U.S. $200,000,000 LOAN AND SERVICING AGREEMENT Dated as of September 9, 2014 Among WAYNE FUNDING LLC, as the Borrower WELLS FARGO SECURITIES, LLC, as the Administrative Agent EACH OF THE CONDUIT LENDERS AND INSTITUTIONAL LENDERS FROM TIME TO TIME...

Exhibit 10.1

EXECUTION VERSION

U.S. $200,000,000

LOAN AND SERVICING AGREEMENT

Dated as of September 9, 2014

Among

▇▇▇▇▇ FUNDING LLC,
as the Borrower

▇▇▇▇▇ FARGO SECURITIES, LLC,
as the Administrative Agent

EACH OF THE CONDUIT LENDERS AND INSTITUTIONAL LENDERS FROM TIME TO TIME PARTY HERETO,
as the Lenders

EACH OF THE LENDER AGENTS FROM TIME TO TIME PARTY HERETO,
as the Lender Agents

and

▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as the Collateral Agent, Account Bank and Collateral Custodian

TABLE OF CONTENTS

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ii

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LIST OF SCHEDULES AND EXHIBITS

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THIS LOAN AND SERVICING AGREEMENT (as amended, modified, waived, supplemented, restated or replaced from time to time, this “Agreement”) is made as of September 9, 2014, among:

(1)                                 ▇▇▇▇▇ FUNDING LLC, a Delaware limited liability company (together with its successors and assigns in such capacity, the “Borrower”);

(2)                                 EACH OF THE CONDUIT LENDERS FROM TIME TO TIME PARTY HERETO (together with its respective successors and assigns in such capacity, each a “Conduit Lender” and collectively, the “Conduit Lenders”);

(3)                                 EACH OF THE INSTITUTIONAL LENDERS FROM TIME TO TIME PARTY HERETO (together with its respective successors and assigns in such capacity, each an “Institutional Lender”, collectively, the “Institutional Lenders” and, together with the Conduit Lenders, the “Lenders”);

(4)                                 EACH OF THE LENDER AGENTS FROM TIME TO TIME PARTY HERETO (together with its respective successors and assigns in such capacity, each a “Lender Agent” and collectively, the “Lender Agents”);

(5)                                 ▇▇▇▇▇ FARGO SECURITIES, LLC, as Administrative Agent (together with its successors and assigns in such capacity, the “Administrative Agent”); and

(6)                                 ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as the Collateral Agent (together with its successors and assigns in such capacity, the “Collateral Agent”),  the Account Bank (as defined herein) and the Collateral Custodian (together with its successors and assigns in such capacity, the “Collateral Custodian”).

PRELIMINARY STATEMENT

The Lenders have agreed, on the terms and conditions set forth herein, to provide a secured revolving credit facility which shall provide for Advances under the Variable Funding Note(s) from time to time in an aggregate principal amount not to exceed the Borrowing Base. The proceeds of the Advances will be used to finance the Borrower’s purchase of Eligible Loans either (i) from the Seller pursuant to the Purchase and Sale Agreement between the Borrower and the Seller or (ii) that the Borrower funds or acquires from a third party seller as approved by the Administrative Agent in accordance herewith. Accordingly, the parties agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.01                             Certain Defined Terms.

(a)                                 Certain capitalized terms used throughout this Agreement are defined above or in this Section 1.01.

(b)                                 As used in this Agreement and the exhibits, schedules and annexes thereto (each of which is hereby incorporated herein and made a part hereof), the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“1940 Act” means the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.

“Account Bank” means ▇▇▇▇▇ Fargo, in its capacity as the “Securities Intermediary” pursuant to the Securities Account Control Agreement.

“Action” has the meaning assigned to that term in Section 8.06.

“Additional Amount” has the meaning assigned to that term in Section 2.10(a).

“Adjusted Borrowing Value” means for any Eligible Loan on any date of determination, an amount equal to the Assigned Value of such Eligible Loan at such time multiplied by the Outstanding Balance of such Loan; provided that the parties hereby agree that the Adjusted Borrowing Value of any Loan that is no longer an Eligible Loan shall be zero.

“Administrative Agent” means ▇▇▇▇▇ Fargo Securities, LLC, in its capacity as administrative agent for the Lender Agents, together with its successors and assigns, including any successor appointed pursuant to Article IX.

“Advance” means each loan advanced by the Lenders to the Borrower on an Advance Date pursuant to Article II.

“Advance Date” means, with respect to any Advance, the date on which such Advance is made.

“Advances Outstanding” means, on any date, the aggregate principal amount of all Advances outstanding on such date, after giving effect to all repayments of Advances and the making of new Advances on such date.

“Advisory Agreements” means (i) the Collateral Advisor Agreement and (ii) the Investment Sub-Advisory Agreement between the Collateral Advisor and the Collateral Sub-Advisor.

“Affected Party” has the meaning assigned to that term in Section 2.09(a).

“Affiliate” means, when used with respect to a Person, any other Person controlling, controlled by or under common control with such Person. For the purposes of this definition, “control” means, when used with respect to any specified Person, the power to vote 20% or more of the voting securities of such Person or to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing; provided, that for purposes of determining whether any Loan is an Eligible Loan,

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the term Affiliate shall not include any Affiliate relationship which may exist solely as a result of direct or indirect ownership of, or control by, a common Financial Sponsor.

“Agented Loan” means any Loan other than a Third Party Agented Loan (i) originated by the Seller as a part of a syndicated loan transaction that has been closed (without regard to any contemporaneous or subsequent syndication of such Loan) prior to the Pledge of such Loan, (ii) with respect to which the Seller is the administrative agent, and (iii) with respect to which, upon an assignment of the promissory note under the Purchase and Sale Agreement to the Borrower, the Borrower, as assignee of the note, will have all of the rights but none of the obligations of the Seller with respect to such note and the Underlying Collateral.

