Document:

FS Investment Corporation II 8-K

 

Exhibit
10.7

 

COLLATERAL
ADMINISTRATION AGREEMENT

This COLLATERAL ADMINISTRATION
AGREEMENT, dated as of December 15, 2014 (as the same may be amended from time to time in accordance with the terms hereof (this
“Agreement”) is entered into by and among Green Creek LLC, a limited liability company organized under the laws
of the State of Delaware, as issuer (the “Issuer”), FS Investment Corporation II, a corporation organized under
the laws of the State of Maryland, in its capacity as investment manager under the Investment Management Agreement referred to
below (in such capacity, together with its successors in such capacity, the “Investment Manager”) and Virtus
Group, LP, a limited partnership organized under the laws of the State of Texas, as collateral administrator (the “Collateral
Administrator”).

WITNESSETH:

WHEREAS, the Issuer
and Citibank, N.A., as trustee (the “Trustee”), have entered into an Indenture (the “Indenture”)
dated as of December 15, 2014, pursuant to which the Notes (as defined in the Indenture) were issued;

WHEREAS, pursuant
to the terms of the Indenture, the Issuer pledged certain Collateral Obligations and Eligible Investments (each as defined in the
Indenture and herein, the “Assets”) as security for the Notes;

WHEREAS, the Investment
Manager has entered into an amended and restated investment management agreement (the “Investment Management Agreement”)
with the Issuer, dated as of December 15, 2014, in connection with which the Investment Manager has agreed to provide certain services
to the Issuer with respect to the Assets;

WHEREAS, the Issuer
wishes to engage the Collateral Administrator to perform on its behalf certain administrative duties of the Issuer with respect
to the Assets pursuant to the Indenture; and

WHEREAS, the Collateral
Administrator, on behalf of the Issuer, is prepared to perform certain specified obligations of the Issuer under the Indenture
or of the Investment Manager under the Indenture, and certain other services as specified herein.

NOW, THEREFORE, in
consideration of the mutual covenants contained herein, and other good and valuable consideration the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

1.                  
Definitions. Capitalized terms not otherwise defined in this Agreement shall have the
meanings set forth in the Indenture.

2.                  
Powers and Duties of the Collateral Administrator and the Investment Manager.

(a)                
The Collateral Administrator shall act as agent for the Issuer until the earlier of (i) its
resignation or removal pursuant to Section 7 hereof or (ii) the termination of this Agreement pursuant to Section 6 or Section
7 hereof. The Collateral Administrator shall assist the Investment Manager in connection with monitoring the Collateral Obligations
and Eligible Investments on an ongoing basis and providing to the Issuer certain reports, schedules and other data which the Issuer
is required to prepare and deliver under Article 10 of the Indenture. The Collateral Administrator’s duties and authority
to act as collateral administrator hereunder are limited to the duties and authority specifically provided for in this Agreement
and under the Indenture. The Collateral Administrator shall not be deemed to assume the obligations of the Issuer under the Indenture
or of the Investment Manager under the Investment Management Agreement or the Indenture. The Collateral Administrator shall perform
those duties and functions assigned to it in the Indenture, comply with all obligations applicable to it under the Indenture and
perform its duties hereunder in accordance with the terms of this Agreement and the terms of the Indenture applicable to it.

 

    	

    	 

    

In addition, the
Collateral Administrator shall prepare and provide to the Specified Holder (as defined in the Indenture), at the addresses from
time to time specified by the Specified Holder, a report on each Business Day setting forth the cash flows on the Collateral Obligations
for the preceding Business Day and the positions in the Collateral Obligations held by the Issuer at the end of such preceding
Business Day (all in such form and in the scope agreed by the Collateral Administrator and the Specified Holder on or prior to
the Closing Date), and shall provide to the Specified Holder, at the addresses from time to time specified by the Specified Holder,
notice of all corporate actions affecting the obligors on the Collateral Obligations promptly following the Collateral Administrator's
obtaining notice of the same.

(b)                
Promptly following the Closing Date, the Collateral Administrator shall create a Collateral
Obligation and Eligible Investments database. Upon request for specific information in the Collateral Obligation and Eligible Investments
database from the Investment Manager, the Collateral Administrator shall promptly provide such information to the Investment Manager.
The Collateral Administrator shall update the Collateral Obligation and Eligible Investments database promptly following (i) the
sale or disposition of any Collateral Obligation or Eligible Investment and (ii) the purchase of any Collateral Obligation or Eligible
Investment. 

(c)                
Not later than the Business Day prior to the day on which each Monthly Report or Valuation
Report is required to be provided by the Issuer to the Trustee pursuant to Section 10.5(a) or Section 10.5(b) of the Indenture,
respectively, the Collateral Administrator shall prepare the relevant report by calculating, using the information contained in
the Collateral Obligation and Eligible Investments database created by the Collateral Administrator pursuant to Section 2(b) above,
and subject to the Collateral Administrator’s receipt from the Investment Manager of information with respect to the Collateral
Obligation or Eligible Investment that is not contained in such database and subject further to the provisions of this Section
2, each item required to be stated in such Monthly Report or Valuation Report (together with Payment Date disbursement instructions)
in accordance with the Indenture and provide the results of such calculations to the Investment Manager so that the Investment
Manager may confirm such results. Upon approval by the Investment Manager, the Collateral Administrator shall deliver the Monthly
Report or Valuation Report to the Trustee, to be posted to the Trustee’s website in the manner contemplated in the Indenture.

