Document:

FSFR-EX10.2_MasterTransferAgreement

EXECUTION

MASTER TRANSFER AGREEMENT
by and between
FIFTH STREET SENIOR FLOATING RATE CORP., 
as the Seller
and
FS SENIOR FUNDING LTD., 
as the Buyer
Dated as of May 28, 2015

1

TABLE OF CONTENTS

Page

	
								
	ARTICLE I
	 
	 
	 
	DEFINITIONS
	 
	1
	

	 
	 
	Section 1.01
	 
	Definitions
	 
	1
	

	 
	 
	Section 1.02
	 
	Other Terms
	 
	4
	

	 
	 
	Section 1.03
	 
	Computation of Time Periods
	 
	4
	

	 
	 
	Section 1.04
	 
	Interpretation
	 
	4
	

	 
	 
	Section 1.05
	 
	References
	 
	5
	

	 
	 
	Section 1.06
	 
	Calculations
	 
	5
	

	 
	 
	 
	 
	 
	 
	 

	ARTICLE II
	 
	 
	 
	TRANSFER OF COLLATERAL OBLIGATIONS
	 
	5
	

	 
	 
	Section 2.01
	 
	Sale, Transfer and Assignment
	 
	5
	

	 
	 
	Section 2.02
	 
	Purchase Price
	 
	7
	

	 
	 
	Section 2.03
	 
	Payment of Purchase Price
	 
	8
	

	 
	 
	Section 2.04
	 
	[Reserved.]
	 
	9
	

	 
	 
	Section 2.05
	 
	Characterization
	 
	9
	

	 
	 
	 
	 
	 
	 
	 

	ARTICLE III
	 
	 
	 
	CONDITIONS PRECEDENT
	 
	9
	

	 
	 
	Section 3.01
	 
	Conditions Precedent to Closing
	 
	9
	

	 
	 
	Section 3.02
	 
	Conditions Precedent to all Purchases
	 
	9
	

	 
	 
	Section 3.03
	 
	Release of Excluded Amounts
	 
	10
	

	 
	 
	 
	 
	 
	 
	 

	ARTICLE IV
	 
	 
	 
	REPRESENTATIONS AND WARRANTIES
	 
	11
	

	 
	 
	Section 4.01
	 
	Representations and Warranties Regarding the Seller
	 
	11
	

	 
	 
	Sections 4.02
	 
	Representations and Warranties of the Seller Relating to the Agreement and the Collateral
	 
	15
	

	 
	 
	Section 4.03
	 
	Representations and Warranties Regarding the Buyer
	 
	15
	

	 
	 
	 
	 
	 
	 
	 

	ARTICLE V
	 
	 
	 
	COVENANTS
	 
	17
	

	 
	 
	Section 5.01
	 
	Affirmative Covenants of the Seller
	 
	17
	

	 
	 
	Section 5.02
	 
	Negative Covenants of the Seller
	 
	18
	

	 
	 
	 
	 
	 
	 
	 

	ARTICLE VI
	 
	 
	 
	OPTION TO REPURCHASE AND SUBSTITUTE COLLATERAL OBLIGATIONS
	 
	19
	

	 
	 
	Section 6.01
	 
	Substitution of Collateral Obligations
	 
	19
	

	 
	 
	Section 6.02
	 
	Seller's Optional Right to Repurchase Collateral Obligations
	 
	20
	

	 
	 
	 
	 
	 
	 
	 

	ARTICLE VII
	 
	 
	 
	INDEMNIFICATION BY THE ORIGINATOR
	 
	21
	

	 
	 
	Section 7.01
	 
	Indemnification
	 
	21
	

	 
	 
	Section 7.02
	 
	Liabilities to Obligors
	 
	21
	

	 
	 
	Section 7.03
	 
	Limitation on Liability
	 
	22
	

	 
	 
	Section 7.04
	 
	Operation of Indemnities
	 
	22
	

	 
	 
	 
	 
	 
	 
	 

	ARTICLE VIII
	 
	 
	 
	TERM AND TERMINATION
	 
	22
	

	 
	 
	Section 8.01
	 
	Termination
	 
	22
	

	 
	 
	 
	 
	 
	 
	 

	ARTICLE IX
	 
	 
	 
	MISCELLANEOUS
	 
	22
	

	 
	 
	Section 9.01
	 
	Amendments and Waivers
	 
	22
	

	 
	 
	Section 9.02
	 
	Notices, Etc.
	 
	23
	

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TABLE OF CONTENTS
(continued)
Page

	
								
	 
	 
	Section 9.03
	 
	Binding Effect; Benefit of Agreement
	 
	23
	

	 
	 
	Section 9.04
	 
	Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue Service of Process
	 
	23
	

	 
	 
	Section 9.05
	 
	Waiver of Jury Trial
	 
	24
	

	 
	 
	Section 9.06
	 
	Certain Taxes
	 
	24
	

	 
	 
	Section 9.07
	 
	Non-Petition
	 
	24
	

	 
	 
	Section 9.08
	 
	Recourse Against Certain Parties
	 
	24
	

	 
	 
	Section 9.09
	 
	Protection of Right, Title and Interest in, to and under the Assets; Further Action Evidencing Purchases
	 
	26
	

	 
	 
	Section 9.10
	 
	Execution in Counterparts; Severability; Integration
	 
	26
	

	 
	 
	Section 9.11
	 
	Heading and Exhibits
	 
	27
	

	 
	 
	Section 9.12
	 
	Assignment
	 
	27
	

	 
	 
	Section 9.13
	 
	No Waiver; Cumulative Remedies
	 
	27
	

	 
	 
	Exhibit A
	 
	Form of Assignment
	 
	 

	 
	 
	Schedule 1
	 
	Initial Collateral Obligations
	 
	 

	 
	 
	 
	 
	 
	 
	 

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MASTER TRANSFER AGREEMENT
THIS MASTER TRANSFER AGREEMENT, dated as of May 28, 2015 (this “Agreement”), is by and between FIFTH STREET SENIOR FLOATING RATE CORP., a Delaware corporation (“Fifth Street,” and in its capacity as seller hereunder, the “Seller”) and FS SENIOR FUNDING LTD., an exempted company incorporated with limited liability in the Cayman Islands (the “Buyer”).
WHEREAS, in the regular course of its business, the Seller originates and/or otherwise acquires Collateral Obligations; and
WHEREAS, pursuant to this Agreement, the Buyer will purchase and may from time to time continue to purchase certain assets from the Seller and the Seller will sell and may from time to time continue to sell and/or contribute to the Buyer certain assets originated or acquired by the Seller in its normal course of business, together with, among other things, certain related security interests and rights of payment thereunder.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I 
 
DEFINITIONS
Section 1.01    Definitions.
Capitalized terms used but not defined in this Agreement shall have the meanings attributed to such terms in the Indenture.  In addition, as used herein, the following defined terms shall have the following meanings:
“Agreement” shall have the meaning provided in the first paragraph of this Agreement.
“Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, public body, administrative tribunal, central bank, public office, court, arbitration or mediation panel, or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of government, including the FINRA, the SEC, the stock exchanges, any Federal, state, territorial, county, municipal or other government or governmental agency, arbitrator, board, body, branch, bureau, commission, court, department, instrumentality, master, mediator, panel, referee, system or other political unit or subdivision or other entity of any of the foregoing, whether domestic or foreign.
“Buyer” shall have the meaning provided in the first paragraph of this Agreement.
“Closing Date” means May 28, 2015.
“Collateral” shall have the meaning provided in Section 2.01.

“Collateral Management Agreement” means the Collateral Management Agreement, dated as of May 28, 2015, by and between Fifth Street, in its capacity as the Collateral Manager, and the Buyer, as the Issuer, as the same may be amended, supplemented, restated or modified from time to time.
“Collateral Obligation List” means the list of Collateral Obligations provided by the Seller to the Buyer on each Purchase Date and incorporated as Schedule I to this Agreement by reference, as such list may be amended, supplemented or modified from time to time in accordance with this Agreement.
“Constituent Documents” means, in respect of any Person, the certificate or articles of formation or organization, the limited liability company agreement, operating agreement, partnership agreement, joint venture agreement or other applicable agreement of formation or organization (or equivalent or comparable constituent documents) and other organizational documents and by-laws and any certificate of incorporation, certificate of formation, certificate of limited partnership and other agreement, or similar instrument filed or made in connection with its formation or organization, in each case, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
“Event of Bankruptcy” means (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Seller or its debts, or of all or a substantial part of its assets, under any bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of all or a receiver, trustee, custodian, sequestrator, conservator or similar official for the Seller or for all or a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 consecutive days; (b) an order or decree approving or ordering any of the actions described in clause (a) shall be entered and the continuance of any such order or decree is unstayed and in effect for a period of 60 consecutive days; or (c) the Seller shall: (i) be wound up or dissolved, (ii) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (iii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (a) of this definition, (iv) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Seller or for all or a substantial part of its assets, (v) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (vi) cease to be able to, or admit in writing its inability to, pay its debts as they become due and payable, or make a general assignment for the benefit of creditors or (vii) take any action for the purpose of effecting any of the foregoing.
“Excluded Amounts” means (a) any amount received by, on or with respect to any Collateral Obligation in the Collateral, which amount is attributable to the payment of any tax, fee or other charge imposed by any applicable Authority on such Collateral Obligation and to the extent such amount is attributable to a time prior to the Purchase Date; (b) any amount representing escrows relating to taxes, insurance and other amounts in connection with any Collateral Obligation which is held in an escrow account for the benefit of the related Obligor and the secured party (other than the Seller in its capacity as lender with respect to such Collateral Obligation) pursuant to escrow 

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arrangements; (c) any amount with respect to any Collateral Obligation repurchased or substituted by the Seller under Article VI to the extent such amount is attributable to a time after the effective date of such repurchase or substitution; (d) any origination fee retained by the Seller in connection with the origination of any Collateral Obligation; and (e) any Equity Security related to any Collateral Obligation that the Seller determines will not be transferred to the Buyer by the Seller in connection with the sale of any related Collateral Obligation hereunder.
“Fifth Street” shall have the meaning provided in the first paragraph of this Agreement.
“Governmental Authorizations” means all franchises, permits, licenses, approvals, consents, orders and other authorizations of all Authorities.
“Governmental Filings” means all filings, including franchise and similar tax filings, and the payment of all fees, assessments, interests and penalties associated with such filings with all Authorities.
“Indemnified Party” shall have the meaning provided in Section 7.01.
“Indenture” means the agreement dated as of the Closing Date, by and among the Issuer, the Co-Issuer, the Trustee and the Collateral Agent.
“Participation” shall have the meaning provided in Section 2.04(a).
“Payment in Full” means payment in full in cash of all Obligations (other than any unasserted contingent obligations), including all principal, interest, Class A-R Commitment Fees, Aggregate Collateral Management Fees, Administrative Expenses and fees, if any, payable under the Transaction Documents.
“Payment in Full Date” means the date on which a Payment in Full occurs and the Class A-R Commitments are terminated.
“Purchase” means a purchase, transfer, settlement or other acquisition by the Buyer of Collateral from or as directed by the Seller pursuant to Section 2.01.
“Purchase Date” means any day on which any Collateral is acquired by the Buyer pursuant to the terms of this Agreement (including any Substitution Date), and including, for the avoidance of doubt, any day on which any Collateral is settled directly with the Buyer from a third party in a transaction intermediated, arranged and underwritten by the Seller and any day on which any Collateral is settled with the Buyer in a transaction in which the Buyer is the designee of the Seller under the instruments of conveyance relating to the applicable Collateral.
“Purchase Price” shall have the meaning provided in Section 2.02.
“Related Contracts” means all credit agreements, indentures, notes, security agreements, leases, financing statements, guaranties, and other contracts, agreements, instruments and other papers evidencing, securing, guaranteeing or otherwise relating to any Collateral Obligation or Eligible Investment or other investment with respect to any Collateral or proceeds thereof (including 

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the related Underlying Instruments), together with all of the Seller’s right, title and interest in, to and under all property or assets securing or otherwise relating to any Collateral Obligation or other loan or security of the Seller or Eligible Investment or other investment with respect to any Collateral or proceeds thereof or any Related Contract.
“Replaced Collateral Obligation” shall have the meaning provided in Section 6.01.
“Repurchase Price” means, on any date of determination with respect to any Credit Risk Obligation or Defaulted Obligation with respect to which the Seller elects to exercise its option to repurchase pursuant to Section 6.02, an amount equal to at least the Market Value of such Credit Risk Obligation or Defaulted Obligation in accordance with Section 12.1 of the Indenture. 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, all as from time to time in effect, or any successor law, rules or regulations, and any reference to any statutory or regulatory provisions shall be deemed to be a reference to any successor statutory or regulatory provision.
“Seller” shall have the meaning provided in the first paragraph of this Agreement.
“Substitute Collateral Obligation” shall have the meaning provided in Section 6.01. 
“Substitution Date” means any date on which the Seller transfers a Substitute Collateral Obligation to the Buyer.
Section 1.02    Other Terms.
All accounting terms used but not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States.  The symbol “$” shall mean the lawful currency of the United States of America.  All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.
Section 1.03    Computation of Time Periods.
Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding”.
Section 1.04    Interpretation.
In this Agreement, unless a contrary intention appears:
(i)    the singular number includes the plural number and vice versa;
(ii)    reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by the Transaction Documents;

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(iii)    references to “including” means “including, without limitation”;
(iv)    reference to day or days without further qualification means calendar days;
(v)    unless otherwise stated, reference to any time means New York, New York time;
(vi)    references to “writing” include printing, typing, lithography, electronic or other means of reproducing words in a visible form;
(vii)    reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, supplemented, replaced, restated, waived or extended and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other Transaction Documents, and reference to any promissory note includes any promissory note that is an extension or renewal thereof or a substitute or replacement therefore; and
(viii)    reference to any applicable law means such applicable law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any section or other provision of any applicable law means that provision of such applicable law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision.
Section 1.05    References.
All section references (including references to the preamble), unless otherwise indicated, shall be to Sections (and the preamble) in this Agreement.
Section 1.06    Calculations.
Except as otherwise provided herein, all interest rate and basis point calculations hereunder will be made on the basis of a 360-day year and the actual days elapsed in the relevant period and will be carried out to at least three decimal places.
ARTICLE II     
 
TRANSFER OF COLLATERAL OBLIGATIONS
Section 2.01    Sale, Transfer and Assignment.
(a)    On the terms and subject to the conditions set forth in this Agreement (including the conditions to purchase set forth in Article III), on each Purchase Date, the Seller hereby sells, transfers, assigns, sets over and otherwise conveys to the Buyer, and the Buyer hereby Purchases and takes from the Seller all right, title and interest (whether now owned or hereafter acquired or arising and wherever located) of the Seller (including all obligations of the Seller as lender to fund any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation conveyed by the 

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Seller to Buyer hereunder which obligations Buyer hereby assumes) in the property identified in clauses (i)–(v) below and all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, general intangibles, instruments, commercial tort claims, deposit accounts, inventory, investment property, letter-of-credit rights, accessions, proceeds and other property consisting of, arising out of, or related to any of the following (in each case excluding the Excluded Amounts) (collectively, the “Collateral”):
(i)    the Collateral Obligations listed on each Collateral Obligation List delivered by the Seller to the Buyer from time to time pursuant to this Agreement, all payments paid in respect thereof, all monies due, to become due or paid in respect of such Collateral Obligations on and after the related Purchase Date (including all Sale Proceeds and other recoveries thereon, in each case as they arise after the related Purchase Date) and any related Assets;
(ii)    all Liens with respect to the Collateral Obligations referred to in clause (i) above; 
(iii)    all Related Contracts with respect to the Collateral Obligations referred to in clause (i) above;
(iv)    all collateral security granted under any Related Contracts; and
(v)    all income and proceeds of the foregoing.
For the avoidance of doubt, and without limiting the foregoing, the term “Collateral” shall, for all purposes of this Agreement, be deemed to include any Collateral Obligation settled directly with the Buyer from a third party in a transaction intermediated, arranged and underwritten by the Seller or any Collateral Obligation acquired by the Buyer in a transaction in which the Seller passes its equitable title to the Buyer as designee of the Seller under the instruments of conveyance relating to the applicable Collateral Obligation.
(b)    From and after each Purchase Date, the Collateral listed on the Collateral Obligation List shall be deemed to be Collateral hereunder.
(c)    On any Purchase Date with respect to the Collateral to be acquired by the Buyer on that date, the Seller shall be deemed to, and hereby does, reaffirm and certify to the Buyer, the Collateral Agent, on behalf of the Secured Parties, the Loan Agent and the Trustee, as of such Purchase Date, that each of the representations and warranties in Section 4.02 is true and correct as of such Purchase Date.
(d)    Except as specifically provided in this Agreement, the sale and purchase of Collateral under this Agreement shall be without recourse to the Seller, it being understood that the Seller shall be liable to the Buyer for all representations, warranties, covenants and indemnities made by the Seller pursuant to the terms of this Agreement, all of which obligations are limited so as not to constitute recourse to the Seller for the credit risk of the Obligors.

