THIRD AMENDMENT TO LOAN, GUARANTEE AND SECURITY AGREEMENT

Exhibit 10.1

Execution Version

 

THIRD AMENDMENT TO LOAN, GUARANTEE AND SECURITY AGREEMENT

 

 

This THIRD AMENDMENT TO LOAN, GUARANTEE AND SECURITY

AGREEMENT (this “Amendment”), dated as of November 22, 2023, is by and between GREAT ELM CAPITAL CORP., a Maryland corporation (“Borrower”) and CITY NATIONAL BANK (“CNB”), as lender (in such capacity, together with its successors and assigns in such capacity, “Bank”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement.

 

W I T N E S S E T H

 

 

 

 

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I AMENDMENTS TO CREDIT AGREEMENT

 

Subject to the satisfaction of the conditions set forth in Section 2.1 below, the Credit Agreement is hereby amended as follows:

 

 

 

 

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ARTICLE II CONDITIONS TO EFFECTIVENESS

 

 

 

 

 

 

 

 

ARTICLE III MISCELLANEOUS

 

 

 

 

 

 

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Charter Documents to execute, deliver and perform its obligations under this Amendment, and under the Credit Agreement as amended hereby;

 

 

 

 

 

 

 

 

 

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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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

 

	GREAT ELM CAPITAL CORP., a Maryland corporation, as Borrower
	By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
	Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
	Title: Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Third Amendment to Loan, Guarantee and Security Agreement]

 

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CITY NATIONAL BANK, as Bank

 

 

By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Title: Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Third Amendment to Loan, Guarantee and Security Agreement]

 

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ANNEX A TO THIRD AMENDMENT

AMENDED CREDIT AGREEMENT

 

(See attached)

 

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Conformed Through SecondThird Amendment to Loan, Guarantee and Security Agreement

 

Execution Version

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GREAT ELM CAPITAL CORP.

 

THE SUBSIDIARY GUARANTORS FROM TIME TO TIME PARTY HERETO

 

AND

 

CITY NATIONAL BANK

 

LOAN, GUARANTEE AND SECURITY AGREEMENT

 

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This LOAN, GUARANTEE AND SECURITY AGREEMENT dated as of May 5, 2021

is entered into by and among CITY NATIONAL BANK (“Bank”), GREAT ELM CAPITAL CORP., a Maryland corporation (“Borrower”) and the Subsidiaries of Borrower from time to time party hereto (each, a “Subsidiary Guarantor” and collectively, the “Subsidiary Guarantors”).

 

RECITALS

 

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

 

AGREEMENT

 

The parties agree as follows:

 

 

 

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

 

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

 

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

 

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

 

“Agreement” means this Loan, Guarantee and Security Agreement among Bank, Borrower, and the Subsidiary Guarantors, together with all exhibits and schedules hereto, as amended, restated, supplemented or otherwise modified from time to time.

 

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

 

“Anti-Money Laundering Laws” means the applicable laws or regulations

 

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in any jurisdiction in which any Loan Party or any of their respective Subsidiaries or Affiliates is

located or is doing business that relates to money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto.

 

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

 

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

 

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

 

“Availability Termination Date” means (i) with respect to the GECCM Notes, August 2, 2024, and (ii) with respect to the GECCO Notes, January 1, 2026.

 

“Bank Asset Coverage” means, as of any date of termination, the result of

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

 

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

 

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

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

 

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

 

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

 

“Bonds” means any High Yield Securities.

 

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

 

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

 

 

 

 

 

 

 

 

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provided that: (i) the portion of the Borrowing Base attributable to Eligible Portfolio Investments that are Second Lien Loans shall not exceed 15% of the Borrowing Base, (ii) the portion of the Borrowing Base attributable to Eligible Portfolio Investments that are Bonds shall not exceed 15% of the Borrowing Base (other than First ▇▇▇▇ ▇▇▇▇▇ that are Broadly Syndicated Portfolio Investments), (iii) the portion of the Borrowing Base attributable to Eligible Portfolio Investments that are Second Lien Loans and Bonds (other than First ▇▇▇▇ ▇▇▇▇▇ that are Broadly Syndicated Portfolio Investments) shall not exceed 25% of the Borrowing Base in the aggregate,

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

 

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

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

 

“Broadly Syndicated Portfolio Investment” means, any First Lien Loan or First ▇▇▇▇ ▇▇▇▇ or Second Lien Loan (a)(i) that is a broadly syndicated commercial loan or

bond, (ii) that is not (and cannot by its terms become) subordinate in right of payment (excluding, for the avoidance of doubt, subordination of the applicable lien on the assets of any Obligor in the case of a Second Lien Loan) to any obligation of the Obligor in any bankruptcy, reorganization, insolvency, moratorium or liquidation proceedings, (iii) that is secured by a pledge of collateral, which security interest is validly perfected and first or second priority, as applicable under Applicable Law (subject to Liens described in clause (c) of the definition of Permitted Liens), (iv)

 

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with respect to which Borrower determines in good faith that the value of the collateral securing such Loan or Bond (or the enterprise value of the underlying business) on or about the time of origination equals or exceeds the outstanding principal balance of such Loan or Bond plus the aggregate outstanding balances of all other loans or bonds of equal or higher seniority secured by the same collateral, (v) in the case of a First Lien Loan, that has an Issue Size of $250,000,000 or greater and (vi) that has at least one bid-side quote provided by an Approved Dealer or (b) that is otherwise approved by Bank in its sole discretion as a “Broadly Syndicated Portfolio Investment”.