“Aggregate Coupon” means, as of any date of determination, the sum of the products obtained by multiplying, in the case of each fixed-rate Loan, (i) the stated coupon on such Loan (excluding any unused fee on the unfunded portion of any Delayed Draw Loan) expressed as a percentage and (ii) the Outstanding Balance of such Loan.

“Aggregate Unfunded Exposure Amount” means, on any date of determination, the sum of the Unfunded Exposure Amounts of all Loans owned by the Borrower.

“Agreement” has the meaning assigned in the preamble hereto.

“Applicable Law” means for any 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 and abusive lending laws, usury laws, the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act, 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.

“Applicable Concentration Percentage” means on any date of determination (i) if both (x) the Weighted Average Coupon is at least 7.00% and (y) such date is prior to the six-month anniversary of the Closing Date, 30.0% and (ii) otherwise, 15.0%.

“Applicable Percentage” means, for each Eligible Loan, the corresponding percentage for the type of Loan (such type to be determined as of the Cut-Off Date of each Loan and set forth on the Approval Notice pertaining to such Loan) set forth below:

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“Applicable Spread” means, with respect to any Lender and/or Lender Agent, the “applicable spread” set forth in the applicable Lender Fee Letter.

“Approval Notice” means, with respect to any Eligible Loan, the written notice, in substantially the form attached hereto as Exhibit A, evidencing the approval by the Administrative Agent, in its sole discretion, of the acquisition of such Eligible Loan by the Borrower.

“Approval Right” has the meaning assigned to that term in Section 3.02(c).

“Approved Broker Dealer” means each of ABN Amro, Bank of America ▇▇▇▇▇▇▇ ▇▇▇▇▇, The Bank of New York Company, Inc., Barclays, BNP Paribas SA, Citigroup, Inc., Credit Suisse, Deutsche Bank AG, The ▇▇▇▇▇▇▇ Sachs Group, Inc., HSBC, JPMorgan Chase & Co., Macquarie, Mitsubishi, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Royal Bank of Canada, The Royal Bank of Scotland Group plc, Societe Generale, Suntrust, UBS and ▇▇▇▇▇ Fargo.

“Approved Valuation Firm” means each of Duff & ▇▇▇▇▇▇ Corp., FTI Consulting, Inc., ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, Lincoln International LLC, Valuation Research Corporation, American Appraisal Associates, Inc., Deloitte LLP, Ernst & Young, LLP, KPMG, Sterling Valuation Group, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., and any other nationally recognized accounting firm or valuation firm as approved by the Administrative Agent in its sole discretion.

“Asset Coverage Ratio” means, with respect to the Collateral Manager, the ratio, determined on a consolidated basis, without duplication, and in accordance with GAAP as required by and in accordance with, the 1940 Act as affected by any orders of the Securities and Exchange Commission issued to the Collateral Manager, to be determined by the Board of Directors of the Collateral Manager and reviewed by its auditors, of (a) the fair market value of the total assets of the Collateral Manager and its Subsidiaries less all liabilities (other than Indebtedness, including Indebtedness hereunder) of the Collateral Manager and its Subsidiaries, to (b) the aggregate amount of Indebtedness of the Collateral Manager and its Subsidiaries;  provided, that the calculation of the Asset Coverage Ratio shall not include Subsidiaries that are not required to be included in consolidated reports by the 1940 Act (which includes any

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subsidiary licensed by the Small Business Administration to operate under the Small Business Investment Act of 1958).

“Assigned Value” means, with respect to each Loan, (i) prior to the occurrence of a Value Adjustment Event with respect to such Loan, the least of (A) the Purchase Price of such Loan (expressed as a percentage of par), (B) the value of such Loan (expressed as a percentage of par and exclusive of any post-acquisition PIK Interest or other accrued and unpaid interest thereon) determined by the Administrative Agent in its sole discretion on the date such Loan was acquired by the Borrower and (C) the par value of such Loan, and (ii) after the occurrence of a Value Adjustment Event with respect to such Loan, as determined below:

(a)                                 If a Value Adjustment Event of the type described in clauses (c), (e) or (g) of the definition thereof with respect to such Loan occurs, the Assigned Value of such Loan will be zero.

(b)                                 If a Value Adjustment Event of the type described in clauses (a), (b), (d), (f), (h), (i) or (j) of the definition thereof with respect to such Loan occurs, the Assigned Value shall be determined by the Administrative Agent in its sole discretion.

(c)                                  After the initial determination by the Administrative Agent of the Assigned Value of a Loan pursuant to clause (b), the Administrative Agent may only decrease the Assigned Value of such Loan upon the occurrence of the applicable Value Adjustment Event or upon the occurrence of another Value Adjustment Event.

(d)                                 The Administrative Agent shall promptly notify the Borrower or the Collateral Manager of any change effected by the Administrative Agent to the Assigned Value of any Loan.

“Authorized Person” means, with respect to any Person, any other duly authorized Person by appropriate organizational process (a copy of which has been delivered to the Administrative Agent) to whom, with respect to a particular matter, such matter is referred because of such Person’s knowledge of and familiarity with the particular subject.

“Available Collections” means all cash collections and other cash proceeds with respect to any Loan, including, without limitation, all Principal Collections, all Interest Collections, all proceeds of any sale or disposition (in part or in whole) with respect to such Loan, cash proceeds or other funds received by the Borrower or any Borrower Advisor with respect to any Underlying Collateral (including from any guarantors), all other amounts on deposit in the Controlled Accounts from time to time, and all proceeds of Permitted Investments with respect to the Controlled Accounts.