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(e)    In connection with each Purchase of Collateral as contemplated by this Agreement, the Buyer hereby directs the Seller to, and the Seller agrees that it will deliver in accordance with the Indenture, or cause to be delivered in accordance with the Indenture (on behalf of the Buyer), to the Custodian, as agent and custodian for the Collateral Agent, each Collateral Obligation being transferred to the Buyer on such Purchase Date in accordance with the applicable provisions of the Indenture.  Each item of Collateral shall be delivered to the Custodian in accordance with the definition of “Deliver” under the Indenture. 
The Seller represents and warrants that each Collateral Obligation purchased prior to the date hereof has been delivered in accordance with the requirements of Section 2.01 of the Amended and Restated Loan Sale and Contribution Agreement, dated as of October 16, 2014, between the Seller and FS Senior Funding LLC.
The Seller shall record and file (or cause to be recorded or filed) on or before the related Purchase Date all financing statements, amendments and terminations statements, as required, and the Seller agrees to record and file (or cause to be recorded or filed) after the related Purchase Date all appropriate financing statements, continuation statements, and other amendments, meeting the requirements of applicable law in such manner and in such jurisdictions as are necessary to perfect and protect the interests of the Collateral Agent and the Secured Parties in the Collateral under the applicable Uniform Commercial Code against all creditors of and purchasers from the Seller.  The Seller promptly shall deliver (or cause to be delivered) file-stamped copies of such financing statements, continuation statements, and amendments to the Collateral Agent, the Trustee and the Loan Agent.  The Seller shall also take such action requested by the Buyer, the Trustee or the Loan Agent, from time to time hereafter, that may be necessary or appropriate to ensure that the Buyer has an enforceable ownership interest and its assigns under the Indenture have an enforceable and perfected security interest in the Collateral Purchased by the Buyer as contemplated by this Agreement.
(f)    In connection with the Purchase by the Buyer of the Collateral as contemplated by this Agreement, the Seller further agrees that it will, at its own expense, indicate clearly and unambiguously in its computer files and its financial statements, on or prior to each Purchase Date, that such Collateral has been Purchased by the Buyer in accordance with this Agreement.
(g)    The Seller further agrees to deliver to the Buyer on or before each Purchase Date a computer file containing a true, complete and correct Collateral Obligation List (which shall contain the related Principal Balance, outstanding principal balance, loan number and Obligor name for each Collateral Obligation) as of the related Purchase Date.  Such file or list shall be marked as Schedule I to this Agreement, shall be delivered to the Buyer as confidential and proprietary, and is hereby incorporated into and made a part of this Agreement as such Schedule I may be supplemented and amended from time to time.
Section 2.02    Purchase Price.
The purchase price for each item of Collateral sold to the Buyer by the Seller under this Agreement shall be a dollar amount equal to the fair market value thereof as determined from time to time by the Seller and the Buyer and each such transaction shall be on terms no less favorable 

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to the Buyer than it would obtain in an comparable arm’s length transaction with a Person that is not an Affiliate (in each case, the “Purchase Price”).
Section 2.03    Payment of Purchase Price.
(b)    For any transfer or purchases the Purchase Price for any Collateral sold by the Seller to the Buyer on any Purchase Date shall be paid in a combination of (i) immediately available funds in cash and (ii) if the Buyer does not have sufficient funds in cash to pay the full amount of the Purchase Price, Additional Subordinated Notes Proceeds.
(c)    The Purchase Price for any Collateral Purchased by the Buyer to be settled directly with a third party on any Purchase Date shall be paid in immediately available funds, which may comprise, if the Buyer does not have sufficient funds in cash to pay the full amount of the Purchase Price, Additional Subordinated Notes Proceeds.
(d)    Notwithstanding any provision herein to the contrary, the Seller may on any Purchase Date elect to designate all or a portion of the Collateral proposed to be transferred to the Buyer on such date as a capital contribution to the Buyer.  In such event, the cash portion of the Purchase Price payable with respect to such transfer shall be reduced by that portion of the Purchase Price of the Collateral that was so contributed; provided that, Collateral contributed to the Buyer as capital shall constitute Collateral for all purposes of this Agreement.  To the extent that the fair market value of any Collateral purchased or acquired by replacement and substitution by Buyer pursuant to this Agreement exceeds the amount of cash paid or other consideration exchanged therefore, such excess shall be deemed to be a capital contribution from the Seller to the Buyer.
(e)    The Seller, in connection with each Purchase hereunder relating to any Collateral, shall be deemed to have certified, and hereby does certify, with respect to the Collateral to be Purchased by the Buyer on such day, that its representations and warranties contained in Article IV are true and correct in all material respects on and as of such day, with the same effect as though made on and as of such day.
(f)    Upon the payment of the Purchase Price for any Purchase, title to the Collateral included in such Purchase shall vest in Buyer, whether or not the conditions precedent to such Purchase and the other covenants and agreements contained herein were in fact satisfied; provided that, the Buyer shall not be deemed to have waived any claim it may have under this Agreement for the failure by the Seller in fact to satisfy any such condition precedent, covenant or agreement.
(g)    The Seller and the Buyer acknowledge and agree that, solely for administrative convenience, any transfer document or assignment agreement (or, in the case of any underlying promissory note, any chain of endorsement) required to be executed and delivered in connection with the transfer of a Collateral Obligation in accordance with the terms of any Related Contracts may reflect that the Seller is assigning such Collateral Obligation directly to the Buyer.  Nothing in such assignment agreements shall be deemed to impair the transfers of the Collateral Obligations by the Seller to the Buyer in accordance with the terms of this Agreement.

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Section 2.04    [Reserved.]
Section 2.05    Characterization.
It is the intention of the parties hereto that the conveyance of all right, title and interest in, to and under the Collateral to the Buyer as provided in this Article II shall constitute an absolute sale, conveyance and transfer conveying good title, free and clear of any Lien (other than Permitted Liens) and that the Collateral shall not be part of the Seller’s bankruptcy estate in the event of an Event of Bankruptcy with respect to the Seller.  Furthermore, it is not intended that such conveyance be deemed a pledge of the Collateral Obligations and the other Collateral to the Buyer to secure a debt or other obligation of the Seller.  If, however, notwithstanding the intention of the parties, the conveyance provided for in this Article II is determined to be a transfer for security and not to be an absolute sale, then this Agreement shall also be deemed to be, and hereby is, a “security agreement” within the meaning of Article 9 of the UCC and the Seller hereby grants to the Buyer a security interest in all right, title and interest in, to and under the Collateral, now existing and hereafter created, to secure the prompt and complete payment of a loan deemed to have been made in an amount equal to the aggregate Purchase Price of the Collateral together with all of the other obligations of the Seller hereunder.  The Buyer shall have, in addition to the rights and remedies which it may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative. The Seller authorizes the Buyer and the Collateral Agent on behalf of the Secured Parties to file UCC financing statements naming the Seller as “debtor”, the Buyer as “assignor secured party” and the Collateral Agent as “assignee secured party”, or similar applicable designations, and describing the Collateral, in each jurisdiction that the Buyer deems necessary in order to protect the security interests in the Collateral granted under this Section 2.05.
ARTICLE III     
 
CONDITIONS PRECEDENT
Section 3.01    Conditions Precedent to Closing.
The closing hereunder is subject to the satisfaction of the conditions precedent set forth in Section 3.1 of the Indenture.
Section 3.02    Conditions Precedent to all Purchases.
The obligations of the Buyer to Purchase the Collateral from the Seller on any Purchase Date (including the initial Purchase Date) shall be subject to the satisfaction of the following conditions precedent that:
(h)    all representations and warranties of the Seller contained in Sections 4.01 and 4.02 shall be true and correct in all material respects on and as of such date as though made on and as of such date and shall be deemed to have been made on and as of such date (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);

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(i)    the Seller shall have delivered to the Buyer a duly completed Collateral Obligation List that is true, accurate and complete in all respects as of the related Purchase Date, which list shall be as of such date incorporated into and made a part of this Agreement;
(j)    on and as of such Purchase Date, the Seller shall have performed all of the obligations, covenants and agreements required to be performed by it on or prior to such date pursuant to the provisions of this Agreement, including ensuring that all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer’s ownership interest in the Collateral Obligations have been duly filed; 
(k)    no event has occurred and is continuing, or would result from such Purchase, that constitutes a Default or an Event of Default (unless such purchase would cure such Default or Event of Default) and the Buyer makes such Purchase in accordance with the applicable provisions hereof and of the Indenture;
(l)    except in connection with the transfer of a Substitute Collateral Obligation in accordance with the provisions of this Agreement and of the Indenture, the final day of the Reinvestment Period shall not have occurred; 
(m)    the Purchase Date shall be a Business Day falling during the Class A-R Commitment Period; 
(n)    no applicable law shall prohibit or enjoin, and no order, judgment or decree of any federal, state or local court or governmental body, agency or instrumentality shall prohibit or enjoin, the making of any such Purchase by the Buyer in accordance with the provisions hereof; and
(o)    all corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in form and substance to the Buyer and its assignees, and the Buyer shall have received from the Seller copies of all documents (including records of corporate proceedings, approvals and opinions) relevant to the transactions herein contemplated as the Buyer may reasonably have requested.
Section 3.03    Release of Excluded Amounts.
The parties acknowledge and agree that the Buyer has no interest in the Excluded Amounts.  Promptly upon the receipt by or release to the Buyer of any Excluded Amounts, the Buyer hereby irrevocably agrees to deliver and release to the Seller such Excluded Amounts, which release shall be automatic and shall require no further act by the Buyer; provided that, the Buyer shall execute and deliver such instruments of release and assignment or other documents, or otherwise confirm the foregoing release of such Excluded Amounts, as may be reasonably requested by the Seller in writing.

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ARTICLE IV     
 
REPRESENTATIONS AND WARRANTIES
Section 4.01    Representations and Warranties Regarding the Seller.
As of the Closing Date and as of each Purchase Date, the Seller represents and warrants to the Buyer for the benefit of the Buyer and each of its successors and assigns that:
(p)    Due Organization. The Seller is a corporation duly incorporated and validly existing under the laws of the State of Delaware, with full power, authority and legal right to own its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Transaction Documents to which it is a party.  
(q)    Due Qualification and Good Standing.  The Seller is in good standing in the State of Delaware.  The Seller is duly qualified to do business and, to the extent applicable, is in good standing and has obtained all material governmental licenses and approvals as required in Delaware and each other jurisdiction in which the failure to be so qualified, maintain good standing or obtain such license or approval, would reasonably be expected to have a Material Adverse Effect.
(r)    Due Authorization; Execution and Delivery; Legal, Value and Binding; Enforceability.  The execution and delivery by the Seller of, and the performance of its obligations under this Agreement and the other Transaction Documents to which it is a party and the other instruments, certificates and agreements contemplated hereby and thereby are within its powers and have been duly authorized by all requisite action by it and have been duly executed and delivered by it and constitute its legal, valid and binding obligations enforceable against it in accordance with their respective 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 Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).  
(s)    Non-Contravention.  None of the execution and delivery by the Seller of this Agreement or the other Transaction Documents to which it is a party, the consummation of the transactions herein or therein contemplated, or performance and compliance by it with the terms, conditions and provisions hereof or thereof, will (i) contravene in any material respect the terms of any Constituent Documents of the Seller, or any amendment thereof; (ii) (A) contravene in any material respect any applicable law, (B) conflict in any material respect, with or result in any breach of, any of the terms and provisions of, or constitute a default under, any indenture, loan, agreement, mortgage, deed of trust or other contractual restriction binding on or affecting it or any of its assets, or (C) contravene in any material respect any order, writ, injunction or decree binding on or affecting it or any of its assets or properties; or (iii) result in a breach or violation of, or constitute a default under, any contractual obligation or any agreement or document to which it is a party or by which it or any of its assets are bound (or to which any such obligation, agreement or document relates), in each case which would reasonably be expected to have a Material Adverse Effect.

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(t)    Governmental Authorizations; Governmental Filings.  Other than any filings the Seller may be required to file after the Closing Date as a public company subject to the Exchange Act and any registration it may be required to make after the Closing Date as an investment adviser pursuant to the Investment Advisers Act, the Seller has obtained, maintained and kept in full force and effect all Governmental Authorizations which are necessary for it to properly carry out its business, and has made all Governmental Filings necessary for the execution and delivery by it of the Transaction Documents to which it is a party and the performance by the Seller of its obligations under this Agreement and the other Transaction Documents, and no Governmental Authorization or Governmental Filing which has not been obtained or made is required to be obtained or made by it in connection with the execution and delivery by it of any Transaction Document to which it is a party or the performance of its obligations under this Agreement and the other Transaction Documents to which it is a party.
(u)    Compliance with Applicable Law.  The Seller has duly observed and complied with all applicable laws, including the Securities Act and the Investment Company Act, relating to the conduct of its business and its assets except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.  
(v)    Taxes.  The Seller has filed or caused to be filed all tax returns which, to its actual knowledge, are required to be filed and has paid all taxes shown to be due and payable on such returns or on any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any applicable Authority (other than any amount of tax due, (i) the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Seller and (ii) the non-payment of which could not reasonably be expected to lead to a Material Adverse Effect.
(w)    Place of Business; No Changes.  The Seller’s location (within the meaning of Article 9 of the UCC) is the State of Delaware.  The Seller has not changed its name, whether by amendment of its certificate of incorporation, by reorganization or otherwise, and has not changed its location within the four months preceding the Closing Date.
(x)    [Reserved.]
(y)    Sale Treatment.  Other than for accounting and tax purposes, the Seller has treated the transfer of Collateral Obligations to the Buyer for all purposes as a sale and/or capital contribution and purchase on all of its relevant books and records.
(z)    Security Interest.
(i)    As described in Section 2.05, it is the intention of the parties hereto that the conveyance of the Collateral to the Buyer be, and be construed as, an absolute sale without recourse.  If, however, notwithstanding the intention of the parties, such conveyance is determined for any reason not to be an absolute sale, this Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in favor of the Buyer in all right, title and interest of the Seller in, to and under the Collateral Obligations, which security 

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interest shall be a first priority perfected security interest prior to all other Liens (other than Permitted Liens), and is enforceable as such against creditors of and purchasers from the Seller upon execution and delivery of this Agreement, 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 Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity);
(ii)    the Collateral Obligations, along with the Related Contracts, constitute “general intangibles,” “instruments,” “accounts,” “investment property,” or “chattel paper,” within the meaning of the applicable UCC;
(iii)    the Seller owns and has, and upon the sale and transfer thereof by the Seller to the Buyer the Buyer will have, good and marketable title to such Collateral Obligations free and clear of any Lien (other than Permitted Liens), claim or encumbrance of any Person;
(iv)    the Seller has received all consents and approvals required by the terms of the Collateral Obligations to the sale of the Collateral Obligations hereunder to the Buyer (except (A) to the extent that the requirement for such consent is rendered ineffective under Section 9-406 of the UCC and (B) for any customary procedural requirements and agents’ and/or Obligors’ consents expected to be obtained in due course in connection with the transfer of the Collateral Obligations to the Buyer (except, in the case of clause (B), for any such agents’ consents where the Seller or any of its Affiliates is the agent which the Seller has or will obtain));
(v)    the Seller has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Collateral Obligations granted to the Buyer under this Agreement to the extent perfection can be achieved by filing a financing statement;
(vi)    other than the security interest granted to the Buyer pursuant to this Agreement, the Seller has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Collateral Obligations.  The Seller has not authorized the filing of and is not aware of any financing statements naming the Seller as debtor that include a description of collateral covering the Collateral Obligations other than any financing statement (A) relating to the security interest granted to the Buyer under this Agreement or (B) that has been terminated or for which a release or partial release has been or will be timely filed.  The Seller is not aware of the filing of any judgment or tax Lien filings against the Seller;
(vii)    except with respect to any Collateral Obligation for which there is no promissory note, all original executed copies of each promissory note that constitutes or evidences the Collateral Obligations have been delivered in accordance with the Indenture by the Seller at the direction of the Buyer as required under the Indenture; and

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(viii)    none of the promissory notes, if any, that constitute or evidence any Collateral Obligations has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Buyer.
(aa)    Value Given.  The cash payments received by the Seller and the increase in the Seller’s equity interest in the Buyer as a result of any capital contribution by the Seller to the Buyer in respect of the Purchase Price of the Collateral Obligations sold hereunder constitute reasonably equivalent value in consideration for the transfer to the Buyer of such Collateral Obligations under this Agreement, such transfer was not made for or on account of an antecedent debt owed by the Seller to the Buyer, and such transfer was not and is not voidable or subject to avoidance under any applicable bankruptcy laws.
(bb)    Bulk Transfer Laws.  The transfer, assignment and conveyance of the Collateral Obligations by the Seller pursuant to this Agreement are not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction.
(cc)    Origination and Collection Practices.  The origination and collection practices used by the Seller and any of its Affiliates with respect to each Collateral Obligation prior to the Purchase Date with respect thereto have been consistent with the Collateral Manager Standard.
(dd)    Lack of Intent to Hinder, Delay or Defraud.  Neither the Seller nor any of its Affiliates has sold, or will sell, any interest in any Collateral Obligations with any intent to hinder, delay or defraud any of their respective creditors.
(ee)    Nonconsolidation.  The Seller conducts its affairs such that (i) the Buyer would not be substantively consolidated in the estate of the Seller and their respective separate existences would not be disregarded in the event of the Seller’s bankruptcy and (ii) in its capacity as board of directors of the Buyer, such that Buyer is in compliance with the provisions of the corporate bylaws of the Buyer; provided that, the Seller does not hereby agree to maintain the solvency of the Buyer.
(ff)    No Proceedings. There is no action, suit or proceeding pending against or, to the actual knowledge of an Officer of the Seller after due inquiry, threatened against or adversely affecting (i) the Seller or (ii) the transactions contemplated by this Agreement, before any court, arbitrator or any governmental body, agency or official, in each case, which has had or would reasonably be expected to have a Material Adverse Effect.
(gg)    [Reserved.]
(hh)    Externally Managed Company.  The Seller is an externally managed, non-diversified, closed-end management investment company that has made an election to be treated as a “business development company” within the meaning of the Investment Company Act.
The representations and warranties set forth in this Section 4.01 shall survive the sale, transfer and assignment of the Collateral Obligations to the Buyer.  Upon discovery by an Officer of either the Seller or the Buyer of a breach of any of the foregoing representations and warranties, the party 

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discovering such breach shall give prompt written notice thereof to the other upon obtaining actual knowledge of such breach.
Section 4.02    Representations and Warranties of the Seller Relating to the Agreement and the Collateral.
The Seller hereby represents and warrants to the Buyer as of the Closing Date and as of each Purchase Date:
(a)    Valid Transfer and Security Interest.  This Agreement constitutes a valid transfer to the Buyer of all right, title and interest of the Seller in, to and under all of the Collateral, free and clear of any Lien (other than Permitted Liens) of any Person claiming through or under the Seller or its Affiliates; provided that, the existence of any lien imposed by law on the property of an Obligor (as described in the Indenture) of which the Seller has no actual knowledge shall not cause a breach of this Section 4.02(a).  If the conveyances contemplated by this Agreement are determined to be a transfer for security, then this Agreement constitutes a grant of a security interest in all of the Collateral to the Buyer, which security interest is a valid and first priority perfected security interest in all Collateral, subject only to Permitted Liens.  Neither the Seller nor any Person claiming through or under Seller shall have any claim to or interest in the Collection Account and if this Agreement constitutes the grant of a security interest in such property, except for the interest of the Seller in such property as a debtor for purposes of the UCC.
(b)    Eligibility of Collateral.  As of the Closing Date and each Purchase Date, (i) the Collateral Obligation List is an accurate and complete listing of all Collateral as of the related Purchase Date and the information contained therein with respect to the identity of such Collateral and the amounts owing thereunder is true and correct in all material respects as of the related Purchase Date and (ii) as of its Purchase Date, each such Collateral Obligation satisfies or satisfied, as applicable, the definition of Collateral Obligation.
(c)    [Reserved.]
(d)    No Fraud.  Each Collateral Obligation was originated without any fraud or material misrepresentation by the Seller or, to the Seller’s knowledge, on the part of the Obligor.
(e)    Ordinary Course of Business.  Any sale of Collateral Obligations pursuant to this Agreement is in the ordinary course of business and financial affairs of the Seller.  Each remittance of Sale Proceeds by the Seller to the Buyer, as transferee under this Agreement, will have been (i) in payment of a debt incurred by the Seller in the ordinary course of business or financial affairs of the Seller and the Buyer and (ii) made in the ordinary course of business or financial affairs of the Seller and the Buyer.
Section 4.03    Representations and Warranties Regarding the Buyer.
By its execution of this Agreement, the Buyer represents and warrants to the Seller that:

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(a)    Due Organization.  The Buyer is an exempted company incorporated with limited liability in the Cayman Islands, with full power and authority to own its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Transaction Documents to which it is a party.
(b)    Due Qualification and Good Standing.  The Buyer is in good standing in the Cayman Islands.  The Buyer is duly qualified to do business and, to the extent applicable, is in good standing and has obtained or will obtain all material governmental licenses and approvals in the Cayman Islands and each other jurisdiction in which the failure to be so qualified, maintain good standing or obtain such license or approval, would reasonably be expected to have a Material Adverse Effect.
(c)    Due Authorization; Execution and Delivery; Legal, Valid and Binding; Enforceability; Valid Sale. The execution and delivery by the Buyer of, and the performance of its obligations under, this Agreement, the other Transaction Documents to which it is a party and the other instruments, certificates and agreements contemplated hereby or thereby are within its powers and have been duly authorized by all requisite action by it and have been duly executed and delivered by it and constitute its legal, valid and binding obligations enforceable against it in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally or general principles of equity, regardless of whether considered in a proceeding in equity or at law.  This Agreement shall effect a valid sale, transfer and assignment of or grant of a security interest in the Collateral Obligations from the Seller to the Buyer, enforceable against the Seller and creditors of and purchasers from the Seller, 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 Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).
(d)    Non-Contravention.  None of the execution and delivery by the Buyer of this Agreement or the other Transaction Documents to which it is a party, the consummation of the transactions herein or therein contemplated, or performance and compliance by it with the terms, conditions and provisions hereof or thereof, will (i) contravene in any material respect or result in any breach of, any of the terms and provisions of, and will not constitute a default under, its Constituent Documents; (ii) conflict with or contravene in any material respect (A) any applicable law, (B) any indenture, agreement or other contractual restriction binding on or affecting it or any of its assets, or (C) contravene in any material respect any order, writ, injunction or decree binding on or affecting it or any of its assets or properties; or (iii) result in a breach or violation of, or constitute a default under, any contractual obligation or any agreement or document to which it is a party or by which it or any of its assets are bound (or to which any such obligation, agreement or document relates), in each case which would reasonably be expected to have a Material Adverse Effect.
(e)    Governmental Authorizations; Governmental Filings.  No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, 

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or is required in connection with the execution, delivery and performance of any Transaction Document (to which it is a party) or the consummation of any of the transactions contemplated thereby other than those that have already been duly made or obtained and remain in full force and effect or those recordings and filings in connection with the Liens granted to the Collateral Agent under the Transaction Documents, except for any order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption, that, if not obtained, would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(f)    [Reserved.]
(g)    Place of Business; No Changes.  The Buyer’s location (within the meaning of Article 9 of the UCC) is the District of Columbia.  The Buyer has not changed its name, whether by amendment of its certificate of formation, by reorganization or otherwise, and has not changed its location, within the four months preceding the Closing Date.
(h)    Sale Treatment.  Other than for accounting and tax purposes, the Buyer has treated the transfer of Collateral Obligations from the Seller for all purposes as a sale and purchase on all of its relevant books and records and other applicable documents
(i)    Ordinary Course of Business.  Any purchase or sale of Collateral Obligations pursuant to this Agreement is in the ordinary course of business and financial affairs of the Buyer.  Each remittance of Sale Proceeds by the Seller to the Buyer, as transferee under this Agreement, will have been received by the Buyer in the ordinary course of business or financial affairs of the Buyer.
ARTICLE V     
 
COVENANTS
Section 5.01    Affirmative Covenants of the Seller.
From the date hereof until the Payment in Full Date:
(f)    Compliance with Laws.  The Seller will comply in all material respects with all applicable requirements of law with respect to the Collateral Obligations.
(g)    Preservation of Corporate Existence.  The Seller will preserve and maintain its corporate existence, material rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification has had, or would reasonably be expected to have, a Material Adverse Effect.
(h)    Performance and Compliance with Collateral.  The Seller will, at its expense, timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under all agreements related to such Collateral.