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of New York or the New York Stock Exchange are authorized or required to close or any day on which dealings in U.S. dollar deposits are not carried on in the London interbank market; provided that, when used in connection with a SOFR Advance, or any other calculation or determination involving SOFR, the term “Business Day” means any such day that is also a U.S. Government Securities Business Day.

 

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

 

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

 

“Change in Control” shall mean (i) with respect to ▇▇▇▇▇▇▇▇, a

 

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

 

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

documents, and all voting agreements and similar arrangements applicable to any of its authorized shares of capital stock, and any other arrangements relating to the control or management of any such entity (whether existing as corporation, a partnership, a limited liability company or otherwise).

 

 

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“Closing Date” means the date of this Agreement. “Code” means the New York Uniform Commercial Code. “Collateral” is defined in Section 4.1(a).

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

 

“Compliance Certificate” means a certificate in substantially the form

attached as Exhibit D.

 

“Condition to Borrowing Material Adverse Effect” means (a) a material

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

 

“Conforming Changes” means, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage costs and other technical, administrative or operational matters) that Bank decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by Bank in a manner substantially consistent with market practice (or, if Bank decides that adoption of any portion of such market practice is not administratively feasible or if Bank determines that no market practice for the administration of any such rate exists, in such other manner of administration as Bank decides is reasonably

necessary in connection with the administration of this Agreement and the other Loan Documents).

 

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable;

 

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(ii) any obligations with respect to undrawn letters of credit, corporate credit cards, or merchant services issued or provided for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.

 

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

 

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

 

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

 

“Daily Balance” means the amount of the Obligations owed at the end of

a given day.

 

“DIP Loan” means any Loan (i) with respect to which the related Obligor

is a debtor-in-possession as defined under the Bankruptcy Code, (ii) which has the priority allowed pursuant to Section 364 of the Bankruptcy Code and (ii) the terms of which have been approved by a court of competent jurisdiction (the enforceability of which is not subject to any pending contested matter or proceeding).

 

“Dollars” means, and the conventional “$” signifies, the lawful currency

of the United States.

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

 

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

 

 

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time as (i) the Loan has a Value that is less than 60% of the par value thereof, (ii) if rated, such Loan has a ▇▇▇▇▇’▇ public rating that is lower than “Caa2” or a public rating by S&P that is lower than “CCC”, (iii) as of any Relevant Test Period, the Loan contains a Net Total Leverage Ratio of greater than 9.0x or (iv) a Specified Obligor Event of Default has occurred with respect thereto;

 

 

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Obligor;

 

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

 

 

 

 

 

 

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

 

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

 

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

 

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

 

“Eurocurrency Reserve Requirement” means the sum (without duplication) of the rates (expressed as a decimal) of reserves (including, without limitation, any basic, marginal, supplemental, or emergency reserves) that are required to be maintained by banks during the Interest Period under any regulations of the Federal Reserve Board, or any other governmental authority having jurisdiction with respect thereto, applicable to funding based on so-called “Eurocurrency Liabilities”, including Regulation D (12 CFR 224).

 

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

Article 8.

 

“Excluded Account” means (i) any trust accounts, escrow accounts and

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

 

“Excluded Collateral” means (a) assets (including equity interests) to the extent the pledge thereof or the grant of security interests therein is prohibited by applicable law, rule or regulation or would require the consent of any Governmental Authority, (b) any permit, license, contract, agreement, state or local franchises, charters and authorizations to which any

Loan Party is a party to the extent that the collateral assignment thereof or the creation of a security

 

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interest therein would constitute a breach of the terms of such permit, license, contract or agreement, or would permit the relevant Governmental Authority or unaffiliated third party to terminate such permit, license, contract or agreement, except the Collateral expressly shall include any proceeds of any of the foregoing assets; provided that, the foregoing exclusions of clause (b) shall cease to be so excluded (i) to the extent such described prohibition or restriction is, or would be (in the case of after-acquired property or changes to applicable law), rendered ineffective under Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction (or any successor provision) or any other applicable law or principles of equity (as determined by an applicable court); or (ii) if such Loan Party has obtained all of the consents of such Governmental Authority or such third party to such license, contract or agreement necessary for the collateral assignment of, or creation of a security interest in, such permit, license, contract, agreement, state or local franchises, charters or authorizations; provided further that, immediately upon the ineffectiveness, lapse or termination of any such term in any such permit, license, contract, agreement, state or local franchises, charters or authorizations, the Collateral shall include, and such Loan Party shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (c) equity interests in any Subsidiary to the extent the pledge thereof to Bank is not permitted by the terms of such Subsidiary’s organizational documents or third party contractual restriction; (d) Excluded Equity;

