s, then such rating shall apply.

“Eligible Governmental Obligor” means any Obligor with respect to an A/R Facility that is a United States Governmental Authority or a federal, state or local government entity of the United States and which has a public rating from Moody’s that is higher than or equal to “Baa3” or from S&P that is higher than or equal to “BBB-”; provided that (a) such rating shall be based on the lower of the S&P and Moody’s rating, in the event that the ratings by S&P and Moody’s are not equivalent and (b) in the event that there is only one rating by S&P or Moody’s, then such rating shall apply. 

“Eligible Obligor” means, as of the date the Portfolio Investment related to such Obligor is added to the Borrowing Base, any Obligor under a Portfolio Investment that: 

(a)is a business organization (and not a natural person) duly organized and validly existing under the laws of its jurisdiction of organization;

(b)except in the case of an Eligible Governmental Obligor, is either a legal operating entity or holding company;

(c)has not entered into its respective Portfolio Investment primarily for personal, family or household purposes;

(d)except in the case of an Eligible Governmental Obligor, is not a Governmental Authority or a federal, state or local government entity, is not a Governmental Authority;

(e)is not an Affiliate of any Loan Party or its officers, employees or agents (provided, that no person shall be deemed to be an Affiliate of a Loan Party solely by reason of control by a common financial sponsor);

(f)such Obligor is domiciled in the United States; provided that up to twenty percent (20%) of the aggregate outstanding balance of all Eligible Portfolio Investments may have Obligors that reside in Canada or the United Kingdom; and

(g)except in the case of an Eligible Governmental Obligor, is not a federal, state or local government entity or any department, agency, or instrumentality.

“Equipment” means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which any Loan Party has any interest.

“Eurocurrency Reserve Requirement” means the sum (without duplication) of the rates (expressed as a decimal) of reserves (including, without limitation, any basic, marginal, supplemental, or emergency reserves) that are required to be maintained by banks during the Interest Period under any regulations of the Federal Reserve Board, or any other 

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governmental authority having jurisdiction with respect thereto, applicable to funding based on so-called “Eurocurrency Liabilities”, including Regulation D (12 CFR 224).

“Eurodollar Business Day” means any Business Day on which major commercial banks are open for international business (including dealings in Dollar deposits) in New York, New York and London, England.

“Event of Default” means any one or more of the events specified in Article 8.

“Excluded Account” means (i) any trust accounts, escrow accounts and other fiduciary accounts, (ii) withholding tax deposit accounts, (iii) payroll, healthcare and other employee wage and benefit accounts, (iv) zero balance accounts and (v) any payment, disbursement or other account containing a balance, individually of less than $25,000 and together with the balances of all other such accounts, of less than $100,000.

“Excluded Collateral” means (a) assets (including equity interests) to the extent the pledge thereof or the grant of security interests therein is prohibited by applicable law, rule or regulation or would require the consent of any Governmental Authority, (b) any permit, license, contract, agreement, state or local franchises, charters and authorizations to which any Loan Party is a party to the extent that the collateral assignment thereof or the creation of a security interest therein would constitute a breach of the terms of such permit, license, contract or agreement, or would permit the relevant Governmental Authority or unaffiliated third party to terminate such permit, license, contract or agreement, except the Collateral expressly shall include any proceeds of any of the foregoing assets; provided that, the foregoing exclusions of clause (b) shall cease to be so excluded (i) to the extent such described prohibition or restriction is, or would be (in the case of after-acquired property or changes to applicable law), rendered ineffective under Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction (or any successor provision) or any other applicable law or principles of equity (as determined by an applicable court); or (ii) if such Loan Party has obtained all of the consents of such Governmental Authority or such third party to such license, contract or agreement necessary for the collateral assignment of, or creation of a security interest in, such permit, license, contract, agreement, state or local franchises, charters or authorizations; provided further that, immediately upon the ineffectiveness, lapse or termination of any such term in any such permit, license, contract, agreement, state or local franchises, charters or authorizations, the Collateral shall include, and such Loan Party shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (c) equity interests in any Subsidiary to the extent the pledge thereof to Bank is not permitted by the terms of such Subsidiary’s organizational documents or third party contractual restriction; (d) Excluded Equity; (e) all leasehold interests in real property; (f) any motor vehicle, aircraft, property and other assets that are, in each case, covered by a certificate of title or ownership, except to the extent perfection of a security interest therein can be perfected solely by the filing of UCC financing statements; (g) any assets or property if the grant of a security interest or Lien in or over such assets or property hereunder could result in a material and adverse tax consequence as reasonably determined by the Borrower in good faith in consultation with Bank; (h) any intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law; provided, that, at such time a 

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verified statement of actual use of any such Trademark is filed with the United States Patent and Trademark Office, the trademark application shall immediately cease to be Excluded Collateral; and (i) any assets or property that the Borrower and Bank shall have determined in their reasonable discretion to treat as Excluded Collateral for purposes hereof on account of the cost, burden or consequences of granting a security interest or Lien in or over such assets or property hereunder being excessive in relation to the practical benefit to Bank of the security to be afforded thereby.

“Excluded Equity” means that portion of the outstanding equity interests of any Subsidiary that (A) exceeds an aggregate of 65% of the equity interests entitled to vote (within the meaning of Treasury Regulation Section 1.956-2(c)(2) or any successor regulation thereto) and 100% of such non-voting equity interests of each Subsidiary that is (x) a “controlled foreign corporation” (as defined under Section 957(a) of the Internal Revenue Code) the dividends or “deemed dividends” of which are not entitled to the dividends received deduction under Section 245A of the Internal Revenue Code (each, a “CFC”), or (y) a Subsidiary substantially all of the assets of which (for U.S. federal income tax purposes) consist of equity interests (or equity interests and indebtedness) of one or more CFCs (each, a “CFC Holdco”) or (B) is a direct or indirect Subsidiary of a CFC or CFC Holdco, in each case, whether now owned or hereafter acquired and which may be issued and outstanding at any time and from time to time. 

“Excluded Subsidiary” means any direct or indirect Subsidiary of the Borrower (a) that is any Person to the extent the guaranty of the Guaranteed Obligations from such Subsidiary is not permitted by the terms of such Person’s organizational documents or applicable law or regulation or unaffiliated third party contractual restriction, (b) that is a CFC, a CFC Holdco or a direct or indirect Subsidiary of a CFC Holdco, (c) that is not a wholly-owned Subsidiary of the Borrower, (d) with respect to which Bank and the Borrower determine that the cost and/or burden of obtaining a guaranty of the Guaranteed Obligations from such Subsidiary outweighs the benefit to Bank, (e) that is an operating subsidiary (including Prestige Capital Finance LLC), joint venture entity, off balance sheet vehicle, any finance subsidiary established in connection with any issuance or incurrence of Indebtedness by such subsidiary or any special purpose vehicle or (f) that is a Subsidiary organized outside of the United States.  Notwithstanding the foregoing, in its sole discretion (with the prior written consent of Bank) the Borrower may elect to join any direct or indirect Subsidiary that would otherwise constitute an Excluded Subsidiary as a Guarantor hereunder, and upon such joinder such Subsidiary shall cease to be an “Excluded Subsidiary” for all purposes hereunder. 

“Excluded Taxes” means any of the following taxes imposed on or with respect to Bank or required to be withheld or deducted from a payment to Bank, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes in each case, that are (i) imposed as a result of Bank being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such tax (or any political subdivision thereof), or (ii) Other Connection Taxes, (b) U.S. federal withholding taxes imposed on amounts payable under any Loan Document pursuant to a law in effect on the date (i) Bank acquires such interest in the Loan Documents, or (ii) Bank changes its lending office, in each case, except to the extent that, pursuant to Section 2.6, amounts with respect to such Taxes were payable to Bank’s assignor (in the case of clause (i)) or Bank (in the case of clause (ii)), 

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immediately prior to such date, (c) Taxes attributable to Bank’s failure to comply with Section 2.6(d), and (d) any U.S. federal withholding taxes imposed under FATCA.

“Existing Indebtedness” means the Indebtedness of the Borrower listed on Schedule E hereto, including, without limitation, the GECC Notes, and in each case, any Permitted Refinancing thereof. 

“FATCA” means Sections 1471 through 1474 of the IRC (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the IRC, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the IRC.

“First Lien Bond” means any Bond that is recorded as a “first lien bond” on a Loan Party’s Books.

“First Lien Loan” means any Loan that is recorded as a “first lien loan” on a Loan Party’s Books.

“GAAP” means generally accepted accounting principles as in effect from time to time.

“GECC Notes”  means those certain 6.50% notes due 2022 in the aggregate principal amount of $32,600,000.

“Governmental Authority” means, with respect to any Person, any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any body or entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person.

“High Leverage Loan” means any Loan or Bond (i) the Obligor of which has a Net Total Leverage Ratio of greater than or equal to 7.5x as of any Relevant Test Period or (ii) for which a Net Total Leverage ratio is not otherwise available.

“High Yield Securities” means debt securities, in each case (a) issued by public or private issuers, (b) issued pursuant to an effective registration statement or pursuant to Rule 144A under the United States Securities Act of 1933, as amended (or any successor provision thereunder) and (c) that are not (i) cash equivalents or Loans or (ii) contractually subordinated in right of payment to other debt of the same Obligor (excluding, for the avoidance of doubt, subordination of the applicable lien on the assets of any Obligor in the case of a Second Lien Bond). 

“Increase” has the meaning set forth in Section 2.7.

“Increase Effective Date” has the meaning set forth in Section 2.7.

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“Increase Fee” has the meaning set forth in Section 2.4(d). 

“Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services (excluding current accounts payable in the ordinary course of business), including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations and (d) all Contingent Obligations.

“Indemnified Liabilities” is defined in Section 13.2.

“Indemnified Taxes” means (a) taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Borrower under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

“Indemnitee” is defined in Section 13.2. 

“Independent Valuation Provider” means any of Houlihan Capital Advisors, LLC, Duff & Phelps LLC, Murray, Devine and Company, Lincoln Advisors, Valuation Research Corporation, Alvarez & Marsal, Houlihan Lokey and Stout, or any other independent nationally recognized third-party appraisal firm selected by Borrower, and reasonably acceptable to Bank. 

“Insolvency Proceeding” means any proceeding commenced by or against any person or entity under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

“Interest Period” means, with respect to any LIBOR Rate Loan, the period commencing on the date such LIBOR Rate Loan is made (including the date a LIBOR Rate Advance is renewed as a LIBOR Rate Advance, which will be the last day of the expiring Interest Period) and ending on the date which is one (1), three (3) or six (6) months thereafter, as selected by the Borrower; provided, that no Interest Period may extend beyond the Revolving Loan Maturity Date.

 “Investment” means any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance or capital contribution to any Person.

“Investment Company Act” means the Investment Company Act of 1940, as amended from time to time.

 “IRC” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations thereunder.

“IRS” means the U.S. Internal Revenue Service.

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“Issue Size” means, with respect to any Portfolio Investment, the dollar value of the all committed Indebtedness of the applicable Obligor currently held or contemplated for purchase by a Loan Party; provided that any pari passu committed Indebtedness that is broadly syndicated with the same material terms and issued by the same Obligor pursuant to the same credit, loan agreement or equivalent underlying documentation may be included in the calculation of Issue Size in the reasonable determination of such Loan Party.

“IVP External Quoted Value” is defined in Section 6.9(a)(i). 

“IVP Tested Assets” is defined in Section 6.9(a)(i). 

“LIBOR Rate” means with respect to each day during each Interest Period pertaining to a LIBOR Rate Advance, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/16th of 1.00%):

Base LIBOR Rate

1 - Eurocurrency Reserve Requirement. 

 “LIBOR Rate Advance” means Advances the rate of interest applicable to which is based upon LIBOR Rate.

“Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

“Loan Documents” means, collectively, this Agreement, Control Agreements, any note or notes executed by Borrower and any other agreement entered into in connection with this Agreement, all as amended or extended from time to time.

“Loan Party” means the Borrower and each Subsidiary Guarantor.  For the avoidance of doubt, no Subsidiary of the Borrower the equity interests of which are pledged by the Borrower pursuant to the terms hereof shall constitute a “Loan Party” unless such entity is otherwise a Subsidiary Guarantor. 

“Loans” means loan assets in the Loan Parties’ loan portfolio.

“Material Adverse Effect” means (a) a material and adverse effect on the business, operations, assets, or financial condition of the Loan Parties, taken a whole, (b) a material and adverse effect on the ability of the Loan Parties, taken as a whole, to perform their payment and other material obligations under the Loan Documents or (c) a material and adverse effect on the rights and remedies (taken as a whole) of Bank under the Loan Documents or ability to realize upon the Collateral.

“Middle Market Loan” means a Loan that is not a Broadly Syndicated Portfolio Investment. 