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(i)    Protection of Interest in Collateral.  With respect to the Collateral Purchased by the Buyer, the Seller will (i) sell such Collateral pursuant to and in accordance with the terms of this Agreement; (ii) at the Seller’s expense take all action necessary to perfect, protect and more fully evidence the Buyer’s or its assignee’s ownership of or security interest in such Collateral free and clear of any Lien (other than the Lien created hereunder and Permitted Liens), including (a) filing and maintaining (at the Seller’s expense), effective financing statements naming the Seller, as debtor, the Buyer, as secured party, and the Collateral Agent, as assignee, in all necessary or appropriate filing offices, and filing continuation statements, amendments or assignments with respect thereto in such filing offices and (b) executing or causing to be executed such other instruments or notices as may be necessary or appropriate; and (iii) take all additional action that the Buyer and the Collateral Agent, the Trustee or the Loan Agent may reasonably request to perfect, protect and more fully evidence the respective interests of the parties to this Agreement in the Collateral and of the Collateral Agent under the Indenture.
(j)    Delivery of Collections.  The Seller will cause all payments relating to all Collateral to be remitted directly to the Collection Account.  In the event any payments relating to any Collateral are remitted directly to the Seller or any Affiliate of the Seller, the Seller will remit (or will cause all such payments to be remitted) directly to the Collection Account within two Business Days following receipt thereof, and, at all times prior to such remittance, the Seller will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Buyer (and its assignees).
(k)    Separate Identity.  The Seller shall take or refrain from taking, as applicable, each of the activities specified or assumed in the true sale and non-consolidation opinions of Dechert LLP delivered on May 28, 2015, upon which the conclusions expressed therein are based.
(l)    Cooperation with Requests for Information or Documents.  The Seller will cooperate fully with all reasonable requests of the Buyer regarding the provision of any information or documents in the possession of or reasonably obtainable by the Seller without undue burden or expense which are necessary or desirable, including the provision of such information or documents in electronic or machine-readable format, to allow each of the Buyer and its assignees to carry out their responsibilities under the Transaction Documents.
Section 5.02    Negative Covenants of the Seller.
From the date hereof until the Payment in Full Date:
(i)    Security Interests.  Except for the transfers hereunder, the Seller will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien (other than Permitted Liens) on any Collateral Obligation, whether now existing or hereafter transferred hereunder, or any interest therein. The Seller will promptly notify the buyer of the existence of any Lien on any Collateral Obligation and the Seller shall defend the right, title and interest of the Buyer and its assignees in, to and under the Collateral Obligations, against all claims of third parties; provided that, nothing in this Section 5.02(a) shall prevent or be deemed to prohibit the Liens created under the Indenture; provided further that, the existence of any lien imposed by 

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law on the property of an Obligor (as described in the Indenture) of which the Seller has no actual knowledge shall not cause a breach of this Section 5.02(a).
(j)    Change of Name or Location of Loan Files.  The Seller shall not change its name, move the location of its principal place of business and chief executive office, or change the jurisdiction of its incorporation, unless the Seller gives 30 days’ prior written notice thereof to the Buyer, the Collateral Agent, the Loan Agent and the Trustee and takes all actions required under the UCC of each relevant jurisdiction in order to continue the first priority perfected security interest of the Buyer and the Collateral Agent, for the benefit of the Secured Parties, in the Collateral.
(k)    Accounting of Purchases.  Other than for tax and accounting purposes, the Seller will not account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby in any manner other than as a sale of the Collateral by the Seller to the Buyer; provided that, for federal income tax reporting purposes, the Buyer will be treated as a “disregarded entity” and the transfer of Collateral by the Seller to the Buyer hereunder will not be recognized.
(l)    Change in Payment Instructions to Obligor.  The Seller shall not make any change in its instructions to Obligors regarding payments to be made to the Collection Account, unless the Collateral Agent, the Trustee and the Loan Agent shall have each given its prior written consent to such change.
ARTICLE VI     
 
OPTION TO REPURCHASE AND SUBSTITUTE COLLATERAL OBLIGATIONS
Section 6.01    Substitution of Collateral Obligations.  
On any day prior to the occurrence of an Event of Default (and thereafter with the prior consent of the Collateral Agent) and so long as the Buyer is permitted to do so pursuant to Section 12.5 of the Indenture, the Seller may, subject to the conditions set forth in this Section 6.01, replace any Credit Risk Obligation or Defaulted Obligation with one or more other Collateral Obligations; provided that, no such replacement shall occur unless each of the following conditions is satisfied as of the date of such replacement and substitution:
(m)    the Seller has notified the Buyer, the Collateral Manager and the Collateral Agent in writing identifying the Collateral Obligation to be replaced (a “Replaced Collateral Obligation”) and the Collateral Obligation(s) to be substituted therefore (each, a “Substitute Collateral Obligation”);
(n)    each Substitute Collateral Obligation is a Collateral Obligation meeting the requirements set forth in the definition of Collateral Obligation on the date of substitution;
(o)    the aggregate outstanding principal balance of such Substitute Collateral Obligation(s) shall be equal to or greater than the outstanding principal balance of such Replaced Collateral Obligation(s);

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(p)    the substitution of any Substitute Collateral Obligation will not cause a Default or an Event of Default to occur;
(q)    the Repurchase and Substitution Limits applicable to any such substitution are satisfied;
(r)    after giving effect to any such substitution, each Coverage Test shall be satisfied;
(s)    after giving effect to any such substitution, each Collateral Quality Test is maintained or improved;
(t)    after giving effect to any such substitution, the Eligibility Criteria shall be satisfied; 
(u)    the Seller shall deliver to the Buyer on the date of such substitution a revised Schedule I that shall include such Substitute Collateral Obligation(s) and shall have deleted such Replaced Collateral Obligation(s); and
(v)    the Seller shall deliver to the Buyer, the Collateral Agent, the Loan Agent and the Trustee on the date of such substitution a certificate of an Officer stating that the foregoing conditions have been or will be met upon such replacement and substitution and an assignment substantially in the form of Exhibit A hereto with respect to such Substitute Collateral Obligation(s).
Section 6.02    Seller’s Optional Right to Repurchase Collateral Obligations.
(a)    In addition to its right of substitution hereunder, on any day prior to the occurrence of an Event of Default (and thereafter with the prior consent of the Collateral Agent) and so long as the Buyer is permitted to do so pursuant to Section 12.5 of the Indenture, the Seller may, subject to the conditions set forth in this Section 6.02, repurchase any Credit Risk Obligation or Defaulted Obligation at the Repurchase Price; provided that, no such repurchase shall occur unless each of the following conditions is satisfied as of the date thereof:
(i)    the Repurchase and Substitution Limits applicable to any such repurchase are satisfied; and
(ii)    the Seller shall deposit in the Collection Account the Repurchase Price with respect to such Credit Risk Obligation or Defaulted Obligation as of the date of such repurchase.  
(b)    Promptly upon request of the Seller, the Buyer (or the Collateral Manager on its behalf) shall determine the Repurchase Price and shall notify the Seller of each thereof and of the Repurchase Price with respect thereto should the Seller elect to exercise its repurchase option.  No later than 10 Business Days after receipt of such information, the Seller may, at its option, by written notice to the Buyer, the Collateral Manager, the Trustee, the Loan Agent and the Collateral Agent, elect to exercise its right to repurchase such Credit Risk Obligation or Defaulted Obligation and, on such date or within five Business Days thereafter, repurchase such Credit Risk Obligation or Defaulted Obligation.  Failure by the Seller to exercise such option to repurchase any Credit Risk Obligation or Defaulted Obligation at any time shall not affect the ability of the Seller to exercise 

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such right at a later date with respect to such Credit Risk Obligation or Defaulted Obligation provided the Repurchase Price is redetermined at such later time.
(c)    Contemporaneously with the receipt of the Repurchase Price, the Buyer shall sell, transfer, assign, set over and otherwise convey to the Seller, without recourse, all the right, title and interest of the Buyer in, to and under any Credit Risk Obligation or Defaulted Obligation repurchased by the Seller pursuant to Section 6.02(a), and the Buyer shall cause the Collateral Agent to release the Lien of the Indenture thereon.
ARTICLE VII     
 
INDEMNIFICATION BY THE ORIGINATOR
Section 7.01    Indemnification.
The Seller agrees to indemnify, defend and hold harmless the Buyer, its officers, directors, employees and agents (any one of which is an “Indemnified Party”) from and against any and all claims, losses, penalties, fines, forfeitures, judgments (provided that any indemnification for damages is limited to actual damages, not consequential, special or punitive damages), reasonable legal fees and related costs and any other reasonable costs, fees and expenses that such Person may sustain as a result of the Seller’s fraud or the failure of the Seller to perform its duties in compliance in all material respects with the terms of this Agreement, except to the extent arising from gross negligence, willful misconduct or fraud by the Person claiming indemnification; provided that, the Seller shall not be liable for any consequential (including loss of profit), indirect, special or punitive damages hereunder.  Any Person seeking indemnification hereunder shall promptly notify the Seller if such Person receives a complaint, claim, compulsory process or other notice of any loss, claim, damage or liability giving rise to a claim of indemnification hereunder, but failure to provide such notice shall not relieve the Seller of its indemnification obligations hereunder unless and to the extent the Seller is deprived of material substantive or procedural rights or defenses as a result thereof.  The Seller shall assume (with the consent of the Indemnified Party, such consent not to be unreasonably withheld) the defense and any settlement of any such claim and pay all expenses in connection therewith, including reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or decree which may be entered against the Indemnified Party in respect of such claim.  The parties agree that the provisions of this Section 7.01 shall not be interpreted to provide recourse to the Seller against loss by reason of the bankruptcy, insolvency or lack of creditworthiness of an Obligor with respect to a Collateral Obligation.  The Seller shall have no liability for making indemnification hereunder to the extent any such indemnification constitutes recourse for uncollectible or uncollected Collateral Obligations.
Section 7.02    Liabilities to Obligors.
Except with respect to the funding commitment assumed by the Buyer with respect to any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation, no obligation or liability to any Obligor under any of the Collateral Obligations is intended to be assumed by the Buyer, the Collateral Agent or any of the other the Secured Parties under or as a result of this Agreement and the transactions contemplated hereby.

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Section 7.03    Limitation on Liability
The Seller shall be liable under this Agreement (i) only to the extent of the obligations specifically undertaken by the Seller under this Agreement and (ii) pursuant to the terms of Section 7.01 above.  The Seller and any member, manager, director, officer, employee or agent of the Seller may rely in good faith on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder.  Subject to Section 7.01, the Seller shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its obligations under this Agreement (including its obligations under Section 7.01) or the other Transaction Documents and that in its opinion may involve it in any expense or liability.
Section 7.04    Operation of Indemnities.
If the Seller has made any indemnity payments to an Indemnified Party pursuant to this Article VII and such Indemnified Party thereafter collects any such amounts from others, such Indemnified Party will repay such amounts collected to the Seller.
ARTICLE VIII     
 
TERM AND TERMINATION
Section 8.01    Termination.
This Agreement shall commence as of the date of execution and delivery hereof and shall continue in full force and effect until the earlier of (i) the Payment in Full Date and (ii) with the prior written consent of the Collateral Agent, the date specified by either party upon 30 days’ prior written notice to the other party as the termination date; provided that, the termination of this Agreement pursuant to this Section 8.01 shall not discharge any Person from obligations incurred prior to any such termination of this Agreement.
ARTICLE IX     
 
MISCELLANEOUS
Section 9.01    Amendments and Waivers.
Except as provided in this Section 9.01, no amendment, waiver or other modification of any provision of this Agreement shall be effective unless it is (a) signed by the Buyer and Seller, after providing notice of such amendment, waiver or other modification to the Trustee, the Loan Agent, the Collateral Agent and the Rating Agencies, (b) consented to in writing by a Majority of the Controlling Class and (c) not objected to in writing by a Majority of the Subordinated Notes; provided that no such consent of the Controlling Class will be required, and no such objection right of the Subordinated Notes shall exist, in connection with any amendment to this Agreement (i) to incorporate by reference and/or amend a Collateral Obligation List on the related Purchase Date, (ii) for which the sole purpose of which is to (x) correct inconsistencies, typographical or other errors, defects or ambiguities or (y) conform this Agreement to the Final Offering Circular or the Indenture (as it may be amended from time to time), (iii) to comply with changes in the Code, (iv) 

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to enable the Buyer to rely upon any exemption from registration under the Securities Act or the 1940 Act or (v) to enable the Buyer to comply with any applicable securities law (including the regulations implementing such laws).  The Buyer shall provide the Holders with notice of any amendment of this Agreement; provided that, the Buyer and the Seller shall provide the Holders of the Controlling Class of Obligations and the Holders of Subordinated Notes with notice of any amendment of this Agreement that does not require the consent of such Holders at least 15 Business Days prior to the proposed execution date thereof; provided, further, that if the Holders of at least 33-1/3% of the Aggregate Outstanding Amount of either the Controlling Class of Obligations or the Subordinated Notes object to such amendment after receiving such notice, then the consent of a Majority of such objecting Class or Classes must be obtained to effect such amendment.       
Section 9.02    Notices, Etc.
All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing and mailed, e-mailed, transmitted or delivered, as to each party hereto, at its address set forth under its name on the signature pages hereof or at such other address as shall be designated by such party in a written notice to the other parties hereto.  All such notices and communications shall be effective, upon receipt, or in the case of (a) notice by mail, three Business Days after being deposited in the United States mail, first class postage prepaid and (b) notice by e-mail or by facsimile mail, when electronic confirmation or verbal communication of receipt is obtained.
Section 9.03    Binding Effect; Benefit of Agreement.
This Agreement shall inure to the benefit of, and the obligations hereunder shall be binding upon, the parties hereto and their respective successors and permitted assigns.  The Seller agrees that the Collateral Agent, as agent for the Secured Parties under the Indenture, shall be a third party beneficiary hereof.  Any permitted assigns of the Buyer shall be third-party beneficiaries of this Agreement.  
Section 9.04    GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE SERVICE OF PROCESS.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON–EXCLUSIVE JURISDICTION OF ANY COURT LOCATED WITHIN THE STATE OF NEW YORK.  EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Each of the Buyer and the Seller agrees that service of process may be effected by mailing a copy thereof by registered or certified mail, postage prepaid, to the Buyer or the Seller, as applicable, at its address specified in the signature pages to this Agreement or at such other address as the Collateral Agent, the Loan Agent and the Trustee shall have been notified in accordance with 

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the Indenture.  Nothing in this Section 9.04 shall affect the right of the Collateral Agent, the Loan Agent or the Trustee to serve legal process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Buyer in any other jurisdiction.
Section 9.05    WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 9.06    Certain Taxes.  The Seller shall pay on demand any and all stamp, sales, excise and other taxes and fees payable or determined to be payable to any applicable Authority in connection with the execution, delivery, filing and recording of this Agreement and the other documents to be delivered hereunder.
Section 9.07    Non-Petition.
(a)    The Seller hereby agrees not to institute against, or join, cooperate with or encourage any other Person in instituting against the Buyer any bankruptcy, reorganization, receivership, arrangement, insolvency, moratorium or liquidation proceedings or other proceedings under federal or state bankruptcy or similar laws until at least one year and one day, or if longer, the applicable preference period then in effect plus one day, after the Payment in Full Date; provided that, nothing in this Section 9.07 shall preclude the Seller (i) from taking any action prior to the expiration of the aforementioned one year and one day period, or if longer the applicable preference period then in effect plus one day, in (a) any case or proceeding voluntarily filed or commenced by the Buyer or (b) any involuntary insolvency proceeding filed or commenced against the Buyer by a Person other than the Seller or its Affiliates, or (ii) from commencing against the Buyer or any properties of the Buyer any legal action which is not a bankruptcy, reorganization, receivership, arrangement, insolvency, moratorium or liquidation proceeding or other proceeding under federal or state bankruptcy or similar laws. 
(b)    The provisions of this Section 9.07 shall survive the termination of this Agreement.
Section 9.08    Recourse Against Certain Parties.
(a)    No recourse under or with respect to any obligation, covenant or agreement (including the payment of any fees or any other obligations) of the Seller as contained in this Agreement, any other Transaction Document or any other agreement, instrument or document entered into by it pursuant to or in connection with this Agreement or any other Transaction Document shall be had against any stockholder, incorporator, authorized representative, officer, employee or director of the Seller by the enforcement of any assessment or by any legal or equitable 

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proceeding, by virtue of any statute or otherwise it being expressly agreed and understood that the agreements of the Seller contained in this Agreement, any other Transaction Document and all of the other agreements, instruments and documents entered into by it pursuant to or in connection with this Agreement or any other Transaction Document are, in each case, solely the corporate obligations of the Seller, and that no personal liability whatsoever shall attach to or be incurred by any stockholder, incorporator, authorized representative, officer, employee or director of the Seller, or any of them, under or by reason of any of the obligations, covenants or agreements of the Seller contained in this Agreement, any other Transaction Document or in any other such instruments, documents or agreements, or which are implied therefrom, and that any and all personal liability of each stockholder, incorporator, authorized representative, officer, employee or director of the Seller, or any of them, for breaches by the Seller of any such obligations, covenants or agreements, which liability may arise either at common law or at equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of this Agreement.  The provisions of this Section 9.08(a) shall survive the termination of this Agreement.
(b)    Notwithstanding any other provision of this Agreement, the obligations of the Buyer under this Agreement and any other Transaction Document are limited recourse obligations of the Buyer payable solely from the Collateral and, following realization of the Collateral, and application of the proceeds thereof in accordance with the Priority of Distributions and all obligations of and any claims by the Seller against the Buyer hereunder after any such realization and application shall be extinguished and shall not thereafter revive.  No recourse under or with respect to any obligation, covenant or agreement (including the payment of any fees or any other obligations) of the Buyer as contained in this Agreement, any other Transaction Document or any other agreement, instrument or document entered into by it pursuant to or in connection with this Agreement or any other Transaction Document shall be had against any member, manager, authorized representative, officer, employee or director of the Buyer by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise it being expressly agreed and understood that the agreements of the Buyer contained in this Agreement, any other Transaction Document and all of the other agreements, instruments and documents entered into by it pursuant to or in connection with this Agreement and any other Transaction Document are, in each case, solely the limited liability company obligations of the Buyer, and that no personal liability whatsoever shall attach to or be incurred by any authorized representative, member, manager, officer, employee or director of the Buyer or any of them, under or by reason of any of the obligations, covenants or agreements of the Buyer contained in this Agreement, any other Transaction Document or in any other such instruments, documents or agreements, or which are implied therefrom, and that any and all personal liability of each authorized representative, member, manager, officer, employee or director of the Buyer, or any of them, for breaches by the Buyer of any such obligations, covenants or agreements, which liability may arise either at common law or at equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of this Agreement.  The provisions of this Section 9.08(b) shall survive the termination of this Agreement.