(e) all leasehold interests in real property; (f) any motor vehicle, aircraft, property and other assets that are, in each case, covered by a certificate of title or ownership, except to the extent perfection of a security interest therein can be perfected solely by the filing of UCC financing statements; (g) any assets or property if the grant of a security interest or Lien in or over such assets or property hereunder could result in a material and adverse tax consequence as reasonably determined by the Borrower in good faith in consultation with Bank; (h) any intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law; provided, that, at such time a verified statement of actual use of any such Trademark is filed with the United States Patent and Trademark Office, the trademark application shall immediately cease to be Excluded Collateral; and (i) any assets or property that the Borrower and Bank shall have determined in their reasonable discretion to treat as Excluded Collateral for purposes hereof on account of the cost, burden or consequences of granting a security interest or Lien in or over such assets or property hereunder being excessive in relation to the practical benefit to Bank of the security to be afforded thereby.

 

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

(B) is a direct or indirect Subsidiary of a CFC or CFC Holdco, in each case, whether now owned

or hereafter acquired and which may be issued and outstanding at any time and from time to time.

 

 

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

 

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

 

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

 

“Extended Availability Termination Date” means (i) with respect to the GECCM Notes, October 3, 2024, and (ii) with respect to the GECCO Notes, March 2, 2026.

 

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

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

 

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

 

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

time to time.

 

“GECC Notes” means individually or collectively, as the context may require, the GECCM Notes and the GECCO Notes.

 

“GECCGECCM Notes” means those certain 6.506.75% notes due 2022January 31, 2025 in the aggregate principal amount of $32,600,00045,600,000.

 

“GECCO Notes” means those certain 5.875% notes due June 30, 2026 in the aggregate principal amount of $57,500,000.

 

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

 

“High Leverage Loan” means any Loan or Bond (i) the Obligor of which has a Net Total Leverage Ratio of greater than or equal to 7.5x as of any Relevant Test Period or

(ii) for which a Net Total Leverage ratio is not otherwise available.

 

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

 

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

“Increase Effective Date” has the meaning set forth in Section 2.7. “Increase Fee” has the meaning set forth in Section 2.4(d). “Indebtedness” means (a) all indebtedness for borrowed money or the

deferred purchase price of property or services (excluding current accounts payable in the ordinary course of business), including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds,

debentures or similar instruments, (c) all capital lease obligations and (d) all Contingent Obligations.

 

“Indemnified Liabilities” is defined in Section 13.2.

 

“Indemnified Taxes” means (a) taxes, other than Excluded Taxes,

 

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

 

“Indemnitee” is defined in Section 13.2.

 

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

 

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

 

“Interest Payment Date” means, (x) in the case of Base Rate Advances, the first Business Day of each fiscal quarter and (y) in the case of SOFR Advances, the last day of the applicable Interest Period, provided, that in the case of any Interest Period greater than three (3) months in duration, interest shall be payable at three (3) month intervals after the commencement of the applicable Interest Period and on the last day of such Interest Period.

 

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

Portfolio Investment.

 

“Minimum Deposits Test” means maintaining accounts with Bank in which the average of the deposits therein (measured on a daily basis throughout each calendar month) in the aggregate for all such accounts is no less than $10,000,000 tested as of the last Business Day of each calendar month.

 

“Negotiable Collateral” means all of each Loan Party’s present and future letters of credit of which it is a beneficiary, drafts, instruments (including promissory notes), securities, documents of title, and chattel paper, and books and records relating to any of the foregoing.

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Periodic Payments” means all installments or similar recurring payments that Borrower may now or hereafter become obligated to pay to Bank pursuant to the terms and

provisions of any instrument, or agreement now or hereafter in existence between Borrower and Bank.

 

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

 

“Permitted Indebtedness” means:

 

 

 

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business;

 

 

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

 

 

 

 

 

 

 

 

support issued for the account of a Loan Party for the purpose of providing a deposit in connection with such Loan Party's obligations under any lease for real property;

 

 

 

$250,000 at any time outstanding.