“Average Life” means, on any date of determination with respect to any Eligible Loan, the quotient obtained by dividing (i) the sum of the products of (a) the number of years (rounded to the nearest one hundredth thereof) from such date of determination to the respective dates of each successive Scheduled Payment of such Eligible Loan and (b) the respective amounts of principal of such Scheduled Payments by (ii) the sum of all successive Scheduled Payments on such Eligible Loan.

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“Bankruptcy Code” means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, 11 U.S.C. §§ 101 et seq., as amended from time to time.

“Bankruptcy Event” means, with respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction over such Person or any substantial part of its property in an involuntary case under any applicable Bankruptcy Law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree, order or appointment shall remain unstayed and in effect for a period of sixty (60) consecutive days, (b) the commencement by such Person of a voluntary case under any applicable Bankruptcy Law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, (c) the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or (d) the failure by such Person generally to pay its debts as such debts become due.

“Bankruptcy Laws” means the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

“Bankruptcy Proceeding” means any case, action or proceeding before any court or other Governmental Authority relating to any Bankruptcy Event.

“Base Rate” means, on any date, a fluctuating per annum interest rate equal to the higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 0.5%; provided that, notwithstanding the foregoing, on any date LIBOR exceeds the higher of the rates specified in clauses (a) and (b), the Base Rate shall be increased by such excess for such date.

“Borrower” has the meaning assigned to that term in the preamble hereto.

“Borrower Advisors” means, collectively, the Collateral Manager, the Collateral Advisor and the Collateral Sub-Advisor.

“Borrower Parties” means, collectively, the Borrower, the Equityholder, the Seller and the Borrower Advisors.

“Borrowing Base” means, as of any date of determination, an amount equal to the least of:

(a)                                 (i) the aggregate sum of the products of  (A) the Applicable Percentage for each Eligible Loan as of such date and (B) the Adjusted Borrowing Value of such Eligible Loan as of such date, plus (ii) the amount on deposit in and the value of all Permitted Investments credited to the Principal Collection Account on such date, minus (iii) the Unfunded Exposure Equity Shortfall; or

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(b)                                 (i) the aggregate sum of the Adjusted Borrowing Values of all Eligible Loans as of such date minus (ii) the Minimum Equity Amount, plus (iii) the amount on deposit in and the value of all Permitted Investments credited to the Principal Collection Account on such date, minus (iv) the Unfunded Exposure Equity Shortfall; or

(c)                                  (i) the Maximum Facility Amount, minus (ii) the Unfunded Exposure Equity Shortfall;

provided that, for the avoidance of doubt, any Loan which is not an Eligible Loan shall not be included in any calculation of “Borrowing Base”.

“Borrowing Base Certificate” means a certificate setting forth the calculation of the Borrowing Base as of the applicable date of determination substantially in the form of Exhibit C hereto, prepared by the Borrower or the Collateral Manager.

“Borrowing Base Deficiency” means, as of any date of determination, the extent to which the aggregate Advances Outstanding on such date exceeds the Borrowing Base.

“Breakage Fee” means, for Advances which are repaid (in whole or in part) on any date other than a Payment Date, the breakage costs, if any, related to such repayment, based upon the assumption that the applicable Lender funded its loan commitment in the London Interbank Eurodollar market and using any reasonable attribution or averaging methods which the Lender deems appropriate and practical, it hereby being understood that the amount of any loss, costs or expense payable by the Borrower to any Lender as Breakage Fee shall be determined in the respective Lender Agent’s reasonable discretion and shall be conclusive absent manifest error.

“Business Day” means a day of the year other than (i) Saturday or a Sunday or (ii) any other day on which commercial banks in New York, New York, Columbia, Maryland or Charlotte, North Carolina are not open for business; provided, that, if any determination of a Business Day shall relate to an Advance bearing interest at LIBOR, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“Capital Lease Obligations” means, with respect to any entity, the obligations of such entity to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such entity under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Interest Expense” means, with respect to any Obligor for any period, the amount which, in conformity with GAAP, would be set forth opposite the caption “interest expense” (exclusive of any PIK Interest) or any like caption reflected on the most recent financial statements delivered by such Obligor to the Borrower for such period.

“Closing Date” means September 9, 2014.

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“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral Advisor” means FS Investment Advisor, LLC, a Delaware limited liability company in its capacity as collateral advisor.

“Collateral Advisor Agreement” means the Investment Advisory and Administrative Services Agreement between the Collateral Manager and the Collateral Advisor.

“Collateral Agent” has the meaning assigned to that term in the preamble hereto.

“Collateral Agent Expenses” means the expenses set forth in the ▇▇▇▇▇ Fargo Corporate Trust Fee Letter and any other accrued and unpaid reasonable and documented out-of-pocket expenses (including reasonable and documented attorneys’ fees, costs and expenses) and indemnity amounts payable by the Borrower to the Collateral Agent under the Transaction Documents.

“Collateral Agent Fees” means the fees set forth in the ▇▇▇▇▇ Fargo Corporate Trust Fee Letter, as such fee letter may be amended, restated, supplemented and/or otherwise modified from time to time.

“Collateral Agent Termination Notice” has the meaning assigned to that term in Section 10.05.

“Collateral Coverage Ratio” means, with respect to any Loan of an Energy-Related Obligor for any Relevant Test Period, the ratio of (a) the PDP PV-10 of such Obligor to (b) the aggregate outstanding Indebtedness of the related Obligor, in each case as calculated by the Borrower or the Collateral Manager in good faith using information from and calculations consistent with relevant compliance statements and financial reporting packages provided by the relevant Obligor.

“Collateral Custodian” means ▇▇▇▇▇ Fargo, not in its individual capacity, but solely as collateral custodian pursuant to the terms of this Agreement.