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Section 9.09    Protection of Right, Title and Interest in, to and under the Assets; Further Action Evidencing Purchases.
(a)    The Seller shall cause all financing statements and continuation statements and any other necessary documents perfecting the Buyer’s security and interest in the Assets to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the perfection and priority of the security interest of the Buyer in all property comprising the Assets. The Seller shall deliver to the Buyer the file–stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. The Seller shall cooperate fully with the Buyer in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this Section 9.09(a).
(b)    The Seller agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that the Buyer or the Collateral Agent, on behalf of the Secured Parties, may reasonably request in order to perfect, protect or more fully evidence the Purchases hereunder and the security and/or interest granted in the Assets.
(c)    If the Seller fails to perform any of its obligations hereunder, the Buyer may (but shall not be required to) perform, or cause performance of, such obligation; and the Buyer’s or the Collateral Agent’s costs and expenses incurred in connection therewith shall be payable by the Seller. The Seller irrevocably authorizes the Buyer at any time (so long as it has filed to perform its obligations hereunder) at the Buyer’s sole discretion and appoints the Collateral Agent as its attorney–in–fact to act on behalf of the Seller (i) to execute on behalf of the Seller and to file financing statements on behalf of the Seller, as debtor, necessary or desirable in the Buyer’s sole discretion to perfect and to maintain the perfection and priority of the security interest of the Buyer (and its assignees) in the Assets and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Assets as a financing statement in such offices as the Buyer in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the security interests of the Buyer (and its assignees) in the Assets. This appointment is coupled with an interest and is irrevocable.
Section 9.10    Execution in Counterparts; Severability; Integration.
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts (including by facsimile), each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.  This Agreement, together with the Indenture and the other Transaction Documents, to the extent that a party is a signatory thereto, and any agreements or letters (including fee letters) executed in connection herewith contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the 

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entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.
Section 9.11    Heading and Exhibits.
The headings herein are for purposes of references only and shall not otherwise affect the meaning or interpretation of any provision hereof.  The schedules and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement for all purposes.
Section 9.12    Assignment.
Notwithstanding anything to the contrary contained herein, this Agreement may not be assigned by the Buyer or the Seller except as permitted by this Section 9.12.  Simultaneously with the execution and delivery of this Agreement, the Buyer shall collaterally assign all of its right, title and interest herein to the Collateral Agent for the benefit of the Secured Parties, to which assignment the Seller hereby expressly consents.  Upon such assignment, the Seller agrees to perform its obligations hereunder for the benefit of the Collateral Agent for the benefit of the Secured Parties and the Collateral Agent, in such capacity, shall be a third party beneficiary hereof.  The Collateral Agent on behalf of the Secured Parties under the Indenture upon such assignment may enforce the provisions of this Agreement, exercise the rights of the Buyer and enforce the obligations of the Seller hereunder without joinder of the Buyer.
Section 9.13    No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the Buyer or the Seller, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.  Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.
[Remainder of Page Intentionally Left Blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written.
FIFTH STREET SENIOR FLOATING RATE CORP., 
as the Seller
By:                               
    Name:  
    Title: 
EXECUTED as a DEED for and on behalf of: 
 
FS SENIOR FUNDING LTD.,  
as the Buyer
By:                               
    Name:  
    Title: 

Exhibit A

Form of Assignment
[Date]
In accordance with the Master Transfer Agreement (together with all amendments and modifications from time to time thereto, the “Agreement”), dated as of May 28, 2015, made by and between the undersigned, Fifth Street Senior Floating Rate Corp., as the Seller (together with its successors and permitted assigns, the “Seller”), and FS Senior Funding Ltd., as the Buyer (together with its successors and permitted assigns, the “Buyer”), as assignee thereunder, the undersigned does hereby sell, transfer, convey and assign, set over and otherwise convey to the Buyer, all of the Seller’s right, title and interest in, to and under the following (including all obligations of the lender to fund any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation conveyed by the undersigned to the Buyer hereunder which obligations the Buyer hereby assumes):
(i)    the Collateral Obligations listed on Schedule I attached hereto (which Schedule I is hereby incorporated by reference in and shall become part of the Collateral Obligation List referred to as Schedule I in the Agreement), all payments paid in respect thereof, all monies due, to become due or paid in respect thereof accruing on and after the Purchase Date (including all Sale Proceeds and other recoveries thereon, in each case as they arise after the Purchase Date) and any related Assets; 
(ii)    all Liens with respect to the Collateral Obligations referred to in clause (i) above;
(iii)    all Related Contracts with respect to the Collateral Obligations referred to in clause (i) above;
(iv)    all collateral security granted under any Related Contracts; and
(v)    all income, payments, proceeds and other benefits of any and all of the foregoing, including all accounts, cash and currency, chattel paper, electronic chattel paper, tangible chattel paper, copyrights, copyright licenses, equipment, fixtures, general intangibles, instruments, commercial tort claims, deposit accounts, inventory, investment property, letter of credit rights, software, supporting obligations, accessions, proceeds and other property consisting of, arising out of, or related to the foregoing, but excluding any Excluded Amount with respect thereto.
Capitalized terms used herein have the meaning given such terms in the Agreement or, if not defined therein, in the Indenture.
This Assignment is made pursuant to and in reliance upon the representations and warranties on the part of the undersigned contained in Article IV and no others.
THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

A-1

IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly executed on the date written above.
FIFTH STREET SENIOR FLOATING RATE CORP.
By:                               
    Name:                           
    Title:                          

A-2

Schedule I

Collateral Obligation List

Sch. I-1FSFR-EX10.3_CollateralManagementAgreement

EXECUTION

COLLATERAL MANAGEMENT AGREEMENT
dated May 28, 2015
by and between
FS SENIOR FUNDING LTD., 
as Issuer
and
FIFTH STREET SENIOR FLOATING RATE CORP., 
as Collateral Manager

TABLE OF CONTENTS
Page

	
						
	Section 1.
	 
	Definitions
	 
	1
	

	Section 2.
	 
	General Duties and Authority of the Collateral Manager
	 
	5
	

	Section 3.
	 
	Purchase and Sale Transactions; Brokerage
	 
	10
	

	Section 4.
	 
	Additional Activities of the Collateral Manager
	 
	12
	

	Section 5.
	 
	Conflicts of Interest
	 
	15
	

	Section 6.
	 
	Records; Confidentiality
	 
	15
	

	Section 7.
	 
	Obligations of Collateral Manager
	 
	16
	

	Section 8.
	 
	Compensation
	 
	17
	

	Section 9.
	 
	Benefit of the Agreement
	 
	19
	

	Section 10.
	 
	Limits of Collateral Manager Responsibility
	 
	19
	

	Section 11.
	 
	Limites Duties and Obligations; No Joint Venture
	 
	20
	

	Section 12.
	 
	Term; Termination
	 
	21
	

	Section 13.
	 
	Assignments
	 
	22
	

	Section 14.
	 
	Removal for Cause
	 
	24
	

	Section 15.
	 
	Obligations of Resigning or Removed Collateral Manager
	 
	27
	

	Section 16.
	 
	Representations and Warranties
	 
	27
	

	Section 17.
	 
	Limited Recourse; No Petition
	 
	31
	

	Section 18.
	 
	Notices
	 
	32
	

	Section 19.
	 
	Binding Nature of Agreement; Successors and Assigns
	 
	33
	

	Section 20.
	 
	Entire Agreement; Amendment
	 
	34
	

	Section 21.
	 
	Governing Law
	 
	34
	

	Section 22.
	 
	Submission to Jurisdiction
	 
	34
	

	Section 23.
	 
	Waiver of Jury Trial
	 
	34
	

	Section 24.
	 
	Conflict with the Indenture
	 
	35
	

	Section 25.
	 
	Subordination; Assignment of Agreement
	 
	35
	

	Section 26.
	 
	Indulgences Not Waivers
	 
	35
	

	Section 27.
	 
	Costs and Expenses
	 
	35
	

	Section 28.
	 
	Third Party Beneficiary
	 
	36
	

	Section 29.
	 
	Titles Not to Affect Interpretation
	 
	36
	

	Section 30.
	 
	Execution to Counterparts
	 
	36
	

	Section 31.
	 
	Provisions Separable
	 
	36
	

COLLATERAL MANAGEMENT AGREEMENT
THIS COLLATERAL MANAGEMENT AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”), dated as of May 28, 2015, is entered into by and between FS SENIOR FUNDING LTD., an exempted company incorporated with limited liability in the Cayman Islands, as issuer (the “Issuer”), and FIFTH STREET SENIOR FLOATING RATE CORP., a Delaware corporation, as collateral manager (together with its successors and permitted assigns, the “Collateral Manager”).
WITNESSETH:
WHEREAS, the Notes will be issued pursuant to an indenture to be dated as of the date hereof (the “Indenture”), between the Issuer, FS Senior Funding CLO LLC, as co-issuer (the “Co-Issuer”) and Wells Fargo Bank, National Association, as trustee (the “Trustee”);
WHEREAS, the Issuer intends to pledge all Collateral Obligations and the other Assets, all as set forth in the Indenture, to the Trustee as security for the Issuer’s obligations under the Indenture;
WHEREAS, the Issuer desires to appoint Fifth Street Senior Floating Rate Corp. as the Collateral Manager to provide the services described herein and Fifth Street Senior Floating Rate Corp. desires to accept such appointment;
WHEREAS, the Indenture authorizes the Issuer to enter into this Agreement, pursuant to which the Collateral Manager agrees to perform, on behalf of the Issuer, certain investment management duties with respect to the acquisition, administration and disposition of Assets in the manner and on the terms set forth herein and to perform such additional duties as are consistent with the terms of this Agreement and the Indenture as the Issuer may from time to time reasonably request; and
WHEREAS, the Collateral Manager has the capacity to provide the services required hereby and is prepared to perform such services upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein set forth and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1.Definitions.
(a)    As used in this Agreement:
“1940 Act” shall mean the Investment Company Act of 1940, as amended.
“Advisers Act” shall mean the U.S. Investment Advisers Act of 1940, as amended. 
“Aggregate Collateral Management Fees” shall have the meaning set forth in Section 8(a).

1

“Agreement” shall have the meaning set forth in the preamble.
“Approved Replacement” shall have the meaning set forth in Section 14(a)(vi).
“Authority” shall mean any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, administrative tribunal, central bank, public office, court, arbitration or mediation panel, or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of government, including the SEC, the stock exchanges, any federal, state, territorial, county, municipal or other government or governmental agency, arbitrator, board, body, branch, bureau, commission, court, department, instrumentality, master, mediator, panel, referee, system or other political unit or subdivision or other entity of any of the foregoing, whether domestic or foreign.
“Cause” shall have the meaning set forth in Section 14(a). 
“Client” shall mean, with respect to any specified Person, any Person or account for which the specified Person provides investment management services or investment advice.  
“Collateral Management Fee” shall have the meaning set forth in Section 8(a).
“Collateral Management Fee Shortfall Amount” shall have the meaning set forth in Section 8(a).
“Collateral Manager” shall have the meaning set forth in the preamble. 
“Collateral Manager Breaches” shall have the meaning set forth in Section 10(a).
“Collateral Manager Offering Circular Information” shall mean the information concerning the Collateral Manager in the Final Offering Circular set forth under the headings “Risk Factors—Relating to the Collateral Manager”, “Risk Factors—Relating to Certain Conflicts of Interest—Certain conflicts of interest relating to the Collateral Manager and its Affiliates”, and “The Collateral Manager”.  
“Collateral Manager Standard” shall mean the standard of care set forth in Section 2(a).
“Cumulative Deferred Management Fee” shall have the meaning set forth in Section 8(a). 
“Current Deferred Management Fee” shall have the meaning set forth in Section 8(a). 
“Expenses” shall have the meaning set forth in Section 10(b).
“Fifth Preliminary Offering Circular” shall mean shall mean the Fifth Preliminary Offering Circular, dated May 4, 2015, with respect to the Offered Securities.
“Fifth Street Entities” shall have the meaning set forth in Section 14(a)(iv).

2

“Final Offering Circular” shall mean the Final Offering Circular, dated as of May 26, 2015, with respect to the Offered Securities and any information in any amendment or supplement to the Final Offering Circular.
“Fourth Preliminary Offering Circular” shall mean shall mean the Fourth Preliminary Offering Circular, dated May 1, 2015, with respect to the Offered Securities.
“Governmental Authorizations” shall mean all franchises, permits, licenses, approvals, consents and other authorizations of all Authorities.
“Governmental Filings” shall mean all filings, including franchise and similar tax filings, and the payment of all fees, assessments, interests and penalties associated with such filings with all Authorities.
“Indemnified Party” shall have the meaning set forth in Section 10(b).
“Indenture” shall have the meaning set forth in the recitals hereto.
“Independent Investment Professional” shall have the meaning set forth in Section 5(a).
“Instrument of Acceptance” shall have the meaning set forth in Section 12(c). 
“Internal Policies” shall have the meaning set forth in Section 3(c).  
“Issuer” shall have the meaning set forth in the preamble.
“Key Person” shall have the meaning set forth in Section 14(a)(vi).
“Losses” shall have the meaning set forth in Section 10(b).
“Material Adverse Effect” shall mean, with respect to any event or circumstance, a material adverse effect on (a) the business, financial condition (other than the performance of the Assets) or operations of the Issuer, taken as a whole, (b) the validity or enforceability of the Indenture, this Agreement or the Issuer’s Amended and Restated Memorandum and Articles of Association or (c) the existence, perfection, priority or enforceability of the Trustee’s lien on the Assets.
“Offering Circular” shall mean, collectively, the Final Offering Circular, the Preliminary Offering Circular and the Second Preliminary Offering Circular, the Third Preliminary Offering Circular, the Fourth Preliminary Offering Circular and the Fifth Preliminary Offering Circular.
“Organizational Instruments” shall mean the memorandum and articles of association or certificate of incorporation and bylaws (or the comparable documents for the applicable jurisdiction), in the case of a corporation, or the partnership agreement, in the case of a partnership, or the certificate of formation and limited liability company agreement (or the comparable documents for the applicable jurisdiction), in the case of a limited liability company.

3

“Owner” shall mean, with respect to any Person, any direct or indirect shareholder, member, partner or other equity or beneficial owner thereof.
“Preliminary Offering Circular” shall mean the Preliminary Offering Circular, dated March 20, 2015, with respect to the Offered Securities.
“Principal Transaction” shall mean any transaction that requires the consent of the Issuer under Section 206(3) of the Advisers Act.
“Registered Investment Adviser” shall mean a Person duly registered as an investment adviser in accordance with and pursuant to Section 203 of the Advisers Act.
“Related Person” shall mean, with respect to any Person, the owners of the equity interests therein, directors, officers, employees, personnel, managers, agents and professional advisors thereof.
“Responsible Officer” shall mean, with respect to any Person, any duly authorized director, officer or manager of such Person with direct responsibility for the administration of the applicable agreement and also, with respect to a particular matter, any other duly authorized director, officer or manager of such Person to whom such matter is referred because of such director’s, officer’s or manager’s knowledge of and familiarity with the particular subject. Each party may receive and accept a certification of the authority of any other party as conclusive evidence of the authority of any Person to act, and such certification may be considered as in full force and effect until receipt by such other party of written notice to the contrary. 
“Second Preliminary Offering Circular” shall mean shall mean the Second Preliminary Offering Circular, dated April 15, 2015, with respect to the Offered Securities.
“Section 28(e)” shall have the meaning set forth in Section 3(b).
“Statement of Cause” shall have the meaning set forth in Section 14(a).
“Termination Notice” shall have the meaning set forth in Section 14(a).
“Third Preliminary Offering Circular” shall mean shall mean the Third Preliminary Offering Circular, dated April 27, 2015, with respect to the Offered Securities.
“Transaction” shall mean any action taken by the Collateral Manager on behalf of the Issuer with respect to the Assets, including, without limitation, (i) selecting the Collateral Obligations and Eligible Investments to be acquired, sold, terminated or otherwise disposed of by the Issuer or any Issuer Subsidiary, (ii) investing and reinvesting the Assets, (iii) amending, waiving and/or taking any other action commensurate with managing the Assets and (iv) instructing the Trustee with respect to any acquisition, disposition or tender of, or Offer with respect to, a Collateral Obligation, Equity Security, Eligible Investment or other assets received in respect thereof in the open market or otherwise by the Issuer.  