“Negotiable Collateral” means all of each Loan Party’s present and future letters of credit of which it is a beneficiary, drafts, instruments (including promissory notes), 

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securities, documents of title, and chattel paper, and books and records relating to any of the foregoing.

“Net Assets” has the meaning set forth in Borrower’s consolidated balance sheet reflected in Borrower’s most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K filings as filed with the SEC. 

“Net Senior Leverage Ratio” with respect to any Loan, the Senior Debt to EBITDA ratio minus unrestricted cash of the applicable Obligor as of such date.

“Net Total Leverage Ratio” with respect to any Loan, the Total Debt to EBITDA ratio minus unrestricted cash of the applicable Obligor as of such date.

“Obligations” means all debt, principal, interest, Bank Expenses, Indemnified Liabilities and other amounts owed to Bank by any Loan Party pursuant to this Agreement or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from any Loan Party to others that Bank may have obtained by assignment or otherwise.

“Obligor” means (x) with respect to any Portfolio Investment (other than an A/R Facility), any Person or Persons obligated to make payments pursuant to or with respect to such Portfolio Investment, including any guarantor thereof and (y) with respect to any Portfolio Investment that constitutes an A/R Facility, any Person that constitutes the applicable underlying account debtor with respect to the accounts receivables comprising such A/R Facility.

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.

“Other Connection Taxes” means Taxes imposed as a result of a present or former connection between Bank and the jurisdiction imposing such Tax (other than connections arising from Bank having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Advance or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.6(f)).

“Patriot Act” means Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001). 

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“Periodic Payments” means all installments or similar recurring payments that Borrower may now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and Bank.

“Permitted Holders” shall mean Great Elm Group, Inc., a Delaware corporation, and its Affiliates.

“Permitted Indebtedness” means: 

(a)Indebtedness of any Loan Party in favor of Bank arising under this Agreement or any other Loan Document;

(b)trade payables incurred in the ordinary course of each Loan Party’s business; 

(c)the Existing Indebtedness ; 

(d)intercompany Indebtedness among (i) the Borrower and the Subsidiary Guarantors and (ii) the Borrower or any Subsidiary Guarantor and any Subsidiary that is not a Subsidiary Guarantor in an aggregate amount not to exceed $1,000,000 at any time outstanding and if requested by Bank, is subordinated to the Obligations on terms and conditions reasonably satisfactory to Bank;

(e)[reserved];

(f)Indebtedness in the ordinary course of business in respect of hedging agreements designed to hedge against fluctuations in interest rates or foreign currency exchange rates and not for speculative purposes;

(g)guarantees and other Contingent Obligations of any Loan Party in respect of Indebtedness otherwise permitted hereunder;

(h)[reserved];

(i)Indebtedness incurred in the ordinary course of business in connection with banking services, cash pooling arrangements, cash management and other similar arrangements consisting of netting arrangements and overdraft protections incurred in the ordinary course of business;

(j)Indebtedness consisting of the financing of insurance premiums in the ordinary course of business;

(k)Indebtedness representing any taxes, assessments or governmental charges to the extent such taxes are being contested in good faith and adequate reserves have been provided therefor;

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(l)Indebtedness of any Loan Party incurred in the ordinary course of business under any reimbursement agreement in respect of any letter of credit or similar credit support issued for the account of a Loan Party for the purpose of providing a deposit in connection with such Loan Party's obligations under any lease for real property;

(m)Permitted Unsecured Debt; 

(n)Subordinated Debt; and

(o)other Indebtedness in an aggregate principal amount not exceeding $250,000 at any time outstanding. 

“Permitted Investment” means: 

(a)Direct registered obligations of, and registered obligations the timely payment of principal and interest on which is fully and expressly guaranteed by, the United States of America or any agency or instrumentality of the United States of America whose obligations are expressly backed by the full faith and credit of the United States of America;

(b)demand and time deposits in, certificates of deposit of, trust accounts with, bankers’ acceptances issued by, or federal funds sold by any depository institution or trust company incorporated under the laws of the United States of America (including Bank) or any state thereof and subject to supervision and examination by federal and/or state banking authorities, in each case payable within 183 days after issuance;

(c)commercial paper maturing no more than one (1) year from the date of creation thereof and currently having rating of at least A-3 or P-3 from either S&P or Moody’s, respectively;

(d)certificates of deposit maturing no more than one (1) year from the date of investment therein issued by Bank;

(e)money market accounts; and

(f)Investments to the extent not prohibited by the Charter Documents.

“Permitted Liens” means the following: 

(a)Liens granted in favor of Bank; 

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(b)(i) Liens and deposits in connection with workers’ compensation, unemployment insurance, social security and other legislation affecting a Loan Party, (ii) banker’s Liens in the nature of rights of setoff arising in the ordinary course of business of a Loan Party, (iii) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings and for which the applicable Loan Party maintains adequate reserves (to the extent required by GAAP), (iv) Liens arising out of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as such judgments or awards do not constitute an Event of Default and (v) with respect to any property or other assets of an Obligor designated as collateral to secure repayment of any Portfolio Investment, Liens permitted by the applicable loan agreement, credit agreement or other equivalent underlying documentation with respect to such Portfolio Investment; 

(c)Liens securing indebtedness permitted under clauses (c), (f), (i), (l) or (o) of the definition of “Permitted Indebtedness”;

(d)carriers', warehousemen's, mechanics', materialmen's, repairmen's or other similar Liens arising in the ordinary course of business and securing obligations that are not due and payable or which are being contested;

(e)deposits (which may be secured on a first priority basis) to secure the performance of bids, trade contracts (other than for Indebtedness), leases (other than capital lease obligations), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business and not in connection with the borrowing of money;

(f)zoning restrictions, easements, leases, rights-of-way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of any Loan Party; and

(g)precautionary filings of financing statements under the Uniform Commercial Code of any applicable jurisdictions in respect of operating leases entered into by any Loan Party in the ordinary course of business.

“Permitted Refinancing” means Indebtedness constituting a refinancing or extension of Existing Indebtedness or Permitted Unsecured Debt that (a) has an aggregate outstanding principal amount not greater than the aggregate principal amount of the Indebtedness being refinanced or extended (plus all accrued but unpaid interest, fees, premiums and make-whole amounts due in connection with the refinancing and all fees and expenses payable in connection with such refinancing), (b) has a weighted average life to maturity (measured as of the date of such refinancing or extension) and maturity no shorter than that of the Indebtedness being refinanced or extended and no earlier than 6 months after the then applicable Revolving Maturity Date, (c) is not secured by a Lien on any assets of any Loan Party, (d) the obligors of which are the same as the obligors of the Indebtedness being refinanced or extended, and (e) other than with respect to 

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pricing terms and interest rates, is otherwise on terms no less favorable to the Loan Parties and their Subsidiaries, taken as a whole, than those of the Indebtedness being refinanced or extended.

“Permitted Unsecured Debt” means Indebtedness that (a) has a weighted average life to maturity (measured as of the date such Indebtedness is incurred) and maturity no earlier than 6 months after the then applicable Revolving Maturity Date and (b) is not secured by a Lien on any assets of any Loan Party.

“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.

“Pledged Equity” means all equity interests of each Subsidiary of each Loan Party to the extent required to be pledged by the terms of this Agreement, including, without limitation the equity interests listed on Schedule P hereto, including (a) such Loan Party’s interests in all profits, losses and other distributions in respect thereof; (b) all other payments due or to become due to such Loan Party in respect of such equity interests; (c) all of such Loan Party’s claims, rights, powers, privileges, authority, options, security interests, liens and remedies in respect of such equity interests; (d) all of such Loan Party’s rights to exercise and enforce every right, power, remedy, authority, option and privilege relating to such equity interests; and (e) all other property delivered in substitution for or in addition to any of the foregoing and all certificates and instruments representing or evidencing such other property received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; provided, however, the term “Pledged Equity” shall expressly exclude any “Excluded Collateral”.

 “Portfolio Investments” means Loans and other debt investments of the Loan Parties, Preferred Equity and any A/R Facility.

 “Preferred Equity” means, with respect to any Obligor at any particular time, any preferred equity securities issued by such Obligor to a Loan Party that is traded on an exchange and outstanding at such time.

“Relevant Test Period” means with respect to any Loan, the relevant test period for the calculation of Net Total Leverage Ratio, as applicable, for such Loan in accordance with the related underlying credit agreement, or, if no such period is provided for therein, (i) for Obligors delivering monthly financial statements, each period of the last 12 consecutive reported calendar months, and (ii) for Obligors delivering quarterly financial statements, each period of the last four consecutive reported fiscal quarters of the principal Obligor on such Loan; provided that with respect to any Loan for which the relevant test period is not provided for in the related underlying credit agreement, if an Obligor is a newly‐formed entity as to which 12 consecutive calendar months have not yet elapsed, “Relevant Test Period” shall initially include the period from the date of formation of such Obligor to the end of the twelfth calendar month or fourth fiscal quarter (as the case may be) from the date of formation, and shall subsequently include each period of the last 12 consecutive reported calendar months or four consecutive reported fiscal quarters (as the case may be) of such Obligor.

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“Required Portfolio Investment Documents” means the following:

(a)a copy of each transfer document or instrument relating to such Portfolio Investment evidencing the assignment of such Portfolio Investment to a Loan Party, if any;

(b)an undated transfer or assignment document or instrument relating to such Portfolio Investment, signed by a Loan Party, as assignor, but not dated and not specifying an assignee;

(c)a copy of the promissory note and loan or credit agreement or other equivalent underlying documentation relating to such Portfolio Investment; and

(d)such other documents in connection with such Portfolio Investment as Bank reasonably requests and that is available to the Loan Parties without undue hardship.

“Responsible Officer” means, with respect to any Person, any duly authorized officer or director of such Person or of the general partner, administrative manager or managing member of such Person with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any other duly authorized officer of such Person or of the general partner, administrative manager or managing member of such Person to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

“Restricted Payment” means (i) any dividend or other distribution, direct or indirect, on account of any class of equity interests of any Loan Party now or hereafter outstanding, except a dividend or distribution paid solely in interests of that class of equity interests or in any junior class of equity interests of such Loan Party; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any class of equity interests of any Loan Party now or hereafter outstanding, and (iii) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire equity interests of any Loan Party now or hereafter outstanding.

“Revolving Facility” means the facility hereunder pursuant to which Borrower may request Bank to issue Advances, as specified in Section 2.1(a) hereof.

“Revolving Line” means aggregate Credit Extensions from time to time of, as of the Closing Date, up to Twenty-Five Million Dollars ($25,000,000), as such amount may be increased from time to time pursuant to Section 2.7.

“Revolving Maturity Date” means  the earlier of (i) the date three (3) years after the Closing Date and (ii) May 15, 2022 if the GECC Notes are not refinanced on or prior to such date in accordance with the terms hereof.

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

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“Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government or (d) a person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.

“Sanctioned Person” means a person named on the list of Specially Designated Nationals maintained by OFAC.

“Sanctions” means individually and collectively, respectively, any and all economic sanctions, trade sanctions, financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes anti-terrorism laws and other sanctions laws, regulations or embargoes, including those imposed, administered or enforced from time to time by:  (a) the United States of America, including those administered by OFAC and the U.S. Department of State or (b) any other governmental authority with jurisdiction over Bank, any Loan Party or any of their respective Subsidiaries or Affiliates.

“SEC” means the U.S. Securities and Exchange Commission.

“Second Lien Bond” means any Bond that is valued as a “second lien bond” on a Loan Party’s Books in accordance with the internal accounting and valuation policies of the Loan Parties in effect as of the Closing Date.

“Second Lien Loan” means any Loan that is valued as a “second lien loan” on a Loan Party’s Books in accordance with the internal accounting and valuation policies of the Loan Parties in effect as of the Closing Date.

“Senior Debt” has the meaning set forth in the applicable Obligor’s loan or credit agreement relating to its Loan that has been delivered to Bank pursuant to the terms hereof.

“Specified Obligor Event of Default” means an event of default has occurred and is continuing with respect to (i) the required principal or interest payments (in the case of interest payments, after giving effect to any applicable cure period and/or extensions granted with respect thereto and permitted by the terms of this Agreement) or (ii) any insolvency, bankruptcy or reorganization of the applicable Obligor after giving effect to any applicable cure period. 

“Spread” means (a) in the case of any LIBOR Rate Advance, 3.50% per annum and (b) in the case of any Base Rate Advance, 2.00% per annum. 

“Subordinated Debt” means any debt incurred by any Loan Party that is subject to a subordination agreement on terms reasonably acceptable to Bank (and identified in writing as being such by Borrower and Bank); provided, no such debt shall mature any earlier than six (6) months following the Revolving Maturity Date. 