(d)                
Upon request of the Investment Manager in connection with a proposed purchase of a Collateral
Obligation pursuant to Section 12.2 of the Indenture (accompanied by such information concerning the Collateral Obligation to be
purchased as may be necessary to make the calculations referred to in this Section 2(d)), the Collateral Administrator shall calculate
each criterion as a condition to such purchase in accordance with the Indenture and provide the results of such calculations to
the Investment Manager for comparison to the Investment Manager’s own calculations in determining whether such purchase is
permitted by the Indenture.

(e)                
Upon notification by the Investment Manager during each time period as set forth in Section
12.1 of the Indenture of a proposed disposition of a Defaulted Obligation, Equity Security, Withholding Tax Security or Collateral
Obligation (accompanied by such information as may be necessary to make the calculation referred to in this Section 2(e)), the
Collateral Administrator shall calculate each criterion set forth in the designated subsection of Section 12.2 of the Indenture
as a condition to such disposition in accordance with the Indenture and shall provide the results of such calculations to the Investment
Manager.

(f)                 
The Collateral Administrator shall have no liability for any determination to purchase or
sell a Collateral Obligation made by the Investment Manager based on the calculations provided by the Collateral Administrator
pursuant to Section 2(d) or Section 2(e), as applicable, except to the extent due to the gross negligence, fraud or willful misconduct
of the Collateral Administrator. The Investment Manager hereby agrees that any determination to purchase or sell a Collateral Obligation
made by the Investment Manager is not based solely upon the calculations of the Collateral Administrator.

(g)                
[Reserved].

(h)                
[Reserved].

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(i)                  
The Collateral Administrator shall assist the Investment Manager in the preparation of such
other reports that may be required by the Indenture and that are reasonably requested in writing by the Investment Manager and
agreed to by the Collateral Administrator, which agreement shall not be unreasonably withheld.

(j)                 
 [Reserved].

(k)                
The Collateral Administrator shall promptly forward to the Investment Manager copies of notices
and other writings received by it, in its capacity as Collateral Administrator hereunder, from the obligor or other Person with
respect to any Collateral Obligation or from any Clearing Agency with respect to any Collateral Obligation advising the holders
of such obligation of any rights that the holders might have with respect thereto (including notices of calls and redemptions thereof)
as well as all periodic financial reports received from such obligor or other Person with respect to such obligation and Clearing
Agencies with respect to such obligor.

(l)                  
The Investment Manager reasonably shall assist and cooperate with the Collateral Administrator
in connection with the preparation by the Collateral Administrator of all reports, instructions, the Monthly Reports, the Valuation
Reports and statements and certificates required in connection with the acquisition and disposition of Collateral Obligations,
Defaulted Obligations, Withholding Tax Securities, Eligible Investments and Equity Securities or as otherwise required under the
Indenture. Without limiting the generality of the foregoing, the Investment Manager shall advise the Collateral Administrator in
a timely manner of the results of any determinations, designations and selections made by it as required or permitted under the
Indenture and supply the Collateral Administrator with such other information as is in the possession of the Investment Manager
that the Collateral Administrator may from time to time reasonably request with respect to the Assets and is reasonably needed
to complete the reports and certificates required to be prepared by the Collateral Administrator hereunder or reasonably required
to permit the Collateral Administrator to perform its obligations hereunder, including any information that may be reasonably required
under the Indenture with respect to or as to the designation of any Collateral Obligation, including but not limited to a Credit
Risk Obligation, Defaulted Obligation, Equity Security, Withholding Tax Security, Substitute Collateral Obligation, Bonds, Synthetic
Security, Participation (and the related selling institution and its rating by each Rating Agency) and Structured Finance Obligation,
whether a Specified Amendment or Specified Event has occurred and the S&P rating and the Market Value of any Collateral Obligation
to the extent required by the Indenture. Nothing herein shall obligate the Collateral Administrator to determine independently
the correct characterization, classification or categorization of any Asset held under the Indenture or the Market Value of any
Asset (it being understood that any such characterization, classification, categorization or Market Value shall be based exclusively
upon the determination and notification received by the Collateral Administrator from the Investment Manager or the Issuer). The
Collateral Administrator shall have no obligation to determine whether any Asset meets the definition of “Collateral Obligation”.
The Investment Manager shall review and verify the contents of the aforesaid reports, instructions, statements and certificates
and shall send such reports, instructions, statements and certificates to the Issuer for execution. Such reports, instructions,
statements and certificates after execution by the Issuer or the Investment Manager, as applicable, will be made available to Holders
on the Trustee’s website.

(m)              
Not later than two Business Days prior to each Payment Date, the Collateral Administrator
shall calculate the Priority of Payments and provide a written report to the Investment Manager and the Trustee setting forth all
amounts that the Trustee will be required to remit on such Payment Date and such other information required for the Trustee to
make such remittances.

(n)                
If, in performing its duties under this Agreement, the Collateral Administrator is required
to decide between alternative courses of action or if there are alternative methodologies that can be used in connection with any
calculations required to be performed by the Collateral Administrator hereunder, the Collateral Administrator may request written
instructions from the Investment Manager as to the course of action or methodology to be used by the Collateral Administrator;
provided, however, that except to the extent required by the Indenture or the Investment Management Agreement, the Investment
Manager shall be under no obligation to provide such instructions. If the Collateral Administrator does not receive such instructions
within two Business Days after it has requested them, it may, but shall be under no duty to, take or refrain from taking such action
provided that the Collateral Administrator as promptly as possible notifies the Investment Manager and the Issuer which course
of action, if any (or refrainment from taking any course of action), it has decided to take. The Collateral Administrator shall
act in accordance with instructions received after such two-Business Day period. The Collateral Administrator shall be entitled
to rely on the advice of legal counsel selected with due care and Independent certified public accountants in performing its duties
hereunder and shall be deemed to have acted in good faith if it acts in accordance with such advice, unless such advice is in conflict
with this Agreement. Nothing herein shall prevent the Collateral Administrator or any of its Affiliates from engaging in other
businesses or from rendering services of any kind to any Person.