4

“Trustee” shall have the meaning set forth in the recitals hereto.
(b)    Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned thereto in the Indenture.  The following rules apply to the use of defined terms and the interpretation of this Agreement: (i) the singular includes the plural and the plural includes the singular; (ii) “or” is not exclusive (unless preceded by “either”) and “include” and “including” are not limiting; (iii) unless the context otherwise requires, references to agreements shall be deemed to mean and include such agreements as the same may be amended, supplemented, waived and otherwise modified from time to time; (iv) a reference to a law includes any amendment or modification to such law and any rules or regulations issued thereunder or any law enacted in substitution or replacement therefor; (v) a reference to a Person includes its successors and assigns; (vi) a reference to a Section without further reference is to the relevant Section of this Agreement; (vii) the headings of the Sections and subsections are for convenience and shall not affect the meaning of this Agreement; (viii) “writing”, “written” and comparable terms refer to printing, typing, lithography and other means of reproducing words in a visible form (including telefacsimile and electronic mail); (ix) “hereof”, “herein”, “hereunder” and comparable terms refer to the entire instrument in which such terms are used and not to any particular article, section or other subdivision thereof or attachment thereto; and (x) references to any gender include any other gender, masculine, feminine or neuter, as the context requires.
Section 2.    General Duties and Authority of the Collateral Manager.
(a)    Fifth Street Senior Floating Rate Corp. is hereby appointed as Collateral Manager of the Issuer for the purpose of performing certain investment management functions including, without limitation, supervising and directing the investment and reinvestment of the Collateral Obligations and Eligible Investments and performing certain administrative and advisory functions on behalf of the Issuer in accordance with the applicable provisions of this Agreement and the Indenture and Fifth Street Senior Floating Rate Corp. hereby accepts such appointment.  The Collateral Manager will perform its obligations hereunder and under the Indenture with reasonable care and in good faith, (i) in a manner which the Collateral Manager believes to be consistent with the practices and procedures followed by institutional managers of national standing relating to assets of the same nature and character as the Collateral Obligations and (ii) substantially in accordance with its existing practices and procedures with respect to investing in assets of the nature and character of the Assets (the “Collateral Manager Standard”). To the extent not inconsistent with the foregoing, the Collateral Manager will follow its customary standards, policies and procedures in performing its duties under this Agreement and the Indenture. 
(b)    Subject to Section 2(a), Section 2(c)(i), Section 2(e), Section 5, Section 7 and Section 10, and to the applicable provisions of the Indenture, the Collateral Manager shall, and is hereby authorized to:
(i)    select the Collateral Obligations and Eligible Investments to be acquired,  sold, terminated or otherwise disposed of by the Issuer or any Issuer Subsidiary;
(ii)    invest and reinvest the Assets as provided in the Indenture; 

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(iii)    instruct the Issuer or the Trustee (as applicable) with respect to any acquisition, disposition or tender of, or Offer with respect to, a Collateral Obligation, Equity Security, Eligible Investment, asset held by the Issuer or any Issuer Subsidiary or other assets received in respect thereof in the open market or otherwise by the Issuer; and
(iv)    perform all other tasks and take all other actions that any of the Indenture, the Master Transfer Agreement, the Class A-R Note Purchase Agreement or this Agreement specify are to be taken by the Collateral Manager.  
The Collateral Manager shall, and is hereby authorized to, perform its obligations hereunder and under the Indenture in a manner which is consistent with the terms hereof and the applicable terms of the Indenture. The Collateral Manager will not be bound to comply with any supplement to the Indenture, however, until it has received a copy of any such supplement from the Issuer or the Trustee and unless the Collateral Manager has consented thereto, as provided in the Indenture.
Notwithstanding anything to the contrary in this Section 2(b), none of the services performed by the Collateral Manager shall result in or be construed as resulting in an obligation to perform any of the following: (i) the Collateral Manager acting repeatedly or continuously as an intermediary in securities for the Issuer; (ii) the Collateral Manager providing investment banking services to the Issuer; or (iii) the Collateral Manager having direct contact with, or actively soliciting or finding, outside investors to invest in the Issuer.  
(c)    Subject to the provisions concerning its general duties and obligations as set forth in paragraphs (a) and (b) above, and to the terms of the Indenture, the Collateral Manager shall provide, and is hereby authorized to provide, the following services to the Issuer:
(i)    The Collateral Manager shall perform the investment-related duties and functions (including, without limitation, the furnishing of Issuer Orders and Responsible Officer’s certificates) as are expressly required hereunder and under the Indenture with regard to acquisitions, sales or other dispositions of Collateral Obligations, Equity Securities, Eligible Investments and other assets permitted to be acquired or sold under, and subject to, the Indenture  (including any proceeds received by way of Offers, workouts and restructurings of assets owned by the Issuer) and shall comply with the requirements in the Indenture.  The Collateral Manager shall have no obligation to perform any other duties other than as expressly specified herein, in the Indenture as applicable to it, and the Collateral Manager shall be subject to no implicit obligations of any kind.  The Issuer hereby irrevocably (except as provided below) appoints the Collateral Manager as its true and lawful agent and attorney-in-fact (with full power of substitution) in its name, place and stead and at its expense, in connection with the performance of its duties provided for in this Agreement, in the Indenture including, without limitation, the following powers: (A) to give or cause to be given any necessary receipts or acquittance for amounts collected or received hereunder or thereunder, (B) to make or cause to be made all necessary transfers of the Collateral Obligations, Equity Securities and Eligible Investments in connection with any acquisition, sale, termination or other disposition made pursuant hereto and the Indenture, (C) to execute (under hand, under seal or as a deed) and deliver or cause to be executed and delivered on behalf of the Issuer all necessary or appropriate bills of sale, assignments, agreements and other instruments in connection with any such acquisition, 

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sale, termination or other disposition and (D) to execute (under hand, under seal or as a deed) and deliver or cause to be executed and delivered on behalf of the Issuer any consents, votes, proxies, waivers, notices, amendments, modifications, agreements, instruments, orders or other documents in connection with or pursuant to this Agreement or the Indenture relating to any Collateral Obligation, Equity Security or Eligible Investment. The Issuer hereby ratifies and confirms all that such attorney-in-fact (or any substitute) shall lawfully do hereunder and pursuant hereto and authorizes such attorney-in-fact to exercise full discretion and act for the Issuer in the same manner and with the same force and effect as the members, managers or officers of the Issuer might or could do in respect of the performance of such services, as well as in respect of all other things the Collateral Manager deems necessary or incidental to the furtherance or conduct of such services, subject in each case to the other terms of this Agreement.  The Issuer hereby authorizes such attorney-in-fact, in its sole discretion (but subject to applicable law and the provisions of this Agreement and the Indenture), to take all actions that it considers reasonably necessary and appropriate in respect of the Assets, this Agreement, the Indenture and the other Transaction Documents. Nevertheless, if so requested by the Collateral Manager or by a purchaser of any Collateral Obligation or Eligible Investment, the Issuer shall ratify and confirm any such sale, termination or other disposition by executing and delivering to the Collateral Manager or such purchaser all proper bills of sale, assignments, releases, powers of attorney, proxies, other orders and other instruments as may reasonably be designated in any such request.  Except as otherwise set forth and provided for herein, this grant of power of attorney is coupled with an interest, and it shall survive and not be affected by the subsequent dissolution or bankruptcy of the Issuer.  Notwithstanding anything herein to the contrary, the appointment herein of the Collateral Manager as the Issuer’s agent and attorney-in-fact shall automatically cease and terminate upon any termination of this Agreement or upon the effective date of the appointment of a successor Collateral Manager following the resignation of the Collateral Manager pursuant to Section 12 or any removal of the Collateral Manager pursuant to Section 14.  Each of the Collateral Manager and the Issuer shall take such other actions, and furnish such certificates, opinions and other documents, as may be reasonably requested by the other party hereto in order to effectuate the purposes of this Agreement and to facilitate compliance with applicable laws and regulations and the terms of this Agreement and the Indenture.
(ii)    The Collateral Manager shall instruct the Issuer with respect to the acquisition of Collateral Obligations by the Issuer in accordance with the Indenture.
(iii)    Pursuant to the terms of this Agreement and subject to any applicable terms of the Indenture, the Collateral Manager shall monitor the Assets on behalf of the Issuer on an ongoing basis and shall provide or cause to be provided to the Issuer all reports, schedules and other data reasonably available to the Collateral Manager that the Issuer is required to prepare and deliver or cause to be prepared and delivered under the Indenture, in such forms and containing such information required thereby, in reasonably sufficient time for such required reports, schedules and data to be reviewed and delivered by or on behalf of the Issuer to the parties entitled thereto under the Indenture.  The obligation of the Collateral Manager to furnish such reports, schedules and other data is subject to the Collateral Manager’s timely receipt of necessary information, reports, schedules and other data from the Person responsible for the delivery or preparation thereof (including without limitation, Obligors of the Collateral Obligations, Moody’s and the Trustee) and to any 

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confidentiality restrictions with respect thereto. The Collateral Manager shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing reasonably believed by it to be genuine and to have been signed or sent by a Person that the Collateral Manager reasonably believes in good faith is duly authorized.  The Collateral Manager also may rely upon any statement made to it orally or by telephone and made by a Person the Collateral Manager reasonably believes in good faith is duly authorized, and shall not incur any liability for relying thereon.  The Collateral Manager is entitled to rely on any other information furnished to it by third parties that it reasonably believes in good faith to be genuine.
(iv)    The Collateral Manager, on behalf of the Issuer, shall be responsible for obtaining, to the extent reasonably practicable and to the extent such information is readily available to it, any information concerning whether a Collateral Obligation is a Discount Obligation or has become a Defaulted Obligation, a Credit Risk Obligation, a Current Pay Obligation or a Credit Improved Obligation.
(v)    The Collateral Manager may, subject to and in accordance with the Indenture, as agent of the Issuer and on behalf of the Issuer, direct the Trustee to take any of the following actions with respect to a Collateral Obligation, Equity Security or Eligible Investment, as applicable:
(A)    purchase or otherwise acquire such Collateral Obligation or Eligible Investment;
(B)    retain such Collateral Obligation, Equity Security or Eligible Investment;
(C)    sell or otherwise dispose of such Collateral Obligation, Equity Security or Eligible Investment (including any assets received by way of Offers, workouts and restructurings on assets owned by the Issuer) in the open market or otherwise;
(D)    if applicable, tender such Collateral Obligation, Equity Security or Eligible Investment;
(E)    if applicable, consent to or refuse to consent to any proposed amendment, modification, restructuring, exchange or waiver;
(F)    retain or dispose of any securities or other property (if other than cash) received by the Issuer;
(G)    waive any default with respect to any Defaulted Obligation;
(H)    vote to accelerate the maturity of any Defaulted Obligation; 
(I)    participate in a committee or group formed by creditors of an issuer or a borrower under a Collateral Obligation, Equity Security or Eligible Investment; 

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(J)    after or in connection with the payment in full of all amounts owed under the Obligations and the termination without replacement of the Indenture or in connection with any redemption of the Obligations, advise the Issuer as to when, in the view of the Collateral Manager, it would be in the best interest of the Issuer to liquidate the Issuer’s investment portfolio (and, if applicable, after discharge of the Indenture) and render such assistance as may be necessary or required by the Issuer in connection with such liquidation or any actions necessary to effectuate a redemption of the Obligations; 
(K)    advise and assist the Issuer with respect to the valuation of the Assets, to the extent required or permitted by the Indenture; 
(L)    provide strategic and financial planning (including advice on utilization of assets), financial statements and other similar reports; 
(M)    negotiate, modify or amend any indebtedness of the Issuer as authorized by the Indenture in connection with an additional issuance of Obligations or a Refinancing; and 
(N)    exercise any other rights or remedies with respect to such Collateral Obligation, Equity Security or Eligible Investment as provided in the Underlying Instruments of the Obligor or issuer of such Assets or the other documents governing the terms of such Assets or take any other action consistent with the terms of this Agreement and the Indenture, which the Collateral Manager reasonably and in good faith determines to be in the best interests of the Issuer. 
(vi)    The Collateral Manager may: (A) upon request of the Issuer, retain accounting, tax, legal counsel and other professional services on behalf of the Issuer as may be needed by the Issuer; and (B) consult on behalf of the Issuer with each Rating Agency at such times as may be reasonably requested in connection with each Rating Agency’s monitoring of the acquisition and disposition of Collateral Obligations and each Rating Agency’s maintenance of their ratings of the Secured Debt.
(vii)    In connection with the acquisition of any Collateral Obligation by the Issuer, the Collateral Manager shall prepare, on behalf of the Issuer, the information required to be delivered to the Trustee pursuant to the Indenture.  
(viii)    Where the Collateral Manager executes on behalf of the Issuer an agreement or instrument pursuant to which any security interest over any assets of the Issuer is created or released, the Collateral Manager shall reasonably promptly give written notice thereof to the Issuer and shall provide the Issuer with such information and/or a copy of documentation in respect thereof as the Issuer may reasonably require.
(d)    In performing its duties hereunder and when exercising its discretion and judgment in connection with any transactions involving the Assets, the Collateral Manager shall carry out any reasonable written directions of the Issuer for the purpose of the Issuer’s compliance with its 

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Organizational Instruments and the Indenture; provided that, such directions are not inconsistent with any provision of this Agreement or the Indenture by which the Collateral Manager is bound or prohibited by applicable law.
(e)    In providing services hereunder, the Collateral Manager may, without the consent of any Person, delegate to third parties (including without limitation its affiliates) the duties assigned to the Collateral Manager under this Agreement, and employ third parties (including without limitation its affiliates) to render advice (including investment advice), to provide services to arrange for trade execution and otherwise provide assistance to the Issuer, and to perform any of the Collateral Manager’s duties under this Agreement; provided that, the Collateral Manager shall not (i) delegate investment advice responsibilities including, without limitation, asset selection, credit review and the negotiation and determination of the acquisition price of a Collateral Obligation, to non-affiliates or (ii) be relieved of any of its duties hereunder regardless of the performance of any services by third parties, including affiliates.
Section 3.    Purchase and Sale Transactions; Brokerage.
(a)    The Collateral Manager, subject to and in accordance with the Indenture, hereby agrees that it shall cause any Transaction to be conducted on terms and conditions negotiated on an arm’s-length basis (except as otherwise expressly required by the Indenture) and in accordance with applicable law.  Except as expressly permitted under the Indenture, no Assets (other than any Delayed Drawdown Collateral Obligations or Revolving Collateral Obligations) shall be purchased if such Assets may give rise to any obligation or liability on the Issuer’s part to the Obligor or issuer thereof to take any action or make any payment other than at the Issuer’s option.  
(b)    To the extent required by applicable law, the Collateral Manager will use all commercially reasonably efforts to obtain best execution (but shall have no obligation to obtain the lowest price available) for all orders placed with respect to any Transaction, in a manner permitted by law and in a manner it believes to be in the best interests of the Issuer.  Subject to the preceding sentence, the Collateral Manager may, in the allocation of business, select brokers and/or dealers with whom to effect trades on behalf of the Issuer and may open cash trading accounts with such brokers and dealers; provided that, none of the Assets may be credited to, held in or subject to the lien of the broker or dealer with respect to any such account.  In addition, subject to the first sentence of this paragraph, the Collateral Manager may, in the allocation of business, take into consideration research and other brokerage services furnished to the Collateral Manager or its affiliates by brokers and dealers which are not affiliates of the Collateral Manager; provided that, the Collateral Manager in good faith believes that the compensation for such services rendered by such brokers and dealers complies with the requirements of Section 28(e) of the Exchange Act (“Section 28(e)”), or in the case of principal or fixed income transactions for which the “safe harbor” of Section 28(e) is not available, the amount of the spread charged is reasonable in relation to the value of the research and other brokerage services provided. Such services may be used by the Collateral Manager in connection with its other advisory activities or investment operations. The Collateral Manager may aggregate sales and purchase orders placed with respect to the Assets with similar orders being made simultaneously for itself, its Affiliates or other accounts managed by the Collateral Manager or by Affiliates of the Collateral Manager, if in the Collateral Manager’s reasonable judgment such 

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aggregation shall result in an overall economic benefit to the Issuer, taking into consideration the advantageous selling or purchase price, brokerage commission or other expenses, as well as the availability of such obligations or securities on any other basis.  In accounting for such aggregated order price, commissions and other expenses may be apportioned on a weighted average basis.  The Issuer acknowledges and agrees that (i) the determination by the Collateral Manager of any benefit to the Issuer will be subjective and will represent the Collateral Manager’s evaluation at the time that the Issuer will be benefited by relatively better purchase or sale prices, lower brokerage commissions, lower transaction costs and expenses and beneficial timing of transactions or any combination of any of these and/or other factors and (ii) the Collateral Manager shall be fully protected with respect to any such determination to the extent the Collateral Manager acts in accordance with the Collateral Manager Standard.
(c)    The Collateral Manager may, from time to time, be presented with investment opportunities that fall within the investment objectives of the Issuer, of the Collateral Manager and its Affiliates, of Clients of the Collateral Manager or its Affiliates and of Persons with whom the Collateral Manager has entered into co-investment arrangements.  In such circumstances, the Collateral Manager expects to allocate such opportunities among the Collateral Manager, its Affiliates, Clients of the Collateral Manager or its Affiliates and any other Persons with whom the Collateral Manager has entered into any co-investment arrangement, as applicable, in accordance with the allocation policy of the Collateral Manager, as such policy may be amended from time to time, and on a basis that the Collateral Manager determines in good faith is appropriate taking into consideration such factors as any allocation and/or co-investment policy agreed to with any such Persons, as applicable, and the contractual and legal duties owed to such Persons, as applicable, the primary investment mandates of each, the capital available to each, any restrictions on investment applicable thereto, the sourcing of the transaction, the size of the transaction, the amount of potential follow-on investing that may be required for such investment and the other investments held by each, the relation of such opportunity to the investment strategy thereof, reasons of portfolio balance, the remaining investment or reinvestment period thereof and any other consideration deemed relevant by the Collateral Manager in good faith.  The Collateral Manager will use reasonable efforts to allocate investment opportunities across the Persons for which such opportunities are appropriate in a manner that is fair and equitable over time and that the Collateral Manager believes, in its reasonable business judgment, to be appropriate and in accordance with (1) its internal conflict of interest and allocation policies (as the same may be amended from time to time, the “Internal Policies”), (2) any allocation and/or co-investment policy or agreement entered into with any such Person, as each may be amended from time to time, and (3) the requirements of applicable law.
(d)    The Collateral Manager may effect Client cross Transactions where the Collateral Manager causes a Transaction to be effected between the Issuer and another Client of the Collateral Manager or any of its Affiliates at any time that the Collateral Manager believes such Transaction to be fair to the Issuer and its other Client.  The Collateral Manager may direct the Issuer to acquire or dispose of Collateral Obligations in trades between the Issuer and other Clients of the Collateral Manager or its Affiliates in accordance with applicable contractual and regulatory requirements.  In such case, the Collateral Manager and such Affiliates may have a potentially conflicting division of loyalties and responsibilities regarding the Issuer and the other parties to such trade.  Under 

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certain circumstances, the Collateral Manager and its Affiliates may determine that it is appropriate to avoid such conflicts by purchasing or selling a Collateral Obligation at a fair value that has been calculated pursuant to the Collateral Manager’s valuation procedures to another Client of the Collateral Manager or such Affiliates.
(e)    In addition, in the future and with the prior blanket authorization of the Issuer, which can be revoked at any time thereafter, the Collateral Manager may enter into agency cross transactions where it or any of its Affiliates acts as broker for the Issuer and for the other party to the transaction, to the extent permitted under applicable law.    
(f)    The Issuer acknowledges and agrees that the Collateral Manager or any of its Affiliates may acquire or sell Assets, for its own account or for the accounts of its Clients, without either requiring or precluding the acquisition or sale of such Assets for the account of the Issuer.  Such investments may be the same or different from those made on behalf of the Issuer.  The Issuer acknowledges that the Collateral Manager and its Affiliates may enter into, for their own accounts or for the accounts of others, credit default swaps relating to Obligors and issuers with respect to the Collateral Obligations and Eligible Investments included in the Assets.
Section 4.    Additional Activities of the Collateral Manager.
Nothing herein shall prevent the Collateral Manager or any of its Affiliates from engaging in other businesses, or from rendering services of any kind to the Issuer, the Trustee, the Placement Agent, any Holder or their respective Affiliates or any other Person or entity regardless of whether such business is in competition with the Issuer or otherwise. Without limiting the generality of the foregoing, partners, members, managers, shareholders, directors, officers, employees and agents of the Collateral Manager, Affiliates of the Collateral Manager, and the Collateral Manager may:
(a)    serve as managers or directors (whether supervisory or managing), officers, employees, members, shareholders, partners, agents, nominees or signatories for the Issuer or any Affiliate thereof, or for any Obligor or issuer in respect of any of the Collateral Obligations, Equity Securities or Eligible Investments or any Affiliate thereof, to the extent permitted by their respective Organizational Instruments and Underlying Instruments, as from time to time amended, or by any resolutions duly adopted by the Issuer, its Affiliates or any Obligor or issuer in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities (or any Affiliate thereof) pursuant to their respective Organizational Instruments or otherwise, and neither the Holders of any Class of Obligations nor the Issuer shall have the right to any such fees;
(b)    receive fees for services of whatever nature, including, without limitation, origination, closing, structuring and other fees, rendered to the Obligor or issuer in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities or any Affiliate thereof (which fees shall be for the benefit of the Collateral Manager’s own account);
(c)    be retained to provide services unrelated to this Agreement to the Issuer or its Affiliates and be paid therefor, on an arm’s-length basis;