“Subsidiary” means, with respect to any Person (a) any corporation in which such Person, directly or indirectly through its Subsidiaries, owns more than 50% of the stock of any class or classes having by the terms thereof the ordinary voting power to elect a majority of 

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the directors of such corporation and (b) any partnership, association, joint venture, limited liability company, or other entity in which such Person, directly or indirectly through its Subsidiaries, has more than a 50% equity interest at the time.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Total Debt” has the meaning set forth in the applicable Obligor’s loan or credit agreement relating to its Loan that has been delivered to Bank pursuant to the terms hereof.

“Unquoted Investments” is defined in Section 6.9(a)(i). 

“Unused Line Fee” means, as of any date, the product of (a) the amount by which the Revolving Line exceeds the aggregate amount of Credit Extensions as of such date times (b) 0.50% per annum.

“Valuation Testing Date” is defined in Section 6.9(a)(i). 

“Value” means, with respect to any Eligible Portfolio Investment, the value thereof determined for purposes of this Agreement in accordance with Section 6.9(a)(i).

1.2Rules of Construction.

(a)All accounting terms not specifically defined herein shall be construed in accordance with GAAP and all calculations made hereunder shall be made in accordance with GAAP. When used herein, the terms “financial statements” shall include the notes and schedules thereto, if applicable.

(b)Defined terms may be used in the singular or the plural, as the context requires.

(c)All reference to any time means New York, New York time (unless expressly specified otherwise).

(d)References herein to Sections, Exhibits, Schedules and like references are to Sections, Exhibits, Schedules and the like in and to this Agreement unless otherwise expressly provided.

(e)References herein to any document, instrument, or agreement (i) shall include all exhibits, schedules, and other attachments thereto, (ii) shall include all documents, instruments, or agreements issued or executed in replacement thereof, to the extent permitted hereby or thereby, and (iii) shall mean such document, instrument, or agreement, or replacement thereof, as amended, supplemented, restated, or otherwise modified from time to time to the extent permitted hereby or thereby and in effect at any given time.

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(f)The words “include,” “includes” and “including” are deemed to be followed by the phrase “without limitation.”

(g)Unless the context in which it is used otherwise clearly requires, the word “or” has the inclusive meaning represented by the phrase “and/or.”

(h)All capitalized terms used herein with reference to the Collateral and defined in the Uniform Commercial Code (“UCC”) as adopted in the applicable jurisdiction from time to time shall have the meaning given therein unless otherwise defined herein.  To the extent the definition of any category or type of Collateral is expanded by any amendment, modification or revision to the UCC, such expanded definition will apply automatically as of the effective date of such amendment, modification or revision.

(i)With respect to any Person, the terms “knowledge” or “actual knowledge” shall mean such knowledge as such Person has or should have after conducting commercially reasonable due inquiry.

(j)References to any Person include that Person’s heirs, personal representatives, successors, trustees, receivers, and permitted assigns.

(k)Unless the context in which it is used otherwise clearly requires, all references to days, weeks and months mean calendar days, weeks and months.

2.LOAN AND TERMS OF PAYMENT.

2.1Credit Extensions

(a)Revolving Line.  Subject to and upon the terms and conditions of this Agreement, Borrower may request Advances in an aggregate outstanding amount not to exceed the lesser of (A) the Revolving Line or (B) the Borrowing Base.  Amounts borrowed pursuant to this Section may be repaid and reborrowed at any time prior to the Revolving Maturity Date.  Whenever Borrower desires an Advance, Borrower will, (1) by no later than (x) 12:00 pm on the Business Day that the Advance is to be made in the case of any Base Rate Advance and (y) 12:00 pm three Eurodollar Business Days prior to the proposed date of the Advance in the case of any LIBOR Rate Advance, (a) provide irrevocable notice thereof to Bank by electronic mail, facsimile transmission or telephone and (b) deliver to Bank a Loan Advance/Paydown Request Form in substantially the form of Exhibit B and (2) by no later than three (3) Business Days prior to the Business Day on which the Advance is to be made, deliver to Bank a Borrowing Base Certificate.  All Advances shall be in a minimum principal amount of $250,000 or a whole multiple of $100,000 in excess thereof (unless otherwise agreed by Bank).  Bank is authorized to make Advances under this Agreement, based upon written instructions received from a Responsible Officer or a designee of a Responsible Officer, or without instructions if in Bank’s reasonable discretion such Advances are necessary to meet Obligations which have become due and remain unpaid.  Bank shall be entitled to rely on any telephonic notice given by a person listed herein as a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance.  Bank will credit the amount 

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of Advances made under this Section 2.1(a) to the Collateral Account designated by Borrower in the Loan Advance/Paydown Request Form.  

(b)Conversion/Continuation.  The Borrower may elect from time to time to convert LIBOR Rate Advances to Base Rate Advances by giving Bank prior written notice of such election pursuant to a Continuation/Conversion Notice no later than 12:00 pm on the proposed conversion date; provided that any such conversion may only be made on the last day of an Interest Period with respect thereto unless Borrower pays any breakage costs incurred by Bank with respect thereto.  The Borrower may elect from time to time to convert Base Rate Advances to LIBOR Rate Advances by giving Bank prior written notice of such election pursuant to a Continuation/Conversion Notice no later than 12:00 pm at least three Business days prior to the proposed conversion date.  Any such Continuation/Conversion Notice shall specify the length of the initial Interest Period therefor.  The Borrower may continue any LIBOR Rate Advance as such upon the expiration of the then current Interest Period with respect thereto by giving Bank at least three Eurodollar Business Days’ prior written notice of such election pursuant to a Continuation/Conversion Notice; provided that if the Borrower shall fail to give any such Continuation/Conversion Notice, such Advances shall be automatically converted to a Base Rate Advance.  Each conversion and/or continuation of Advances made pursuant to this Section 2.1(b) shall be in minimum amounts of $250,000 and integral multiples of $100,000 in excess thereof and shall be irrevocable.  No Advance (or portion thereof) may be converted into, or continued as, a LIBOR Rate Advance with an Interest Period that ends after the Maturity Date and no outstanding Advance may be continued as, or be converted into, a LIBOR Advance when any Event of Default has occurred and is continuing. There shall not be more than five LIBOR Rate Advances outstanding at any one time. 

2.2Interest Rates, Payments, and Calculations.

(a)Interest Rate.  The Advances may from time to time be (i) a LIBOR Rate Advance, (ii) a Base Rate Advance or (iii) a combination thereof, as determined by the Borrower and notified to Bank in accordance with the term of this Agreement.  Each Advance that is a LIBOR Rate Advance shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the LIBOR Rate for such Interest Period plus the applicable Spread.  Each Loan that is a Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus the applicable Spread.  Interest shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to paragraph (b) below shall be payable on demand. Each determination of an interest rate by Bank pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower in the absence of manifest error.  

(b)Default Rate.  If any payment is not made within ten (10) Business Days after the date such payment is due, Bank shall notify Borrower.  All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to two (2.00%) percentage points per annum above the interest rate applicable immediately prior to the occurrence of the Event of Default.  

(c)Payments; Prepayments.  

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(i)Borrower promises to pay to Bank, in lawful money of the United States of America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to Borrower hereunder in accordance with the terms herein.  Borrower shall also pay interest on the unpaid principal amount of such Credit Extensions at rates in accordance with the terms hereof.  Interest as to any Base Rate Advance shall be due and payable on the first Business Day of each fiscal quarter during the term hereof and interest as to any LIBOR Rate Advance shall be due and payable on the last day of the applicable Interest Period; provided, that in the case of any Interest Period greater than three months in duration, interest shall be payable at three month intervals after the commencement of the applicable Interest Period and on the last day of such Interest Period.  Bank may, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit accounts and Bank shall provide Borrower prompt notice of any such charge.  Only if Borrower’s deposit accounts lack sufficient funds to pay such amounts when due, Bank shall charge such amounts against the Revolving Line, in which case those amounts shall thereafter accrue interest at the rate then applicable hereunder.  Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder.  Failure of Bank to draw interest, Bank Expenses, and Periodic Payments from Borrower’s deposit accounts in a timely manner shall not cause additional interest or penalties to accrue.  Notwithstanding anything to the contrary in this Agreement, on the Revolving Maturity Date, all Advances under this Section shall be immediately due and payable.  Borrower may prepay any Advances without penalty or premium.

(ii)Subject to Section 2.9(b), Borrower shall have the right, at any time and from time to time, to prepay the Advances without penalty or premium.  Borrower shall give Bank written notice prior to 12:00 pm at least one Business Day prior to any such prepayment with respect to Base Rate Advances and prior to 12:00 pm at least three (3) Eurodollar Business Days prior to any such prepayment with respect to LIBOR Rate Advances.  Each such prepayment shall be in an aggregate minimum amount of $250,000 and shall include interest accrued on the amount prepaid to, but not including, the date of payment in accordance with the terms hereof (or, in each case, such lesser amount constituting the amount of all Loans then outstanding).  

(iii)In the event that the amount of total Credit Extensions exceeds the Revolving Line, promptly (but in no event later than three (3) days) Borrower shall prepay Advances in such amounts as shall be necessary so that the amount of total Credit Extensions does not exceed the Revolving Line.  

(iv)In the event that at any time the amount of total Credit Extensions exceeds the Borrowing Base (a “Borrowing Base Deficiency”), promptly (but in no event later than fifteen (15) days), Borrower shall prepay the Advances and/or deposit cash into a Collateral Account so that any such deficiency is promptly cured.  

(d)Computation.  All interest chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty (360) day year (or a 365-day year or 366-day year, as the case may be, for Base Rate Advances) for the actual number of days elapsed.

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2.3Crediting Payments.  Prior to the occurrence and continuance of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation as Borrower specifies.  After the occurrence of an Event of Default, the receipt by Bank of any wire transfer of funds, check, or other item of payment shall be immediately applied to conditionally reduce Obligations, but shall not be considered a payment on account unless such payment is of immediately available federal funds or unless and until such check or other item of payment is honored when presented for payment.  Notwithstanding anything to the contrary contained herein, any wire transfer or payment received by Bank after 3:00 p.m.  shall be deemed to have been received by Bank as of the opening of business on the immediately following Business Day.  Whenever any payment to Bank under the Loan Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue and be payable for the period of such extension.

2.4Fees.  Borrower shall pay to Bank the following:

(a)Revolving Facility Fee.  A fully earned and non-refundable facility fee equal to Two Hundred Fifty Thousand Dollars ($250,000), which fee shall be due and payable on the Closing Date;

(b)Bank Expenses.  On the Closing Date, an amount equal to all Bank Expenses reasonably incurred and documented through the Closing Date.  After the Closing Date, Borrower shall pay Bank all reasonably incurred and documented Bank Expenses, including reasonable attorneys’ fees and expenses, as and when they become due.

(c)Commitment Fee.  On the fifth Business Day of each fiscal quarter, Borrower shall pay Bank a commitment fee in an amount equal to the result of the sum of the Unused Line Fee for each day during the immediately preceding fiscal quarter.  All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(d)Increase Fee.  On any Increase Effective Date, an increase fee (the “Increase Fee”) based on a percentage to be agreed between the Borrower and Bank at the time of the applicable increase multiplied by the maximum amount of the Revolving Line then in effect.

2.5Term.  This Agreement shall become effective on the Closing Date and, subject to Section 13.7, shall continue in full force and effect for so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions under this Agreement.  Notwithstanding the foregoing, Bank shall have the right to terminate its obligation to make Credit Extensions under this Agreement immediately upon the occurrence and during the continuance of an Event of Default with notice to Borrower; provided that no such notice shall be required upon the occurrence and during the continuance of an Event of Default under Section 8.5.

2.6Taxes.

(a)Any and all payments by or on account of any obligation of Borrower under any Loan Document shall be made without deduction or withholding for any 

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Taxes, except as required by Applicable Law.  If any Applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) Bank receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)Borrower shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of Bank timely reimburse it for the payment of, any Other Taxes.

(c)Borrower shall indemnify Bank, within ten (10) Business Days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by Bank or required to be withheld or deducted from a payment to Bank, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to Borrower by Bank shall be conclusive absent manifest error.

(d)Bank shall deliver to Borrower upon execution of this Agreement and at the time or times reasonably requested by Borrower, such properly completed and executed documentation reasonably requested by Borrower as will permit payments under the Loan Documents to be made without withholding or at a reduced rate of withholding (including, without limitation, a duly executed IRS Form W-9 or applicable IRS Form W-8 (together with all appropriate attachments) (or applicable successor form)).  In addition, Bank, if reasonably requested by Borrower, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by Borrower as will enable Borrower to determine whether Bank is subject to backup withholding or information reporting requirements.  Bank agrees that, if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrower of its legal inability to do so.  Notwithstanding anything to the contrary in the preceding three sentences, the completion, execution and submission of such documentation by Bank (other than an IRS Form W-9 or IRS Form W-8 together with all appropriate attachments (or applicable successor forms)) shall not be required to the extent Bank is not legally entitled to do so, or if in Bank's reasonable judgment such completion, execution or submission would subject Bank to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of Bank.

