Document:

ex_128351.htm

 

Exhibit 10.7

 

Execution Copy

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “Agreement”), dated as of October 31, 2018, is made by IN GOOD HEALTH, INC., a Massachusetts not for profit corporation (the “Borrower”), with an address at 1200 West Chestnut Street, Brockton, MA 02301, in favor of CLS HOLDINGS USA, INC.,  a Nevada corporation (the “Lender”), with an address at 11767 S. Dixie Highway, Suite 115, Miami, FL 33156.

 

To secure the obligations of the Borrower to the Lender under that certain Loan Agreement (the “Loan Agreement”) and Secured Promissory Note (the “Note”) of even date herewith, the Borrower is executing this Agreement in favor of the Lender, in connection with which, under the terms hereof, the Lender shall obtain and the Borrower shall grant the Lender security for all of the Obligations (as hereinafter defined).

 

NOW, THEREFORE, the Borrower and the Lender, intending to be legally bound, hereby agree as follows:

 

1.     Definitions.

 

(a)     “Collateral” shall include all personal property of the Borrower, including the following, all whether now owned or hereafter acquired or arising and wherever located: (i) accounts (including credit card receivables); (ii) securities entitlements, securities accounts, commodity accounts, commodity contracts and investment property; (iii) deposit accounts; (iv) instruments (including promissory notes); (v) documents; (vi) chattel paper (including electronic chattel paper and tangible chattel paper); (vii) inventory, including raw materials, work in process, or materials used or consumed in Borrower’s business, items held for sale or furnished or to be furnished under contracts of service or sale lease, and goods that are returned, reclaimed or repossessed; (viii) goods of every nature, including stock-in-trade, goods on consignment; (ix) equipment, including machinery, vehicles and furniture; (x) fixtures; (xi) commercial tort claims; (xii) letter of credit rights; (xiii) general intangibles, of every kind and description, including payment intangibles, software, computer information, source codes, object codes, records and data, all existing and future customer lists, claims (including claims for indemnification or breach of warranty), books, records, patents and patent applications, copyrights, trademarks, tradenames, tradestyles, trademark applications, goodwill, designs and plans, trade secrets, contracts, licenses, license agreements, formulae, tax and any other types of refunds, returned and unearned insurance premiums, and rights and claims under insurance policies; (xiv) all supporting obligations of all of the foregoing property; (xv) all property of the Borrower now or hereafter in the Lender’s possession or in transit to or from, or under the custody or control of, the Lender or any affiliate thereof; (xvi) all cash and cash equivalents thereof; and (xvii) all cash and noncash proceeds (including insurance proceeds) of all of the foregoing property, all products thereof and all additions and accessions thereto, substitutions therefor and replacements thereof.

 

(b)     “Obligations” shall include all loans, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to the Lender or to any other direct or indirect subsidiary of the Lender of any kind or nature, present or future (including any interest accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect, absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, whether or not (i) evidenced by the Note, any other note, guaranty or other instrument, (ii) arising under any agreement, instrument or document, (iii) for the

 

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payment of money, (iv) arising by reason of an extension of credit, loan, equipment lease or guarantee, (v) and any amendments, extensions, renewals and increases of or to any of the foregoing, and all costs and expenses of the Lender incurred in the documentation, negotiation, modification, enforcement, collection and otherwise in connection with any of the foregoing, including reasonable attorneys’ fees and expenses.

 

(c)     “UCC” means the Uniform Commercial Code, as adopted and enacted and as in effect from time to time in the Commonwealth of Massachusetts. Terms used herein which are defined in the UCC and not otherwise defined herein shall have the respective meanings ascribed to such terms in the UCC. To the extent the definition of any category or type of collateral is modified by any amendment, modification or revision to the UCC, such modified definition will apply automatically as of the date of such amendment, modification or revision.

 

2.     Grant of Security Interest. To secure the Obligations, the Borrower, as debtor, hereby assigns and grants to the Lender, as secured party, a continuing first priority lien on and security interest in the Collateral.

 

3.     Change in Name or Locations. The Borrower hereby agrees that if the location of the Collateral changes from the locations listed on Exhibit A hereto and made part hereof, or if the Borrower changes its name, its type of organization, its state of organization, or establishes a name in which it may do business that is not listed as a tradename on Exhibit A hereto, the Borrower will immediately notify the Lender in writing of the additions or changes.

 

4.     General Representations, Warranties and Covenants. The Borrower represents, warrants and covenants to the Lender that: (a) all information, including its type of organization, jurisdiction of organization, and chief executive office are as set forth on Exhibit A hereto and are true and correct on the date hereof; (b) the Borrower has good, marketable and indefeasible title to the Collateral, has not made any prior sale, pledge, encumbrance, assignment or other disposition of any of the Collateral, and the Collateral is free from all encumbrances and rights of setoff of any kind except the lien in favor of the Lender created by this Agreement; and (c) the Borrower will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein.

 

5.     Borrower’s Representations, Warranties and Covenants for Certain Collateral. The Borrower represents, warrants and covenants to the Lender as follows:

 

(a)     From time to time and at all reasonable times, the Borrower will allow the Lender, by or through any of its officers, agents, attorneys, or accountants, to examine or inspect the Collateral, and obtain valuations and audits of the Collateral, at the Borrower’s expense, wherever located. The Borrower shall do, obtain, make, execute and deliver all such additional and further acts, things, deeds, assurances and instruments as the Lender may require to vest in and assure to the Lender its rights hereunder and in or to the Collateral, and the proceeds thereof, including waivers from landlords, warehousemen and mortgagees.

 

(b)     The Borrower will keep the Collateral in good order and repair at all times and immediately notify the Lender of any event causing a material loss or decline in value of the Collateral, whether or not covered by insurance, and the amount of such loss or depreciation.

 

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(c)     Except as to the federal Controlled Substances Act, the Borrower will only use or permit the Collateral to be used in accordance with all applicable federal, state, county and municipal laws and regulations.