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(d)    be a secured or unsecured creditor of, or hold a debt obligation of or equity interest in, the Issuer or any Affiliate thereof or any Obligor or issuer of any Collateral Obligation, Eligible Investment or Equity Security or any Affiliate thereof;
(e)    subject to the applicable provisions of this Agreement and the Indenture, sell any Collateral Obligation or Eligible Investment to, or purchase or acquire any Collateral Obligation or Equity Security from, the Issuer while acting in the capacity of principal or agent;
(f)    underwrite, arrange, structure, originate, syndicate, act as a distributor of or make a market in any Collateral Obligation, Equity Security or Eligible Investment;
(g)    act as an advisor, including as a restructuring advisor or financial advisor, to Obligors or issuers in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities or any Affiliate thereof, or to other interested parties, such as bondholders, equityholders, “creditors’ committees” and potential purchasers;
(h)    serve as a member of any “creditors’ board”, “creditors’ committee” or similar creditor group with respect to any Collateral Obligation, Defaulted Obligation, Eligible Investment or Equity Security; or
(i)    act as collateral manager, portfolio manager, investment manager and/or investment adviser or sub-adviser for Persons issuing securities backed by loans and other assets similar to the Assets, collateralized loan obligation vehicles, separately managed accounts, private funds or other pooled investment vehicles and other similar investment vehicles owned in whole or in part by any of the Collateral Manager, any Affiliate thereof, any other Related Person or any non-affiliated third party.
As a result, such individuals and Persons may possess information relating to Obligors and issuers of Collateral Obligations that is (a) not known to or (b) known but restricted as to its use by the individuals at the Collateral Manager responsible for monitoring the Collateral Obligations and performing the other obligations of the Collateral Manager under this Agreement. Each of such ownership and other relationships may result in securities laws restrictions on transactions in such securities by the Issuer and otherwise create conflicts of interest for the Issuer.  The Issuer acknowledges and agrees that, in all such instances, the Collateral Manager and its Affiliates may in their discretion make investment recommendations and decisions that may be the same as or different from those made with respect to the Issuer’s investments and they have no duty, in making or managing such investments, to act in a way that is favorable to the Issuer.  
The Issuer acknowledges that the Collateral Manager does not expect to maintain information barriers with respect to confidential communications which restrict the Collateral Manager from purchasing securities for itself, its Affiliates or its Clients.  The officers, employees or Affiliates of the Collateral Manager may possess information relating to Obligors and issuers of Collateral Obligations that is not known to the individuals at the Collateral Manager responsible for monitoring the Collateral Obligations and performing the other obligations under this Agreement.  The Collateral Manager may from time to time come into possession of material non-public 

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information that limits the ability of the Collateral Manager to effect a transaction for the Issuer, and the Issuer's investments may be constrained as a consequence of the Collateral Manager's inability to use such information for advisory purposes or otherwise to effect transactions that otherwise may have been initiated on behalf of the Issuer.
The Collateral Manager in its discretion may not, or if prohibited by applicable law will not, acquire or sell Collateral Obligations, Equity Securities or Eligible Investments issued by (i) Persons of which the Collateral Manager, any of its Affiliates or any of its officers, directors or employees are directors or officers, (ii) Persons of which the Collateral Manager, or any of its respective Affiliates act as principal or (iii) Persons about which the Collateral Manager or any of its Affiliates have material non-public information which the Collateral Manager deems would prohibit it from advising as to the trading of such obligations or securities in accordance with applicable law. 
It is understood that the Collateral Manager and any of its Affiliates may engage in any other business and furnish investment management and advisory services to others, including Persons which may have investment policies similar to those followed by the Collateral Manager with respect to the Assets and which may own obligations or securities of the same class, or which are of the same type, as the Collateral Obligations or the Eligible Investments or other obligations or securities of the Obligors or issuers of the Collateral Obligations or the Eligible Investments. The Collateral Manager will be free, in its sole discretion, to make recommendations to others, or effect transactions on behalf of itself or for others, which may be the same as or different from those effected with respect to the Assets. Nothing in the Indenture and this Agreement shall prevent the Collateral Manager or any of its Affiliates, acting either as principal or agent on behalf of others, from buying or selling, or from recommending to or directing any other account to buy or sell, at any time, obligations or securities of the same kind or class, or obligations or securities of a different kind or class of the same Obligor or issuer, as those directed by the Collateral Manager to be purchased or sold on behalf of the Issuer. It is understood that, to the extent permitted by applicable law, the Collateral Manager, its Owners, their Affiliates or their respective Related Persons or any member of their families or a Person or entity advised by the Collateral Manager may have an interest in a particular transaction or in obligations or securities of the same kind or class, or obligations or securities of a different kind or class of the same Obligor or issuer, as those whose acquisition or sale the Collateral Manager may direct hereunder.  If, in light of market conditions and investment objectives, the Collateral Manager determines that it would be advisable to purchase the same Collateral Obligation both for the Issuer, the Collateral Manager, any of its Affiliates, any Client of the Collateral Manager or of its Affiliates and any other Person with whom the Collateral Manager has entered into any co-investment arrangement, as applicable, the Collateral Manager will use reasonable efforts to allocate such investment opportunities across such Persons for which such opportunities that the Collateral Manager believes, in its reasonable business judgment, to be appropriate and in accordance with (i) its Internal Policies, (ii) any allocation and/or co-investment policy or agreement entered into with any such Person, as applicable, as each may be amended from time to time, and (iii) any applicable requirements of the Advisers Act. The Issuer agrees that, in the course of managing the Collateral Obligations held by the Issuer, the Collateral Manager may consider its relationships with its Clients (including Obligors and issuers) and its Affiliates.  The 

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Collateral Manager may decline to make a particular investment for the Issuer in view of such relationships. 
The Issuer acknowledges and agrees that the Collateral Manager and its Affiliates may make and/or hold investments on behalf of themselves or on behalf of their respective Clients in an Obligor’s or issuer’s obligations or securities that may be pari passu, senior or junior in ranking to an investment in such Obligor’s or issuer’s obligations or securities made and/or held by the Issuer, or otherwise may have interests different from or adverse to those of the Issuer and may consider such interests in the course of managing the Collateral Obligations held by the Issuer.
Section 5.    Conflicts of Interest.
(a)    The Issuer shall appoint an Independent third party to act on behalf of the Issuer (such party, the “Independent Investment Professional”) with respect to Principal Transactions and, if referred thereto by the Collateral Manager in its sole discretion, other actual or potential conflicts of interest relating to the Collateral Manager, its Affiliates and any other Related Persons. Decisions of the Independent Investment Professional shall be binding on the Collateral Manager, the Issuer, the Holders of the Obligations and the beneficial owners thereof.  
(b)    The Independent Investment Professional (i) shall be an Independent Person appointed by the Issuer (or at the request of the Issuer, selected by the Collateral Manager), (ii) when requested to do so by the Collateral Manager, shall be required to assess the potential conflicts and merits of each applicable Principal Transaction and either grant or withhold consent to such Principal Transaction in its sole judgment, and (iii) shall be Independent with respect to the Issuer, the Collateral Manager and their respective Affiliates and not be (A) affiliated with the Issuer (other than as a Holder or beneficial owner of an Obligation or as a passive investor in the Issuer or an Affiliate of the Issuer) or the Collateral Manager or (B) involved in the daily administration of the Issuer or the Collateral Manager.
(c)    The Issuer (i) shall be responsible for any fees relating to the services provided by the Independent Investment Professional and shall reimburse the Independent Investment Professional for its out-of-pocket expenses and (ii) may indemnify the Independent Investment Professional to the maximum extent permitted by law, subject to terms and conditions satisfactory to the Collateral Manager.
Section 6.    Records; Confidentiality.
The Collateral Manager shall maintain or cause to be maintained appropriate books of account and records relating to its services performed hereunder, and such books of account and records shall be accessible for inspection by representatives of the Issuer, the Trustee, the Holders and the Independent accountants appointed by the Collateral Manager on behalf of the Issuer pursuant to Section 10.9 of the Indenture at any time during normal business hours and upon not less than three Business Days’ prior notice. The Collateral Manager shall keep confidential any and all information obtained in connection with the services rendered hereunder and shall not disclose any such information to non-affiliated third parties (excluding any Holders of the Obligations) 

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except (a) with the prior written consent of the Issuer, (b) such information as a Rating Agency shall reasonably request in connection with its rating of the Obligations or supplying credit ratings or estimates on any obligation included in the Assets, (c) in connection with establishing trading or investment accounts or otherwise in connection with effecting Transactions on behalf of the Issuer, (d) as required by (i) applicable law, regulation, court order, or a request by a governmental regulatory agency with jurisdiction over the Collateral Manager or any of its Affiliates, (ii) the rules or regulations of any self-regulating organization, body or official having jurisdiction over the Collateral Manager or any of its Affiliates or (iii) the Irish Stock Exchange, (e) to its professional advisors (including, without limitation, legal, tax and accounting advisors) and consultants, (f) such information as shall have been publicly disclosed other than in known violation of this Agreement or the provisions of the Indenture or shall have been obtained by the Collateral Manager on a non-confidential basis, (g) to nationally recognized statistical rating agencies in accordance with Rule 17g-5 under the Exchange Act, (h) such information as is necessary or appropriate to disclose so that the Collateral Manager may perform its duties hereunder, under the Indenture or any other Transaction Document or (i) general performance information which may be used by the Collateral Manager, its Affiliates or Owners in connection with their marketing activities.  Notwithstanding the foregoing, it is agreed that the Collateral Manager may disclose (i) that it is serving as collateral manager of the Issuer, (ii) the nature, aggregate principal amount and overall performance of the Issuer’s Assets, (iii) the amount of earnings on the Assets, (iv) such other information about the Issuer, the Assets and the Obligations as is customarily disclosed by managers of collateralized loan obligations and (v) each of its respective employees, representatives or other agents may disclose to any and all Persons, without limitation, the United States federal income tax treatment and United States federal income tax structure of the transactions contemplated by the Indenture, this Agreement and the related documents and all materials of any kind (including opinions and other tax analyses) that are provided to them relating to such United States federal income tax treatment and United States income tax structure. For purposes of this Section 6, the Holders of the Obligations shall not be considered “non-affiliated third parties.”
Section 7.    Obligations of Collateral Manager.
In accordance with the Collateral Manager Standard, the Collateral Manager shall take care to avoid taking any action that would (a) materially adversely affect the status of the Issuer for purposes of United States federal or state law, or other law that is known by the Collateral Manager to be applicable to the Issuer, (b) not be permitted by the Issuer’s Organizational Instruments, copies of which the Collateral Manager acknowledges the Issuer has provided to the Collateral Manager, (c) violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Issuer, including, without limitation, actions which would violate any United States federal, state or other applicable securities law that is known by the Collateral Manager to be applicable to it and, in each case, the violation of which would have a Material Adverse Effect on the Issuer or have a material adverse effect on the ability of the Collateral Manager to perform its obligations hereunder, (d) require registration of the Issuer or the pool of Assets as an “investment company” under Section 8 of the 1940 Act, or (e) knowingly and willfully adversely affect the interests of the Holders of the Obligations in the Assets in any material respect (other than (i) as expressly permitted hereunder or under the Indenture or (ii) in connection with any action taken in the ordinary course 

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of business of the Collateral Manager in accordance with its fiduciary duties to its Clients).  If the Collateral Manager is directed by the Issuer or the requisite Holders of the Obligations, as applicable, to take any action which would, or could reasonably be expected to, in each case in its reasonable business judgment, have any such consequences, the Collateral Manager shall promptly notify the Issuer that such action would, or could reasonably be expected to, in each case in its reasonable business judgment, have one or more of the consequences set forth above and shall not take such action unless the Issuer then requests the Collateral Manager to do so and both a Majority of the Controlling Class and a Majority of the Subordinated Notes have consented thereto in writing. Notwithstanding any such request, the Collateral Manager may, in its sole discretion, choose not to take such action unless (1) arrangements satisfactory to it are made to insure or indemnify the Collateral Manager, Affiliates of the Collateral Manager and stockholders, partners, members, managers, directors, officers or employees of the Collateral Manager or such Affiliates from any liability and expense it may incur as a result of such action and (2) if the Collateral Manager so requests in respect of a question of law, the Issuer delivers to the Collateral Manager an opinion of counsel (from outside counsel satisfactory to the Collateral Manager) that the action so requested does not violate any material law, rule or regulation of any governmental body or agency having jurisdiction over the Issuer or over the Collateral Manager.  Neither the Collateral Manager, its Affiliates, nor stockholders, partners, members, managers, directors, officers or employees of the Collateral Manager or of its Affiliates shall be liable to the Issuer or any other Person, except as provided in Section 10. Notwithstanding anything contained in this Agreement to the contrary, any indemnification or insurance by the Issuer provided for in this Section 7 or Section 10 shall be payable out of the Assets in accordance with the Priority of Distributions, and the Collateral Manager may take into account such Priority of Distributions in determining whether any proposed indemnity arrangements contemplated by this Section 7 are satisfactory.
Section 8.    Compensation.  
(a)    As compensation for the performance of its obligations as Collateral Manager, the Collateral Manager under this Agreement and the Indenture will be entitled to receive on each Distribution Date (in accordance with the Priority of Distributions) a fee, which will accrue quarterly in arrears on each Distribution Date (prorated for the related Interest Accrual Period), in an amount equal to 0.40% per annum (calculated on the basis of the actual number of days in the applicable Collection Period divided by 360) of the Fee Basis Amount at the beginning of the Collection Period relating to such Distribution Date (the "Collateral Management Fee"); provided that the Collateral Management Fees due on any Distribution Date shall not include any such fees (or any portion thereof) that have been waived or deferred by the Collateral Manager pursuant to this Agreement no later than the Determination Date immediately prior to such Distribution Date.  The Collateral Management Fees will be payable on each Distribution Date to the extent of funds available for such purpose in accordance with the Priority of Distributions.
The Collateral Management Fee is payable on each Distribution Date only to the extent that sufficient Interest Proceeds or Principal Proceeds are available in accordance with the Priority of Distributions.  To the extent the Collateral Management Fee is not paid on a Distribution Date due to insufficient Interest Proceeds or Principal Proceeds (and such fee was not voluntarily deferred 

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or waived by the Collateral Manager), the Collateral Management Fee due on such Distribution Date (or the unpaid portion thereof, as applicable, the "Collateral Management Fee Shortfall Amount") will be automatically deferred for payment on the succeeding Distribution Date, with interest, in accordance with the Priority of Distributions.  Interest on the Collateral Management Fee Shortfall Amounts shall accrue at LIBOR + 0.25% for the period beginning on the first Distribution Date on which the related Collateral Management Fee was due (and not paid) through the Distribution Date on which such Collateral Management Fee Shortfall Amount (including accrued interest) is paid. 
At the option of the Collateral Manager, by written notice to the Trustee, no later than the Determination Date immediately prior to such Distribution Date, on each Distribution Date, (i) all or a portion of the Collateral Management Fee or the Collateral Management Fee Shortfall Amount (including accrued interest thereon) due and owing on such Distribution Date may be deferred for payment on a subsequent Distribution Date, without interest (the "Current Deferred Management Fee") and (ii) all or a portion of the previously deferred Collateral Management Fees or Collateral Management Fee Shortfall Amounts (including accrued interest thereon) (collectively, the "Cumulative Deferred Management Fee") may be declared due and payable and will be payable in accordance with the Priority of Distributions.  At such time as the Obligations are redeemed or repaid in whole in connection with an Optional Redemption (other than a Refinancing), all accrued and unpaid Collateral Management Fees, Current Deferred Management Fees, Cumulative Deferred Management Fees and Collateral Management Fee Shortfall Amounts (collectively, the "Aggregate Collateral Management Fees") shall be due and payable to the Collateral Manager.
(b)    The Collateral Manager may, in its sole discretion (but shall not be obligated to), elect to waive all or any portion of the Collateral Management Fees or Aggregate Collateral Management Fees payable to the Collateral Manager on any Distribution Date.  Any such election shall be made by the Collateral Manager delivering written notice thereof to the Trustee no later than the Determination Date immediately prior to such Distribution Date.  Any election to waive the Collateral Management Fees or the Aggregate Collateral Management Fees may also be made by written standing instructions to the Trustee; provided that such standing instructions may be rescinded by the Collateral Manager at any time.  
(c)    Except as otherwise set forth herein and in the Indenture, the Collateral Manager will continue to serve as collateral manager under this Agreement notwithstanding that the Collateral Manager will not have received amounts due it under this Agreement because sufficient funds were not then available thereunder to pay such amounts in accordance with the Priority of Distributions.
(d)    If this Agreement is terminated for any reason, or if the Collateral Manager resigns or is removed, (i) the Collateral Management Fee shall be prorated for any partial period elapsing from the last Distribution Date on which such Collateral Manager received such Collateral Management Fees to the effective date of such termination, resignation or removal and (ii) any unpaid Cumulative Deferred Management Fees shall be determined as of the effective date of such termination, resignation or removal and, in each case, shall be due and payable on each Distribution Date following the effective date of such termination, resignation or removal in accordance with the Priority of Distributions until paid in full.  Otherwise, such Collateral Manager shall not be 

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entitled to any further compensation for further services but shall be entitled to receive any expense reimbursement accrued to the effective date of termination, resignation or removal and any indemnity amounts owing (or that may become owing) under this Agreement.  Any such Collateral Management Fees, expense reimbursement and indemnities owed to such Collateral Manager or owed to any successor Collateral Manager on any Distribution Date shall be paid pro rata based on the amount thereof then owing to each such Person, subject to the Priority of Distributions.  
Section 9.    Benefit of the Agreement.
The Collateral Manager shall perform its obligations hereunder and under the Indenture in accordance with the terms of this Agreement and the terms of the Indenture applicable to it.  The Collateral Manager agrees and consents to the provisions contained in Article XV of the Indenture.  In addition, the Collateral Manager acknowledges the pledge under the granting clause of the Indenture.
Section 10.    Limits of Collateral Manager Responsibility.
(a)    The Collateral Manager shall not be responsible for any action or inaction of the Issuer, the Independent Investment Professional or the Trustee in following or declining to follow any advice, recommendation or direction of the Collateral Manager including as set forth in Section 7.  The Indemnified Parties (as defined below) shall not be liable to the Issuer, the Trustee, any Holder of Obligations, the Placement Agent, any of their respective Affiliates, Owners or Related Persons or any other Persons for any act, omission, error of judgment, mistake of law, or for any claim, loss, liability, damage, judgment, assessment, settlement, cost, or other expense (including attorneys’ fees and expenses and court costs) arising out of any investment, or for any other act or omission in the performance of the Collateral Manager’s obligations under or in connection with this Agreement or the terms of any other Transaction Document applicable to the Collateral Manager, incurred as a result of actions taken or recommended or for any omissions of the Collateral Manager, or for any decrease in the value of the Assets, except the Collateral Manager shall be liable (i) by reason of acts or omissions constituting bad faith, willful misconduct or gross negligence in the performance of its duties hereunder and under the terms of the Indenture applicable to the Collateral Manager or (ii) with respect to the Collateral Manager Offering Circular Information, as of the date made, containing any untrue statement of a material fact or omitting to state a material fact, in each case necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (the preceding clauses (i) and (ii) collectively referred to for purposes of this Section 10 as “Collateral Manager Breaches”). The Collateral Manager shall not be liable for any consequential, punitive, exemplary or treble damages or lost profits hereunder or under the Indenture. Nothing contained herein shall be deemed to waive any liability which cannot be waived under applicable state or federal law or any rules or regulations adopted thereunder.
(b)    (i)  The Issuer shall indemnify and hold harmless the Collateral Manager, its Affiliates and Owners and their respective Related Persons (any such party in each such case, an “Indemnified Party”) from and against any and all losses, claims, damages, judgments, assessments, costs or other liabilities (collectively, “Losses”) and will promptly reimburse each such Indemnified Party for all reasonable fees and expenses incurred by an Indemnified Party with respect thereto (including 