(e)If a payment made to Bank under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the IRC, as applicable), Bank shall deliver to Borrower, at the time or times prescribed by Applicable Law and at such time or times reasonably requested by the Borrower, such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation reasonably requested by Borrower as may be 

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necessary for Borrower to (i) comply with its obligations under FATCA and (ii) to determine (A) that Bank has complied with Bank’s obligations under FATCA or (B) the amount, if any, to that it is required deduct and withhold from such payment under FATCA.  Solely for purposes of this paragraph (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.  

(f)If Bank determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.6 (including by the payment of additional amounts pursuant to this Section 2.6), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (f) (plus any penalties or interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(g)If Bank requests compensation under this Section 2.6, or requires Borrower to pay any Indemnified Taxes or additional amounts to Bank or any Governmental Authority for the account of Bank pursuant to this Section 2.6, then Bank shall (at the request of Borrower) use reasonable efforts to designate a different lending office for funding or booking its Advances hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of Bank, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to this Section 2.6, in the future, and (ii) would not subject Bank to any unreimbursed cost or expense and would not otherwise be disadvantageous to Bank.  Borrower hereby agrees to pay all reasonable costs and expenses incurred by Bank in connection with any such designation or assignment.

(h)As soon as practicable after any payment of Taxes by Borrower to a Governmental Authority pursuant to this Section 2.6, Borrower shall deliver to Bank the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Bank.

(i)Each party’s obligations under this Section 2.6 shall survive any assignment of rights by, or the replacement of, Bank, and the repayment, satisfaction or discharge of all obligations under any Loan Document.

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(j)For purposes of this Section 2.6, the term “Bank” includes any assignee of an interest in the Loan Documents and the term “Applicable Law” includes FATCA.

2.7Increases.  Upon written notice to Bank, the Borrower may from time to time request to increase the Revolving Line in an aggregate amount not to exceed Twenty-Five Million Dollars ($25,000,000) (each such requested increase, an “Increase”).  Such written notice shall specify (i) the amount of the requested increase, which amount shall not be less than $1,000,000 and (ii) the time period within which Bank is requested to respond (which shall in no event be less than thirty (30) days from the date of delivery of such notice to Bank) and (iii) the requested effective date of such Increase (such date, the “Increase Effective Date”).  Bank shall not be obligated to provide any Increase, and it may decline such request in its sole discretion. If, and only if, Bank agrees to such Increase, then, upon Bank’s receipt of the Increase Fee in respect of such Increase and the satisfaction of such other terms and conditions as the Bank and the Borrower shall mutually agree, including but not limited receipt by Bank of a customary legal opinion, the Revolving Line shall automatically increase by an amount equal to such Increase on the Increase Effective Date.

2.8Inability to Determine Interest Rate.  

(a)Temporary Inability. Subject to Section 2.8(b) below (to the extent applicable), in the event, prior to commencement of any Interest Period relating to a LIBOR Rate Advance, Bank shall determine that: (A) deposits in Dollars (in the applicable amounts) are not being offered to it in the London Interbank Offered Rate market for such Interest Period, (B) by reason of circumstances affecting the London Interbank Offered Rate market adequate and reasonable methods do not exist for ascertaining LIBOR, (C) LIBOR as determined Bank will not adequately and fairly reflect the cost to Bank of funding its LIBOR Rate Advances for such Interest Period, or (D) the making or funding of LIBOR Rate Advances has become impracticable; then, in any such case, Bank shall promptly provide notice of such determination to the Borrower (which shall be conclusive and binding on it), and (x) any request for a LIBOR Rate Advance or for a conversion to or continuation of a LIBOR Rate Advance shall be automatically withdrawn and shall be deemed a request for a Base Rate Loan, (y) each LIBOR Rate Advance will automatically, on the last day of the then current Interest Period relating thereto, become a Base Rate Advance, and (z) the obligations of Bank to make LIBOR Rate Advances shall be suspended until Bank determines that the circumstances giving rise to such suspension no longer exist, in which event Bank shall so notify the Borrower

(b)Benchmark Replacement.  Notwithstanding anything to the contrary herein or in any other Loan Document if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, in connection with a Benchmark Transition Event, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark 

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Replacement Date, or in connection with an Early Opt-in Election, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 8:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Borrower without any amendment to this Agreement or any other Loan Document, or further action or consent of the Borrower, so long as Bank has not received, by such time, written notice of objection to such Benchmark Replacement from the Borrower.  

(c)Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, Bank will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of the Borrower.

(d)Notices; Standards for Decisions and Determinations. Bank will promptly notify the Borrower of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (d) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by Bank pursuant to this Section 2.8(b), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its sole discretion and without consent from the Borrower, except, in each case, as expressly required pursuant to this Section 2.8(b).

(e)Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or USD LIBOR) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by Bank in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then Bank may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then Bank may modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(f)Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a borrowing of LIBOR Rate Advances or any conversion to or continuation of LIBOR 

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Rate Advances to be made during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Advances.  During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Base Rate.

(g)Certain Defined Terms.  As used in this Section 2.8(b): 

“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (iv) of this Section 2.8(b).

“Benchmark” means, initially, USD LIBOR; provided that if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to USD LIBOR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (i) of this Section 2.8(b). 

“Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by Bank for the applicable Benchmark Replacement Date: (1) the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment; (2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment; (3) the sum of: (a) the alternate benchmark rate that has been selected by Bank as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for U.S. dollar-denominated syndicated or bilateral credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by Bank in its reasonable discretion. If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement: 

(1) for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by Bank: (a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor; (b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first 

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set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and 

(2) for purposes of clause (3) of the definition of “Benchmark Replacement,” the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Bank for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral credit facilities; 

provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by Bank in its reasonable discretion.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions and other technical, administrative or operational matters) that Bank decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Bank in a manner substantially consistent with market practice (or, if Bank decides that adoption of any portion of such market practice is not administratively feasible or if Bank determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as Bank decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark: (1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); (2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein; or (3) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the 

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Borrower, so long as Bank has not received, by 8:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Borrower, written notice of objection to such Early Opt-in Election from the Borrower.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark: (1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); (2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator for such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or (3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative. 

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with this Section 2.8(b) and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with this Section 2.8(b). 

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“Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

“Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by Bank in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for business loans; provided, that if Bank decides that any such convention is not administratively feasible for Bank, then Bank may establish another convention in its reasonable discretion.

“Early Opt-in Election” means, if the then-current Benchmark is USD LIBOR, the occurrence of: (1) a determination by Bank that at least five currently outstanding U.S. dollar-denominated syndicated or bilateral credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such credit facilities are identified in the notice to the Borrower described in clause (2) below and are publicly available for review), and (2) the joint election by Borrower and Bank that an Early Opt-in Election has occurred.

“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to USD LIBOR.

“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.

“Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is USD LIBOR, 11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not USD LIBOR, the time determined by Bank in its reasonable discretion.

“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.

“SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.

“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate). 

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“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

“Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body. 

“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment. 

“USD LIBOR” means the London interbank offered rate for U.S. dollars.

2.9Increased Costs; Breakage.  

(a)Increase Costs; etc. If after the Closing Date, the adoption of, or any change in, any applicable law, rule, or regulation, or any change in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or compliance by Bank (or its Affiliates) with any request, guideline, or directive (irrespective of whether having the force of law) of any governmental authority shall impose, modify, or deem applicable any reserve, special deposit, or similar requirement (including any such requirement imposed by the Federal Reserve Board, but excluding with respect to any LIBOR Rate Advance any such requirement included in the calculation of the LIBOR Rate, as applicable) against assets of, deposits with, or for the account of, or credit extended by, Bank (or its Affiliates) or shall impose on Bank (or its Affiliates) or the interbank eurodollar market any other condition affecting its LIBOR Rate Advances, as applicable, or its obligation to make LIBOR Rate Advances, as applicable, then, Bank may, by written notice given to the Borrower, require the Borrower to pay to Bank such additional amounts as shall compensate Bank for any such increased cost, reduction, loss, or expense (other than, in each case, (x) loss of profit and (y) Indemnified Taxes and Excluded Taxes) incurred by Bank in connection with the Advances.  Any such request for compensation by Bank under this Section 2.9 shall set forth the basis of calculation thereof and shall, in the absence of manifest error, be conclusive and binding for all purposes.  Notwithstanding anything herein to the contrary, (i) the issuance of any rules, regulations or directions under the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith after the date of this Agreement and (ii) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the US or foreign regulatory authorities shall, in each case, be deemed to be change in law, rule, regulation or guideline for purposes of Section 2.9 and the protection of Section 2.9 shall be available to Bank regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed, so long as it shall be customary for lenders or issuing banks affected thereby to comply therewith.

(b)Breakage.  The Borrower agrees to indemnify Bank and to hold Bank harmless from and to pay Bank on demand the amount of any liability, loss or expense arising from the reemployment of funds obtained by it or from fees payable to terminate the deposits from 

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which such funds were obtained (including reasonable fees and expenses of outside counsel) which Bank may sustain or incur as a consequence of (i) default by the Borrower in payment when due of the principal amount of or interest on any LIBOR Rate Advance, (ii) default by the Borrower in making a borrowing of, conversion into or continuation of LIBOR Rate Advances after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (iii) default by the Borrower in making any prepayment after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (iv) the making by the Borrower of a prepayment or conversion of LIBOR Rate Advances on a day which is not the last day of an Interest Period with respect thereto (including any prepayment required as a result of acceleration of the Loans).  Bank’s certificate as to such liability, loss or expense shall be deemed conclusive, absent manifest error.  This covenant shall survive the termination of this Agreement, the expiration of the Revolving Loan Commitment and the payment of all amounts payable hereunder.

3.CONDITIONS OF ADVANCES.

3.1Conditions Precedent to Initial Credit Extension.  The obligation of Bank to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance reasonably satisfactory to Bank, the following:

(a)this Agreement;

(b)a certificate with respect to incumbency and resolutions of Borrower, authorizing the execution and delivery of this Agreement;

(c)a UCC-1 Financing Statement reflecting Borrower as debtor and Bank as secured party;

(d)the Charter Documents of Borrower;

(e)a good standing certificate from the applicable Governmental Authority of Borrower’s jurisdiction of organization or formation, dated a recent date prior to the Closing Date;

(f)current Secretary of State reports indicating that except for Permitted Liens, there are no other security interests or Liens of record in the Collateral; 

(g)a legal opinion from Shearman & Sterling LLP, counsel to Borrower, and from Venable LLP, Maryland counsel to the Borrower; 

(h)a Beneficial Ownership Certification with respect to Borrower at least two (2) Business Days prior to the Closing Date; 

(i)payment of the fees and Bank Expenses then due specified in Section 2.4 hereof; 

(j)[reserved];

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(k)for at least five (5) Borrowing Base Portfolio Investments selected by Bank, copies of each of the Required Portfolio Investment Documents with respect thereto; 

(l)since December 31, 2020, there shall not have occurred a Material Adverse Effect; and

(m)such other documents, instruments, certificates and information as Bank may reasonably request. 

3.2Conditions Precedent to all Credit Extensions.  The obligation of Bank to make each Credit Extension, including the initial Credit Extension on the Closing Date, is further subject to the following conditions:

(a)receipt by Bank of (i) a Loan Advance/Paydown Request Form in accordance with Section 2.1(a) and (ii) a Borrowing Base Certificate signed by a Responsible Officer; 

(b)the representations and warranties contained in Section 5 shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality) on and as of the date of such Loan Advance/Paydown Request Form and on the effective date of each Credit Extension as though made at and as of each such date;

(c)no Default under Section 6.7, Section 8.1 or Section 8.5 or any Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit Extension; 

(d)no Borrowing Base Deficiency shall have occurred and be continuing, or would exist after giving effect to such Credit Extension; and

(e)since the Closing Date, no event shall have occurred that would reasonably be expected to have a Condition to Borrowing Material Adverse Effect upon the ability of any Loan Party to meet its obligations under this Agreement.

The making of each Credit Extension shall be deemed to be a representation and warranty by Borrower on the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2(b), (c), (d) and (e). 

4.CREATION OF SECURITY INTEREST.