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3.                  
Compensation. Subject to Section 13, the Issuer agrees to pay, and the Collateral Administrator
shall be entitled to receive, as compensation for and reimbursement of expenses in connection with the Collateral Administrator’s
performance of the duties called for herein, the amounts set forth in a separate fee letter among the Investment Manager, the Trustee
and the Collateral Administrator. In accordance with Section 13, all amounts payable under this Section 3 shall be payable only
in accordance with, and subject to, the Priority of Payments as set forth in the Indenture.

4.                  
Limitation of Responsibility of the Collateral Administrator. (a) The Collateral Administrator
will have no responsibility under this Agreement other than to render the services called for hereunder in good faith and without
willful misfeasance, gross negligence or reckless disregard of its duties hereunder. The Collateral Administrator shall incur no
liability to anyone in acting upon, and may rely conclusively upon, any signature, instrument, statement, notice, resolution, request,
direction, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed by it to be genuine
and reasonably believed by it to be signed by the proper party or parties. Subject to Section 12, the Collateral Administrator
may exercise any of its rights or powers hereunder or perform any of its duties hereunder either directly or by or through agents
or attorneys, and the Collateral Administrator shall not be responsible for any misconduct or negligence on the part of any agent
or attorney appointed hereunder with due care by it. The Collateral Administrator shall be entitled to the same rights, protections
and immunities that are afforded to the Trustee under Article 6 of the Indenture. Neither the Collateral Administrator nor any
of its Affiliates, directors, officers, shareholders, members, agents or employees will be liable to the Investment Manager, the
Issuer or others, except by reason of acts or omissions constituting bad faith, willful misfeasance, gross negligence or reckless
disregard of the Collateral Administrator’s duties hereunder. Anything in this Agreement notwithstanding, in no event shall
the Collateral Administrator be liable for special, punitive, indirect or consequential damage of any kind whatsoever (including
but not limited to lost profits), even if the Collateral Administrator has been advised of such loss or damage and regardless of
the form of action under or pursuant to this Agreement, its duties or obligations hereunder or arising out of or relating to the
subject matter hereof. The Collateral Administrator shall in no event have any liability for the actions or omissions of the Issuer,
the Investment Manager or any other Person, and shall have no liability for any inaccuracy or error in any duty performed by it
that results from or is caused by inaccurate, untimely or incomplete information or data received by it from the Issuer, the Investment
Manager or another Person except to the extent that such inaccuracies or errors are caused by the Collateral Administrator’s
own bad faith, willful misfeasance, gross negligence or reckless disregard of its duties hereunder. The Collateral Administrator
shall not be liable for failing to perform or delay in performing its specified duties hereunder which results from or is caused
by a failure or delay on the part of the Issuer, the Investment Manager or another Person in furnishing necessary, timely and accurate
information to the Collateral Administrator except to the extent that any failure or delay is caused by the Collateral Administrator’s
own criminal conduct, fraud, bad faith, willful misfeasance, gross negligence or reckless disregard of its duties hereunder. The
duties and obligations of the Collateral Administrator and its employees or agents shall be determined solely by the express provisions
of this Agreement and they shall not be under any obligation or duty except for the performance of such duties and obligations
as are specifically set forth herein, and no implied covenants shall be read into this Agreement against them. For purposes of
monitoring changes in ratings, the Collateral Administrator shall be entitled to use and rely (in good faith) exclusively upon
one or more reputable electronic financial information reporting services, and shall have no liability for any inaccuracies in
the information reported by, or other errors or omissions of, any such services.

(b)                
To the extent of any ambiguity in the interpretation of any definition or term contained in
the Indenture, the Collateral Administrator shall request direction from the Investment Manager as to the interpretation used,
and the Collateral Administrator shall follow such direction, and together with the Trustee, shall be entitled to conclusively
rely thereon without any responsibility or liability therefor.

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(c)                
The Issuer shall reimburse, indemnify and hold harmless the Collateral Administrator, and
its Affiliates, directors, officers, shareholders, members, agents and employees with respect to all out-of-pocket expenses, losses,
damages, liabilities, demands, charges and claims of any nature (including the reasonable fees and expenses of counsel and other
experts) in connection with or arising out of this Agreement and the Indenture, other than any such expenses, losses, damages,
liabilities, demands, charges or claims incurred by reason of the bad faith, willful misfeasance, gross negligence or reckless
disregard by the Collateral Administrator of its duties hereunder.

(d)                
The Collateral Administrator shall reimburse, indemnify and hold harmless the Investment Manager
and the Issuer and their respective Affiliates, directors, officers, shareholders, members, agents and employees with respect to
all expenses, losses, damages, liabilities, demands, charges and claims of any nature (including the reasonable fees and expenses
of counsel and other experts) in respect of or arising out of any acts or omissions performed or omitted, as the case may be, by
the Collateral Administrator, its Affiliates, directors, officers, shareholders, members, agents or employees hereunder or in connection
with the Indenture made in bad faith or constituting willful misfeasance, gross negligence or reckless disregard of its duties
hereunder.