“Collateral Custodian Expenses” means the expenses set forth in the ▇▇▇▇▇ Fargo Corporate Trust Fee Letter and any other accrued and unpaid reasonable and documented out-of-pocket expenses (including reasonable and documented attorneys’ fees, costs and expenses) and indemnity amounts payable by the Borrower to the Collateral Custodian under the Transaction Documents.

“Collateral Custodian Fees” means the fees set forth in the ▇▇▇▇▇ Fargo Corporate Trust Fee Letter, as such fee letter may be amended, restated, supplemented and/or otherwise modified from time to time.

“Collateral Custodian Termination Notice” has the meaning assigned to that term in Section 11.05.

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“Collateral File” means, for each Loan, (a) copies of each of the Required Loan Documents and (b) any other portion of the Loan File which is not part of the Required Loan Documents.

“Collateral Management Report” has the meaning assigned to that term in Section 6.07(b).

“Collateral Manager” means FS Energy and Power Fund or any other Person then authorized, pursuant to the Management Agreement, to service, administer, and collect on the Loans and exercise rights and remedies in respect of the same.

“Collateral Manager Event of Default” has the meaning assigned to that term in Section 6.11.

“Collateral Management Fee” has the meaning assigned to that term in the Management Agreement.

“Collateral Management Standard” means, with respect to any Loans included in the Collateral Portfolio, to service and administer such Loans on behalf of the Secured Parties in accordance with Applicable Law, the terms of this Agreement, the Underlying Instruments, all customary and usual servicing practices for loans like the Loans and, to the extent consistent with the foregoing, (i) with reasonable care, using a degree of skill and diligence not less than that with which the Borrower or Collateral Manager, as applicable, services and administers loans for its own account or for the account of its Affiliates having similar lending objectives and restrictions, and (ii) to the extent not inconsistent with clause (i), in a manner consistent with the customary standards, policies and procedures followed by institutional managers of national standing relating to assets of the nature and character of the Collateral Portfolio and without regard to any relationship that the Collateral Manager or any Affiliate thereof may have with any Obligor or any Affiliate of any Obligor.  Solely pursuant to Section 6.11(a), the “Collateral Management Standard” shall apply to each Borrower Advisor.

“Collateral Manager Certificate” has the meaning assigned to that term in Section 6.07(c).

“Collateral Portfolio” means all right, title, and interest (whether now owned or hereafter acquired or arising, and wherever located) of the Borrower in the property identified below in clauses (a) through (e) and all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, contract rights, general intangibles, instruments, certificates of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, commercial tort claims, deposit accounts, inventory, investment property, letter-of-credit rights, software, supporting obligations, accessions, or other property consisting of, arising out of, or related to any of the following (in each case excluding the Retained Interest and the Excluded Amounts):

(a)                                 the Loans, and all monies due or to become due in payment under such Loans on and after the related Cut-Off Date, including, but not limited to, all Available Collections;

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(b)                                 the Portfolio Assets with respect to the Loans referred to in clause (a);

(c)                                  the Controlled Accounts and all Permitted Investments purchased with funds on deposit in the Controlled Accounts;

(d)                                 the Borrower’s equity interests in any Portfolio Subsidiary;

(e)                                  any Loan or other asset received in exchange for an Eligible Loan in connection with any workout or other restructuring of such asset (it being understood, for the avoidance of doubt, that such Loan or other asset shall not be an Eligible Loan unless it meets each of the criteria set forth in such definition); and

(f)                                   all income and Proceeds of the foregoing.

“Collateral Sub-Advisor” means GSO Capital Partners LP, a Delaware limited partnership, in its capacity as Collateral Sub-Advisor.

“Collection Account” means account number ▇▇▇▇▇▇▇▇ at the Account Bank in the name of the Borrower subject to the Lien of the Collateral Agent for the benefit of the Secured Parties including any sub-account thereof; provided, that the funds deposited therein (including any interest and earnings thereon) from time to time shall constitute the property and assets of the Borrower, and the Borrower shall be solely liable for any Taxes payable with respect to the Collection Account.

“Collection Date” means the date on which the aggregate outstanding principal amount of the Advances have been repaid in full and all Yield and Fees and all other Obligations have been paid in full (other than contingent liability obligations as to which no claim has been made), and the Borrower shall have no further right to request any additional Advances.

“Collection Period” means, (i) as to the initial Payment Date, the period beginning on the Closing Date and ending on, and including, the Determination Date immediately preceding such Payment Date and (ii) as to any subsequent Payment Date, the period beginning on the first day after the most recently ended Collection Period and ending on, and including, the Determination Date immediately preceding such Payment Date, or, with respect to the final Collection Period, the Collection Date.

“Commercial Paper Notes” means, any short-term promissory notes of any Conduit Lender issued by such Conduit Lender in the commercial paper market.

“Commitment” means, with respect to each Lender, (i) prior to the end of the Reinvestment Period, the dollar amount set forth opposite such Lender’s name on Annex B hereto or the amount set forth as such Lender’s “Commitment” on Schedule I to the Joinder Supplement relating to such Lender, as applicable (after giving effect to any decrease pursuant to Section 2.17 or increase pursuant to Section 2.20)  and (ii) on or after the Reinvestment Period, such Lender’s Pro Rata Share of the aggregate Advances Outstanding.

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“Commitment Reduction Fee” means, with respect to any Lender and/or Lender Agent, the “Commitment Reduction Fee” set forth in the applicable Lender Fee Letter.

“Conduit Lender”  means each commercial paper conduit as may from time to time become a Lender hereunder by executing and delivering a Joinder Supplement to the Administrative Agent and the Borrower as contemplated by Section 2.20.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.

“Controlled Accounts” means the Collection Account, the Interest Collection Account, the Principal Collection Account and the Unfunded Exposure Account.

“Credit Risk Loan” means an Eligible Loan that, in the Borrower or the Collateral Manager’s reasonable commercial judgment (as certified by the Borrower or the Collateral Manager to the Administrative Agent and the Lenders), is declining in value or has a significant risk of declining in credit quality or price in the near term.