 

(d)     The Borrower will have and maintain insurance at all times with respect to all Collateral against risks of fire (including so-called extended coverage), theft, sprinkler leakage, and other risks (including risk of flood if any Collateral is maintained at a location in a flood hazard zone) as the Lender may require, in such form, in such amount, for such period and written by such companies as may be satisfactory to the Lender in its sole discretion. Each such casualty insurance policy shall contain a standard Lender’s Loss Payable Clause issued in favor of the Lender under which all losses thereunder shall be paid to the Lender as the Lender’s interests may appear. Such policies shall expressly provide that the requisite insurance cannot be altered or canceled without at least thirty (30) days prior written notice to the Lender and shall insure the Lender notwithstanding the act or neglect of the Borrower. Upon the Lender’s demand, the Borrower will furnish the Lender with duplicate original policies of insurance or such other evidence of insurance as the Lender may require. If the Borrower fails to provide insurance as herein required, the Lender may, at its option, obtain such insurance and the Borrower will pay to the Lender, on demand, the cost thereof. Proceeds of insurance may be applied by the Lender to reduce the Obligations or to repair or replace Collateral, all in the Lender’s sole discretion.

 

(e)     Each account and general intangible is genuine and enforceable in accordance with its terms, no such account or general intangible will be subject to any claim for credit, allowance or adjustment by any account debtor or any setoff, defense or counterclaim, and the Borrower will defend the same against all claims, demands, setoffs and counterclaims at any time asserted. At the time any account or general intangible becomes subject to this Agreement, such account or general intangible will be a good and valid account representing a bona fide sale of goods or services by the Borrower and such goods will have been shipped to the respective account debtors or the services will have been performed for the respective account debtors.

 

(f)     Following an Event of Default, the Borrower agrees that, to the extent permitted by applicable law, the Lender has the right to notify (on invoices or otherwise) account debtors and other obligors or payors on any Collateral of its assignment to the Lender, and that all payments thereon should be made directly to the Lender.

 

(g)     The Borrower will, on the Lender’s demand, make notations on its books and records showing the Lender’s security interest and make available to the Lender a copy of the invoice for each account and copies of any written contract or order from which an account arose. The Borrower will promptly notify the Lender if an account becomes evidenced or secured by an instrument or chattel paper and upon the Lender’s request, will promptly deliver any such instrument or chattel paper to the Lender, including any letter of credit delivered to the Borrower to support a shipment of inventory by the Borrower.

 

(h)     From time to time with such frequency as the Lender may request, the Borrower will report to the Lender all credits given to account debtors on all accounts.

 

(i)     At any time after the occurrence of an Event of Default, and without notice to the Borrower, the Lender may direct any persons who are indebted to the Borrower on any Collateral consisting of accounts or general intangibles to make payment directly to the Lender of the amounts due, and the Lender may notify the United States Postal Service to send the Borrower’s mail to the Lender. The Lender is authorized to collect, compromise, endorse and sell any such Collateral in its own name

 

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or in the Borrower’s name and to give receipts to such account debtors for any such payments and the account debtors will be protected in making such payments to the Lender. Upon the Lender’s written request, the Borrower will use its best efforts to attempt to establish and maintain a lockbox account (“Lockbox”) and a depository account(s) (“Cash Collateral Account”), to which the Lender is given access subject to the provisions of this subparagraph and such other related agreements as the Lender may require, and the Borrower shall notify its account debtors to remit payments directly to the Lockbox. Thereafter, funds collected in the Lockbox shall be transferred to the Cash Collateral Account, and funds in the Cash Collateral Account shall be applied by the Lender, daily, to reduce the outstanding Obligations.

 

6.     Negative Pledge; No Transfer. Without the Lender’s prior written consent, the Borrower will not sell or offer to sell or otherwise transfer or grant or allow the imposition of a lien, security interest or right of setoff upon the Collateral (except for sales of inventory and collections of accounts in the Borrower’s ordinary course of business), will not allow any third party to gain control of all or any part of the Collateral, and will not use any portion of the Collateral in any manner inconsistent with this Agreement or with the terms and conditions of any policy of insurance thereon.

 

7.     Further Assurances. By its signature hereon, the Borrower hereby irrevocably authorizes the Lender to file against the Borrower one or more financing, continuation or amendment statements pursuant to the UCC in form satisfactory to the Lender, and the Borrower will pay the cost of preparing and filing the same in all jurisdictions in which such filing is deemed by the Lender to be necessary or desirable in order to perfect, preserve and protect its security interests. If required by the Lender, the Borrower will execute all documentation necessary for the Lender to obtain and maintain perfection of its security interests in the Collateral. If any Collateral consists of letter of credit rights, electronic chattel paper, deposit accounts or supporting obligations, or any securities entitlement, securities account, commodities account, commodities contract or other investment property, then, at the Lender’s request, the Borrower will execute, and will cause the depository institution or securities intermediary upon whose books and records the ownership interest of the Borrower in such Collateral appears to execute, such pledge agreements, control agreements or other agreements as the Lender deems necessary in order to perfect, prioritize and protect its security interest in such Collateral, in each case in a form satisfactory to the Lender.

 

8.     Events of Default. The Borrower shall, at the Lender’s option, be in default under this Agreement upon the happening of any of the following events or conditions (each, an “Event of Default”): (a) any Event of Default (as defined in any of the Obligations), or a breach of or an event of default under any other agreement between the Borrower and the Lender or an affiliate of the Lender; (b) any default under any of the Obligations that does not have a defined set of “Events of Default” and the lapse of any notice or cure period provided in such Obligations with respect to such default; (c) an the occurrence of an Event of Default under the Loan Agreement or the Note; (d) the failure by the Borrower to perform any of its obligations under this Agreement or under any other agreement between the Borrower and the Lender or an affiliate of the Lender; (e) falsity, inaccuracy or material breach by the Borrower of any written warranty, representation or statement made or furnished to the Lender by or on behalf of the Borrower; (f) an uninsured material loss, theft, damage, or destruction to any of the Collateral, or the entry of any uninsured final and unappealable judgment against the Borrower in excess of $100,000 or any lien against or the making of any levy, seizure or attachment of or on the Collateral; (g) the failure of the Lender to have a perfected first priority security interest in the Collateral; (h) any indication or evidence received by the Lender that the Borrower may become subject, in the Lender’s reasonable discretion, to the forfeiture of any property of the Borrower to any federal, state or local governmental entity; or (i) if the Lender otherwise deems itself insecure.