 

“Permitted Investment” means:

 

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“Permitted Liens” means the following:

 

 

(v) with respect to any property or other assets of an Obligor designated as collateral to secure

repayment of any Portfolio Investment, Liens permitted by the applicable loan agreement, credit agreement or other equivalent underlying documentation with respect to such Portfolio Investment;

 

 

 

 

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

 

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

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

 

“Pledged Equity” means all equity interests of each Subsidiary of each Loan Party to the extent required to be pledged by the terms of this Agreement, including, without limitation the equity interests listed on Schedule P hereto, including (a) such Loan Party’s interests in all profits, losses and other distributions in respect thereof; (b) all other payments due or to become due to such Loan Party in respect of such equity interests; (c) all of such Loan Party’s claims, rights, powers, privileges, authority, options, security interests, liens and remedies in respect of such equity interests; (d) all of such Loan Party’s rights to exercise and enforce every right, power, remedy, authority, option and privilege relating to such equity interests; and (e) all

 

22

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other property delivered in substitution for or in addition to any of the foregoing and all certificates and instruments representing or evidencing such other property received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; provided, however, the term “Pledged Equity” shall expressly exclude any “Excluded Collateral”.

 

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

 

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

 

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

 

“Required Portfolio Investment Documents” means the following:

 

 

 

 

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

 

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particular subject.

 

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

 

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

 

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

 

“Revolving Maturity Date” means the earlier of (i) the date three (3) years after the Closing DateMay 5, 2027, and (ii) May 15, 2022 if the GECCthe Availability Termination Date with respect to the GECCM Notes if the GECCM Notes are not refinanced on or prior to such date in accordance with the terms hereof.; provided that if there are no Obligations outstanding as of such Availability Termination Date, the Revolving Maturity Date shall be automatically extended to the Extended Availability Termination Date with respect to the GECCM Notes and (iii) the Availability Termination Date with respect to the GECCO Notes if the GECCO Notes are not refinanced on or prior to such date in accordance with the terms hereof; provided that if there are no Obligations outstanding as of such Availability Termination Date, the Revolving Maturity Date shall be automatically extended to the Extended Availability Termination Date with respect to the GECCO Notes.

 

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

 

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

 

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

 

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

 

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governmental authority with jurisdiction over Bank, any Loan Party or any of their respective Subsidiaries or Affiliates.

 

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

 

“Second Amendment Effective Date” means May 4, 2022.

 

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

 

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

 

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

 

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

 

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

 

“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇, or any successor source for

the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

 

“SOFR Advance” means any Advance bearing interest based upon Term SOFR other than pursuant to clause (b) of the definition of “Base Rate”.

 

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

 

“Spread” means (i) at all times when the Permitted Holders have met the Minimum Deposits Test (based on the immediately preceding calendar month), (a) in the case of any SOFR Advance, 3.503.00% per annum and (b) in the case of any Base Rate Advance, 2.00% per annum., and (ii) at all times when the Permitted Holders have not met the Minimum Deposits Test (based on the immediately preceding calendar month), (a) in the case of any SOFR Advance,

 

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4.00% per annum and (b) in the case of any Base Rate Advance, 3.00% per annum.

 

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

 

“Subsidiary” means, with respect to any Person (a) any corporation in which such Person, directly or indirectly through its Subsidiaries, owns more than 50% of the stock of any class or classes having by the terms thereof the ordinary voting power to elect a majority of the directors of such corporation and (b) any partnership, association, joint venture, limited liability company, or other entity in which such Person, directly or indirectly through its Subsidiaries, has more than a 50% equity interest at the time.

 

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

 

“Term SOFR” means, for any Interest Period for a SOFR Advance, the greater of (a) the Term SOFR Reference Rate (rounded upward to the next one-16th (1/16th) of one percent, if necessary) for a tenor comparable to the applicable Interest Period on the day that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator and (b) 0.00%.

 

“Term SOFR Administrator” means the CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by Bank in its reasonable discretion).

“Term SOFR Reference Rate” means the rate per annum determined by Bank as the forward-looking term rate based on SOFR.

 

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

 

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

 

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

 

“U.S. Government Securities Business Day” means any day except for

(a) Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

 

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

 

 

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

 

 

 

context requires.

 

(unless expressly specified otherwise).

 

 

 

 

 

 

 

 

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amount prepaid to, but not including, the date of payment in accordance with the terms hereof (or, in each case, such lesser amount constituting the amount of all Loans then outstanding).

 

 

 

 

 

 

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Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by Bank or required to be withheld or deducted from a payment to Bank, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrower by Bank shall be conclusive absent manifest error.

 

 

 

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

 

any penalties or interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

 

 

 

 

 

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$1,000,000 and (ii) the time period within which Bank is requested to respond (which shall in no event be less than thirty (30) days from the date of delivery of such notice to Bank) and (iii) the requested effective date of such Increase (such date, the “Increase Effective Date”). Bank shall not be obligated to provide any Increase, and it may decline such request in its sole discretion. If, and only if, Bank agrees to such Increase, then, upon Bank’s receipt of the Increase Fee in respect of such Increase and the satisfaction of such other terms and conditions as the Bank and the Borrower shall mutually agree, including but not limited receipt by Bank of a customary legal

opinion, the Revolving Line shall automatically increase by an amount equal to such Increase on the Increase Effective Date.