“Cure Plan” means a plan submitted by the Borrower to the Administrative Agent satisfying the requirements of Section 2.06(c).

“Cure Plan Sale” means a sale of a Loan pursuant to an approved Cure Plan.

“Current Ratio” means, with respect to any Obligor, the ratio of (a) all assets of such Obligor that, in accordance with GAAP, would be included as current assets on a balance sheet as of the date of calculation, after deducting adequate reserves in each case in which a reserve is proper in accordance with GAAP divided by (b) all liabilities of such Obligor that, in accordance with GAAP, would be included as current liabilities on a balance sheet as of the date of calculation; provided that, such calculation shall (x) exclude any non-▇▇▇▇ ▇▇▇▇-to-market value and liability associated with Derivative Contracts pursuant to SFAS 133 Accounting for Derivative Instruments and Hedging Activities and (y) be made by the Borrower or the Collateral Manager in good faith using information from and calculations consistent with relevant compliance statements and financial reporting packages provided by the relevant Obligor.

“Cut-Off Date” means, with respect to each Loan, the date such Loan is Pledged hereunder.

“Defaulting Lender” means any Lender that has (or, with respect to clause (iv) of this definition, has a direct or indirect parent company that has) (i) failed to fund any portion of the Advances on the date required to be funded by it hereunder, (ii) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless such amount is the subject of a good faith dispute, (iii) notified the Borrower, the Administrative Agent or any other Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply or has failed to comply with its funding obligations under this Agreement or generally under other agreements in which it commits or is obligated to extend credit, or (iv) become or is not Solvent

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or has become the subject of a Bankruptcy Proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

“Delayed Draw Loan” means a Loan that requires one or more future advances to be made by the Borrower and which does not permit the re-borrowing of any amount previously repaid by the related Obligor; provided that, such Loan shall only be considered a Delayed Draw Loan for so long as any future funding obligations remain in effect and any reference to a Delayed Draw Loan shall refer only to any portion of such Loan which constitutes a future funding obligation.

“Determination Date” means the 4th day of each March, June, September and December.

“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, (iii) 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) and (iv) which is not a Senior Secured Bond or a Second Lien Energy Loan.

“Disbursement Request” means a disbursement request from the Borrower to the Administrative Agent and the Collateral Agent in the form attached hereto as Exhibit D in connection with a disbursement request from the Principal Collection Account in accordance with Section 2.19.

“Discretionary Sale” has the meaning set forth in Section 2.07(b).

“Dollars” means the lawful currency of the United States of America.

“EBITDA” means, with respect to any period and any Loan, the meaning of “EBITDA”, “Adjusted EBITDA” or any comparable definition in the Underlying Instrument for each such Loan, together with all reasonable add-backs and exclusions as designated in such Underlying Instrument, and in any case that “EBITDA”, “Adjusted EBITDA” or such comparable definition is not defined in such Underlying Instrument, an amount, for the principal obligor on such Loan and any of its parents or Subsidiaries that are obligated pursuant to the Underlying Instrument for such Loan (determined on a consolidated basis without duplication in accordance with GAAP) equal to earnings from continuing operations for such period plus interest expense, income taxes and unallocated depreciation and amortization for such period (to the extent deducted in determining earnings from continuing operations for such period), and any other item the Borrower and the Administrative Agent mutually deem to be appropriate.

“Eligible Assignee” means any commercial bank or insurance company.

“Eligible Loan” means each Loan (A) for which the Administrative Agent and/or the Collateral Agent have received (or, in accordance with the definition of “Required Loan Documents,” will receive) the related Required Loan Documents; (B) with respect to which an Approval Notice has been executed by the Administrative Agent; and (C) that satisfies each of

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the following eligibility requirements (unless the Administrative Agent, with the prior consent of the Required Lenders, agrees to waive any such eligibility requirement with respect to such Loan):

(a)                                 such Loan is (i) a Senior Secured Loan (which may be a DIP Loan), a First Lien Energy Loan  (which may be a DIP Loan) or a Second Lien Energy Loan or (ii) prior to the occurrence of the Required Sale Date, a Senior Secured Bond;

(b)                                 after giving effect to such Loan as an Eligible Loan, as of the related Cut-Off Date, the aggregate Outstanding Balance of all Eligible Loans made to the applicable Obligor is not greater than $17,500,000; provided that the aggregate Outstanding Balance of all Eligible Loans made to up to three (3) Obligors may be up to $25,000,000 for each such Obligor; provided, further, that only the portion of the Loans in excess of this threshold will be deemed to have not satisfied this clause (b);

(c)                                  such Loan is denominated and payable solely in Dollars;

(d)                                 such Loan does not constitute Margin Stock;

(e)                                  unless such Loan is a Delayed Draw Loan, such Loan does not require the Borrower to make advances in respect of such Loan at any time after the Borrower’s purchase of such Loan;

(f)                                   the acquisition of such Loan will not cause the Borrower or the Collateral Portfolio to be required to register as an investment company under the 1940 Act;

(g)                                  after giving effect to such Loan as an Eligible Loan, the aggregate Outstanding Balance of all Eligible Loans that are DIP Loans is not more than 5% of the aggregate Outstanding Balance of all Eligible Loans; provided that, only the portion of the Loans in excess of such threshold will be deemed to have not satisfied this clause (g);

(h)                                 the principal Underlying Collateral for such Loan is not real property;

(i)                                     such Loan, together with the Underlying Instrument related thereto, is in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor and each guarantor thereof (if applicable), enforceable against such Obligor and each such guarantor in accordance with its terms, subject to customary bankruptcy, insolvency and equity limitations;