4.1Grant of Security Interest.  As collateral security for the prompt payment and performance in full when due of all Obligations to Bank under this Agreement and the other Loan Documents (collectively, the “Secured Obligations”), each Loan Party hereby pledges to Bank and grants a continuing security interest in favor of Bank in all of such Loan Party’s right, title and interest in, to and under (in each case, whether now owned or existing, or hereafter acquired or arising) all accounts, payment intangibles, general intangibles, chattel paper, electronic chattel paper, instruments, deposit accounts, securities accounts, cash, cash equivalents, letter-of-credit rights, investment property, documents, equipment, fixtures, inventory, intellectual 

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property, software, supporting obligations, books and records pertaining to the Collateral, goods and all accessions and proceeds and products of the foregoing, including, without limitation:  (1) each Portfolio Investment, including, without limitation, those set forth on Exhibit A hereto as of the date hereof and the equity interests in each Subsidiary of such Loan Party (excluding, for the avoidance of doubt, Excluded Equity), (2) all of such Loan Party’s interests in each Collateral Account and, in each case, all investments, obligations, cash, cash equivalents, financial assets and other property from time to time credited thereto, (3) all underlying documentation relating to Portfolio Investments and all rights related to each such agreement and (4) all proceeds thereof, all accessions to and substitutions and replacements for, any of the foregoing, and all rents, profits and products of any thereof (collectively, the “Collateral”).  Notwithstanding anything contained in this Agreement to the contrary, the term “Collateral” shall not include any Excluded Collateral.  

4.2Perfection of Security Interest.  Each Loan Party authorizes Bank to file at any time financing statements, continuation statements, and amendments thereto that (i) describe the Collateral hereunder, and (ii) contain any other information required by the Code for the sufficiency of filing office acceptance of any financing statement, continuation statement, or amendment, including whether such Loan Party is an organization, the type of organization and any organizational identification number issued to such Loan Party, if applicable.  Any such financing statements may be filed by Bank at any time in any jurisdiction whether or not Revised Article 9 of the Code is then in effect in that jurisdiction.  Each Loan Party shall from time to time promptly endorse and deliver to Bank, at the reasonable request of Bank, all Negotiable Collateral and other documents that Bank may reasonably request, in form reasonably satisfactory to Bank, to perfect and continue perfection of Bank’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated under the Loan Documents.  Each Loan Party (or its agent or designee) shall have possession of the Collateral, except where expressly otherwise provided in (or not prohibited by) this Agreement or where Bank chooses to perfect its security interest by possession in addition to the filing of a financing statement.  Each Loan Party from time to time may deposit with Bank specific cash collateral to secure specific Obligations; each Loan Party authorizes Bank to hold such specific balances in pledge and to decline to honor any drafts thereon or any request by such Loan Party or any other Person to pay or otherwise transfer any part of such balances for so long as the specific Obligations are outstanding.

4.3Delivery of Additional Documentation Required.  Each Loan Party shall from time to time promptly execute and deliver to Bank, at the reasonable request of Bank, all Negotiable Collateral and all other documents that Bank may reasonably request, including, without limitation, Control Agreements in respect of applicable Collateral to the extent permitted by law, in each case in form reasonably satisfactory to Bank, to perfect and continue the perfection of Bank’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated under the Loan Documents.

4.4Right to Inspect.  Bank (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice, one time per calendar year during usual business hours (provided, that upon the occurrence and during the continuance of an Event of Default, no such limit shall apply to the number of inspection visits that may be made by Bank in any calendar year), to inspect each Loan Party’s books and records and to make copies thereof and to check, test, and appraise the Collateral in order to verify such Loan Party’s financial condition or the 

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amount, condition of, or any other matter relating to, the Collateral, in each case, at Borrower’s expense (but with such reimbursement obligation to extend only to the reasonable and documented out-of-pocket expenses of Bank).  

4.5Pledged Equity.  

(a)The Pledged Equity described on Schedule P (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement) constitutes (i) all of the equity interests of any Subsidiary owned by each Loan Party (other than Excluded Collateral), (ii) such Loan Party owns the percentage of the issued and outstanding equity interests of such Subsidiary indicated on Schedule P (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), and (iii) there is no other class of equity interests issued and outstanding of the Pledged Equity that is owned by any Loan Party except as set forth on Schedule P (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

(b)Any certificate representing Pledged Equity shall, on (i) the Closing Date (with respect to such certificates existing on such date, if any) and (ii) promptly upon receipt or acquisition by any Loan Party (with respect to such certificates received or acquired after the Closing Date, if any), in each case, other than such certificates representing Excluded Collateral), be delivered to and held by Bank (or its agent or designee as specified by Bank) and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed undated endorsements, instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to Bank; provided that no Loan Party shall be required to certificate (or be required to cause to be certificated) any such Pledged Equity as a result of this Section 4.5(b).

4.6Bank’s Liability for Collateral.  So long as Bank complies with its obligations, if any, under the Code, Bank shall not in any way or manner be liable or responsible for:  (a) the safekeeping of the Collateral, (b) any loss or damage to the Collateral occurring or arising in any manner or fashion from any cause, or (c) any diminution in the value of the Collateral.  All risk of loss, damage, or destruction of the Collateral shall be borne by the Loan Parties.

5.REPRESENTATIONS AND WARRANTIES.

Each Loan Party represents and warrants as follows:

5.1Due Organization and Qualification.  Such Loan Party is an entity, duly existing under the laws of the jurisdiction in which it is organized and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property requires that it be so qualified.

5.2Due Authorization; No Conflict; Binding Agreements.  The execution, delivery, and performance of the Loan Documents to which it is a party and the request for each Advance hereunder (in the case of Borrower) are within such Loan Party’s powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in such 

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Loan Party’s Charter Documents, nor will they violate or constitute an event of default under the documentation governing the Existing Indebtedness or any other material agreement to which any Loan Party is a party or by which such Loan Party is bound.  No Loan Party is in default of any payment obligation and no event of default has occurred and is continuing under any material agreement to which it is a party or by which it is bound.  This Agreement has been duly executed and delivered by each Loan Party and constitutes, and the other Loan Documents, when executed and delivered by each Loan Party, will constitute, the legal, valid, and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with their terms, except as the enforceability hereof or thereof may be affected by:  (a) bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting the enforcement of creditors’ rights generally, and (b) the limitation of certain remedies by certain equitable principles of general applicability.

5.3Collateral.  Each Loan Party has rights in or the power to transfer the Collateral, and its title to the Collateral is free and clear of Liens, except for Permitted Liens.  All Collateral is located solely with the applicable Loan Party or its applicable agent or designee or in the Collateral Account. Upon proper filing of UCC financing statements naming each Loan Party as debtor and Bank as secured party and describing the Collateral in appropriate form with the Secretary of State (or other appropriate filing office) of the jurisdiction of organization of such Loan Party (as applicable), together with the payment of any applicable filing fees, the Liens granted to Bank hereunder shall constitute valid and perfected Liens in the Collateral, prior to all other Liens (but subject to Permitted Liens), to the extent that a security interest therein may be perfected by filing a UCC financing statement pursuant to the Uniform Commercial Code in effect in such jurisdiction.

5.4No Prior Encumbrances.  Each Loan Party has good and marketable title to its property, free and clear of Liens, except for Permitted Liens.

5.5Charter Documents.  The Charter Documents are in full force and effect in the form presented to Bank as of the Closing Date or such date such Loan Party becomes a party thereto.

5.6Name; Location of Chief Executive Office.  No Loan Party has done business under any name other than that specified on the signature page hereof or any joinder documentation hereto. The chief executive office of each Loan Party is located at the address indicated in Section 10 hereof or in the applicable joinder documentation hereto.

5.7Litigation.  There are no actions or proceedings pending by or against any Loan Party before any court or administrative agency in which an adverse decision could have a Material Adverse Effect.

5.8No Material Adverse Change in Financial Statements.  All financial statements related to Borrower that Bank has received from Borrower fairly present in all material respects the Loan Parties’ financial condition as of the date thereof and the Loan Parties’ results of operations for the period then ended.  There has not been a material adverse change in the financial condition of the Loan Parties, taken as a whole, since the date of the most recent of such financial statements or any other interim financial information submitted to Bank.

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5.9Solvency, Payment of Debts.  The Loan Parties on a consolidated basis are solvent and able to pay their debts (including trade debts) as they mature.

5.10Regulatory Compliance.  No Loan Party is required to register as an “investment company” under the Investment Company Act.  No Loan Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System).  No Loan Party has violated any statutes, laws, ordinances or rules applicable to it except as would not have a Material Adverse Effect.

5.11Taxes.  To the best of its knowledge and belief, each Loan Party has filed or caused to be filed all U.S. federal and state income tax returns and all other material tax returns required to be filed, and has paid all Taxes reflected therein as due and payable, and all other material Taxes imposed on such Loan Party or its properties, except Taxes that are being contested in good faith by appropriate proceedings and are adequately reserved against (to the extent required by GAAP) by such Loan Party.  No Loan Party is not a party to any Tax sharing or similar agreement (other than an agreement or contract the principal subject matter of which is not Taxes) with any Person that is not a Loan Party.

5.12Subsidiaries.  No Loan Party owns any stock, partnership interest or other equity securities of any Person, except for Permitted Investments.

5.13Government Consents.  Each Loan Party has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary for the continued operation of such Loan Party’s business as currently conducted, the failure to obtain which could have a Material Adverse Effect.

5.14Full Disclosure.  No representation, warranty or other statement made by any Loan Party in any certificate or written statement furnished to Bank contains any materially untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading as of the date of such statements.

5.15Beneficial Ownership Regulations; PATRIOT Act; Sanctions.  

(a)The information included in the Beneficial Ownership Certification (as updated from time to time) is true and correct in all respects.

(b)Each Loan Party is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto and (b) the Patriot Act.  No part of the proceeds of the Loans made hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”). 

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(c)No Loan Party or any of its Subsidiaries nor, to the actual knowledge of any Loan Party, any of the Loan Parties’ Subsidiaries, any director, officer, employee, agent or Affiliate of any Loan Party or its Subsidiaries (a) is a Sanctioned Person or Sanctioned Entity, (b) has any assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities.  Each Loan Party and each of its Subsidiaries has implemented and maintains in effect policies and procedures designed to ensure compliance with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws.  Each Loan Party and each of its Subsidiaries, and to the knowledge of each such Person, each director, officer, employee, agent and Affiliate of each Loan Party and each of its Subsidiaries, is in compliance with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws.  No proceeds of any Loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity, or otherwise used in any manner that would result in a violation of any Sanction, Anti-Corruption Law or Anti-Money Laundering Law by any Person (including Bank or other individual or entity participating in any transaction).

5.16Collateral Account.  As of the Closing Date, the Collateral Account held at U.S. Bank National Association is the only securities account or deposit account in the name of Borrower and there is no deposit account or securities account in the name of Borrower, in each case other than any Excluded Account.

6.AFFIRMATIVE COVENANTS.

Each Loan Party shall do all of the following:

6.1Good Standing.  Each Loan Party shall maintain (i) its existence in its jurisdiction of organization, (ii) its qualification and good standing in each jurisdiction in which it is required to do so and (iii) in force all licenses, approvals and agreements necessary for the conduct of its business as currently conducted, in each case of clauses (ii) and (iii) under this Section 6.1, except as would not reasonably be expected to have a Material Adverse Effect.

6.2Government Compliance.  Each Loan Party shall comply with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which would not reasonably be likely to have a Material Adverse Effect.  Notwithstanding the foregoing, each applicable Loan Party shall comply with all SEC reporting requirements applicable to it.

6.3Financial Statements, Reports, Certificates.  Borrower shall deliver to Bank: 

(a)as soon as available, but in any case within five (5) Business Days of the end of each month, or at the request of the Bank, on each Friday of each calendar week (or such other day as Bank may agree in its sole discretion), and with each request for an Advance in accordance with Section 2.1(a), a Borrowing Base Certificate signed by a Responsible Officer;

(b)as soon as available, but in any case within forty-five (45) days after the end of each month, a borrower servicer report prepared consistent with the past practices of 

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the Borrower (it being understood and agreed that the borrower service report provided by Borrower to the Bank prior to the Closing Date was prepared consistent with the past practices of the Borrower), signed by a Responsible Officer;

(c)concurrently with delivery of the Quarterly Report and the Annual Report pursuant to Section 6.3(f), a Compliance Certificate signed by a Responsible Officer;

(d)as soon as available, but in any case within sixty (60) days after the end of each fiscal quarter and within one hundred twenty (120) days after the end of each fiscal year, an internally prepared quarterly or annual, as applicable, portfolio review package with respect to the Borrowing Base Portfolio Investments, in form and substance reasonably satisfactory to Bank (it being understood and agreed that (x) the portfolio review package provided by Borrower to the Bank prior to the Closing Date is in form and substance reasonably satisfactory to Bank and (y) the portfolio review package filed with the applicable Quarterly Report on Form 10-Q, together with any associated report of an Independent Valuation Provider, is in form and substance reasonably satisfactory to Bank), reflecting, among other things, the Value of such Portfolio Investments in accordance with Section 6.9; 

(e)promptly upon the occurrence thereof, notice to Bank (i) of any material changes to the Loan Parties’ credit policy or risk rating system, or (ii) of any risk rating changes within the Loan Parties’ portfolio as reflected in servicer reports of the Loan Parties as could reasonably be expected to have a Material Adverse Effect;

(f)as soon as available, but in any case within (i) sixty (60) days after the last day of each fiscal quarter, the Quarterly Report on Form 10-Q as filed with the SEC and (ii) one hundred twenty (120) days after the last day of each fiscal year, the Annual Report on Form 10-K filings as filed with the SEC; provided that, any such Form publicly available on EDGAR shall be deemed delivered to Bank without any further action taken by Borrower provided that Borrower provides Bank notice of the availability of such Forms on EDGAR; 

(g)notwithstanding any of the foregoing, if applicable, copies of all statements, reports and notices sent or made available generally on EDGAR shall be deemed delivered to Bank without any further action taken by Borrower but subject to any notice required under Section 6.3(f); 

(h)promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against any Loan Party that would reasonably be expected to have a Material Adverse Effect;

(i)promptly upon the occurrence thereof, written notice of any default under the Existing Indebtedness or any documentation governing any Permitted Unsecured Debt or Subordinated Debt, in each case relating to Indebtedness in an aggregate principal amount in excess of $1,000,000;

(j)promptly upon the occurrence of an Event of Default, upon the request of Bank, all original Required Portfolio Investment Documents (or such lesser amount as the Bank may request in its sole discretion); and

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(k)such other financial information as Bank may reasonably request from time to time.