(e)                
The Investment Manager will have no responsibility under this Agreement other than to render
the services called for hereunder or in connection with the Indenture in good faith and without willful misfeasance, gross negligence
or reckless disregard of its duties hereunder. The Investment Manager will not be liable to the Collateral Administrator, the Issuer
or others, except by reason of acts or omissions constituting bad faith, willful misfeasance, gross negligence or reckless disregard
of the Investment Manager’s duties hereunder. The Investment Manager shall reimburse, indemnify and hold harmless the Collateral
Administrator and its Affiliates, directors, officers, shareholders, members, agents and employees with respect to all expenses,
losses, damages, liabilities, demands, charges and claims of any nature (including the reasonable fees and expenses of counsel
and other experts) in respect of or arising out of any acts or omissions performed or omitted, as the case may be, by the Investment
Manager, its Affiliates, directors, officers, shareholders, members, agents or employees hereunder made in bad faith or constituting
willful misfeasance, gross negligence or reckless disregard of its duties hereunder or under the Indenture. Anything in this Agreement
notwithstanding, in no event shall the Investment Manager be liable for special, indirect or consequential damage of any kind whatsoever
(including but not limited to lost profits), even if Investment Manager has been advised of such loss or damage and regardless
of the form of action.

(f)                 
In connection with the aforesaid indemnification provisions, upon reasonable prior notice,
any indemnified party will afford to the applicable indemnifying party the right, in its sole discretion and at its sole expense,
to assume the defense of any claim, including, but not limited to, the right to designate counsel and to control all negotiations,
litigation, arbitration, settlements, compromises and appeals of such claim; provided, that if the indemnifying party assumes the
defense of such claim, it shall not be liable for any fees and expenses of counsel for any indemnified party incurred thereafter
in connection with such claim except that if such indemnified party reasonably determines that counsel designated by the indemnifying
party has a conflict of interest, such indemnifying party shall pay the reasonable fees and disbursements of one counsel (in addition
to any local counsel) separate from its own counsel for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; and provided,
further, that prior to entering into any final settlement or compromise, such indemnifying party shall seek the consent of the
indemnified party and use its best efforts in the light of the then-prevailing circumstances (including, without limitation, any
express or implied time constraint on any pending settlement offer) to obtain the consent of such indemnified party as to the terms
of settlement or compromise. If an indemnified party does not consent to the settlement or compromise within a reasonable time
under the circumstances, the indemnifying party shall not thereafter be obligated to indemnify the indemnified party for any amount
in excess of such proposed settlement or compromise.

5.                  
No Joint Venture. Nothing contained in this Agreement (i) shall constitute the Collateral
Administrator, the Issuer and the Investment Manager as members of any partnership, joint venture, association, syndicate, unincorporated
business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed
to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others.

 

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6.                  
Term. This Agreement shall continue in effect so long as the Indenture remains in effect
with respect to the Notes, unless this Agreement has been previously terminated in accordance with Section 7 hereof. Notwithstanding
the foregoing, the indemnification obligations of all parties under Section 4 hereof shall survive the termination of this Agreement
or release of any party hereto with respect to matters occurring prior to such termination or release.

7.                  
Termination; Resignation and Appointment of Successor.

(a)                
This Agreement may be terminated without cause by any party hereto upon not less than 90 days’
prior written notice to each other party hereto.

(b)                
At the option of the Investment Manager or the Issuer, this Agreement shall be terminated
upon ten days’ written notice of termination from the Investment Manager or the Issuer to the Collateral Administrator if
any of the following events shall occur:

(i)                  
The Collateral Administrator shall default in the performance of any of its material duties
under this Agreement and shall not cure such default within thirty days (or, if such default cannot be cured in such time, shall
not give within 30 days such assurance of cure as shall be reasonably satisfactory to the Investment Manager or the Issuer);

(ii)                
The Collateral Administrator shall be dissolved (other than pursuant to a consolidation, amalgamation
or merger) or shall have a resolution passed for its winding up, official management or liquidation (other than pursuant to a consolidation,
amalgamation or merger);

(iii)               
A court having jurisdiction in the premises shall enter a decree or order for relief in respect
of the Collateral Administrator in any involuntary case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the
Collateral Administrator or for any substantial part of its property, or order the winding-up or liquidation of its affairs; or

(iv)              
The Collateral Administrator shall commence a voluntary case under applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or similar official) of the Collateral Administrator or for any substantial part of its property, or shall
make any general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due.

 

If any of the events
specified in clauses (ii), (iii) or (iv) of this Section 7(b) shall occur, the Collateral Administrator shall give written notice
thereof to the Investment Manager and the Issuer within one Business Day after the happening of such event.

(c)                
Upon receiving any notice of resignation of the Collateral Administrator or removal by the
Issuer, the Issuer shall promptly appoint a successor collateral administrator by written instrument, in duplicate, executed by
an Authorized Officer of the Issuer, one copy of which shall be delivered to the Collateral Administrator so resigning or removed
and one copy to·the successor collateral administrator. No resignation or removal of the Collateral Administrator shall
be effective until a successor collateral administrator shall have been appointed and shall have accepted such appointment hereunder
in writing. If the Issuer shall fail to appoint a successor collateral administrator within 30 days after such notice of resignation,
then the Collateral Administrator may petition any court of competent jurisdiction for the appointment of a successor collateral
administrator. Notwithstanding the foregoing, the Collateral Administrator may resign its duties hereunder without any requirement
that a successor collateral administrator be obligated hereunder and without any liability for further performance of any duties
hereunder upon at least 90 days’ prior written notice to the other parties hereto upon the occurrence of any of the following
events and the failure to cure such event within such 90 day notice period: (i) failure of the Issuer to pay any of the amounts
specified in Section 3 within 90 days after such amount is due pursuant to Section 3 hereof or (ii) failure of the Investment Manager
or the Issuer to provide any indemnity payment or expense reimbursement to the Collateral Administrator required under Section
4 hereof within 90 days of the receipt by the Investment Manager or the Issuer of a written request for such payment or reimbursement.

 

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8.                  
Representations and Warranties.