 

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9.     Remedies. Upon the occurrence of any such Event of Default and at any time thereafter, the Lender may declare all Obligations secured hereby immediately due and payable and shall have, in addition to any remedies provided herein or by any applicable law or in equity, all the remedies of a secured party under the UCC. The Lender’s remedies include, but are not limited to, the right to (a) peaceably by its own means or with judicial assistance enter the Borrower’s premises and take possession of the Collateral without prior notice to the Borrower or the opportunity for a hearing, (b) render the Collateral unusable, (c) dispose of the Collateral on the Borrower’s premises and in the Borrower’s name but for the benefit of the Lender, and (d) require the Borrower to assemble the Collateral and make it available to the Lender at a place designated by the Lender. The Borrower agrees that the Lender has full power and authority to collect, compromise, endorse, sell or otherwise deal with the Collateral in its own name or that of the Borrower at any time upon an Event of Default. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Lender will give the Borrower reasonable notice of the time and place of any public sale thereof or of the time after which any private sale or any other intended disposition thereof is to be made. The requirements of commercially reasonable notice shall be met if such notice is sent to the Borrower at least ten (10) days before the time of the intended sale or disposition. Expenses of retaking, holding, preparing for disposition, disposing or the like shall include the Lender’s reasonable attorneys’ fees and legal expenses, incurred or expended by the Lender to enforce any payment due it under this Agreement either as against the Borrower, or in the prosecution or defense of any action, or concerning any matter growing out of or connection with the subject matter of this Agreement and the Collateral pledged hereunder. The Borrower waives all relief from all appraisement or exemption laws now in force or hereafter enacted.

 

10.     Power of Attorney. The Borrower does hereby make, constitute and appoint any officer or agent of the Lender as the Borrower’s true and lawful attorney-in-fact, with power to, upon the occurrence of an Event of Default, (a) endorse the name of the Borrower or any of the Borrower’s officers or agents upon any notes, checks, drafts, money orders, or other instruments of payment or Collateral that may come into the Lender’s possession in full or part payment of any Obligations; (b) sue for, compromise, settle and release all claims and disputes with respect to, the Collateral; and (c) sign, for the Borrower, such documentation as may be required by the UCC or supplemental security agreements; granting to the Borrower’s said attorney full power to do any and all things necessary to be done in and about the premises as fully and effectually as the Borrower might or could do. The Borrower hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest, and is irrevocable.

 

11.     Payment of Expenses. At its option, the Lender may, following notice to the Borrower, discharge taxes, liens, security interests or such other encumbrances as may attach to the Collateral, may pay for required insurance on the Collateral and may pay for the maintenance, appraisal or reappraisal, and preservation of the Collateral, as determined by the Lender to be necessary. The Borrower will reimburse the Lender on demand for any payment so made or any expense incurred by the Lender pursuant to the foregoing authorization, and the Collateral also will secure any advances or payments so made or expenses so incurred by the Lender.

 

12.     Notices. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”) must be in writing, be delivered as set forth in the Note and be effective when set forth in the Note. Regardless of the manner in which provided, Notices may be sent to a party’s address as set forth above or to such other address as any party may give to the other for such purpose in accordance with this section.

 

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13.     Preservation of Rights. No delay or omission on the Lender’s part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Lender’s action or inaction impair any such right or power. The Lender’s rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Lender may have under other agreements, at law or in equity.

 

14.     Illegality. If any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, it shall not affect or impair the validity, legality and enforceability of the remaining provisions of this Agreement.

 

15.     Changes in Writing. No modification, amendment or waiver of, or consent to any departure by the Borrower from, any provision of this Agreement will be effective unless made in a writing signed by the Lender, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Borrower will entitle the Borrower to any other or further notice or demand in the same, similar or other circumstance.

 

16.     Entire Agreement. This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

 

17.     Counterparts. This Agreement may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument. Delivery of an executed counterpart of signature page to this Agreement by electronic transmission shall be effective as delivery of a manually executed counterpart. Any party so executing this Agreement by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission.

 

18.     Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Borrower and the Lender and their respective heirs, executors, administrators, successors and assigns; provided, however, that neither the Borrower nor the Lender may assign this Agreement in whole or in part without the other party’s prior written consent.

 

19.     Interpretation. In this Agreement, unless the Lender and the Borrower otherwise agree in writing, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to; the word “or” shall be deemed to include “and/or,” the words “including,” “includes” and “include” shall be deemed to be followed by the words “without limitation”; references to articles, sections (or subdivisions of sections) or exhibits are to those of this Agreement; and references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications to such instruments, but only to the extent such amendments and other modifications are not prohibited by the terms of this Agreement. Section headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. Unless otherwise specified in this Agreement, all accounting terms shall be interpreted and all accounting determinations shall be made in accordance with GAAP.

 

20.     Indemnity. The Borrower agrees to indemnify each of the Lender, each legal entity, if any, who controls, is controlled by or is under common control with the Lender, and each of their respective directors, managers, officers and employees (the “Indemnified Parties”). and to defend and hold each

 

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Indemnified Party harmless from and against any and all claims, damages, losses, liabilities and expenses (including all fees and charges of internal or external counsel with whom any Indemnified Party may consult and all expenses of litigation and preparation therefor) which any Indemnified Party may incur or which may be asserted against any Indemnified Party by any person, entity or governmental authority (including any person or entity claiming derivatively on behalf of the Borrower), in connection with or arising out of or relating to the matters referred to in this Agreement or the Obligations, whether (a) arising from or incurred in connection with any breach of a representation, warranty or covenant by the Borrower, or (b) arising out of or resulting from any suit, action, claim, proceeding or governmental investigation, pending or threatened, whether based on statute, regulation or order, or tort, or contract or otherwise, before any court or governmental authority; provided, however, that the foregoing indemnity agreement shall not apply to any claims, damages, losses, liabilities and expenses attributable to an Indemnified Party’s gross negligence or willful misconduct. The indemnity agreement contained in this Section shall survive the termination of this Agreement, payment of the Obligations and the assignment of any rights hereunder. The Borrower may participate at its expense in the defense of any such claim.