(j)                                    such Loan is in the form of and is treated as indebtedness of the related Obligor for U.S. federal income tax purposes;

(k)                                 as of the related Cut-Off Date, such Loan is not delinquent in payment of any amount under the related Underlying Instrument or other related transaction documents;

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(l)                                     none of the acquisition, sale, transfer or assignment of such Loan nor the granting of a security interest hereunder to the Collateral Agent will (i) violate, conflict with or contravene any Applicable Law or any contractual or other restriction, limitation or encumbrance binding on the Borrower or (ii) cause any Lender to fail to comply with any Applicable Law or request or directive (whether or not having the force of law) from any banking or other Governmental Authority having jurisdiction over such Lender;

(m)                             such Loan is eligible under the applicable Underlying Instrument (giving effect to the provisions of Sections 9-406 and 9-408 of the UCC) to be sold, transferred or assigned to the Borrower and to have a security interest therein granted to the Collateral Agent, as agent for the Secured Parties (subject to the rights of any applicable agents under the terms of the related Underlying Instrument);

(n)                                 such Loan is not subject to, or the subject of any assertions in respect of, any litigation, dispute or offset, and contains provisions substantially to the effect that the Obligor’s and each guarantor’s (if applicable) payment obligations thereunder are absolute and unconditional without any right of rescission, setoff, counterclaim or defense for any reason against the Borrower or any assignee;

(o)                                 immediately after giving effect to its acquisition of such Loan and at all times it is owned by the Borrower, the Borrower (i) has good and marketable title to, and is the sole owner of, such Loan, and the Borrower has granted to the Collateral Agent for the benefit of the Secured Parties a valid and perfected first priority (subject to Permitted Liens) Lien in the Loan and related Underlying Instrument and (ii) has not granted a Lien in the Loan or the related Underlying Instrument to any Person other than to the Collateral Agent hereunder;

(p)                                 such Loan (or the acquisition thereof) is not subject to and will not subject any Secured Party or any Affiliate thereof to any Tax, fee or other governmental charge payable to any Governmental Authority;

(q)                                 the Obligor with respect to such Loan and each guarantor (if applicable) thereof had full legal capacity to execute and deliver the related Underlying Instrument;

(r)                                    all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority or any other Person required by the Borrower or under the Related Underlying Instrument under Applicable Law to be obtained, effected or given in connection with the making, acquisition, transfer or performance of such Loan have been duly obtained, effected or given and are in full force and effect;

(s)                                   such Loan requires the related Obligor to pay customary maintenance, repair, insurance and taxes, together with all other ancillary costs and expenses, with respect to the Underlying Collateral of such Loan;

(t)                                    such Loan and any Underlying Collateral (i) comply in all respects with all Applicable Laws and (ii) have not, and will not, be used by the related Obligor in any manner or for any purpose that would result in any material risk of liability being imposed upon the Borrower or any Secured Party under any Applicable Law;

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(u)                                 (i) such Loan has a term to stated maturity that does not exceed eight (8) years and (ii) after giving effect to such Loan as an Eligible Loan, the aggregate Outstanding Balance of all Eligible Loans with a term to stated maturity of greater than seven (7) years does not exceed 10% of the aggregate Outstanding Balance of all Eligible Loans; provided, that only the portion of the Loans in excess of this threshold will be deemed to have not satisfied this clause (u);

(v)                                 the Underlying Instrument for such Loan does not contain a confidentiality provision that would prohibit any Secured Party from accessing all necessary information with regard to such Loan, so long as such Secured Party has agreed to maintain the confidentiality of such information in accordance with the provisions of such Underlying Instrument;

(w)                               after giving effect to such Loan as an Eligible Loan, the aggregate Outstanding Balance of all fixed-rate Loans and Senior Secured Bonds is not more than the Applicable Concentration Percentage of the aggregate Outstanding Balance of all Eligible Loans; provided that, only the portion of the Loans in excess of such threshold will be deemed to have not satisfied this clause (w);

(x)                                 reserved;

(y)                                 such Loan, and any payment made with respect to such Loan, is not currently withholding any tax (or similar governmental charge) unless the Obligor thereon is making “gross-up” payments that cover the full amount of such withheld tax (or similar governmental charge) on an after-tax basis;

(z)                                  after giving effect to such Loan as an Eligible Loan, the aggregate Outstanding Balance of all Loans with an Obligor organized or incorporated in Canada is not more than 20% of the aggregate Outstanding Balance of all Eligible Loans; provided that, only the portion of the Loans in excess of such threshold will be deemed to have not satisfied this clause (z);

(aa)                          after giving effect to such Loan as an Eligible Loan, the aggregate Outstanding Balance of all Eligible Loans that are Delayed Draw Loans is not more than 10% of the aggregate Outstanding Balance of all Eligible Loans; provided that, only the portion of the Loans in excess of such threshold will be deemed to have not satisfied this clause (aa);

(bb)                          to the actual knowledge of the Borrower, no written or verbal notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Underlying Collateral, nor does the Borrower have knowledge or reason to believe that any such notice will be received or is being threatened, other than, in each case, as notified to the Administrative Agent in writing on or prior to the applicable Cut-Off Date or promptly after obtaining actual knowledge of any such notice or inquiry; provided that, unless otherwise permitted by the Administrative Agent, from and after the Borrower obtaining such actual knowledge, the related Loans will no longer be counted as Eligible Loans for purposes of calculating the Borrowing Base;

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(cc)                            the Obligor with respect to such Loan is an Eligible Obligor; and

(dd)                          after giving effect to such Loan as an Eligible Loan, the aggregate Outstanding Balance of all Eligible Loans that are Second Lien Energy Loans is not more than 60% of the aggregate Outstanding Balance of all Eligible Loans; provided that, only the portion of the Loans in excess of such threshold will be deemed to have not satisfied this clause (dd).