(a)                
The Issuer hereby represents and warrants to the Collateral Administrator and the Investment
Manager as follows:

(i)                  
The Issuer has been duly incorporated and is validly existing and in good standing under the
laws of the State of Delaware and has the full power and authority to execute, deliver and perform this Agreement and all obligations
required hereunder and has taken all necessary action to authorize this Agreement on the terms and conditions hereof, the execution,
delivery and performance of this Agreement and the performance of all obligations imposed upon it hereunder. No consent of any
other person including, without limitation, members, shareholders and creditors of the Issuer, and no license, permit, approval
or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority
is required to be obtained or made by the Issuer in connection with this Agreement or the execution, delivery, performance, validity
or enforceability of this Agreement and the obligations imposed upon it hereunder. This Agreement constitutes, and each instrument
or document required hereunder, when executed and delivered by the Issuer hereunder, will constitute, the legally valid and binding
obligations of the Issuer enforceable against the Issuer in accordance with their terms subject, as to enforcement, (a) to the
effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would
apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Issuer and (b) to general equitable
principles (whether enforceability of such principles is considered in a proceeding at law or in equity).

(ii)                
The execution, delivery and performance by the Issuer of this Agreement, the Issuer’s
obligations hereunder and the documents and instruments required hereunder will not violate any provision of any existing law or
regulation binding on the Issuer, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding
on the Issuer, or the governing instruments of, or any securities issued by, the Issuer or of any mortgage, indenture, lease, contract
or other agreement, instrument or undertaking to which the Issuer is a party or by which the Issuer or any of its assets may be
bound, the violation of which would have a material adverse effect on the business, operations, assets or financial condition of
the Issuer and will not result in, or require, the creation or imposition of any lien on any of its property, assets or revenues
pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.

(b)                
The Investment Manager hereby represents and warrants to the Collateral Administrator and
the Issuer as follows:

(i)                  
The Investment Manager has been duly formed and is validly existing and in good standing under
the laws of the State of Maryland as a corporation and has the full power and authority to execute, deliver and perform this Agreement
and all obligations required hereunder and has taken all necessary action to authorize this Agreement on the terms and conditions
hereof, the execution, delivery and performance of this Agreement and the performance of all obligations imposed upon it hereunder.
No consent of any other person including, without limitation, shareholders and creditors of the Investment Manager, and no license,
permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental
authority is required by the Investment Manager in connection with this Agreement or the execution, delivery, performance, validity
or enforceability of this Agreement and the obligations imposed upon it hereunder. This Agreement constitutes, and each instrument
or document required hereunder, when executed and delivered by the Investment Manager hereunder, will constitute, the legally valid
and binding obligations of the Investment Manager enforceable against the Investment Manager in accordance with their terms subject,
as to enforcement, (a) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’
rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Investment
Manager and (b) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law
or in equity).

 

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(ii)                
The execution, delivery and performance of this Agreement, the Investment Manager’s
obligations hereunder and the documents and instruments required hereunder will not violate any provision of any existing law or
regulation binding on the Investment Manager, or any order, judgment, award or decree of any court, arbitrator or governmental
authority binding on the Investment Manager, or the governing instruments of, or any securities issued by, the Investment Manager
or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Investment Manager is
a party or by which the Investment Manager or any of its assets may be bound, the violation of which would have a material adverse
effect on the business, operations, assets or financial condition of the Investment Manager and will not result in, or require,
the creation or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage,
indenture, lease, contract or other agreement, instrument or undertaking.

(c)                
The Collateral Administrator hereby represents and warrants to the Investment Manager and
the Issuer as follows:

(i)                  
The Collateral Administrator is a limited partnership duly organized and validly existing
under the laws of the State of Texas and has full power and authority to execute and deliver this Agreement and perform all obligations
required hereunder and has taken all necessary action to authorize this Agreement on the terms and conditions hereof, the execution
and delivery of this Agreement and the performance of all obligations required hereunder. No consent of any other person including,
without limitation, partners and creditors of the Collateral Administrator, and no license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the Collateral
Administrator in connection with this Agreement or the execution, delivery, performance, validity or enforceability of this Agreement
and the obligations imposed upon it hereunder. This Agreement constitutes, and each instrument and document required hereunder,
when executed and delivered by the Collateral Administrator hereunder, will constitute, the legally valid and binding obligations
of the Collateral Administrator enforceable against the Collateral Administrator in accordance with their terms subject, as to
enforcement, (a) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’
rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Collateral
Administrator and (b) to general equitable principles (whether enforceability of such principles is considered in a proceeding
at law or in equity).

(ii)                
The execution, delivery and performance of this Agreement, the Collateral Administrator’s
obligations hereunder and the documents and instruments required hereunder will not violate any provision of any existing law or
regulation binding on the Collateral Administrator, or any order, judgment, award or decree of any court, arbitrator or governmental
authority binding on the Collateral Administrator, or the organizational documents of the Collateral Administrator or of any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking to which the Collateral Administrator is a party or by
which the Collateral Administrator or any of its assets may be bound, the violation of which would have a material adverse effect
on the business, operations, assets or financial condition of the Collateral Administrator and will not result in, or require,
the creation or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage,
indenture, lease, contract or other agreement, instrument or undertaking.

9.                  
Amendments. This Agreement may not be amended, changed, modified or terminated (except
as otherwise expressly provided herein) except by the Investment Manager, the Issuer, the Collateral Administrator and, for so
long as the Notes issued under the Indenture remain Outstanding, Holders of a Majority of the Notes in writing.

10.               
Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND THIS AGREEMENT
AND ANY MATTERS ARISING OUT OF OR RELATING IN ANY WAY WHATSOEVER TO THIS AGREEMENT (WHETHER IN CONTRACT, TORT OR OTHERWISE) SHALL
BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.