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reasonable fees and expenses of counsel) (collectively, “Expenses”) arising out of or in connection with the issuance and borrowing of the Obligations (including, without limitation, any untrue statement of material fact contained in the Offering Circular, or omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, other than Collateral Manager Offering Circular Information), the transactions contemplated by the Offering Circular, the Indenture or this Agreement and any acts or omissions of any such Indemnified Party; provided that, such Indemnified Party shall not be indemnified for any Losses or Expenses incurred as a result of any Collateral Manager Breach. Notwithstanding anything contained herein to the contrary, the obligations of the Issuer under this Section 10 to indemnify any Indemnified Party for any Losses or Expenses are non-recourse obligations of the Issuer payable solely out of the Assets in accordance with the Priority of Distributions.
(ii)    The Collateral Manager shall indemnify and hold harmless the Issuer, its Affiliates and their respective partners, members, managers, stockholders, directors, officers, employees and agents (any such party in each such case, an “Indemnified Party”) from and against any and all Losses or Expenses arising out of or in connection with a Collateral Manager Breach; provided that the Collateral Manager will not be liable for any Losses to the extent that such Losses are incurred as a result of any acts or omissions by such Indemnified Party that constitute bad faith, willful misconduct, gross negligence or fraud by such Indemnified Party hereunder or under the terms of any other Transaction Document applicable to it.
Section 11.    Limited Duties and Obligations; No Joint Venture.
The Collateral Manager shall not have any duties or obligations except those expressly set forth herein.  Without limiting the generality of the foregoing, (i) the Collateral Manager shall not be subject to any fiduciary or other implied duties and (ii) the Collateral Manager shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby.  The Issuer and the Collateral Manager are not partners or joint venturers with each other and nothing herein shall be construed to make them partners or joint venturers or impose any liability as such on either of them. The Collateral Manager shall be deemed, for all purposes herein, an independent contractor and shall, except as otherwise expressly provided herein or in the Indenture or authorized by the Issuer from time to time, have no authority to act for or represent the Issuer in any way or otherwise be deemed an agent of the Issuer.  It is acknowledged that neither the Collateral Manager nor any of its Affiliates has provided or shall provide any tax, accounting or legal advice or assistance to the Issuer or any other Person in connection with the transactions contemplated hereby.
Section 12.    Term; Termination.
(a)    This Agreement shall commence as of the date first set forth above and shall continue in force until the first of the following occurs: (i) the final liquidation of the Assets and the final distribution of the proceeds of such liquidation to the Holders of the Obligations, (ii) the payment in full of the Obligations and the satisfaction and discharge of the Indenture in accordance with its terms or (iii) the early termination of this Agreement with respect to the Collateral Manager in 

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accordance with Section 12(c), in connection with the resignation of such Collateral Manager pursuant to Section 12(b) or in connection with the removal of such Collateral Manager pursuant to Section 14.
(b)    Subject only to clause (c) below, the Collateral Manager may resign upon 90  days’ prior written notice to the Issuer (or such shorter notice as is acceptable to the Issuer), the Holders and the Trustee; provided that, the Collateral Manager shall have the right to resign immediately upon the effectiveness of any material change in applicable law or regulation which renders the performance by the Collateral Manager of its duties hereunder or under the Indenture to be a violation of such law or regulation. 
(c)    Notwithstanding the provisions of clause (b) above, no resignation or removal of the Collateral Manager or termination of this Agreement with respect to such Collateral Manager in connection with such resignation or removal shall be effective until the date as of which a successor Collateral Manager shall have been appointed in accordance with Section 12(d) or Section 12(e), and has accepted all of the Collateral Manager’s duties and obligations pursuant to this Agreement in writing (an “Instrument of Acceptance”) and has assumed such duties and obligations. 
(d)    Promptly after notice of any removal under Section 14 or any resignation of the Collateral Manager that is to take place while any of the Obligations are Outstanding, the Issuer shall transmit copies of such notice to the Trustee (which shall forward a copy of such notice to the Holders) and the Rating Agencies (provided that, in the case of S&P, only for so long as any Class A Debt remains Outstanding) and shall appoint a successor Collateral Manager, at the direction of a Majority of the Subordinated Notes, which (i) has demonstrated an ability to professionally and competently perform duties similar to those imposed upon the Collateral Manager hereunder, (ii) is legally qualified and has the capacity to assume all of the responsibilities, duties and obligations of the Collateral Manager hereunder and under the applicable terms of the Indenture, (iii) does not cause or result in the Issuer becoming, or require the pool of Assets to be registered as, an investment company under the 1940 Act, (iv) with respect to which the Global Rating Agency Condition has been satisfied, (v) the appointment of which does not subject the issuer to material adverse tax consequences and (vi) has been approved by a Majority of the Controlling Class.  
(e)    If (i) a Majority of the Subordinated Notes fails to nominate a successor within 30 days of initial notice of the resignation or removal of the Collateral Manager or (ii) a Majority of the Controlling Class does not approve the proposed successor nominated by a Majority of the Subordinated Notes within 20 days of the date of the notice of such nomination, then a Majority of the Controlling Class shall, within 60 days of the failure described in clauses (i) or (ii) of this sentence, as the case may be, nominate a successor Collateral Manager that meets the criteria set forth in Section 12(d).  If a Majority of the Subordinated Notes approves such Controlling Class nominee, such nominee shall become the Collateral Manager.  If no successor Collateral Manager is appointed within 90 days (or, in the event of a change in applicable law or regulation which renders the performance by the Collateral Manager of its duties under this Agreement or the Indenture to be a violation of such law or regulation, within 30 days) following the termination or resignation of the Collateral Manager, any of the Collateral Manager, the Issuer, a Majority of the Subordinated Notes and a Majority of the Controlling Class shall have the right to petition a court of competent 

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jurisdiction to appoint a successor Collateral Manager, in any such case whose appointment shall become effective after such successor has accepted its appointment and without the consent of any Holder of any Obligation.
(f)    The successor Collateral Manager shall be entitled to the Collateral Management Fees set forth in Section 8(a) (except such portion of the Collateral Management Fees due and payable to the former Collateral Manager as set forth in Section 8(d)) and no compensation payable to such successor Collateral Manager shall be greater than as set forth in Section 8(a) without the prior written consent of 100% of the Holders of each Class of Obligations. Upon the later of the expiration of the applicable notice periods with respect to termination specified in this Section 12 or in Section 14 and the acceptance of its appointment hereunder by the successor Collateral Manager, all authority and power of the Collateral Manager hereunder, whether with respect to the Assets or otherwise, shall automatically and without action by any Person or entity pass to and be vested in the successor Collateral Manager. The Issuer, the Trustee and the successor Collateral Manager shall take such action (or the Issuer shall cause the outgoing Collateral Manager to take such action) consistent with this Agreement and as shall be necessary to effect any such succession. 
(g)    If this Agreement is terminated pursuant to this Section 12, such termination shall be without any further liability or obligation of either party to the other, except as provided in clause (h) below.
(h)    Sections 6, 10, 12(g), 15, 17, 21, 22, 23 and 25 shall survive any termination of this Agreement pursuant to this Section 12 or Section 14.
Section 13.    Assignments.
(a)    Except as otherwise provided in this Section 13, the Collateral Manager may not assign or delegate (except as provided in Section 2(e)) its rights or responsibilities under this Agreement unless it has (i) notified Moody’s and directed the Trustee to provide notice to each registered holder, (ii) the Issuer and a Majority of the Controlling Class have consented thereto and (iii) a Majority of the Subordinated Notes has not objected thereto.  The Collateral Manager shall not be required to obtain such consent with respect to a change of control transaction that is deemed to be an assignment within the meaning of Section 202(a)(1) of the Advisers Act, as interpreted by the SEC and its Staff and relevant courts, at the time of any such transaction; provided that, if the Collateral Manager or the Sub-Advisor is a Registered Investment Adviser, the Collateral Manager shall obtain the consent of the Majority of the Holders of Obligations, on behalf of the Issuer, in a manner consistent with SEC Staff interpretations of Section 205(a)(2) of the Advisers Act, to any such transaction.  For the avoidance of doubt, such consent by the Majority of the Holders of Obligations shall be presumed to be granted should the Majority of the Holders of Obligations fail to object within a reasonable period following appropriate notice by the Collateral Manager of an actual, potential or intended change of control transaction.
(b)    The Collateral Manager may, without notifying Moody’s and without obtaining the consent of any Holder (and without respect to the objection of any Holder) and, so long as such assignment does not constitute an “assignment” for purposes of Section 205(a)(2) of the Advisers 

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Act during such time as the Collateral Manager or the Sub-Advisor is a Registered Investment Adviser, without obtaining the prior consent of the Majority of the Holders of Obligations on behalf of the Issuer, (1) assign any of its rights or obligations under this Agreement to an Affiliate; provided that, such Affiliate (i) has demonstrated an ability to professionally and competently perform duties similar to those imposed upon the Collateral Manager pursuant to this Agreement, (ii) has the legal right and capacity to act as Collateral Manager under this Agreement, (iii) shall not cause the Issuer or the pool of Assets to become required to register under the provisions of the 1940 Act or (2) enter into (or have its parent, if any, enter into) any consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all of its assets to, another entity and (iv) shall have the benefit of the Sub-Advisory Agreement to the same extent as the Collateral Manager; provided that, at the time of such consolidation, merger, amalgamation or transfer the resulting, surviving or transferee entity assumes all the obligations of the Collateral Manager under this Agreement generally and the other entity has substantially the same investment personnel; provided, further, that such action does not cause the Issuer to be subject to tax in any jurisdiction; provided, further, that the Collateral Manager shall deliver prior notice to Moody’s of any assignment or combination made pursuant to this sentence.  Upon the execution and delivery of any such assignment by the assignee, the Collateral Manager will be released from further obligations pursuant to this Agreement except with respect to its obligations and agreements arising under Section 10, 12(g), 17, 21 through 23, and 25 in respect of acts or omissions occurring prior to such assignment and except with respect to its obligations under Section 15 after such assignment. 
(c)    This Agreement shall not be assigned by the Issuer without (i) the prior written consent of (A) the Collateral Manager and (B) a Majority of each Class of Obligations (voting separately) and (ii) satisfaction of the Global Rating Agency Condition, except in the case of assignment by the Issuer (1) to an entity which is a successor to the Issuer permitted under the Indenture, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Issuer is bound hereunder or (2) to the Trustee as contemplated by the granting clause of the Indenture. The Issuer has assigned its rights, title and interest in (but not its obligations under) this Agreement to the Trustee pursuant to the Indenture, and the Collateral Manager by its signature below agrees to, and acknowledges, such assignment. Upon assignment by the Issuer, the Issuer shall use reasonable efforts to cause such assignee to execute and deliver to the Collateral Manager such documents as the Collateral Manager shall consider reasonably necessary to effect fully such assignment.
(d)    The Issuer shall provide the Rating Agencies and the Trustee (who shall provide a copy of such notice to the Controlling Class) with notice of any assignment pursuant to this Section 13.
Section 14.    Removal for Cause.
(a)    The Collateral Manager may be removed for Cause upon 10 Business Days’ prior written notice by the Issuer (“Termination Notice”) at the direction of a Majority of the Controlling Class or a Majority of the Subordinated Notes.  Simultaneous with its direction to the Issuer to remove the Collateral Manager for Cause, a Majority of the Controlling Class or a Majority of the Subordinated Notes, as applicable, shall give to the Issuer a written statement setting forth the reason 

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for such removal (“Statement of Cause”).  The Issuer shall deliver to the Trustee (who shall deliver a copy of such notice to the Holders) a copy of the Termination Notice and the Statement of Cause within five Business Days of receipt.  No such removal shall be effective (A) until the date as of which a successor Collateral Manager shall have been appointed in accordance with Sections 12(d) and (e) and delivered an Instrument of Acceptance to the Issuer and the removed Collateral Manager and the successor Collateral Manager has effectively assumed all of the Collateral Manager’s duties and obligations and (B) unless the Statement of Cause has been delivered to the Issuer as set forth in this Section 14(a).  “Cause” shall mean any of the following:
(i)    the Collateral Manager shall willfully and intentionally violate or breach any provision of this Agreement or the Indenture applicable to it (not including a willful and intentional breach that results from a good faith dispute regarding reasonable alternative courses of action or interpretation of instructions), which breach, in each case or taken in the aggregate, shall have or could be reasonably expected to have a material adverse effect on the Issuer or the Holders of any Class of Obligations; 
(ii)    the Collateral Manager shall breach any provision of this Agreement or any terms of the Indenture or any other Transaction Document applicable to it (other than as covered by clause (i) and it being understood that the failure to meet any Concentration Limitation, Collateral Quality Test or Coverage Test is not a breach for purposes of this clause (ii)), which breach would have a material adverse effect on the holders of any Class of Obligations and shall not cure such breach (if capable of being cured) within 30 days after the earlier to occur of a Responsible Officer of the Collateral Manager receiving notice or having actual knowledge of such breach, unless, if such breach is remediable, the Collateral Manager has taken action commencing the cure thereof within such 30 day period that the Collateral Manager believes in good faith will remedy such breach within 60 days after the earlier to occur of a Responsible Officer receiving notice or having actual knowledge thereof; 
(iii)    the failure of any representation, warranty, certification or statement made or delivered by the Collateral Manager in or pursuant to this Agreement or the Indenture to be correct in any material respect when made which failure (A) would have a material adverse effect on the holders of any Class of Obligation and (B) is not corrected by the Collateral Manager within 30 days of a Responsible Officer of the Collateral Manager receiving notice of such failure, unless, if such failure is remediable, the Collateral Manager has taken action commencing the cure thereof within such 30-day period that the Collateral Manager believes in good faith will remedy such failure within 60 days after the earlier to occur of a Responsible Officer receiving notice thereof or having actual knowledge thereof; 
(iv)    the Collateral Manager, Fifth Street Management LLC or any successor sub-adviser of the Collateral Manager (collectively, the “Fifth Street Entities”) is wound up or dissolved or there is appointed over it or a substantial part of its assets a receiver, administrator, administrative receiver, trustee or similar officer; or any of the Fifth Street Entities (A) ceases to be able to, or admits in writing its inability to, pay its debts as they become due and payable, or makes a general assignment for the benefit of, or enters into any composition or arrangement with, its creditors generally; (B) applies for or consents (by admission of material allegations of a petition or otherwise) 

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to the appointment of a receiver, trustee, assignee, custodian, liquidator or sequestrator (or other similar official) of any of the Fifth Street Entities or of any substantial part of its properties or assets in connection with any winding up, liquidation, reorganization or other relief under any bankruptcy, insolvency, receivership or similar law, or authorizes such an application or consent, or proceedings seeking such appointment are commenced without such authorization, consent or application against any of the Fifth Street Entities and continue undismissed for 60 days; (C) authorizes or files a voluntary petition in bankruptcy, or applies for or consents (by admission of material allegations of a petition or otherwise) to the application of any bankruptcy, reorganization, arrangement, readjustment of debt, insolvency, dissolution, or similar law, or authorizes such application or consent, or proceedings to such end are instituted against any of the Fifth Street Entities without such authorization, application or consent and are approved as properly instituted and remain undismissed for 60 days or result in adjudication of bankruptcy or insolvency or the issuance of an order for relief; or (D) permits or suffers all or any substantial part of its properties or assets to be sequestered or attached by court order and the order (if contested in good faith) remains undismissed for 60 days; 
(v)    the occurrence and continuation of an Event of Default pursuant to Section 5.1(a), (b) or (c) of the Indenture that results primarily from any material breach by the Collateral Manager of its duties under this Agreement or under the Indenture which breach or default is not cured within any applicable cure period; 
(vi)    Two or more of the Key Persons shall (i) not be an officer or employee of the Collateral Manager (or an Affiliate of the Collateral Manager that is acting on behalf of the Collateral Manager) or (ii) not be actively involved in the management of the Collateral Manager or any Affiliate thereof for any continuous 60-day period, other than due to temporary absences for family leave (each such occurrence, a “Key Person Event”), and the responsibilities of any such Key Person that are relevant to the Collateral Manager's responsibilities hereunder are not assumed by an individual who is an Approved Replacement within 60 days after the last day on which such Key Person ceased to comply with the provisions of clause (i) or (ii) above. “Key Persons” shall initially mean Bernard Berman, Ivelin Dimitrov and Leonard Tannenbaum and may subsequently include any Approved Replacements therefor. “Approved Replacement” any replacement Key Person approved in accordance with the following procedures:  The Collateral Manager may, at any time and by notice to the Trustee (who shall forward such notice to the Controlling Class and the holders of the Subordinated Notes) propose any person to be an Approved Replacement.  Any such proposed individual shall become an Approved Replacement if such person is (i) affirmatively approved in writing by a Majority of the Controlling Class prior to the expiration of a period of 90 consecutive days after the occurrence of any Key Person Event or (ii) not objected to by a Majority of the Controlling Class within 30 days after notice of such proposed replacement is sent to the Holders of the Controlling Class; provided that the Collateral Manager must propose any such replacement not later than 60 days after the occurrence of any Key Person Event. If any proposed replacement (whether or not it was the first to be proposed) is not approved in accordance with the procedures described in this paragraph, the Collateral Manager may, subject to the approval rights in the preceding sentence, propose another replacement within the time periods specified in the preceding sentence; 

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(vii)    (A) the occurrence of an act by any of the Fifth Street Entities that constitutes fraud or criminal activity in the performance of its obligations under this Agreement, the Sub-Advisory Agreement, any other advisory agreement, any staffing agreement or similar agreement that is entered into for the benefit of the Collateral Manager or the Issuer (as determined pursuant to a final adjudication by a court of competent jurisdiction) or any of the Fifth Street Entities being indicted or convicted for a criminal offense materially related to its business of providing asset management services and, in the case of an indictment, such indictment remains undismissed for at least 90 days, or (B) any Responsible Officer of any of the Fifth Street Entities primarily responsible (directly or indirectly) for the performance by the Collateral Manager of its obligations under this Agreement (in the performance of his or her investment management duties) is indicted or convicted for a criminal offense materially related to the business of the Collateral Manager or the Sub-Advisor providing asset management services and continues to have responsibility for the performance (directly or indirectly) by the Collateral Manager under this Agreement for a period of 10 days after such indictment or conviction; or
(viii)    the inability of the Collateral Manager to perform its duties hereunder, under the Indenture for a period of 30 consecutive days due to termination of, non-performance under, or any other reason relating to the Sub-Advisory Agreement, any other advisory agreement, any staffing agreement or other similar agreement that is entered into with any of the Fifth Street Entities for the benefit of the Collateral Manager or the Issuer.
(b)    If any of the events specified in clauses (a)(i) through (viii) of this Section 14 shall occur, the Collateral Manager shall give prompt written notice thereof to the Issuer, the Holders, the Trustee and the Rating Agencies; provided that, if any of the events specified in Section 14(a)(iv) shall occur, the Collateral Manager shall give written notice thereof to the Issuer, the Trustee and the Rating Agencies immediately upon the Collateral Manager’s becoming aware of the occurrence of such event.  A Majority of each Class of Obligations, voting separately by Class, and a Majority of the Subordinated Notes may waive any event described in Section 14(a)(i), (ii), (iii), (v), (vi), (vii) or (viii) as a basis for termination of this Agreement and removal of the Collateral Manager under this Section 14.  In no event will the Trustee be required to determine whether or not Cause exists for the removal of the Collateral Manager.
(c)    If the Collateral Manager is removed pursuant to this Section 14, the Issuer shall have, in addition to the rights and remedies set forth in this Agreement, all of the rights and remedies available with respect thereto at law or equity. 
(d)    Obligations owned or beneficially owned by the Collateral Manager or any Affiliate of the Collateral Manager or held in accounts with respect to which the Collateral Manager exercises discretionary voting rights will be disregarded and deemed not to be outstanding with respect to a vote to (1) remove the Collateral Manager, (2) waive an event constituting Cause and (3) appoint or disapprove a successor Collateral Manager, if the Collateral Manager is being terminated for Cause. 
Section 15.    Obligations of Resigning or Removed Collateral Manager.