“Eligible Obligor” means, on any date of determination, any Obligor that:

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

(b)                                 is not a Governmental Authority;

(c)                                  is not an Affiliate of the Borrower or any Borrower Advisor;

(d)                                 is organized and incorporated in the United States or any State thereof or Canada;

(e)                                  as of the related Cut-Off Date, there are no proceedings pending or, to the best of the Borrower’s or the Equityholder’s knowledge, threatened (i) asserting that such Obligor is not Solvent or (ii) pursuant to which such Obligor, any other obligated party or any Governmental Authority has asserted that such Loan or the related Underlying Instrument is illegal or unenforceable;

(f)                                   as of the related Cut-Off Date, is not the subject of and, to the best of the Borrower’s or the Equityholder’s knowledge is not threatened with any proceeding which would result in, a Bankruptcy Event with respect to such Obligor;

(g)                                  to the actual knowledge of the Borrower, none of such Obligor’s operations is the subject of a material Federal or state investigation evaluating whether any remedial action, involving expenditures, is needed to respond to a release of any Hazardous Materials into the environment, other than, in each case, as notified to the Administrative Agent in writing on or prior to the applicable Cut-Off Date or promptly after obtaining actual knowledge of any such investigation; provided that, unless otherwise permitted by the Administrative Agent, from and after the Borrower obtaining such actual knowledge, the related Loans will no longer be counted as Eligible Loans for purposes of calculating the Borrowing Base; and

(h)                                 to the actual knowledge of the Borrower, such Obligor does not have any material contingent liability in connection with any release of any Hazardous Materials into the environment, other than, in each case, as notified to the Administrative Agent in writing on or prior to the applicable Cut-Off Date or promptly after obtaining actual knowledge of any such material contingent liability; provided that, unless otherwise permitted by the Administrative Agent, from and after the Borrower obtaining such actual knowledge, the related Loans will no longer be counted as Eligible Loans for purposes of calculating the Borrowing Base.

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“Eligible Repurchase Obligations” means repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States, in either case entered into with a depository institution or trust company (acting as principal) described in the definition of Permitted Investments.

“Energy-Related Obligor” means any Obligor that is designated on the applicable Approval Notice as an Obligor engaged in the business of owning, operating, exploring, producing, drilling or managing oil and gas assets.

“Environmental Laws” means any and all foreign, federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, binding interpretations and orders of courts or Governmental Authorities, relating to the protection of human health from exposure to Hazardous Materials or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials.  Environmental Laws include, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Material Transportation Act (49 U.S.C. § 331 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Safe Drinking Water Act (42 U.S.C. § 300, et seq.), the Environmental Protection Agency’s regulations relating to underground storage tanks (40 C.F.R. Parts 280 and 281), and the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), and the rules and regulations thereunder, each as amended or supplemented from time to time.

“Equityholder” means  FS Energy and Power Fund, as the owner of 100% of the membership interests in the Borrower.

“ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” means (a) any corporation that is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Borrower or the Collateral Manager, as applicable, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with the Borrower or the Collateral Manager, as applicable, or (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Borrower or the Collateral Manager, as applicable, any corporation described in clause (a) above or any trade or business described in clause (b) above.

“Eurodollar Disruption Event” means occurrence of any of the following:  (a) any Liquidity Bank or any Institutional Lender shall have notified the Administrative Agent in writing of a determination by such Liquidity Bank or any of its assignees or participants or such Institutional Lender that it would be contrary to law or to the directive of any central bank or other Governmental Authority (whether or not having the force of law) to obtain United States dollars in the London interbank market to fund any Advance, (b) the Administrative Agent is

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unable to determine LIBOR for any reason, (c) any Liquidity Bank or any Institutional Lender shall have notified the Administrative Agent in writing of a determination by such Liquidity Bank or any of its assignees or participants or such Institutional Lender, as applicable, that the rate at which deposits of United States dollars are being offered to such Liquidity Bank or any of its assignees or participants or such Institutional Lender in the London interbank market does not accurately reflect the cost to such Liquidity Bank, such assignee or such participant or such Institutional Lender of making, funding or maintaining any Advance or (d) any Liquidity Bank or any Institutional Lender shall have notified the Administrative Agent in writing of the inability of such Liquidity Bank or any of its assignees or participants or such Institutional Lender, as applicable, to obtain United States dollars in the London interbank market to make, fund or maintain any Advance.

“Event of Default” has the meaning assigned to that term in Section 7.01.

“Excepted Persons” has the meaning assigned to that term in Section 12.13(a).

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Amounts” means (a) any amount received in any Controlled Account with respect to any Loan included as part of the Collateral Portfolio, which amount is attributable to the payment of any Tax, fee or other charge imposed by any Governmental Authority on such Loan or on any Underlying Collateral, or (b) any amount received in any Controlled Account representing (i) any amount representing a reimbursement of insurance premiums, (ii) any escrows relating to Taxes, insurance and other amounts in connection with Loans which are held in an escrow account for the benefit of the Obligor and the secured party pursuant to escrow arrangements under a Underlying Instrument and (iii) any amount received in any Controlled Account with respect to any Loan that is sold or transferred by the Borrower pursuant to Section 2.07, to the extent such amount is attributable to a time after the effective date of such replacement or sale.

“Excluded Taxes” has the meaning assigned to that term in Section 2.10(a).

“Facility Maturity Date” means the earliest to occur of (i) the Stated Maturity Date, (ii) the date of the declaration or automatic occurrence of the Facility Maturity Date pursuant to Section 7.01 and (iii) the Collection Date.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code, and any law, regulation, legislation or practice adopted pursuant to an intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal, for each day during such period, to the weighted average of the overnight federal funds rates as in Federal Reserve Board Statistical Release H.15(519) or any successor or substitute publication selected by the Administrative Agent (or, if such day is not a Business Day, for the

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next preceding Business Day), or, if for any reason such rate is not available on any day, the rate determined, in the sole discretion of the Administrative Agent, to be the rate at which overnight federal funds are being offered in the national federal funds market at 9:00 a.m. on such day.