 

    	8

    	 

    

11.               
Notices. All notices, requests, directions and other communications permitted or required
hereunder shall be in writing and shall be deemed to have been duly given (i) when delivered personally, (ii) when transmitted
by facsimile or other electronic means of communication (it being agreed that such notice shall be effective at the time that a
transmission report confirming transmission is generated by the sender's facsimile machine) or (iii) when mailed, first class postage
prepaid, or sent by overnight courier service, to the parties at their respective addresses set forth below (or to such other address
as a party may have specified by written notice given to the other parties pursuant to this provision.

 

If to the Collateral Administrator, to:

 

Virtus Group, LP

5400 Westheimer Court

Suite 760

Houston, Texas 77056

Telecopy: (866) 816-3203

 

If to the Issuer, to:

Green Creek LLC

c/o FS Investment Corporation II

Cira Centre

2929 Arch Street, Suite 675

Philadelphia, Pennsylvania 19104

Facsimile: (215) 222-4649

Attention: Gerald F. Stahlecker

 

If to the Investment Manager, to:

FS Investment Corporation II

Cira Centre

2929 Arch Street, Suite 675

Philadelphia, Pennsylvania 19104

Facsimile: (215) 222-4649

Attention: Gerald F. Stahlecker

12.               
Successors and Assigns. This Agreement shall inure to the benefit of, and be binding
upon, the successors and assigns of each of the Investment Manager, the Issuer and the Collateral Administrator (including by merger
or consolidation); provided, however, that the Collateral Administrator may not assign its rights and obligations hereunder without
the prior written consent of the Investment Manager and the Issuer, except that the Collateral Administrator may delegate to, employ
as agent, or otherwise cause any duty or obligation hereunder to be performed by, any Affiliate of the Collateral Administrator
or its successors without the prior written consent of the Investment Manager and the Issuer, provided that the Collateral Administrator
shall remain directly liable to the Issuer for the performance of its duties hereunder.

13.               
Bankruptcy Non-Petition and Limited Recourse. Notwithstanding any other provision of
this Agreement, the Collateral Administrator and the Investment Manager may not, prior to the date which is one year and one day
(or, if longer, the then applicable preference period plus one day) after the payment in full of all the Notes, institute against,
or join any other Person in instituting against, the Issuer, any bankruptcy, reorganization, arrangement, insolvency, moratorium
or liquidation proceedings, or other proceedings under United States federal or state bankruptcy laws, or any similar laws; provided,
however, that nothing in this agreement by the Investment Manager, the Collateral Administrator or the Issuer (i) shall preclude,
or be deemed to estop, the Investment Manager or the Collateral Administrator (A) from taking any action prior to the expiration
of the aforementioned one year plus one day period (or if longer, the applicable preference period plus one day) in (x) any case
or proceeding voluntarily filed or commenced by the Issuer or (y) any involuntary insolvency proceeding filed or commenced against
the Issuer by a Person other than the Investment Manager or the Collateral Administrator or any of their respective Affiliates
or (B) from commencing against the Issuer or any properties of the Issuer, any legal action which is not a bankruptcy, reorganization,
arrangement, insolvency, moratorium or liquidation proceeding. The Issuer’s obligations hereunder will be solely the corporate
obligations of the Issuer, and the Collateral Administrator and the Investment Manager will not have any recourse to any of the
directors, officers, employees, shareholders, members, governors or Affiliates of the Issuer with respect to any claims, losses,
damages, liabilities, indemnities or other obligations in connection with any transactions contemplated hereby. The obligations
of the Issuer hereunder shall be limited to the net proceeds of the Assets (if any), payable solely in accordance with the order
specified in the Priority of Payments under the Indenture, and following realization of the Assets and the application of their
proceeds in accordance with the Priority of Payments under the Indenture, any outstanding obligations of the Issuer hereunder,
and any claims in respect thereof, shall be extinguished and shall not thereafter revive. The provisions of this Section 13 shall
survive the termination of this Agreement.

 

    	9

    	 

    

14.               
Counterparts. This Agreement may be executed in any number of counterparts, including
by facsimile or other electronic means of communication, each of which shall be deemed to be an original, but all of which together
shall constitute but one and the same instrument. Delivery of an executed counterpart of this Agreement by e-mail (PDF) or telecopy
shall be as effective as delivery of a manually executed counterpart of this Agreement.

15.               
Conflict with the Indenture. If this Agreement shall require that any action be taken
with respect to any matter and the Indenture shall require that, a different action be taken with respect to such matter, and such
actions shall be mutually exclusive, or if this Agreement should otherwise conflict with the Indenture, the Indenture shall govern.

16.               
Assignment of Issuer’s Rights. The parties hereto hereby acknowledge the Issuer’s
Grant pursuant to the Indenture of its right, title and interest in, to and under this Agreement.

17.               
Jurisdiction. The parties hereto hereby irrevocably submit to the non-exclusive jurisdiction
of any New York State or Federal court sitting in the Borough of Manhattan in The City of New York in any action or proceeding
arising out of or relating to this Agreement, and the parties hereto hereby irrevocably agree that all claims in respect of such
action or proceeding may be heard and determined in such New York State or Federal court. The parties hereto hereby irrevocably
waive, to the fullest extent that they may legally do so, the defense of an inconvenient forum to the maintenance of such action
or proceeding. The parties hereto hereby agree that a final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

18.               
Waiver of Jury Trial Right. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY (BUT NO OTHER JUDICIAL REMEDIES) IN RESPECT
OF ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby (i)
certifies that no representative, agent or attorney of the other has represented, expressly or otherwise, that the other would
not, in the event of such proceedings, seek to enforce the foregoing waiver and (ii) acknowledges that it has been induced to enter
into this Agreement by, among other things, the mutual waivers and certifications in this Section 18.