 

21.     Governing Law and Jurisdiction. This Agreement has been delivered to and accepted by the Lender and will be deemed to be made in the State of Florida. This Agreement will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the Commonwealth of Massachusetts, except as may be necessary in connection with the creation, perfection and foreclosure of the liens created hereunder on such property or any interest therein. The Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in Suffolk County, Massachusetts; provided that nothing contained in this Agreement will prevent the Lender from bringing any action, enforcing any award or judgment or exercising any rights against the Borrower individually, against any security or against any property of the Borrower within any other county, state or other foreign or domestic jurisdiction. The Lender and the Borrower agree that the venue provided above is the most convenient forum for both the Lender and the Borrower. The Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Agreement.

 

22.     WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE LENDER IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER AND THE LENDER ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

 

The Borrower acknowledges that its duly authorized officer has read and understood all the provisions of this Agreement, including the waiver of jury trial, and either has been advised by independent counsel as necessary or appropriate or has declined to retain independent counsel.

 

23.     Limitations on Remedies. Notwithstanding any provision of this Agreement to the contrary, the Lender hereby agrees that, unless and until such time that it has been approved by the Commonwealth of Massachusetts (the “Massachusetts Cannabis Authorization”) to own assets protected by the Humanitarian Medical Use of Marijuana Act, Ch. 369 of the Acts of 2012 (the “Massachusetts Cannabis Act”), its rights and remedies following an Event of Default shall not include the seizure of assets protected by the Massachusetts Cannabis Act. The Lender shall not be entitled to any remedy that provides the Lender with any rights to the inventory of the Borrower that contains any amount of

 

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marijuana, in any form, whether flower or infused product unless and until it has obtained the Massachusetts Cannabis Authorization. The Lender hereby forfeits any such remedy unless and until it has obtained the Massachusetts Cannabis Authorization. The Borrower shall use its commercially reasonable efforts to assist Lender and otherwise cooperate with Lender to obtain the Massachusetts Cannabis Authorization. The Lender acknowledges and agrees that a cannabis Certificate of Registration, whether provisional or final, is non-transferrable, and may not be assigned or transferred without prior Massachusetts Department of Public Health approval. Accordingly, following an Event of Default, the Borrower shall use it best efforts (and shall cause its shareholders to use their best efforts) to obtain the approval of the Massachusetts Department of Public Health to the transfer of the Borrower’s cannabis Certificate of Registration to the Lender, either directly, or indirectly through the transfer of the shares of stock in the Borrower to the Lender.

 

 

 

 

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Execution Copy

 

THIS SECURITY AGREEMENT has been executed and delivered on behalf of the Borrower and the Lender, by their duly authorized officers, as of the date first written above.

 

	 	
			IN GOOD HEALTH, INC.,

			a Massachusetts not for profit corporation

			 

			 

			 

			By: /s/ David Noble               

			Name: David Noble

			Title:   President

			 

			 

			 

			 

			CLS HOLDINGS USA, INC.,

			a Nevada corporation

			 

			 

			By: /s/ Jeffrey I. Binder          

			Name: Jeffrey I. Binder

			Title:  Chairman and CEO

			

 

 

 

 

 

[Signature Page to Security Agreement]

 

 

 

 

EXHIBIT A

 

TO SECURITY AGREEMENT

 

	
			1.

				
			Borrower’s form of organization: not for profit corporation [to be converted to a for profit corporation within 10 business days from date hereof]

			

 

	
			2.

				
			Borrower’s state of organization: Massachusetts

			

 

	
			3.

				
			Address of Borrower’s chief executive office: 1200 West Chestnut Street, Brockton, MA 02301

			

 

	
			4.

				
			Borrower’s organizational ID #: 462680110

			

 

	
			5.

				
			Address for books and records, if different: None

			

 

	
			6.

				
			Addresses of Collateral locations:

			

 

	 	
			a)

				
			1200 West Chestnut Street, Brockton, MA 02301

			

 

	 	
			b)

				
			 

			

 

	 	
			c)

				
			 

			

 

	 	
			d)

				
			 

			

 

	
			7.

				
			Name and address of landlord for Collateral locations:

			

 

MNP Realty Trust                         

1200 Chestnut Street                         

Brockton, MA 02301                         

 

	
			8.

				
			Other names or tradenames used or to be used by the Borrower: None

			

 

	
			9.

				
			Description of Equipment:

			

 

All Equipment of the Borrower.

 

 

 

-10-Exhibit 10.1

 

AMENDED
AND RESTATED

INVESTMENT
ADVISORY AGREEMENT

BETWEEN

WHITEHORSE
FINANCE, INC.

AND

H.I.G.
WHITEHORSE ADVISERS, LLC

 

This Amended and Restated Investment Advisory
Agreement is made this 1st day of November, 2018 (this “Agreement”), by and between WHITEHORSE FINANCE, INC., a Delaware
corporation (the “Corporation”), and H.I.G. WHITEHORSE ADVISERS, LLC, a Delaware limited liability company (the “Adviser”).