 

 

 

 

 

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Benchmark Replacement is Daily Simple SOFR, all interest payments will be payable on a quarterly basis.

 

 

 

 

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that a tenor for the then-current Benchmark is not an Available Tenor, any component of the Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of Base Rate.

 

 

“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 2.8(b)(iv).

 

“Benchmark” means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Replacement Date has occurred with respect to the Term SOFR Reference Rate or the then current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has become effective pursuant to this Section 2.8(b).

 

“Benchmark Replacement” means, with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by Bank for the applicable Benchmark Replacement Date:

 

 

 

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If the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than 1.00%, the Benchmark Replacement will be deemed to be 1.00% for the purposes of this Agreement and the other Loan Documents.

 

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Bank and Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of

such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral credit facilities at such time.

 

“Benchmark Replacement Date” means a date and time determined by Bank, which date shall be no later than the earliest to occur of the following events with respect to the then-current Benchmark:

 

 

 

For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

 

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:

 

37

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New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

 

 

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

 

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

 

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

 

38

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establish another convention in its reasonable discretion.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States.

 

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

 

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

 

 

 

39

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Agreement, the expiration of the Revolving Loan Commitment and the payment of all amounts payable hereunder.

 

 

 

 

 

 

 

40

---

 

 

 

 

 

 

 

 

Section 2.4 hereof;



 

41

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by Bank, copies of each of the Required Portfolio Investment Documents with respect thereto;

 

Adverse Effect; and

 

Bank may reasonably request.

 

 

 

 

 

 

 

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

 

 

 

42

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pledge and to decline to honor any drafts thereon or any request by such Loan Party or any other Person to pay or otherwise transfer any part of such balances for so long as the specific Obligations are outstanding.

 

 

43

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Each Loan Party represents and warrants as follows:

 

 

44

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45

---

 

 

 

 

 

 

 

 

 

 

(a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto and (b) the Patriot Act. No part of the

 

46

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proceeds of the Loans made hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”).

 

 

of Borrower and there is no deposit account or securities account in the name of Borrower, in each case other than any Excluded Account.

 

 

Each Loan Party shall do all of the following:

 

 

 

Bank:

 

 

47

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

 

 

 

 

(ii) one hundred twenty (120) days after the last day of each fiscal year, the Annual Report on Form 10-K filings as filed with the SEC; provided that, any such Form publicly available on ▇▇▇▇▇ shall be deemed delivered to Bank without any further action taken by ▇▇▇▇▇▇▇▇ provided that Borrower provides Bank notice of the availability of such Forms on ▇▇▇▇▇;

 

 

 

 

48

---

 

 

 

 

from time to time.

 

 

 

 

 

 

(1) Business Day after receipt of such payment, remit such payments directly to a Collateral Account.

 

 

49

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50

---

 

 

6.8 shall be a Loan Document.

 

 

 

 

 

 

 

 

 

 

51

---

 

 

 

 

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

 

 

 

52

---

 

 

 

 

being valued and held by the Obligors. Other procedures relating to the valuation will be reasonably agreed upon by Bank and Borrower.

 

 

 

 

 

 

 

53

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No Loan Party will do any of the following:

 

forth in Section 6.7(c) on a pro forma basis, (c) any Default under Section 8.1 or 8.5 has occurred and is continuing or (d) any Event of Default has occurred and is continuing or would result therefrom and (ii) no Loan Party will Transfer any other assets or property (other than any Borrowing Base Portfolio Investment, which shall be subject to the immediately preceding clause (i)) (including to any Subsidiary that is not a Subsidiary Guarantor) if (a) a Borrowing Base Deficiency would result therefrom as demonstrated in a Borrowing Base Certificate delivered on or prior to the proposed Transfer date, (b) Borrower is not in compliance with the covenant set forth in Section 6.7(c) on a pro forma basis or (c) any Default under Section 8.1 or

 

 

 

 

 

 

54

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transaction with a non-affiliated Person, other than transactions between or among Loan Parties and Excluded Subsidiaries.

 

 

 

 

 

55

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

 

 

 

 

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

 

56

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57

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such premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at law, in equity, or otherwise;

 

 

 

 

 

 

 

 

58

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59

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whether matured or unmatured, and, in the case of deposits of a Loan Party, whether general or special, time or demand and however evidenced).

 

 

 

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

 

 

If to Borrower: GREAT ELM CAPITAL CORP.

▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇

Waltham, MA 02453 Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇

Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

 

 

If to Bank: CITY NATIONAL BANK

▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇

E-mail: ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇

 

 

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

 

 

New York law governs the Loan Documents without regard to principles of conflicts of law. Loan Parties and Bank each submit to the exclusive jurisdiction of the State and Federal courts in the City of New York, Borough of Manhattan. Each Loan Party expressly

 

60

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submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and each Loan Party hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Each Loan

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

 

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

 

 

 

 

61

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

 

 

 

 

 

62

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

 

 

 

 

 

63

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Bank would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a change in law that occurs after such Person acquired the applicable participation. Notwithstanding the foregoing, no participant shall be entitled to any benefits of Section 2.6 unless such participant complies with the requirements of Section 2.6, including the requirements of Sections 2.6(d) and (e) (it being understood that the documentation required under Section 2.6 shall be delivered to Bank).