 

    	10

    	 

    

 

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

	 	GREEN CREEK LLC
	 	the Issuer
	 	 	 
	 	 	 
	 	By:	/s/ Gerald F. Stahlecker
	 	 	Name: Gerald F. Stahlecker
	 	 	Title: Executive Vice President
	 	 	 
	 	 	 
	 	 	 
	 	FS INVESTMENT CORPORATION II
	 	the Investment Manager
	 	 	 
	 	 	 
	 	By:	/s/ Gerald F. Stahlecker
	 	 	Name: Gerald F. Stahlecker
	 	 	Title: Executive Vice President
	 	 	 
	 	 	 
	 	 	 
	 	VIRTUS GROUP, LP
	 	the Collateral Administrator
	 	 	 
	 	 	 
	 	By:	/s/ Joseph U. Elston
	 	 	Name: Joseph U. Elston
	 	 	Title: PartnerExhibit 10.1

 

EMPLOYMENT AGREEMENT

 

 

EMPLOYMENT
AGREEMENT (this “Agreement”) dated as of December 02, 2014, by and between MOBIQUITY TECHNOLOGIES, INC., a
New York corporation (the “Company”) and Thomas Arnost (“Arnost”) each having an office at 600 Old
Country Road, Suite 541, Garden City, NY 11530.

 

W I T N E S S E T H:

 

WHEREAS, Company
desires to engage the services of Arnost and Arnost desires to provide the services to Company in connection with Company's business;
and

 

WHEREAS, both parties
desire to clarify and specify the rights and obligations which each have with respect to the other in connection with Arnost's
services.

 

NOW, THEREFORE, in
consideration of the agreements and covenants herein set forth, the parties hereby agree as follows:

 

1. Employment

 

Arnost hereby agrees to
be employed by Company as the Executive Chairman of Company, and Arnost hereby agrees to render his services as Company's Executive
Chairman for the Term (as hereinafter defined), all subject to and on the terms and conditions herein set forth.

 

2. Duties and Responsibilities of Arnost

 

(a) Arnost will be the
Executive Chairman of Company, subject to the other provisions of this Section 2. Although Arnost shall be required to travel from
time to time, Amost's primary office shall be based at his California home. Arnost shall not be required to relocate.

 

(b) Arnost shall be elected
to the Board of Directors of the Company (the “Board”) and during the Term shall be nominated for re-election to the
Board.

 

(c) During the term of
this Agreement, Arnost will exercise such authority, perform such executive duties and functions and discharge such responsibilities
as are assigned to him by the Board. As Executive Chairman, his duties shall include the following:

 

	•		Uphold the highest standards of integrity and probity.

	•		Establish and maintain high level strategic industry relevant relationships.

	•		Assist senior management in setting overall strategic direction of company.

	•		Ensure effective communication with shareholders.

	•		Assist with active role in
strategic oversight of sales department.

 

    	2

    	 

    

 

3. Exclusivity of Service

 

The Company agrees that
Arnost shall be required to devote the necessary business time, effort and attention to the business and efforts of the Company
and its subsidiaries as he deems necessary for the performance of his duties. Arnost may pursue other outside business interests
that are not related to the same business as the Company, as long as it does not interfere with the everyday responsibilities of
the Company.

 

4. Compensation; Bonus

 

(In consideration for
Arnost’s services to be performed under this Agreement and as compensation therefor, Company shall pay to Arnost, commencing as
of the date set forth above, in addition to all other benefits provided for in this Agreement, a salary at the rate of Ten Thousand
($10,000) Dollars per month, (the “Arnost Salary”). All payments of Arnost Salary shall be payable in accordance with
Company's policies.

 

5. Reimbursements and Indemnification

 

Arnost shall be entitled to the following during
and in respect of the term of this Agreement:

 

(a) Arnost shall each
be entitled to reimbursement for all reasonable travel, reasonable entertainment and other reasonable expenses incurred in connection
with Company's business, provided that such expenses are adequately documented and vouchered in accordance with Company's policies.

 

(b) The Company shall
provide to Arnost to the full extent provided for under the laws of the Company's state of incorporation and the Company's Certificate
of Incorporation and Bylaws, indemnification for any claim or lawsuit which may be asserted against Arnost when acting in such
capacity for the Company and/or any subsidiary or affiliated business. The Company shall use reasonable best efforts to include
Arnost as an insured under all applicable directors' and officers' liability insurance policies maintained by the Company, and
any other subsidiary or affiliated business.

 

6. Term of Employment

 

The term of Arnost's
employment hereunder shall be from the date hereof for a period of three (3) years (the "Term"), unless terminated prior
thereto in accordance with Section 8 hereof.

 

7. Non-Competition; Non-Solicitation

 

(a) Arnost hereby
agrees and covenants that during the Term hereof that he will not directly or indirectly engage in or become interested
(whether as an owner, principal, agent, stockholder, member, partner, trustee, venturer, lender or other investor, director,
officer, employee, consultant or through the agency of any corporation, limited liability company, partnership, association
or agent or otherwise) in any business enterprise which is engaged in the current business of the Company during the Term; provided,
however, that ownership of not more than 15% of the outstanding securities of any class of any entity that are listed on a
national securities exchange or traded in the over-the-counter market shall not be considered a breach of this Section 7.

 

    	3

    	 

    

 

(b) Arnost agrees and covenants that during
the Term hereof he and his agents will not (without first obtaining the written permission of Company) directly or indirectly participate
in the solicitation of any business of any type conducted by Company during the period of this Agreement from any person or entity
which was a client or customer of Company during the period of this Agreement, or was a prospective customer of Company from which
Arnost solicited business or for which a proposal for submission was prepared during the period.