 

WHEREAS, the Corporation operates as a closed-end,
non-diversified management investment company;

 

WHEREAS, the Corporation has elected to
be treated as a business development company under the Investment Company Act of 1940, as amended (the “Investment Company
Act”);

 

WHEREAS, the Corporation has acquired interests
in senior secured loans and other debt obligations that comprise a portion of the Corporation’s portfolio;

 

WHEREAS, the Corporation owns, and may in
the future own, subsidiaries that have acquired or may acquire and hold such interests in senior secured loans and other debt obligations;

 

WHEREAS, the Adviser is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”);

 

WHEREAS, the Corporation and the Adviser
entered into the original investment advisory agreement (the “Original Agreement”) on December 4, 2012; and

 

WHEREAS, the Corporation and the Adviser
desire to amend and restate the Original Agreement to set forth the terms and conditions pursuant to which the Adviser shall continue
to provide comprehensive investment advisory services to the Corporation, including making available investment and other personnel
to the Corporation so that it may effectively and efficiently manage the Corporation’s subsidiaries from time to time listed
on Appendix A hereto (each a “Managed Subsidiary”) and fulfill any obligations and provide any services the Corporation
may undertake as manager, adviser, collateral manager and/or servicer (collectively, “Management Services”) of such
Managed Subsidiaries.

 

NOW, THEREFORE, in consideration of the
premises and for other good and valuable consideration, each of the parties hereby agrees as follows:

 

     

     

    

 

1.                 
Duties of the Adviser.

 

(a)              
The Corporation hereby employs the Adviser to act as the investment adviser to the Corporation and to manage the investment
and reinvestment of the assets of the Corporation, subject to the supervision of the board of directors of the Corporation (the
“Board of Directors”), for the period and upon the terms herein set forth, (i) in accordance with the investment objective,
policies and restrictions that are set forth in the Corporation’s filings with the Securities and Exchange Commission (the
“SEC”), as supplemented, amended or superseded from time to time, (ii) in accordance with the Investment Company Act,
the Investment Advisers Act and all other applicable federal and state laws and (iii) in accordance with the Corporation’s
certificate of incorporation and bylaws. Without limiting the generality of the foregoing, the Adviser shall, during the term and
subject to the provisions of this Agreement, (i) determine the composition of the portfolio of the Corporation, the nature and
timing of the changes therein and the manner of implementing such changes; (ii) identify, evaluate and negotiate the structure
of the investments made by the Corporation (including performing due diligence on prospective portfolio companies); (iii) execute,
close, service and monitor the Corporation’s investments; (iv) determine the securities and other assets that the Corporation
will purchase, retain or sell; (v) provide the Corporation with such other investment advisory, research and related services as
the Corporation may, from time to time, reasonably require for the investment of its funds; and (vi) make an investment committee
and personnel available to the Corporation so that it may provide all necessary Management Services to the Managed Subsidiaries.
The Adviser shall have the power and authority on behalf of the Corporation to effectuate its investment decisions for the Corporation,
including the execution and delivery of all documents relating to the Corporation’s investments and the placing of orders
for other purchase or sale transactions on behalf of the Corporation. In the event that the Corporation determines to acquire debt
financing or to refinance existing debt financing, the Adviser shall arrange for such financing on the Corporation’s behalf,
subject to the oversight and approval of the Board of Directors. If the Adviser determines it is appropriate to form a subsidiary
or special purpose vehicle through which the Corporation may indirectly make investments, the Adviser shall have authority to create
or arrange for the creation of such subsidiary or special purpose vehicle, to cause the Corporation to provide Management Services
to such subsidiaries, and to make such investments through such subsidiary or special purpose vehicle in accordance with applicable
law.

 

(b)              
The Adviser hereby accepts such employment and agrees during the term hereof to render the services described herein for
the amounts of compensation provided herein.

 

(c)              
Subject to the requirements of the Investment Company Act, the Adviser is hereby authorized, but not required, to enter
into one or more sub-advisory agreements with other investment advisers (each, a “Sub-Adviser”) pursuant to which the
Adviser may obtain the services of the Sub-Adviser(s) to assist the Adviser in fulfilling its responsibilities hereunder. Specifically,
the Adviser may retain a Sub-Adviser to recommend specific securities or other investments based upon the Corporation’s investment
objective and policies, and work, along with the Adviser, in structuring, negotiating, arranging or effecting the acquisition or
disposition of such investments and monitoring investments on behalf of the Corporation, subject in all cases to the oversight
of the Adviser and the Corporation. The Adviser, and not the Corporation, shall be responsible for any compensation payable to
any Sub-Adviser. Any sub-advisory agreement entered into by the Adviser shall be in accordance with the requirements of the Investment
Company Act, the Investment Advisers Act and other applicable federal and state law.

 

(d)              
For all purposes herein provided, the Adviser shall be deemed to be an independent contractor and, except as expressly provided
or authorized herein, shall have no authority to act for or represent the Corporation in any way or otherwise be deemed an agent
of the Corporation.

 

    2

     

    

 

(e)              
The Adviser shall keep and preserve, in the manner and for the period that would be applicable to investment companies registered
under the Investment Company Act, any books and records relevant to the provision of its investment advisory services to the Corporation,
shall specifically maintain all books and records with respect to the Corporation’s portfolio transactions and shall render
to the Board of Directors such periodic and special reports as the Board of Directors may reasonably request. The Adviser agrees
that all records that it maintains for the Corporation are the property of the Corporation and shall surrender promptly to the
Corporation any such records upon the Corporation’s request, provided that the Adviser may retain a copy of such records.

 