 

13.2. If any investigative, judicial, or administrative proceeding arising from any of the foregoing is brought against any Indemnitee indemnified or intended to be indemnified pursuant to this Section 13.2 Borrower will resist and defend such action, suit, or proceeding or cause the same to be resisted and defended by counsel designated by Borrower (which counsel shall be reasonably satisfactory to the Indemnitee or intended Indemnitee). Each Indemnitee will use its reasonable efforts to cooperate in the defense of any such action, writ, or proceeding. To the extent that the undertaking to indemnify, pay, and hold harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, Borrower shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under Applicable Law. The obligations of Borrower under this Section 13.2 shall survive the termination of this Agreement and the discharge of Borrower’s other obligations hereunder. This Section 13.2 shall not apply with respect to taxes, other than taxes that represent losses, claims, penalties or damages arising from any non-tax claim. Borrower shall not be liable to any Indemnitee for any special, indirect, consequential or punitive damages (as opposed to direct or actual damages (other than in respect of any such damages incurred or paid by an Indemnitee to a third party)) arising out of, in connection with, or as a result of the transactions contemplated hereby asserted by an Indemnitee against Borrower; provided that the foregoing limitation shall not be deemed to impair or affect the obligations of Borrower under the preceding provisions of this section.

 

64

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[SIGNATURE PAGE FOLLOWS.]

 

 

 

 

 

 

 

66

 

65

---

 

 

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

 

GREAT ELM CAPITAL CORP.

 

By:

Name:

Title:

 

 

CITY NATIONAL BANK, as Bank

 

By:

Name:

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Loan, Guarantee and Security Agreement]

 

66

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SCHEDULE E

 

Existing Indebtedness

 

 

---

 

 

SCHEDULE P

 

Pledged Equity

 

Grantor	Issuer	Class of Equity Interest	Certificate No(s)	Number of Shares	Percentage of Outstandin g Shares
Great Elm Capital Corp.	Prestige CapitalGreat Elm Specialty Finance, LLC	Membership Interests	N/A	N/A87.5	8087.5% of   Membership Interests

 

 

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Exhibit 10.1

EXHIBIT A

 

CLOSING DATE PORTFOLIO INVESTMENTS

 

 

 

Obligor Name	Funded Principal Amount	Unfunded Principal Amount	Total Commitmen t Amount	Maturity Date	Lien Type	Facility Type
ABB/Con-Cise Optical Group LLC	$2,984,375	$0	$2,984,375	6/15/2023	1st Lien	Term Loan
AgroFresh Inc.	$1,472,824	$0	$1,472,824	12/31/202 4	1st Lien	Term Loan
APTIM Corp.	$3,000,000	$0	$3,000,000	6/15/2025	1st ▇▇▇▇	▇▇▇▇
Avanti Communication s Group PLC	$4,147,394	$0	$4,147,394	7/31/2022	1.125 Lien	Term Loan
Avanti Communication s Group PLC	$1,220,052	$0	$1,220,052	7/31/2022	1.25 Lien	Term Loan
Avanti Communication s Group PLC	$10,110,28 3	$0	$10,110,283	7/31/2022	1.5 Lien	DDTL
Avanti Communication s Group PLC	$48,461,73 3	$0	$48,461,733	10/1/2022	2nd ▇▇▇▇	▇▇▇▇
Luling Lodging LLC	$2,715,420	$0	$2,715,420	12/18/201 7	1st Lien	Term Loan
Blueknight Energy Partners L.P.	$1,130,955 (173,993 shares)	$0	$1,130,955 (173,993 shares)	Perpetual	N/A	Preferred
California Pizza Kitchen, Inc.	$9,838,572	$0	$9,838,572	11/23/202 4	1st Lien	Term Loan
▇▇▇▇▇▇▇-▇▇▇▇▇▇ Inc.	$1,000,000	$0	$1,000,000	3/1/2023	1st ▇▇▇▇	▇▇▇▇
Crestwood Equity Partners LP	$18,260,00 0 (2,000,000 shares)	$0	$18,260,000 (2,000,000 shares)	Perpetual	N/A	Preferred
Davidzon Radio, Inc.	$8,962,354	$0	$8,962,354	3/31/2020	1st Lien	Term Loan
ECL Entertainment, LLC	$2,500,000	$0	$2,500,000	4/30/2028	1st Lien	Term Loan

 