 

(c) Arnost agrees and covenants that during
the Term of this Agreement he will not (without first obtaining the written permission of Company) directly or indirectly recruit
for employment, or induce or seek to cause such person to terminate his or her employment with Company, any person who then is
an employee of Company or who was an employee of Company during the preceding six (6) months.

 

8. Termination

 

(a) Termination by the Company with
Cause. Notwithstanding the terms of this Agreement, Company may terminate this Agreement for cause (“Cause”) in
the event (i) of Arnost’s commission of an act involving fraud, embezzlement, or theft against the property or personnel of
Company, or (ii) Arnost shall be convicted of, or plead nolo contendere to a felony or engages in other criminal
conduct that could reasonably be expected to have a material adverse affect on the business, assets, properties, prospects,
results of operations or financial condition of Company. In the event this Agreement is terminated pursuant to this Section
8(a), Arnost’s Salary and all benefits under Section 5(c) hereof shall terminate immediately upon such discharge, and Company
shall have no further obligations to Arnost except for payment and reimbursement for any monies due which right to payment or
reimbursement accrued prior to such termination. Termination for cause shall also include failure to adhere to policies and
Code of Conduct established by the Board of Directors.

 

    	4

    	 

    

 

(b) Death or Disability. The Company may terminate this Agreement upon the disability or death of Arnost
by giving written notice to Amost. In the case of disability, such termination will become effective immediately upon the giving
of such notice unless otherwise specified by the Company. For purposes of this Section 8(b), "disability" shall mean
that for a period of more than six consecutive months in any 12-month period Arnost is unable to perform the essential functions
of his position because of physical, mental or emotional incapacity resulting from injury, sickness or disease. Upon any such
termination, the Company shall be relieved of all its obligations under this Agreement, except for payment of the Arnost Salary
and entitlement to reimbursed expenses unpaid through the effective date of termination. Nothing in this provision is intended
to violate state or federal laws.

 

(c) Termination by Arnost. Arnost may
terminate this Agreement at any time by giving three months' prior written notice to the Company. The Company shall be relieved
of all of its obligations under this Agreement, except for payment of the Arnost Salary and unrein1bursed expenses through the
termination date of his employment.

 

9. Violation of Other Agreements and Authority

 

Arnost represents and warrants to Company that
he is legally able to enter into this Agreement; that he is not prohibited by the terms of any agreement, understanding or policy
from entering into this Agreement; that the terms hereof will not and do not violate or contravene the terms of any agreement,
understanding or policy to which Arnost is or may be a party, or by which Arnost may be bound; that Amost is under no physical
or mental disability that would materiall y interfere with the performance of his duties under this Agreement. Arnost agrees that,
as it is a material inducement to Company that Arnost make the foregoing representations and warranties and that they be true in
all material respects.

 

10. Company Authority Relative to this Agreement

 

The Company has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement. The Board
of Directors of the Company has duly authorized the execution and delivery of this Agreement by the Company and the consummation
by the Company of the transactions contemplated on its part by this Agreement, and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or for the Company to consummate the transactions contemplated by it. The
Company has duly validly executed and delivered this Agreement and it is a valid and binding Agreement of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy or insolvency laws affecting creditors' rights generally
and to general principles of equity.

 

    	5

    	 

    

 

11. Notices

 

Any and all notices, demands or requests required
or permitted to be given under this Agreement shall be given in writing and sent via email to the email address provided for Mr.
Amost below and, on behalf of the Company, to the email address of Dean Julia as set forth below.

 

 

12. Waivers

 

No waiver by any party of any default with
respect to any provision, condition or requirement hereof shall be deemed to be a waiver of any other provision, condition or requirement
hereof; nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such
right accruing to it thereafter.

 

13.Entire Agreement

 

This Agreement sets forth the entire and only
agreement or understanding between the parties relating to the subject matter hereof and supersedes and cancels all previous agreements,
negotiations, letters of intent, correspondence, commitments and representations in respect thereof among them, and no party shall
be bound by any conditions, definitions, warranties or representations with respect to the subject matter of this Agreement except
as provided in this Agreement, other than a separate sales commission agreement.

 

14.Inurement; Assignment

 

The rights and obligations of Company under
this Agreement shall inure to the benefit of and shall be binding upon any successor of Company or to the business of Company,
subject to the provisions hereof. Neither this Agreement nor any rights or obligations of Arnost hereunder shall be transferable
or assignable by Arnost.

 

15. Amendment

 

This Agreement may not be amended in any respect
except by an instrument in writing signed by the parties hereto.

 

16.Headings

 

The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

 

17.Counterparts

 

This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the
same instrument.

 

    	6

    	 

    

 

18. Governing Law

 

This Agreement shall be governed by, construed
and enforced in accordance with the internal laws of the State of New York, without giving reference to principles of conflict
of laws. Each of the parties hereto irrevocably consents to the venue and exclusive jurisdiction of the federal and state courts
located in the State of New York, County of Nassau. THE PARTIES HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS EMPLOYMENT AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED IN IT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY TO IT.

 

 

 

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

 

	 	MOBIQUITY TECHNOLOGIES, INC.
	 	 
	 	 
	 	By:  /s/ Dean Julia                                             
	 	Dean Julia, Co-CEO
	 	Email: djulia@mobiquitynetworks.com 
	 	 
	 	 
	 	 
	 	/s/
    Thomas     Arnost                                               
	 	Thomas
    Arnost, Chairman
	 	Email:  tarnost@aol.com  

 

 

    	7

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