2.                 
Corporation’s Responsibilities and Expenses Payable by the Corporation. All investment professionals
of the Adviser and their respective staffs, when and to the extent engaged in providing investment advisory and management services
hereunder, and the compensation and routine overhead expenses of such personnel allocable to such services, shall be provided and
paid for by the Adviser and not by the Corporation. The Corporation shall bear all other costs and expenses of its operations and
transactions, including, without limitation, those relating to: (a) organization; (b) calculating the Corporation’s net asset
value and net asset value per share (including the cost and expenses of any independent valuation firm); (c) fees and expenses,
including travel expenses, incurred by the Adviser or payable to third parties in performing due diligence on prospective portfolio
companies, monitoring the Corporation’s investments and, if necessary, enforcing the Corporation’s rights; (d) interest
payable on debt, if any, incurred to finance the Corporation’s investments; (e) costs of offerings of the Corporation’s
common stock and other securities; (f) the base management fee and any incentive fee; (g) distributions on the Corporation’s
common stock; (h) administration fees payable to H.I.G. WhiteHorse Administration, LLC (the “Administrator”) under
the administration agreement dated as of December 4, 2012 with H.I.G. WhiteHorse Administration, LLC (the “Administration
Agreement”); (i) transfer agent and custody fees and expenses; (j) the allocated costs incurred by the Administrator in providing
managerial assistance to those portfolio companies that request it; (k) amounts payable to third parties relating to, or associated
with, evaluating, making and disposing of investments; (l) brokerage fees and commissions; (m) registration fees; (n) listing fees;
(o) taxes; (p) independent director fees and expenses; (q) costs associated with the Corporation’s reporting and compliance
obligations under the Investment Company Act and applicable U.S. federal and state securities laws; (r) the costs of any reports,
proxy statements or other notices to the Corporation’s stockholders, including printing costs; (s) costs of holding stockholder
meetings; (t) the Corporation’s fidelity bond; (u) directors and officers/errors and omissions liability insurance, and any
other insurance premiums; (v) litigation, indemnification and other non-recurring or extraordinary expenses; (w) direct costs and
expenses of administration and operation, including audit and legal costs; (x) fees and expenses associated with marketing efforts,
including to financial sponsors; (y) dues, fees and charges of any trade association of which the Corporation is a member; and
(z) all other expenses reasonably incurred by the Corporation or the Administrator in connection with administering the Corporation’s
business, such as the allocable portion of overhead under this Agreement, including rent and the Corporation’s allocable
portion of the costs and expenses of its chief compliance officer, chief financial officer, chief operating officer and their respective
staffs.

 

    3

     

    

 

3.                 
Compensation of the Adviser. The Corporation agrees to pay, and the Adviser agrees to accept, as compensation
for the investment advisory and management services provided by the Adviser hereunder, a fee consisting of two components: a base
management fee (the “Base Management Fee”) and an incentive fee (the “Incentive Fee”), each as hereinafter
set forth. The Corporation shall make any payments due hereunder to the Adviser or to the Adviser’s designee as the Adviser
may otherwise direct. To the extent permitted by applicable law, the Adviser may elect, or adopt a deferred compensation plan pursuant
to which it may elect to defer all or a portion of its fees hereunder for a specified period of time.

 

(a)              
The Base Management Fee shall be calculated at an annual rate equal to 2.0% of the consolidated gross assets of the Corporation,
including cash and cash equivalents and assets purchased with borrowed funds; provided, however, the Base Management Fee shall
be calculated at an annual rate of 1.25% of the consolidated gross assets of the Corporation, including cash and cash equivalents
and assets purchased with borrowed funds, that exceeds the product of (i) 200% and (ii) the value of the Corporation’s
total net assets. For services rendered under this Agreement, the Base Management Fee shall be payable quarterly in arrears. The
Base Management Fee shall be calculated based on the average carrying value of the consolidated gross assets of the Corporation
at the end of the two most recently completed calendar quarters. Such amount shall be appropriately adjusted (based on the actual
number of days elapsed relative to the total number of days in such calendar quarter) for any share issuances or repurchases during
the current calendar quarter. The Base Management Fee for any partial month or quarter shall be appropriately pro-rated (based
on the number of days actually elapsed at the end of such partial month or quarter relative to the total number of days in such
month or quarter). For purposes of this Agreement, cash equivalents shall mean U.S. government securities and commercial paper
instruments maturing within 270 days of the date of purchase of such instrument by the Corporation.

 

(b)              
The Incentive Fee, which is subject to the Incentive Fee Cap and Deferral Mechanism (as defined under Section 3(c) below),
shall consist of two parts, as follows:

 

(i)                
One part will be calculated and payable quarterly in arrears, commencing with the quarter beginning January 1, 2013, based
on the Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter, subject to the Incentive Fee Cap
and Deferral Mechanism. For this purpose, Pre-Incentive Fee Net Investment Income means, in each case on a consolidated basis,
interest income, distribution income and any other income (including any other fees (other than fees for providing managerial assistance),
such as commitment, origination, structuring, diligence and consulting fees or other fees that the Corporation receives from portfolio
companies) accrued during the calendar quarter, minus the Corporation’s operating expenses for the quarter (including the
Base Management Fee, expenses payable under the Administration Agreement and any interest expense and dividends paid on any issued
and outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income does not include any
realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

 

Pre-Incentive Fee Net Investment Income,
expressed as a rate of return on the value of the Corporation’s net assets at the end of the immediately preceding calendar
quarter, shall be compared to a “hurdle rate” of 1.75% per quarter (7.00% annualized). The Corporation will pay the
Adviser an Incentive Fee with respect to the Corporation’s Pre-Incentive Fee Net Investment Income in each calendar quarter
as follows: (1) no Incentive Fee in any calendar quarter in which the Corporation’s Pre-Incentive Fee Net Investment Income
does not exceed the hurdle rate; (2) 100% of the Corporation’s Pre-Incentive Fee Net Investment Income with respect to that
portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.1875% in any calendar
quarter; and (3) 20% of the amount of the Corporation’s Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.1875%
in any calendar quarter.

 

    4

     

    

 

The portion of such Incentive Fee that is
attributable to deferred interest (such as payment-in-kind interest or original issue discount) shall be paid to the Adviser, together
with interest accrued on the loan from the date of deferral to the date of payment, only if and to the extent the Corporation actually
receives such interest in cash, and any accrual thereof shall be reversed if and to the extent such interest is reversed in connection
with any write-off or similar treatment of the investment giving rise to any deferred interest accrual.

 

These calculations shall be appropriately
pro-rated for any period of less than three months and adjusted for any share issuances or repurchases during the current quarter.