Exhibit A

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Finastra Group Holdings, Ltd.	$2,000,000	$0	$2,000,000	6/13/2025	2nd Lien	Term Loan
First Brands, Inc.	$6,000,000	$0	$6,000,000	3/31/2028	2nd Lien	Term Loan
Gateway Casinos & Entertainment Limited	$5,000,000	$0	$5,000,000	3/1/2024	2nd ▇▇▇▇	▇▇▇▇
The ▇▇▇ Group, Inc.	$3,000,000	$0	$3,000,000	10/15/202 4	Unsecured	Bond
Greenway Health, LLC	$0	$8,025,60 0	$8,025,600	2/16/2022	1st Lien	RLC
▇▇▇▇▇▇ Midstream Partners LP	$110,000	$0	$110,000	2/28/2025	2nd Lien	▇▇▇▇
▇▇▇▇▇▇▇▇ International, Inc.	$3,000,000	$0	$3,000,000	11/▇▇/▇▇▇ ▇	▇▇▇ ▇▇▇▇	▇▇▇▇ Loan
National CineMedia, Inc.	$2,000,000	$0	$2,000,000	4/15/2028	1st ▇▇▇▇	▇▇▇▇
Natural Resource Partners LP	$7,462,000	$0	$7,462,000	6/30/2025	Unsecured	Bond
Par Petroleum, LLC	$3,000,000	$0	$3,000,000	12/15/202 5	1st ▇▇▇▇	▇▇▇▇
Perforce Software, Inc.	$875,000	$3,500,00 0	$4,375,000	7/8/2024	1st Lien	RLC
PFS Holdings Corp.	$1,073,382	$0	$1,073,382	11/13/202 4	1st Lien	Term Loan
W&T Offshore, Inc.	$3,000,000	$0	$3,000,000	11/1/2023	2nd ▇▇▇▇	▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇	$3,659,599	$4,740,40 1	$8,400,000	3/16/2022	N/A	A/R Facility
Quad/Graphics, Inc.	$2,000,000	$0	$2,000,000	5/1/2022	Unsecured	Bond
Research Now Group, Inc.	$6,947,368	$3,052,63 2	$10,000,000	12/20/202 2	1st Lien	RLC

 

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Research Now Group, Inc.	$12,000,00 0	$0	$12,000,000	12/20/202 5	2nd Lien	Term Loan
Summit Midstream Holdings, LLC	$3,000,000	$0	$3,000,000	4/15/2025	Unsecured	Bond
Tensar Corporation	$10,000,00 0	$0	$10,000,000	2/20/2026	2nd Lien	Term Loan
Viasat, Inc.	$3,000,000	$0	$3,000,000	6/15/2021	N/A	A/R Facility

 

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EXHIBIT B

 

LOAN ADVANCE/PAYDOWN REQUEST FORM

 

 

To: [●] Date:

Copy: [●]

FAX #:

 

 

FROM

 

Borrower’s Name: Great Elm Capital Corp.   Authorized Signer’s Name:   Authorized Signature:

 

All representations and warranties of Borrower stated in the Loan, Guarantee and Security Agreement are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality) as of the date of the telephone request for and advance confirmed by this Borrowing Certificate; provided, however, that those representations and warranties expressly referring to another date shall be true and correct in all material respects as of such date (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality).

 

DRAWDOWN PAYDOWN   TO LOAN#:   AMOUNT:  PRINCIPAL AMOUNT:
WIRE INSTRUCTIONS:  INTEREST AMOUNT:
WIRE INSTRUCTIONS:

 

 

*IS THERE A WIRE REQUEST TIED TO THIS LOAN ADVANCE? (PLEASE CIRCLE ONE) YES NO

 

If YES, the Outgoing Wire Transfer Instructions must be completed below.

 

 

Exhibit B

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OUTGOING WIRE TRANSFER INSTRUCTIONS		Fed Reference Number	Bank Transfer Number
The items marked with an asterisk (*) are required to be completed.
*Beneficiary Name
*Beneficiary Account Number
*Beneficiary Address
Amount	[SAME AS AMOUNT OF DRAWDOWN ABOVE]
*Routing Number (ABA/SWIFT/IBAN)
*Receiving Institution Name
*Receiving Institution Address
Other Instructions

 

 

Exhibit B

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EXHIBIT C BORROWING BASE CERTIFICATE

[ ], 20[ ]

 

This certificate is delivered pursuant to that certain Loan, Guarantee and Security Agreement, dated as of May 5, 2021 (as amended, modified, supplemented or restated from time to time, the “Loan Agreement”), by and among Great Elm Capital Corp., a Maryland corporation (the “Borrower”), the Subsidiary Guarantors from time to time party thereto and City National Bank (the “Bank”). Capitalized terms used but not defined herein shall have the meanings provided in the Loan Agreement.