6.4Charter Documents.  Each Loan Party shall cause its Charter Documents to remain in full force and effect in the form presented to Bank on the Closing Date, except for amendments that do not materially and adversely affect the right or ability to satisfy such Loan Party’s obligations under this Agreement.

6.5Taxes.  Each Loan Party shall make due and timely payment of all material federal, state, and local Taxes (including withholding Taxes) required of it by law; provided that no Loan Party shall be required to make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is adequately reserved against (to the extent required by GAAP) by such Loan Party.

6.6Bank Accounts.

(a)Collections.  Borrower shall at all times maintain a securities account and/or deposit account (or accounts) into which all principal, interest and fees with respect to Portfolio Investments will be deposited in accordance with clause (b)(i), below, which securities account or deposit account (or accounts), as the case may be, shall at all times be subject to a Control Agreement if not maintained with Bank (each, a “Collateral Account” and collectively, the “Collateral Accounts”).  

(b)Collateral Accounts.

(i)Borrower shall direct each Obligor under the Portfolio Investments (and each depository institution where payments with respect to the Portfolio Investments are on deposit) to remit payments with respect to the Portfolio Investments to the Collateral Accounts.  It will be considered an Event of Default if Borrower fails to direct each Obligor under the Portfolio Investments (and each depository institution where payments with respect to the Portfolio Investments are on deposit) to remit payments with respect to the Portfolio Investments to the Collateral Accounts.  

(ii)In the event any Loan Party receives any payment on account of any Portfolio Investment directly from any Obligor, such Loan Party shall, within one (1) Business Day after receipt of such payment, remit such payments directly to a Collateral Account.

(iii)Upon the occurrence and during the continuance of an Event of Default, Bank may direct the applicable bank to liquidate each Collateral Account and any other account of any Loan Party that is subject to a Control Agreement and remit the proceeds thereof to Bank for application to the Obligations.

(iv)If an Event of Default has occurred and is continuing or a Borrowing Base Deficiency has occurred and is continuing, no Loan Party will transfer any funds in any Collateral Account or any other account of such Loan Party that is subject to a Control Agreement to any other deposit account or securities account or otherwise dispose of any such 

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funds without Bank’s prior written consent, other than payments made to Bank to pay or prepay the Obligations.

(v)To the extent any Loan Party opens a deposit account or securities account after the Closing Date that is not an Excluded Account, such Loan Party, the depository institution, and Bank shall execute and deliver a Control Agreement with respect thereto within thirty (30) days thereof.  For the avoidance of doubt, while the Obligations are outstanding, no Loan Party shall not transfer any cash or other assets held in a Collateral Account to any such other account until such time as a Control Agreement is in effect.

(vi)Borrower shall execute and deliver a Control Agreement with respect to each Collateral Account in existence on the Closing Date within thirty (30) days thereof.   

6.7Financial Covenants.  Borrower shall as of the last day of each fiscal quarter, maintain the following financial covenants and ratios:

(a)Minimum Net Assets.  Net Assets of not less than sixty-five million dollars ($65,000,000), tested as of the last day of each fiscal quarter of Borrower.

(b)Minimum Asset Coverage.  Asset Coverage equal to or greater than one hundred sixty percent (160%), tested as of the last day of each fiscal quarter of Borrower.

(c)Minimum Bank Asset Coverage.  Bank Asset Coverage equal to or greater than three hundred percent (300%), tested as of the last day of each fiscal quarter of Borrower.

6.8Further Assurances.  

(a)At any time and from time to time each Loan Party shall execute and deliver such further instruments and take such further action as may reasonably be requested by Bank to effect the purposes of this Agreement.

(b)Within 30 days (or such later date as Bank may determine in its sole discretion) of the formation of any new Subsidiary of Borrower (other than an Excluded Subsidiary), Borrower shall: (a) cause such Subsidiary to deliver to Bank a joinder to this Agreement as well as appropriate financing statements, all in form and substance reasonably satisfactory to Bank, (b) cause the equity interests of such Subsidiary (to the extent not constituting Excluded Collateral) to be pledged to Bank in accordance with the terms hereof and supplement Schedule P hereto and (c) provide to Bank all other documentation, including one or more opinions of counsel reasonably satisfactory to Bank, which in its reasonable discretion is appropriate with respect to the execution and delivery of the applicable documentation referred to above.  Any document, agreement or instrument executed or issued pursuant to this Section 6.8 shall be a Loan Document.

6.9Portfolio Valuation and Diversification Etc.  

(a)Portfolio Valuation, Etc. 

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(i)Determination of Values. Borrower will conduct reviews of the value to be assigned to each of the Loan Parties’ Eligible Portfolio Investments as follows:

(A)Quoted Investments External Review. With respect to Eligible Portfolio Investments traded in an active and orderly market for which market quotations are readily available (“Quoted Investment”), Borrower shall, not less frequently than once each calendar week determine the market value of such Quoted Investments that are included in the Borrowing Base, which shall, in each case, be determined in accordance with one of the following methodologies as selected by Borrower (each such value, an “External Quoted Value”): 

(w)in the case of public and 144A securities, the average of the most recent bid prices as determined by at least two Approved Dealers selected by Borrower with respect to such public and 144A securities or if only one bid price is available, such bid price,

(x)in the case of Broadly Syndicated Portfolio Investments, the average of the most recent bid prices as determined by at least two Approved Dealers selected by Borrower or if only one bid price is available, such bid price, 

(y)in the case of any Quoted Investment traded on an exchange, the closing price for such Eligible Portfolio Investment most recently posted on such exchange; and 

(z)solely to the extent clause (x) hereto does not apply, in the case of any other Quoted Investment, the fair market value thereof as determined by an Approved Dealer.

(B)Unquoted Investments External Review. With respect to Eligible Portfolio Investments that are included in the Borrowing Base for which market quotations are not readily available, including any Middle Market Loans, DIP Loans and A/R Facilities (“Unquoted Investments”):

(x)No less frequently than quarterly (each a “Valuation Testing Date”), an Independent Valuation Provider shall test the values as of such Valuation Testing Date of Unquoted Investments (such selected assets, the “IVP Tested Assets” and such value, the “IVP External Unquoted Value”) provided, that the fair value of such Unquoted Investments tested by the Independent Valuation Provider as of any IVP Testing Date shall be at least 100% of the aggregate value of the Eligible Portfolio Investments constituting Unquoted Investments included in the Borrowing Base as of such Valuation Testing Date for the prior four-fiscal quarter period (in each case, the determination of fair value for such percentage thresholds shall be based off of the last determination of value of the Unquoted Investments pursuant to this Section 6.9). Borrower shall promptly provide to Bank 

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copies of all reports prepared pursuant to this Section 6.9(a)(i)(B) by the Independent Valuation Provider. 

(y)To the extent clause (x) above doesn’t apply, the cost of such Unquoted Investment until such time as the IVP External Unquoted Value of such Unquoted Investment is determined in accordance with clause (x) above (“Borrower Tested Assets”).

For the avoidance of doubt, Unquoted Investments that are part of the Collateral but not included in the Borrowing Base shall not be subject to testing under this Section 6.9(a)(i)(B).

(C)Actions Upon a Borrowing Base Deficiency. If, based upon any quarterly review, Borrower determines that a Borrowing Base Deficiency exists, then Borrower shall, promptly and in any event within one Business Day, deliver a Borrowing Base Certificate reflecting the new amount of the Borrowing Base and shall take the actions, and make prepayments to the extent required by Section 2.2(c)(ii). 

(D)Failure to Determine Values. If Borrower shall fail to determine the value of any Eligible Portfolio Investment as at any date pursuant to the requirements (but subject to the exclusions) of the foregoing sub-clauses (A) or (B), then the “Value” of such Eligible Portfolio Investment as at such date shall be deemed to be zero (until such Value is determined).

(ii)Supplemental Testing of Values; Valuation Dispute Resolutions. Notwithstanding the foregoing, Bank shall have the right, solely for purposes of the Borrowing Base, to request in its reasonable discretion and no more than two (2) times per calendar year, any Unquoted Investment included in the Borrowing Base with a value assigned by Borrower (other than IVP Tested Assets as of the most recent IVP Testing Date) to be independently valued by an Independent Valuation Provider for purposes of the Borrowing Base. Subject to Section 6.9(a)(iii)(C) below, the costs of any such valuation shall be at the expense of Borrower.  If (x) the value of any Borrower Tested Asset is less than the value determined by the Independent Valuation Provider pursuant to this clause, then the value determined pursuant to Section 6.9(a)(i) shall continue to be used as the “Value” for purposes of this Agreement and (y) if the value of any Borrower Tested Asset determined pursuant to Section 6.9(a)(i) is greater than the value determined by the Independent Valuation Provider and the difference between such values is (1) less than or equal to 5% of the value determined pursuant to Section 6.9(a)(i), then the value determined pursuant to Section 6.9(a)(i) shall become the “Value” of such Portfolio Investment, (2) greater than 5% and less than or equal to 20% of the value determined pursuant to Section 6.9(a)(i), then the “Value” of such Portfolio Investment shall become the average of the value determined pursuant to Section 6.9(a)(i) and the value determined by the Independent Valuation Provider, and (3) greater than 20% of the value determined pursuant to Section 6.9(a)(i), then Borrower and Bank shall retain an additional third-party appraiser and, upon the completion of such appraisal, the “Value” of such Portfolio Investment shall become the average of the three valuations (with the average of the value 

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of the Independent Valuation Provider and value determined pursuant to Section 6.9(a)(i) to be used until the third value is obtained).

(iii)Generally Applicable Valuation Provisions.

(A)The Value of any Portfolio Investment for which the Independent Valuation Provider’s value is used shall be the midpoint of the range (if any) determined by the Independent Valuation Provider. The Independent Valuation Provider shall apply a recognized valuation methodology that is commonly accepted in Borrower’s industry for valuing Portfolio Investments of the type being valued and held by the Obligors. Other procedures relating to the valuation will be reasonably agreed upon by Bank and Borrower.

(B)All valuations shall be on a settlement-date basis. For the avoidance of doubt, the value of any Portfolio Investments determined in accordance with any provision of this Section 6.9 shall be the Value of such Portfolio Investment for purposes of this Agreement until a new Value for such Portfolio Investment is subsequently determined in good faith in accordance with this Section 6.9.

(C)The reasonable and documented out-of-pocket costs of any valuation reasonably incurred by Bank under this Section 6.9 shall be at the expense of Borrower.

(D)The foregoing valuation procedures shall only be required to be used for purposes of calculating the Borrowing Base and related concepts and shall not be required to be utilized by Borrower for any other purpose, including, without limitation, the delivery of financial statements or valuations required under ASC820 or the Investment Company Act.

(E)The Independent Valuation Provider shall be instructed to conduct its tests in a manner not disruptive to the business of Borrower in any material respect.  Bank shall notify Borrower of its receipt of the written final results of any such test within ten (10) Business Days after its receipt thereof and shall provide a copy of such results and the related report to Borrower within ten (10) Business Days after Borrower’s request.

(b)Investment Company Diversification Requirements. Borrower (together with its subsidiaries to the extent required by the Investment Company Act) will at all times comply in all material respects with the portfolio diversification and similar requirements set forth in the Investment Company Act applicable to business development companies, except for any such noncompliance that would not reasonably be likely to have a Material Adverse Effect. 

(c)Regulated Investment Company.  Borrower will at all times maintain its status as a regulated investment company for U.S. federal income tax purposes. 

7.NEGATIVE COVENANTS.