 

(ii)             
The second part of the Incentive Fee (the “Capital Gains Fee”) shall be determined and payable in arrears as
of the end of each calendar year (or upon termination of this Agreement as set forth below), commencing on January 1, 2013, and
shall equal 20.0% of the Corporation’s cumulative aggregate realized capital gains from January 1, 2013 through
the end of that calendar year, computed net of the Corporation’s aggregate cumulative realized capital losses and the Corporation’s
aggregate cumulative unrealized capital depreciation through the end of such year, less the aggregate amount of any previously
paid capital gains incentives fees and subject to the Incentive Fee Cap and Deferral Mechanism. In the event that this Agreement
shall terminate as of a date that is not a calendar year end, the termination date shall be treated as though it were a calendar
year end for purposes of calculating and paying a Capital Gains Fee. The Corporation shall accrue the Capital Gains Fee if, on
a cumulative basis, the sum of net realized gains/(losses) plus net unrealized appreciation/(depreciation) is positive.

 

(c)              
No incentive fee shall be paid to the Adviser for any quarter if, after such payment, the cumulative incentive fees paid
to the Adviser for the period that includes the then current fiscal quarter and the 11 full preceding fiscal quarters (the “Incentive
Fee Look-back Period”) would exceed 20.0% of our Cumulative Pre-Incentive Fee Net Return (as defined below) during the Incentive
Fee Look-back Period. Each quarterly Incentive Fee is subject to a cap (the “Incentive Fee Cap”) and a deferral mechanism
through which the Adviser may recoup a portion of such deferred incentive fees (collectively, the “Incentive Fee Cap and
Deferral Mechanism”). The Incentive Fee Look-back Period will commence on January 1, 2013 and may be a total of less than
12 full fiscal quarters. The Incentive Fee Cap in any quarter is equal to (a) 20.0% of Cumulative Pre-Incentive Fee Net Return
during the Incentive Fee Look-back Period less (b) cumulative incentive fees of any kind paid to the Adviser during the Incentive
Fee Look-back Period. To the extent the Incentive Fee Cap is zero or a negative value in any quarter, the Corporation shall pay
no Incentive Fee to the Adviser in that quarter. To the extent that the payment of Incentive Fees is limited by the Incentive Fee
Cap, the payment of such fees shall be deferred and paid in subsequent quarters up to three years after their date of deferment
subject to applicable limitations included herein. The Corporation shall only pay Incentive Fees to the extent allowed by the Incentive
Fee Cap and Deferral Mechanism. “Cumulative Pre-Incentive Fee Net Return” during the Incentive Fee Look-back Period
means the sum of (a) Pre-Incentive Fee Net Investment Income for each period during the Incentive Fee Look-back Period and (b)
the sum of cumulative realized capital gains, cumulative realized capital losses, cumulative unrealized capital depreciation and
cumulative unrealized capital appreciation during the applicable Incentive Fee Look-back Period.

 

    5

     

    

 

4.                 
Covenants of the Adviser. The Adviser hereby covenants that it is registered as an investment adviser under
the Investment Advisers Act. The Adviser hereby agrees that its activities shall at all times be in compliance in all material
respects with all applicable federal and state laws governing its operations and investments.

 

5.                 
Excess Brokerage Commissions. The Adviser is hereby authorized, to the fullest extent now or hereafter permitted
by law, to cause the Corporation to pay a member of a national securities exchange, broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another member of such exchange, broker or dealer would
have charged for effecting such transaction if the Adviser determines, in good faith and taking into account such factors as price
(including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities
of the firm and the firm’s risk and skill in positioning blocks of securities, that the amount of such commission is reasonable
in relation to the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of
either that particular transaction or its overall responsibilities with respect to the Corporation’s portfolio, and constitutes
the best net result for the Corporation.

 

6.                 
Proxy Voting. The Adviser shall be responsible for voting any proxies solicited by an issuer of securities
held by the Corporation in the best interest of the Corporation and in accordance with the Adviser’s proxy voting policies
and procedures, as any such proxy voting policies and procedures may be amended from time to time. The Corporation has been provided
with a copy of the Adviser’s proxy voting policies and procedures and has been informed as to how it can obtain further information
from the Adviser regarding proxy voting activities undertaken on behalf of the Corporation. The Adviser shall be responsible for
reporting the Corporation’s proxy voting activities, as required, through periodic filings on Form N-PX.

 

7.                 
Limitations on the Employment of the Adviser. The services of the Adviser to the Corporation are not, and
shall not be, exclusive. The Adviser may engage in any other business or render similar or different services to others including,
without limitation, direct or indirect sponsorship or management of other investment based accounts or commingled pools of capital,
however structured, having investment objectives similar to those of the Corporation; provided that its services to the Corporation
hereunder are not impaired thereby. Nothing in this Agreement shall limit or restrict the right of any manager, partner, officer
or employee of the Adviser to engage in any other business or to devote his or her time and attention in part to any other business,
whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith (including fees for serving
as a director of, or providing consulting services to, one or more of the portfolio companies of the Corporation, subject at all
times to applicable law). So long as this Agreement or any extension, renewal or amendment hereof remains in effect, the Adviser
shall be the only investment adviser for the Corporation, subject to the Adviser’s right to enter into sub-advisory agreements.
The Adviser assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood
that directors, officers, employees and stockholders of the Corporation are or may become interested in the Adviser and its affiliates,
as directors, officers, employees, partners, stockholders, members, managers or otherwise, and that the Adviser and directors,
officers, employees, partners, stockholders, members and managers of the Adviser and its affiliates are or may become similarly
interested in the Corporation as stockholders or otherwise.