 

As of the date hereof, the undersigned Responsible Officer certifies that (i) all of the information set forth in Schedule A attached hereto is true, correct and complete as of the date set forth therein and that all calculations therein have been made in accordance with the terms and definitions set forth in the Loan Agreement, (ii) all of the Borrowing Base Portfolio Investments continue to comply with the applicable requirements set forth in “Eligible Portfolio Investments” in the Loan Agreement, (iii) each of the representations and warranties contained in Section 5 of the Loan Agreement is true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality) on and as of the date hereof; provided, however, that those representations and warranties expressly referring to another date shall be true and correct in all material respects as of such date (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality) and (iv) no Default under Section 6.7, Section 8.1 or Section 8.5 or Event of Default has occurred and is continuing under the Loan Agreement.

 

[Remainder of Page Intentionally Left Blank]

Schedule A to Borrowing Base Certificate Borrowing Base Calculation

[On file with Bank]1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit C

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1 Borrower to provide Borrowing Base calculation.

 

Exhibit C

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EXHIBIT D

COMPLIANCE CERTIFICATE

TO: CITY NATIONAL BANK FROM: GREAT ELM CAPITAL CORP.

The undersigned authorized officer of GREAT ELM CAPITAL CORP. hereby certifies that in accordance with the terms and conditions of the Loan, Guarantee and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in compliance for the period ending with all required covenants except as noted below and on Schedule A attached hereto, (ii) all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality) as of the date hereof; provided, however, that those representations and warranties expressly referring to another date shall be true and correct in all material respects as of such date (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality) and (iii) all Borrowing Base Portfolio Investments continue to comply with the applicable requirements set forth in “Eligible Portfolio Investments” in the Agreement. Schedule A attached hereto sets forth the calculations of ▇▇▇▇▇▇▇▇’s financial covenants reported herein. The Officer further certifies that these are prepared in accordance with the internal accounting and valuation policies in effect as of the Closing Date except as explained in an accompanying letter or footnotes.

 

Please indicate compliance status by circling Yes/No under “Complies” column.

Borrower’s Financial Covenants (tested quarterly)	Required	Actual	Complies
Minimum Net Assets as demonstrated by the calculations set forth on Schedule A	$65,000,000	$	Yes No
Minimum Bank Asset Coverage as demonstrated by the calculations set forth on Schedule A	300%	$	Yes No
Minimum Asset Coverage as demonstrated by the calculations set forth on Schedule A	150%		Yes No
	BANK USE ONLY
Comments Regarding Exceptions: See Attached.
	Received by:
Sincerely,		AUTHORIZED SIGNER
	Date:
	Verified:
SIGNATURE		AUTHORIZED SIGNER
	Date:
TITLE
	Compliance Status		Yes No
DATE

 

 

Exhibit D

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Schedule A to Compliance Certificate

Financial Covenant Calculations

 

[See Attached]2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2 Borrower to provide covenant calculations.

 

Exhibit D

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EXHIBIT E

CONTINUATION/CONVERSION NOTICE

To: [●] Date:

Copy: [●]

FAX #:

 

FROM

 

Borrower’s Name: Great Elm Capital Corp.   Authorized Signer’s Name:   Authorized Signature:

 

Reference is hereby made to that certain Loan, Guarantee and Security Agreement, dated as of May 5, 2021 (as amended, modified, supplemented or restated from time to time, the “Loan Agreement”), by and among Great Elm Capital Corp., a Maryland corporation (the “Borrower”), the Subsidiary Guarantors from time to time party thereto and City National Bank (the “Bank”). Capitalized terms used but not defined herein shall have the meanings provided in the Loan Agreement

 

[Pursuant to Section 2.1(b) of the Loan Agreement, the undersigned elects to convert the following SOFR Advances to Base Rate Advances at the end of the current Interest Period for such SOFR Advances:

SOFR Advance Amount	Last Day of Current Interest Period
1.
2.
3. [and so on]	]

 

[Pursuant to Section 2.1(b) of the Loan Agreement, the undersigned elects to convert Base Rate Advances in the aggregate amount of $ to SOFR Advances(s) as follows:

 

SOFR Advance Amount	Desired Date of Conversion	Length of Interest Period
1.
2.
3. [and so on]		]

 

 

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[Pursuant to Section 2.1(b) of the Loan Agreement, the undersigned elects to continue the Interest Periods with respect to the following SOFR Advances for the following additional Interest Period:

 

 

SOFR Advance Amount	Last Day of Current Interest Period	Length of Continued Interest Period
1.
2.
3. [and so on]		]

​

 

 

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ANNEX B

TO THIRD AMENDMENT

AMENDED SCHEDULES

 

(See attached).

 

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SCHEDULE E

 

Existing Indebtedness

 

 

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SCHEDULE P

 

Pledged Equity

 

Grantor	Issuer	Class of Equity Interest	Certificate No(s)	Number of Shares	Percentage of Outstanding Shares
Great Elm Capital Corp.	Great Elm Specia lty Finance, LLC	Membership Interests	N/A	87.5	87.5% of Membership Interests

 

 

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