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No Loan Party will do any of the following:

7.1Dispositions.  Convey, sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”) all or any part of its assets or other property, other than Transfers of securities, assets, cash and Equipment in the ordinary course of such Loan Party’s business; provided that (i) no Loan Party will Transfer any Borrowing Base Portfolio Investment (including to any Subsidiary that is not a Subsidiary Guarantor) if (a) a Borrowing Base Deficiency would result therefrom as demonstrated in a Borrowing Base Certificate delivered on or prior to the proposed Transfer date, (b) Borrower is not in compliance with the covenant set forth in Section 6.7(c) on a pro forma basis, (c) any Default under Section 8.1 or 8.5 has occurred and is continuing or (d) any Event of Default has occurred and is continuing or would result therefrom and (ii) no Loan Party will Transfer any other assets or property (other than any Borrowing Base Portfolio Investment, which shall be subject to the immediately preceding clause (i)) (including to any Subsidiary that is not a Subsidiary Guarantor) if (a) a Borrowing Base Deficiency would result therefrom as demonstrated in a Borrowing Base Certificate delivered on or prior to the proposed Transfer date, (b) Borrower is not in compliance with the covenant set forth in Section 6.7(c) on a pro forma basis or (c) any Default under Section 8.1 or 8.5 has occurred and is continuing.

7.2Change in Business; Change in Control or Executive Office.  Engage in any business other than the business purposes permitted by such Loan Party’s Charter Documents and any business substantially similar or related thereto (or incidental thereto); or cease to conduct business materially in the manner permitted by such Loan Party as of the Closing Date or the date such Loan Party becomes a party to this Agreement; or without Bank’s prior written consent, suffer or permit a Change in Control; or without twenty (20) days’ prior written notification to Bank, relocate its chief executive office or state of formation; or without Bank’s prior written consent, change the date on which its fiscal year ends.

7.3Mergers or Acquisitions.  Merge or consolidate with or into any other business organization, or acquire all or substantially all of the capital stock or property of another Person, other than Permitted Investments (including without limitation in connection with the making or consummation of a Permitted Investment).

7.4Indebtedness.  Create, incur, assume or be or remain liable with respect to any Indebtedness other than Permitted Indebtedness.

7.5Encumbrances.  Except to the extent permitted pursuant to Section 7.1, create, incur, assume or suffer to exist any Lien with respect to the Collateral other than Permitted Liens; or assign or otherwise convey any right to receive income other than Permitted Liens or other transfers permitted under this Agreement; or agree with any Person other than Bank not to grant a security interest in, or otherwise encumber, any of the Collateral in favor of Bank other than Permitted Liens. 

7.6Investments.  Directly or indirectly acquire or own, or make any Investment in or to any Person other than Permitted Investments; provided that if an Event of Default has occurred and is continuing or a Borrowing Base Deficiency has occurred and is continuing, Borrower shall not make any cash Investment in any subsidiary that is not a Subsidiary Guarantor. 

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7.7Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of such Loan Party except for transactions that are in the ordinary course of such Loan Party’s business (including entering into any investment advisory agreements or administration agreements with such Affiliates), upon fair and reasonable terms that are no less favorable to such Loan Party than would be obtained in an arm’s length transaction with a non-affiliated Person, other than transactions between or among Loan Parties and Excluded Subsidiaries.

7.8Existing Indebtedness; Permitted Unsecured Debt; Subordinated Debt.  Make any payment (a) in respect of any Existing Indebtedness or any Permitted Unsecured Debt except for (i) regularly scheduled payments, prepayments or redemptions of principal and interest (at the non-default rate) in respect thereof required pursuant to the instruments evidencing such Existing Indebtedness or Permitted Unsecured Debt, as the case may be, and the payment when due of the types of reasonable fees and expenses that are customarily paid in connection therewith, (ii) so long as no Event of Default has occurred and is continuing, any voluntary payments of Existing Indebtedness or Permitted Unsecured Debt (other than a Permitted Refinancing) and (iii) any refinancing of Existing Indebtedness or Permitted Unsecured Debt pursuant to a Permitted Refinancing or (b) in respect of any Subordinated Debt in contravention of the terms of the subordination provisions applicable to such Subordinated Debt, whether such subordination provisions are contained in the promissory note or other agreement, document or instrument evidencing such Subordinated Debt or in a separate subordination agreement between Bank and the holder of such Subordinated Debt, or amend any subordination provision contained in any documentation relating to any Subordinated Debt which amendment purports to increase the priority of such instrument, change the payment schedule under such instrument or otherwise contradict any provision of a subordination agreement between Bank and the holder of such Subordinated Debt, without Bank’s prior written consent.

7.9[Reserved].

7.10Compliance.  Be required to register as an “investment company” under the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose, or fail to comply in any material respect with, or violate any, law or regulation applicable to Borrower that could reasonably be expected to result in a Material Adverse Effect.

7.11Distributions.  Make or declare, directly or indirectly, any Restricted Payment at any time when an Event of Default has occurred and is continuing or would result therefrom or when a Borrowing Base Deficiency has occurred and is continuing or would result therefrom; provided that, notwithstanding the foregoing, Borrower shall be permitted to make or declare a Restricted Payment to the extent necessary to maintain its status as a Business Development Company under the Investment Company Act and as a regulated investment company for U.S. federal or applicable state and local income tax purposes.

7.12Use of Proceeds.  Use the proceeds of the Advances for any purpose other than the acquisition and funding (either directly or indirectly as permitted hereunder) of leveraged loans, high-yield securities and other Investments, the payment of the Obligations, for general 

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corporate purposes of the Loan Parties, or the payment of fees and expenses of the Loan Parties related to the transactions hereunder.

8.EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an Event of Default under this Agreement:

8.1Payment Default.  If Borrower fails to (a) make any payment of principal on its due date or (b) make any payment of interest or any other Obligations within five (5) Business Days after such Obligations are due and payable.  For the avoidance of doubt, during any cure period, the failure to make or pay any payment specified under clause (b) hereunder is not an Event of Default.

8.2Covenant Default.  If any Loan Party (i) fails to perform any obligation under Section 6.1(i) or 6.6, (ii) fails to perform any obligation under Article 4, Section 6.7 or Section 6.8 and such failure continues for a period of five (5) Business Days, (iii) violates any of the covenants contained in Article 7 of this Agreement, or (iv) fails or neglects to perform, keep, or observe any other material term, provision, condition, covenant, or agreement contained in this Agreement, in any of the Loan Documents, and as to any default under such other term, provision, condition, covenant or agreement in this clause (iv) that can be cured, has failed to cure such default within ten (10) Business Days after Borrower receives notice thereof from Bank or any officer of any Loan Party has knowledge thereof;

8.3Existence.  If any Loan Party is dissolved or such Loan Party’s existence is otherwise terminated or any action is taken to effect such termination or such Loan Party’s dissolution, or if such Loan Party fails to comply with any term of its Charter Documents beyond any applicable time for cure, that would have a Material Adverse Effect;

8.4Attachment.  If any portion of the Collateral with a value in excess of $2,500,000 is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within ten (10) Business Days, or that such Loan Party is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion the Collateral, or if a notice of lien, levy, or assessment is filed of record with respect to a material portion of the Collateral, by such Loan Party by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and, in each case, the same is not paid within thirty (30) days after such Loan Party receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by such Loan Party (provided that no Credit Extensions will be required to be made during such cure period);

8.5Bankruptcy.  If an Insolvency Proceeding is commenced by any Loan Party, or if an Insolvency Proceeding is commenced against such Loan Party and is not dismissed 

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or stayed within sixty (60) days (provided that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding);

8.6Other Agreements.  If there is a default or other failure to perform beyond any applicable cure period in any material agreement to which any Loan Party is a party or by which it is bound resulting in a right by a third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness owed by such Loan Party thereunder in each case, in an amount in excess of $2,500,000; 

8.7Judgments.  If a final, non-appealable judgment or judgments rendered by a court of competent jurisdiction for the payment of money in an amount, individually or in the aggregate, of at least $2,500,000 not covered by independent third party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against any Loan Party and shall remain unsatisfied and unstayed for a period of sixty (60) days (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment); or

8.8Misrepresentations.  If any financial statement, representation, warranty, document or certification required to be made or furnished by any Loan Party under this Agreement to Bank pursuant to this Agreement shall have been false, incorrect, or incomplete in any material respect when made, effective, or reaffirmed, as the case may be.  

9.BANK’S RIGHTS AND REMEDIES.

9.1Rights and Remedies.  Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election, with notice of its election to Borrower (provided that no such notice shall be required upon the occurrence and during the continuance of an Event of Default under Section 8.5 and the failure to provide any such notice shall not affect the validity of any action taken), and without demand on any Loan Party, do any one or more of the following, all of which are authorized by each Loan Party:

(a)Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 8.5, all Obligations shall become immediately due and payable without any action by Bank);

(b)Cease advancing money or extending credit to or for the benefit of Borrower under this Agreement;

(c)Settle or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Bank reasonably considers advisable;

(d)Make such payments and do such acts as Bank considers necessary or reasonable to protect its security interest in the Collateral.  Each Loan Party agrees to assemble the Collateral and/or any documents relating to the Collateral, and to make such documents and/or the Collateral available to Bank as Bank may designate.  Each Loan Party authorizes Bank to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which 

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in Bank’s determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith.  With respect to any of such Loan Party’s owned premises, such Loan Party hereby grants Bank a license to enter into such premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at law, in equity, or otherwise;

(e)Enforce all of the rights of each Loan Party to receive the proceeds of the Collateral and apply the proceeds thereof to the Obligations;

(f)Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral.  Bank is hereby granted a limited license or other right, solely pursuant to the provisions of this Section, to use, without charge, each Loan Party’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section, such Loan Party’s rights under all licenses and all franchise agreements shall inure to Bank’s benefit;

(g)Dispose of the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including each Loan Party’s premises) as Bank determines is commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order Bank deems appropriate; and

(h)Other than a purchase by a Loan Party, Bank may bid and purchase the Collateral at any public sale of the Collateral upon terms no less favorable than that of the highest bid received.

9.2Pledged Equity Remedies. 

(a)Voting Rights.  At any time prior to the occurrence and during the continuance of an Event of Default, the Loan Parties shall be entitled to exercise any and all voting and other consensual rights pertaining to the Pledged Equity (including all voting, consent, administration, management and other rights and remedies under any organizational document with respect thereto), or any part thereof, for any purpose. 

(b)Dividend and Distribution Rights.  The Loan Parties shall be entitled to receive and to retain and use any and all dividends or distributions paid in respect of the Pledged Equity; provided, however, that, following the occurrence and during the continuance of an Event of Default, any and all non-cash dividends or non-cash distributions in the form of certificated capital stock, certificated limited liability interests, instruments or other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Equity, shall forthwith be delivered to Bank to be held as Collateral or applied to the Obligations in accordance with this Agreement, as Bank shall elect; and, if received by any Loan Party, shall be received in trust for the benefit of Bank, be segregated from the other property of the Loan Parties and forthwith be delivered to Bank in the same form as so received (with any necessary endorsements) 

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to be held as Collateral or applied to the Obligations, in accordance with this Agreement, as Bank shall elect.

(c)Rights as to Pledged Equity During Event of Default.  After an Event of Default has occurred and while such Event of Default is continuing:

(i)Voting, Dividend and Distribution Rights.  At the option of Bank, all rights of the Loan Parties to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 9.2(a) above, and to receive the dividends and distributions which it would otherwise be authorized to receive and retain pursuant to Section 9.2(b) above, shall cease, and all such rights shall thereupon become vested in Bank who shall thereupon have the sole right to exercise such voting and other consensual rights and to receive and to hold as Pledged Equity such dividends and distributions.

(ii)Dividends and Distributions Held in Trust.  All dividends and other distributions which are received by the Loan Parties contrary to the provisions of Section 9.2(c)(i) above shall be received in trust for the benefit of Bank, shall be segregated from other funds of the Loan Parties and forthwith shall be paid over to Bank as Collateral in the same form as so received (with any necessary endorsements) to be held as Collateral or applied to the Obligations, as Bank may elect.

(d)Irrevocable Proxy.  After the occurrence and during the continuation of an Event of Default, each Loan Party hereby revokes all previous proxies (if any) with regard to the Pledged Equity and appoints Bank as its proxyholder and attorney in fact to, so long as such actions are performed in accordance with the applicable organizational documents and applicable law, attend and vote at any and all meetings of the equity holders of the entities which issued the Pledged Equity (whether or not transferred into the name of Bank), and any adjournments thereof, held on or after the date of the giving of this proxy and to execute any and all written consents, waivers and ratifications of the equity holders of such entities executed on or after the date of the giving of this proxy with the same effect as if the Loan Parties had personally attended the meetings or had personally voted its shares or had personally signed the written consents, waivers or ratification.  For the avoidance of doubt, the revocation of existing proxies (if any) shall not be effective until, and the appointment of Bank as proxyholder and attorney-in-fact shall not be effective until, the occurrence and during the continuance of an Event of Default.  After the occurrence and during the continuation of an Event of Default, the Loan Parties hereby authorize Bank to substitute another Person (which Person shall be a successor to the rights of Bank hereunder or a nominee appointed by Bank to serve as proxyholder) as the proxyholder and, upon the occurrence or during the continuance of any Event of Default, hereby authorize and direct the proxyholder to file this proxy and the substitution instrument with the secretary of the appropriate entity.  This proxy is coupled with an interest and is irrevocable until the Obligations have been paid in full in cash (other than contingent indemnification obligations for which no claim has been made). 