 

    6

     

    

 

Subject to any restrictions prescribed by
law, by the provisions of the Code of Ethics of the Corporation and the Adviser and by the Adviser’s Allocation Policy, the
Adviser and its members, officers, employees and agents shall be free from time to time to acquire, possess, manage and dispose
of securities or other investment assets for their own accounts, for the accounts of their family members, for the account of any
entity in which they have a beneficial interest or for the accounts of others for whom they may provide investment advisory, brokerage
or other services (collectively, “Managed Accounts”), in transactions that may or may not correspond with transactions
effected or positions held by the Corporation or to give advice and take action with respect to Managed Accounts that differ from
advice given to, or action taken on behalf of, the Corporation; provided that the Adviser allocates investment opportunities to
the Corporation over a period of time on a fair and equitable basis compared to investment opportunities extended to other Managed
Accounts. The Adviser is not, and shall not be, obligated to initiate the purchase or sale for the Corporation of any security
that the Adviser and its members, officers, employees or agents may purchase or sell for its or their own accounts or for the account
of any other client if, in the opinion of the Adviser, such transaction or investment appears unsuitable or undesirable for the
Corporation. Moreover, it is understood that when the Adviser determines that it would be appropriate for the Corporation and one
or more Managed Accounts to participate in the same investment opportunity, the Adviser shall seek to execute orders for the Corporation
and for such Managed Account(s) on a basis that the Adviser considers to be fair and equitable over time. In such situations, the
Adviser may (but is not required to) place orders for the Corporation and each Managed Account simultaneously or on an aggregated
basis. If all such orders are not filled at the same price, the Adviser may cause the Corporation and each Managed Account to pay
or receive the average of the prices at which the orders were filled for the Corporation and all relevant Managed Accounts on each
applicable day. If all such orders cannot be fully executed under prevailing market conditions, the Adviser may allocate the investment
opportunities among participating accounts in a manner that the Adviser considers equitable, taking into account, among other things,
the size of each account, the size of the order placed for each account and any other factors that the Adviser deems relevant.

 

8.                 
Responsibility of Dual Directors, Officers and/or Employees. If any person who is a manager, partner, officer
or employee of the Adviser or the Administrator is or becomes a director, officer and/or employee of the Corporation and acts as
such in any business of the Corporation, then such manager, partner, officer and/or employee of the Adviser or the Administrator
shall be deemed to be acting in such capacity solely for the Corporation and not as a manager, partner, officer and/or employee
of the Adviser or the Administrator or under the control or direction of the Adviser or the Administrator, even if paid by the
Adviser or the Administrator.

 

    7

     

    

 

9.                 
Limitation of Liability of the Adviser; Indemnification. The Adviser (and its officers, managers, agents,
employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation
its general partner and the Administrator) shall not be liable to the Corporation for any action taken or omitted to be taken by
the Adviser in connection with the performance of any of its duties or obligations under this Agreement or otherwise as an investment
adviser of the Corporation, except to the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting
from a breach of fiduciary duty (as the same is finally determined by judicial proceedings) with respect to the receipt of compensation
for services, and the Corporation shall indemnify, defend and protect the Adviser (and its officers, managers, agents, employees,
controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its general
partner and the Administrator, each of whom shall be deemed a third party beneficiary hereof) (collectively, the “Indemnified
Parties”) and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys’
fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened
or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Corporation
or its security holders) arising out of or otherwise based upon the performance of any of the Adviser’s duties or obligations
under this Agreement or otherwise as an investment adviser of the Corporation. Notwithstanding the preceding sentence of this Paragraph
9 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or
be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Corporation or its security
holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence
in the performance of the Adviser’s duties or by reason of the reckless disregard of the Adviser’s duties and obligations
under this Agreement (as the same shall be determined in accordance with the Investment Company Act and any interpretations or
guidance by the SEC or its staff thereunder).

 

10.             
Effectiveness, Duration and Termination of Agreement. This Agreement shall become effective as of the first
date above written. This Agreement shall remain in effect until December 4, 2019, and thereafter shall continue automatically
for successive annual periods; provided that such continuance is specifically approved at least annually by (a) the vote of the
Board of Directors, or by the vote of a majority of the outstanding voting securities of the Corporation and (b) the vote of a
majority of the Corporation’s Directors who are not parties to this Agreement or “interested persons” (as such
term is defined in Section 2(a)(19) of the Investment Company Act) of any such party, in accordance with the requirements of the
Investment Company Act. This Agreement may be terminated at any time, without the payment of any penalty, upon not less than 60
days’ written notice, by the vote of a majority of the outstanding voting securities of the Corporation, or by the vote of
the Corporation’s Directors or by the Adviser. This Agreement shall automatically terminate in the event of its “assignment”
(as such term is defined for purposes of Section 15(a)(4) of the Investment Company Act). The provisions of Section 9 of this Agreement
shall remain in full force and effect, and the Adviser shall remain entitled to the benefits thereof, notwithstanding any termination
of this Agreement. Further, notwithstanding the termination or expiration of this Agreement as aforesaid, the Adviser shall be
entitled to any amounts owed under Section 3 through the date of termination or expiration and Section 9 shall continue in force
and effect and apply to the Adviser and its representatives as and to the extent applicable.

 

    8

     

    

 

11.             
Notices. Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage
prepaid, to the other party at its principal office.

 

12.             
Amendments. This Agreement may be amended by mutual consent, but the consent of the Corporation must be obtained
in conformity with the requirements of the Investment Company Act.

 

13.             
Entire Agreement; Governing Law. This Agreement contains the entire agreement of the parties and supersedes
all prior agreements, understandings and arrangements with respect to the subject matter hereof. This Agreement shall be construed
in accordance with the laws of the State of New York and the applicable provisions of the Investment Company Act. To the extent
the applicable laws of the State of New York or any of the provisions herein conflict with the provisions of the Investment Company
Act, the latter shall control.

 

****

 

    9

     

    

 

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

 

 

 

	 	WHITEHORSE FINANCE, INC.
	 	 	 
	 	By: 	s/ Stuart Aronson
	 	Name:	Stuart Aronson
	 	Title:	Chief Executive Officer
	 	 	 
	 	H.I.G. WHITEHORSE ADVISERS, LLC
	 	 	 
	 	By:	/s/ Richard Siegel
	 	Name:	Richard Siegel
	 	Title:	Chief Compliance Officer

 

    
[Signature Page to A&R Investment Advisory Agreement]

     

    

 

APPENDIX
A

MANAGED SUBSIDIARIES

 

WhiteHorse Finance Warehouse,
LLC

WhiteHorse Finance Credit I, LLC

WhiteHorse Finance (CA), LLC

WhiteHorse Crews of California Holding,
Inc.

WhiteHorse Nicholas & Associates Holding,
Inc.

WhiteHorse Pinnacle Management Holding,
Inc.

WHF PMA Holdco Blocker, LLC

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