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(a)    On, or as soon as practicable after, the date any resignation or removal is effective, the Collateral Manager shall (at the Issuer’s expense):
(i)    deliver to the Issuer or to such other Person as the Issuer shall instruct all property and documents of the Issuer or otherwise relating to the Assets then in the custody of the Collateral Manager;
(ii)    deliver to the Trustee an accounting with respect to the books and records delivered to the Trustee or the successor Collateral Manager appointed pursuant to Section 12; and
(iii)    agree to cooperate with all reasonable requests related to any proceedings, even after its resignation or removal, which arise in connection with this Agreement or the Indenture, assuming the Collateral Manager has received an indemnity in form reasonably satisfactory to the Collateral Manager from an entity reasonably satisfactory to the Collateral Manager, and expense reimbursement reasonably satisfactory to the Collateral Manager.
(b)    Notwithstanding such resignation or removal, the Collateral Manager shall remain liable for its obligations under Section 10 and its acts or omissions giving rise thereto and for any expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including reasonable attorneys’ fees) in respect of or arising out of a Collateral Manager Breach, subject to the limitations of liability set forth in Section 10.
Section 16.    Representations and Warranties.
(a)    The Issuer hereby represents and warrants to the Collateral Manager as follows:
(i)    The Issuer has been duly organized and is validly existing under the laws of the jurisdiction of its organization, has the full power and authority to own its assets and the securities proposed to be owned by it and included in the Assets and to transact the business in which it is presently engaged and is duly qualified under the laws of each jurisdiction where its ownership or lease of property, the conduct of its business or the performance of this Agreement or the Indenture and the Obligations require such qualification, except for those jurisdictions in which the failure to be so qualified, authorized or licensed would not have a Material Adverse Effect on the Issuer. 
(ii)    The Issuer has full power and authority to execute, deliver and perform all of its obligations under this Agreement, the Indenture and the Obligations and has taken all necessary action to authorize this Agreement and the execution and delivery of this Agreement and the performance of all obligations imposed upon it hereunder, and, as of the Closing Date, will have taken all necessary action to authorize the Indenture and the Obligations and the execution, delivery and performance of this Agreement, the Indenture and the Obligations and the performance of all obligations imposed upon it thereunder.  No consent of any other Person including, without limitation, the holders of Subordinated Notes and creditors of the Issuer, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing (other than any filings pursuant to the UCC required under the Indenture and necessary to perfect any security 

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interest granted thereunder) or declaration with, any governmental authority is required by the Issuer in connection with the execution, delivery, performance, validity or enforceability of this Agreement, the Indenture or the Obligations or the obligations imposed upon the Issuer hereunder and thereunder other than those that have been obtained or made. This Agreement has been, and each instrument and document to which the Issuer is a party required hereunder or under the Indenture or the Obligations will be, executed and delivered by a Responsible Officer of the Issuer, and this Agreement constitutes, and each instrument or document required hereunder to which the Issuer is a party, when executed and delivered hereunder, will constitute, the legally valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms, subject, as to enforcement, (A) to the effect of bankruptcy, receivership, insolvency, winding-up or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency, winding-up 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).
(iii)    The execution, delivery and performance of this Agreement and the documents and instruments required hereunder and under the Indenture 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 Organizational 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 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 (other than the lien of the Indenture). 
(iv)    The Issuer is not in violation of its Organizational Instruments or in breach or violation of or in default under any contract or agreement to which it is a party or by which it or any of its property may be bound, or any applicable statute or any rule, regulation or order of any court, government agency or body having jurisdiction over the Issuer or its properties, the breach or violation of which or default under which would have a material adverse effect on the validity or enforceability of this Agreement or the provisions of the Indenture applicable to the Issuer, or the performance by the Issuer of its duties hereunder or thereunder. 
(v)    The Issuer acknowledges receipt of the Sub-Advisor’s Form ADV, Part 2A at or prior to execution of this Agreement, as well as Part 2B reflecting relevant personnel, as required by the Advisers Act on behalf of the Collateral Manager.  The Issuer acknowledges that such Form ADV, Part 2A includes a description of the Sub-Advisor’s proxy voting policies.  The Issuer understands that it may receive a copy of such proxy voting policies as well as information as to how the Sub-Advisor has voted proxies, if any, related to securities held by the Issuer by contacting the Collateral Manager.
(b)    The Collateral Manager hereby represents and warrants to the Issuer, as of the date hereof, as follows:

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(i)    The Collateral Manager is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction of its organization and has full power and authority to own its assets and to transact the business in which it is currently engaged, and is duly qualified to do business and is in good standing under the laws of each jurisdiction where the performance of this Agreement and any other Transaction Document to which it is a party would require such qualification, except for those jurisdictions in which the failure to be so qualified, authorized or licensed would not have a material adverse effect on the ability of the Collateral Manager to perform its obligations under this Agreement, the provisions of the Indenture applicable to the Collateral Manager and any other Transaction Document to which it is a party, or on the validity or enforceability of this Agreement, the provisions of the Indenture applicable to the Collateral Manager and any other Transaction Document to which it is a party. 
(ii)    The Collateral Manager has full power and authority to execute and deliver this Agreement and any other Transaction Document to which it is a party and to perform all of its obligations required hereunder and under the provisions of the Indenture and such other Transaction Documents applicable to the Collateral Manager, and has taken all necessary action to authorize this Agreement and any other Transaction Document to which it is a party on the terms and conditions hereof and thereof and the execution and delivery of this Agreement and any other Transaction Document to which it is a party and the performance of all obligations required hereunder and thereunder applicable to the Collateral Manager.  No consent of any other Person, including, without limitation, members and creditors of the Collateral 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 Collateral Manager hereof in connection with this Agreement or any other Transaction Document to which it is a party or the execution, delivery, performance, validity or enforceability of this Agreement or any other Transaction Document to which it is a party or the obligations imposed on the Collateral Manager hereunder or under the terms of the Indenture or any other Transaction Document applicable to the Collateral Manager other than those which have been obtained or made.  No representation is made herein with respect to the requirements of state securities laws or regulations.  This Agreement has been executed and delivered by a Responsible Officer of the Collateral Manager, and this Agreement and any other Transaction Document to which it is a party constitutes the valid and legally binding obligation of the Collateral Manager enforceable against the Collateral Manager in accordance with its terms, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency, winding-up or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency, winding-up or similar event applicable to the Collateral Manager and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity). 
(iii)    The execution, delivery and performance of this Agreement and the terms of the Indenture and any other Transaction Document applicable to the Collateral Manager will not violate any provision of any existing law or regulation binding on the Collateral Manager (except that no representation is made herein with respect to the requirements of state securities laws or regulations), or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Collateral Manager, or the Organizational Instruments of, or any securities 

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issued by, the Collateral Manager or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Collateral Manager is a party or by which the Collateral 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 Collateral Manager or which would reasonably be expected to materially adversely affect its ability to perform its obligations hereunder or under the Indenture or any other Transaction Document to which it is a party.
(iv)    There is no charge, investigation, action, suit or proceeding before or by any court pending or, to the actual knowledge of the Collateral Manager, threatened, that, if determined adversely to the Collateral Manager, would have a material adverse effect upon the performance by the Collateral Manager of its duties under this Agreement or the provisions of the Indenture and any other Transaction Document applicable to the Collateral Manager. 
(v)    The Collateral Manager Offering Circular Information in the Final Offering Circular, as of the date of the Final Offering Circular and the Closing Date, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(vi)    Other than any filings the Collateral Manager may be required to file after the Closing Date as a public company subject to the Exchange Act, the Collateral Manager has obtained, maintained and kept in full force and effect all Governmental Authorizations which are necessary for it to properly carry out its business, and has made all Governmental Filings necessary for the execution and delivery by it of the Transaction Documents to which it is a party and the performance by the Collateral Manager of its obligations under this Agreement and the other Transaction Documents, and no Governmental Authorization or Governmental Filing which has not been obtained or made is required to be obtained or made by it in connection with the execution and delivery by it of any Transaction Document to which it is a party or the performance of its obligations under this Agreement and the other Transaction Documents to which it is a party.
(vii)    The Collateral Manager has duly observed and complied with all applicable laws, including the Securities Act and the 1940 Act, relating to the conduct of its business and its assets except where the failure to do so could not reasonably be expected to result in a material adverse effect upon the performance by the Collateral Manager of its duties under, or on the validity or enforceability of this Agreement and the provisions of the Indenture and any other Transaction Document applicable to the Collateral Manager thereunder or could reasonably be expected to constitute “Cause” hereunder. The Collateral Manager has preserved and kept in full force and effect its legal existence. The Collateral Manager has preserved and kept in full force and effect its rights, privileges, qualifications and franchises, except where the failure to do so is not likely to have a have a material adverse effect on the Issuer or the Holders of any Class of Obligations.
(viii)    To the Collateral Manager’s knowledge, no event constituting Cause hereunder has occurred and is continuing and no event that with the giving of notice or passage of time would become an event constituting Cause has occurred or is continuing and no such event would occur as a result of its entering into or performing its obligations under this Agreement.

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(ix)    (i) The Collateral Manager does not hold itself out to the public as an investment adviser and to the extent the Collateral Manager provides any investment advice to any Person, it provides investment advice solely to its wholly-owned subsidiaries, and (ii) the Collateral Manager is not required to register as an investment adviser under the Advisers Act.
(c)    The Collateral Manager makes no representation, express or implied, with respect to the Issuer or the disclosure in the Offering Circular with respect to the Issuer.
Section 17.    Limited Recourse; No Petition.
The Collateral Manager hereby agrees that it shall not 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 or other bankruptcy or similar laws until at least one year (or, if longer, the applicable preference period then in effect) plus one day after payment in full of all Obligations issued or borrowed under the Indenture; provided that, nothing in this Section 17 shall preclude the Collateral Manager from (A) taking any action prior to the expiration of such applicable preference period in (i) any case or proceeding voluntarily filed or commenced by the Issuer or (ii) any insolvency proceeding filed or commenced against the Issuer by any Person other than the Collateral Manager or (B) commencing against the Issuer or any of its properties any legal action that is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceeding. The Collateral Manager hereby acknowledges and agrees that the Issuer’s obligations hereunder will be solely the exempted company obligations of the Issuer, and that the Collateral Manager will not have any recourse to any of the Affiliates of the Issuer or any of the shareholders, partners, managers, members, officers or employees of the Issuer or of any Affiliate of the Issuer with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any Transactions contemplated hereby. Notwithstanding any other provisions hereof or of any other Transaction Document, recourse in respect of any obligations of the Issuer to the Collateral Manager hereunder or thereunder will be limited to the Assets as applied in accordance with the Priority of Distributions pursuant to the Indenture and, on the exhaustion of the Assets, all claims against the Issuer arising from this Agreement, the Indenture or any other Transaction Document or any Transactions contemplated hereby or thereby shall be extinguished and shall not revive. This Section 17 shall survive the termination of this Agreement for any reason whatsoever.
The Issuer hereby acknowledges and agrees that the Collateral Manager’s obligations hereunder will be solely the corporate obligations of the Collateral Manager, and that the Issuer will not have any recourse to any of the directors, officers, employees, shareholders or Affiliates of the Collateral Manager with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any Transactions contemplated hereby.
Section 18.    Notices.
Unless expressly provided otherwise herein, all notices, demands, certificates, requests, directions and communications hereunder shall be in writing and shall be effective (a) upon receipt when sent through the U.S. mails, registered or certified mail, return receipt requested, postage 

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prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, (b) one Business Day after delivery to any overnight courier, (c) on the date personally delivered to a Responsible Officer of the party to which sent, (d) on the date transmitted by legible facsimile transmission with a confirmation of receipt, or (e) upon receipt when transmitted by electronic mail transmission, in all cases addressed to the recipient at such recipient’s address for notices as set forth below:
(a)    If to the Issuer:
FS Senior Funding Ltd. 
c/o Appleby Trust (Cayman) Ltd. 
Clifton House, 75 Fort Street, PO Box 1350 
Grand Cayman KY1-1108 
Cayman Islands 
Attention: The Directors 
Telephone No.: (345)-949-4900 
Facsimile No.: (345)-949-4901 
Email: atclsf@applebyglobal.com
(b)    If to the Collateral Manager:
Fifth Street Senior Floating Rate Corp. 
777 W. Putnam Ave. 3rd Floor 
Greenwich, CT 06830 
Attention: Ivelin Dimitrov 
Telephone No.: 203-681-3142 
Facsimile No.: 203-681-3879 
Email: ivelin@fifthstreetfinance.com
(c)    If to the Trustee:
Wells Fargo Bank, National Association 
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention:  CDO Trust Services – FS Senior Funding Ltd.
Telephone No.: (410) 884-2000
Facsimile No.: 410-715-3748
Email: FifthStreet@wellsfargo.com

(d)    If to the Holders: 
At their respective addresses set forth in the Register, as applicable.
Any party may change the address, telecopy number, or email address to which communications or copies directed to such party are to be sent by giving notice to the other parties 

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of such change of address, telecopy number, or email address in conformity with the provisions of this Section 18 for the giving of notice.
Unless the parties hereto otherwise agree, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, if any such notice or other communication is not sent or posted during normal business hours, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day; provided, further, that if in any instance the intended recipient declines or opts out of the receipt acknowledgment, then such notice or communication shall be deemed to have been received on the Business Day sent or posted, if sent or posted during normal business hours on such Business Day, or if otherwise, at the opening of business on the next Business Day.
Section 19.    Binding Nature of Agreement; Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns as provided herein.
Section 20.    Entire Agreement; Amendment.
This Agreement, the Sub-Advisory Agreement (along with any other advisory agreement, any staffing agreement or other similar agreement that is entered into with any of the Fifth Street Entities for the benefit of the Collateral Manager or the Issuer) and the Indenture contain the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersede all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.  The express terms hereof and thereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.  This Agreement may not be modified or amended other than by an agreement in writing executed by each of the parties hereto.  Neither the Issuer nor the Collateral Manager will enter into any agreement amending, modifying or terminating this Agreement (i) without notifying Moody’s, (ii) without obtaining the consent of a Majority of the Controlling Class and (iii) unless no objection has been received from a Majority of the Subordinated Notes; provided that, no such consent of the Controlling Class will be required, and no such objection right of the Subordinated Notes shall exist, in connection with any amendment hereto the sole purpose of which is to (i) correct inconsistencies, typographical or other errors, defects or ambiguities or (ii) conform this Agreement to the Final Offering Circular or the Indenture (as it may be amended from time to time). The Issuer shall provide the Holders with notice of any amendment of this Agreement; provided that the Issuer shall provide the Holders of the Controlling Class of Obligations and the Holders of Subordinated Notes with notice of any amendment of this Agreement that does not require the consent of such Holders at least 15 Business Days prior to the proposed execution date of such amendment; provided, further, that if the Holders of at least 33-1/3% 

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of the Aggregate Outstanding Amount of either the Controlling Class of Obligations or the Subordinated Notes object to such amendment after receiving such notice, then the consent of a Majority such objecting Class or Classes must be obtained to effect such amendment.  
Section 21.    Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW); provided that, nothing herein shall be construed in a manner that is inconsistent with the Advisers Act to the extent the Advisers Act is applicable.
Section 22.    Submission to Jurisdiction.
Each party hereto hereby irrevocably submits 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 this Agreement, and hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State or Federal court.  Each party hereto hereby irrevocably waives, to the fullest extent that it may legally do so, the defense of an inconvenient forum to the maintenance of such action or proceeding.  Each party hereto irrevocably consents to the service of any and all process in any action or proceeding by the mailing or delivery of copies of such process to it the address set forth in Section 18.  Each party hereto agrees 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.
Section 23.    Waiver of Jury Trial.
EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING.
Section 24.    Conflict with the Indenture.
In respect of any conflict between the terms of this Agreement and the Indenture or actions required under the terms of the Indenture and the terms of this Agreement, the terms of the Indenture shall control.
Section 25.    Subordination; Assignment of Agreement.
The Collateral Manager agrees that the payment of all amounts to which it is entitled pursuant to this Agreement shall be subordinated to the extent set forth in, and the Collateral Manager agrees to be bound by the provisions of, Article XI of the Indenture as if the Collateral Manager were a party to the Indenture and hereby consents to the assignment of this Agreement as provided in Section 15.1 of the Indenture.

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Section 26.    Indulgences Not Waivers.
Neither the failure nor any delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
Section 27.    Costs and Expenses.
Except as otherwise agreed to by the parties hereto, the costs and expenses (including the fees and disbursements of legal counsel and accountants) of the Collateral Manager and of the Issuer incurred in connection with the negotiation and preparation of and the execution of this Agreement and any amendment hereto, and all matters incidental thereto, shall be paid by the Issuer in accordance with the Indenture.  The Issuer will pay or reimburse the Collateral Manager for expenses including fees and out-of-pocket expenses reasonably incurred by the Collateral Manager in connection with the services provided by the Collateral Manager under this Agreement or the Indenture, including  with respect to (a) legal advisers, consultants, rating agencies, accountants, brokers and other professionals retained by the Issuer or the Collateral Manager (on behalf of the Issuer), (b) asset pricing and asset rating services, compliance services and software, and accounting, programming and data entry services directly related to the management of the Assets, (c) all taxes, regulatory and governmental charges (not based on the income of the Collateral Manager), insurance premiums or expenses, (d) any and all costs and expenses incurred in connection with the acquisition or disposition of investments on behalf of the Issuer (whether or not actually consummated) and management thereof, including attorneys’ fees and disbursements, (e) any fees, expenses or other amounts payable to the Rating Agencies, (f) expenses and fees relating to any issuance of additional Obligations, redemption or Refinancing, as applicable, by the Issuer, (g) any extraordinary costs and expenses incurred by the Collateral Manager in the performance of its obligations under this Agreement and the Indenture and (h) as otherwise agreed upon by the Issuer and the Collateral Manager.  In addition, the Issuer will pay or reimburse the costs and expenses (including fees and disbursements of legal counsel and accountants) of the Collateral Manager and the Issuer incurred in connection with or incidental to the entering into of this Agreement or any amendment thereof. The fees and expenses payable to the Collateral Manager on any Distribution Date are payable in accordance with the Priority of Distributions.
Section 28.    Third Party Beneficiary.
The parties hereto agree that the Trustee on behalf of the Secured Parties shall be a third party beneficiary of this Agreement, and shall be entitled to rely upon and enforce such provisions of this Agreement to the same extent as if it were a party hereto.
Section 29.    Titles Not to Affect Interpretation.

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The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.
Section 30.    Execution in Counterparts.
This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by e-mail (.pdf) or facsimile transmission), each of which will be deemed an original, and all of which together constitute one and the same instrument.  Delivery of an executed counterpart signature page of this Agreement by e-mail (.pdf) or facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 31.    Provisions Separable.
The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

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

EXECUTED as a DEED for and on behalf of:
FS SENIOR FUNDING LTD., as Issuer
By:     ___________________________________ 
Name:     
Title:     

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

FIFTH STREET SENIOR FLOATING RATE CORP., 
as Collateral Manager

By:       _____________________________________ 
Name:     
Title:

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