9.3Right of Setoff; Deposit Accounts.  Upon and after the occurrence of an Event of Default, Bank is hereby authorized by each Loan Party, at any time and from time to time, to set off against, and to appropriate and apply to the payment of, the Obligations (whether matured or unmatured, fixed or contingent or liquidated or unliquidated) any and all amounts 

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owing by Bank to any Loan Party (whether payable in U.S. Dollars or any other currency, whether matured or unmatured, and, in the case of deposits of a Loan Party, whether general or special, time or demand and however evidenced).

9.4Remedies Cumulative.  Bank’s rights and remedies under this Agreement, and the Loan Documents shall be cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity.  No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of Default on any Loan Party’s part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made in writing by Bank and then shall be effective only in the specific instance and for the specific purpose for which it was given.

10.NOTICES.

Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt requested, or by email to Borrower or to Bank, as the case may be, at its addresses set forth below:

		
	
If to Borrower:
	
GREAT ELM CAPITAL CORP.

800 South Street, Suite 230
Waltham, MA 02453
Attn: Adam Kleinman
Email: akleinman@greatelmcap.com

	
If to Bank:
	
CITY NATIONAL BANK

555 South Flower Street, 21st Floor

Los Angeles, California 90071

Attention:  Stephanie Leimbach

Telephone:  (213) 673-0775

E-mail: stephanie.leimbach@cnb.com

 

The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.

11.CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

New York law governs the Loan Documents without regard to principles of conflicts of law.  Loan Parties and Bank each submit to the exclusive jurisdiction of the State and Federal courts in the City of New York, Borough of Manhattan.  Each Loan Party expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and each Loan Party hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the 

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granting of such legal or equitable relief as is deemed appropriate by such court.  Each Loan Party hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or five (5) days after deposit in the U.S. mails, first class, registered or certified mail return receipt requested, proper postage prepaid.

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH LOAN PARTY AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS.  THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12.GUARANTEE

12.1Guarantee. Each Subsidiary Guarantor hereby absolutely and unconditionally, guarantees, as primary obligor and as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all Obligations of the Borrower (subject to the proviso in this sentence, the “Guaranteed Obligations”); provided that the liability of each Subsidiary Guarantor individually with respect to this Guarantee shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code of the United States or any comparable provisions of any applicable state law.  Without limiting the generality of the foregoing, to the maximum extent permitted by applicable law, the Guaranteed Obligations shall include any such indebtedness, obligations, and liabilities, or portion thereof, which may be or hereafter become unenforceable or compromised or shall be an allowed or disallowed claim under any proceeding or case commenced by or against Borrower under any debtor relief laws.  Bank’s books and records showing the amount of the Obligations shall be conclusive for the purpose of establishing the amount of the Obligations (absent manifest error).  This Guarantee shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations or any instrument or agreement evidencing any Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Obligations which might otherwise constitute a defense to the obligations of any Subsidiary Guarantor under this Guarantee (except for payment in full of the Guaranteed Obligations (other than contingent indemnification obligations for which no claim has been made)), and, to the maximum extent permitted by applicable law each Subsidiary Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing.

12.2Rights of Bank.  Each Subsidiary Guarantor consents and agrees that Bank may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof:  (a) amend, extend, renew, compromise, 

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discharge, accelerate or otherwise change the time for payment or the terms of the Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guarantee or any Obligations; (c) apply such security and direct the order or manner of sale thereof as Bank in its sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantor of any of the Obligations, in each case, in accordance with the applicable Loan Documents.  Without limiting the generality of the foregoing, each Subsidiary Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of such Subsidiary Guarantor under this Guarantee or which, but for this provision, might operate as a discharge of such Subsidiary Guarantor.

12.3Certain Waivers.  To the maximum extent permitted by applicable law, each Subsidiary Guarantor waives (a) any defense arising by reason of any disability or other defense of Borrower or any other guarantor, or the cessation from any cause whatsoever (including any act or omission of Bank) of the liability of Borrower or any other Loan Party; (b) any defense based on any claim that such Subsidiary Guarantor’s obligations exceed or are more burdensome than those of the Borrower or any other Loan Party; (c) the benefit of any statute of limitations affecting such Subsidiary Guarantor’s liability hereunder; (d) any right to proceed against Borrower or any other Loan Party, proceed against or exhaust any security for the Obligations, or pursue any other remedy in the power of Bank whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by Bank; and (f) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating such Subsidiary Guarantor or sureties.  To the maximum extent permitted by applicable law, each Subsidiary Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Obligations, and all notices of acceptance of this Guarantee or of the existence, creation or incurrence of new or additional Obligations.

12.4Obligations Independent.  The obligations of each Subsidiary Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Obligations and the obligations of any other guarantor, and a separate action may be brought against each Subsidiary Guarantor to enforce this Guaranty whether or not Borrower or any other person or entity is joined as a party.

12.5Subrogation.  Each Subsidiary Guarantor shall not exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Guarantee until all of the Obligations and any amounts payable under this Guarantee have been indefeasibly paid and performed in full and this Agreement is terminated.  If any amounts are paid to any Subsidiary Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of Bank and shall forthwith be paid to Bank to reduce the amount of the Obligations, whether matured or unmatured.

12.6Termination; Reinstatement.  This Guarantee is a continuing and irrevocable guaranty of all Obligations now or hereafter existing and shall remain in full force and effect until the payment in full of all Obligations.  Notwithstanding the foregoing, this Guarantee 

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shall continue in full force and effect or be revived, as the case may be, to the extent that any payment by or on behalf of Borrower or any Subsidiary Guarantor is made, or Bank exercises its right of setoff, in respect of the Guaranteed Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Bank in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any debtor relief laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not Bank is in possession of or has released this Guarantee and regardless of any prior revocation, rescission, termination or reduction.  The obligations of each Subsidiary Guarantor under this paragraph shall survive termination of this Guarantee.

12.7Stay of Acceleration.  If acceleration of the time for payment of any of the Obligations is stayed, in connection with any case commenced by or against any Subsidiary Guarantor or Borrower under any debtor relief laws, or otherwise, all such amounts shall nonetheless be payable by such Subsidiary Guarantor, immediately upon demand by Bank.

12.8Condition of Borrower.  Each Subsidiary Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Borrower and any other guarantor such information concerning the financial condition, business and operations of the Borrower and any such other guarantor as such Subsidiary Guarantor requires, and that Bank has no duty, and no Subsidiary Guarantor is relying on Bank at any time, to disclose to it any information relating to the business, operations or financial condition of the Borrower or any other guarantor (each Subsidiary Guarantor waiving any duty on the part of Bank to disclose such information and any defense relating to the failure to provide the same).

13.GENERAL PROVISIONS.

13.1Successors and Assigns.  This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by any Loan Party without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion.  Bank may not assign, transfer, negotiate or grant participation in all or any part of Bank’s interest, rights, obligations or benefits hereunder, without Borrower’s prior written consent (unless an Event of Default has occurred and is continuing, in which case, the consent of Borrower is not required), which shall not be unreasonably withheld. Notwithstanding the foregoing, Bank shall have the right without the consent of, but with notice to, Borrower to sell, transfer, negotiate or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder to any of Bank’s Affiliates; provided that such sale, transfer or participation shall not be effective until written notice has been provided to Borrower.  Borrower shall maintain a register of the name and address of any Persons to which Bank assigned or participated its obligations, rights and benefits hereunder and the principal amounts (and stated interest) of each such Person’s interest in the Advances or other obligations, rights and benefits under the Loan Documents, and shall treat such Persons as the beneficial owners of such obligations, rights and benefits for all U.S. federal tax purposes absent demonstrable error. The entries in such register shall be conclusive absent manifest error. Such Persons shall not be entitled to receive any greater payment under Section 2.6, with respect to any participation, than Bank would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a change in law that 

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occurs after such Person acquired the applicable participation. Notwithstanding the foregoing, no participant shall be entitled to any benefits of Section 2.6 unless such participant complies with the requirements of Section 2.6, including the requirements of Sections 2.6(d) and (e) (it being understood that the documentation required under Section 2.6 shall be delivered to Bank).

13.2Indemnification.  Irrespective of whether the transactions contemplated hereby are consummated, Borrower agrees to indemnify, exonerate, defend, pay, and hold harmless Bank, its affiliates, officers, directors, employees, attorneys, and agents (collectively, the “Indemnitees” and individually as “Indemnitee”) from and against any and all liabilities, obligations, losses, damages, penalties, actions, causes of action, judgments, suits, claims, costs, expenses, and disbursements of any kind or nature whatsoever (including, the reasonable and documented out-of-pocket fees and expenses of outside counsel for such Indemnitees in connection with any investigation, administrative, or judicial proceeding, whether such Indemnitee shall be designated a party thereto), that may be imposed on, incurred by, or asserted against such Indemnitee, in any manner relating to or arising out of the Revolving Line, the use or intended use of the proceeds of the Advances, or the consummation of the transactions contemplated by this Agreement, including any matter relating to or arising out of the filing or recordation of any of the Loan Documents which filing or recordation is done based upon information supplied by Borrower to Bank and its counsel (the “Indemnified Liabilities”); provided, that Borrower shall have no obligation hereunder with respect to Indemnified Liabilities arising from the bad faith, gross negligence or willful misconduct of any such Indemnitee.  Each Indemnitee will promptly notify Borrower of each event of which it has knowledge which may give rise to a claim under the indemnification provisions of this Section 13.2.  If any investigative, judicial, or administrative proceeding arising from any of the foregoing is brought against any Indemnitee indemnified or intended to be indemnified pursuant to this Section 13.2 Borrower will resist and defend such action, suit, or proceeding or cause the same to be resisted and defended by counsel designated by Borrower (which counsel shall be reasonably satisfactory to the Indemnitee or intended Indemnitee).  Each Indemnitee will use its reasonable efforts to cooperate in the defense of any such action, writ, or proceeding.  To the extent that the undertaking to indemnify, pay, and hold harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, Borrower shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under Applicable Law.  The obligations of Borrower under this Section 13.2 shall survive the termination of this Agreement and the discharge of Borrower’s other obligations hereunder.  This Section 13.2 shall not apply with respect to taxes, other than taxes that represent losses, claims, penalties or damages arising from any non-tax claim.  Borrower shall not be liable to any Indemnitee for any special, indirect, consequential or punitive damages (as opposed to direct or actual damages (other than in respect of any such damages incurred or paid by an Indemnitee to a third party)) arising out of, in connection with, or as a result of the transactions contemplated hereby asserted by an Indemnitee against Borrower; provided that the foregoing limitation shall not be deemed to impair or affect the obligations of Borrower under the preceding provisions of this section.

13.3Time of Essence.  Time is of the essence for the performance of all obligations set forth in this Agreement.

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13.4Severability of Provisions.  Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

13.5Amendments in Writing, Integration.  Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and Bank.  All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement and the Loan Documents, if any, are merged into this Agreement and the Loan Documents.

13.6Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.  Delivery of an executed signature page to this Agreement by facsimile transmission or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

13.7Survival.  All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions to Borrower.  

13.8Termination of Security; Release of Guarantees.  Borrower may terminate this Agreement at any time in its sole discretion upon at least three (3) Business Days’ prior notice to Bank, provided that, prior to such time, all Advances have been repaid and any and all other charges and costs to be paid hereunder have been paid in full as due to the date of termination and Borrower has complied with all other obligations hereunder to the date of termination, in each case as determined by Bank in its reasonable discretion.  After such termination, Bank shall promptly release any security that it may have to the Collateral and shall terminate any guarantees hereunder, and the parties shall execute such other documents as may reasonably be required to fully terminate this Agreement and the parties’ rights and obligations hereunder following such termination.

[SIGNATURE PAGE FOLLOWS.]

 

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

GREAT ELM CAPITAL CORP.

By:    /s/ Adam M. Kleinman
Name:  Adam M. Kleinman
Title:  Chief Compliance Officer and Secretary

CITY NATIONAL BANK, as Bank

By:    /s/ Jeanine Smith
Name:  Jeanine Smith
Title:  Senior Vice President

 

 

 

Schedule E - Existing Indebtedness

Schedule P - Pledged Equity

Exhibit A - Portfolio Investments

Exhibit B - Bank Loan Advance/Paydown Request Form

Exhibit C - Borrowing Base Certificate

Exhibit D - Compliance Certificate

Exhibit E - Continuation/Conversion Notice

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