“Fees” means the Non-Usage Fee and all other fees payable to each Lender or Lender Agent pursuant to the terms of any Lender Fee Letter.

“Financial Asset” has the meaning specified in Section 8-102(a)(9) of the UCC.

“Financial Sponsor” means any Person, including any Subsidiary of such Person, whose principal business activity is acquiring, holding, and selling investments (including controlling interests) in otherwise unrelated companies that each are distinct legal entities with separate management, books and records and bank accounts, whose operations are not integrated with one another and whose financial condition and creditworthiness are independent of the other companies so owned by such Person.

“First Lien Energy Loan” means a Loan Asset that (i) is made to an Energy-Related Obligor, (ii) is not (and cannot by its terms become) subordinate in right of payment to any obligation of the Obligor in any bankruptcy, reorganization, insolvency, moratorium or liquidation proceedings, (iii) is secured by a pledge of collateral, which security interest is validly perfected and first priority under Applicable Law (subject to Liens described in clause (b) (other than clause (v) thereof) of the definition of Permitted Liens), and (iv) the Borrower or the Collateral Manager determines in good faith that the value of the collateral securing the loan (or the enterprise value of the underlying business) on or about the time of origination equals or exceeds the outstanding principal balance of the loan plus the aggregate outstanding balances of all other loans of equal or higher seniority secured by the same collateral.

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

“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, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person.

“Hazardous Materials” means all hazardous or toxic materials subject to any Environmental Law, including, without limitation, materials listed in 49 C.F.R. § 172.010, materials defined as hazardous pursuant to § 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, flammable, explosive or radioactive materials, hazardous or toxic wastes or substances, lead-based materials, petroleum or petroleum distillates or asbestos or material containing asbestos, polychlorinated biphenyls, radon gas, urea formaldehyde and any such materials classified as being “in inventory”, “usable work in process” or similar classification that would, if classified as unusable, be included in the foregoing definition.

“Highest Required Investment Category” means (a) with respect to ratings assigned by Moody’s, “Aa2” or “P-1” for one-month instruments, “Aa2” and “P-1” for three-

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month instruments, “Aa2” and “P-1” for six-month instruments and “Aaa” and “P-1” for instruments with a term in excess of six-months, and (b) with respect to rating assigned by S&P, “A-1+” for short-term instruments and “AAA” for long-term instruments.

“Indebtedness” means (i) with respect to any Obligor under any Loan, the meaning of “Indebtedness” or any comparable definition in the Underlying Instrument for each such Loan, and in any case that “Indebtedness” or such comparable definition is not defined in such Underlying Instrument, without duplication, (a) all obligations of such entity for borrowed money, (b) all obligations of such entity evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such entity under conditional sale or other title retention agreements relating to property acquired by such entity, (d) all obligations of such entity in respect of the deferred purchase price of property or services (excluding current accounts payable and trade payables incurred in the ordinary course of business), (e) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such entity, whether or not the indebtedness secured thereby has been assumed, (f) all guarantees by such entity of indebtedness of others, (g) all Capital Lease Obligations of such entity, (h) all obligations, contingent or otherwise, of such entity as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such entity in respect of bankers’ acceptances; and (ii) for all other purposes, with respect to any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than current liabilities incurred in the ordinary course of business and payable in accordance with customary trade practices) or that is evidenced by a note, bond, debenture or similar instrument or other evidence of indebtedness customary for indebtedness of that type, (b) all Capital Lease Obligations of such Person, (c) all obligations of such Person in respect of acceptances issued or created for the account of such Person, (d) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, (e) all indebtedness, obligations or liabilities of that Person in respect of derivatives (on a net basis, to the extent the same are reported by such Person on a net basis), and (f) all obligations under direct or indirect guaranties in respect of obligations (contingent or otherwise) to purchase or otherwise acquire, or to otherwise assure a creditor against loss in respect of, indebtedness or obligations of others of the kind referred to in clauses (a) through (e) of this clause (ii).

“Indemnified Amounts” has the meaning assigned to that term in Section 8.01.

“Indemnified Party” has the meaning assigned to that term in Section 8.01.

“Indemnity Letter” means that certain Indemnity Letter, dated as of the date hereof, given by the Collateral Advisor to the Administrative Agent, on behalf of the Secured Parties.

“Independent Director” means a natural person who, (A) has not been for the three-year period prior to his or her appointment as an Independent Director, and during the continuation of his or her service as Independent Director is not: (i) an employee, director, stockholder, member, manager, partner or officer of the Borrower or any of their respective Affiliates (other than his or her service as an Independent Director of the Borrower or other

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Affiliates that are structured to be “bankruptcy remote” and does not hold, either directly or indirectly, any equity interests in the Borrower or in any direct or indirect parent or Subsidiary thereof); (ii) a customer, creditor, service provider (including a provider of professional services) or supplier of the Borrower or any of their Affiliates (other than his or her service as an Independent Director of the Borrower or other Affiliates of the Borrower that are structured to be “bankruptcy remote”); (iii) any member of the immediate family of a person described in (i) or (ii), or (iv) a Person that controls (whether directly, indirectly or otherwise) any of (i), (ii) or (iii), (B) has, (i) prior experience as an Independent Director for a corporation or limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three years of employment experience with CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Independent Directors, another nationally-recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower and that provides professional Independent Directors and other corporate services in the ordinary course of its business and (C) is employed by a nationally recognized company that routinely provides professional Independent Directors and other corporate services in the ordinary course of its business. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraphs (i) and (ii) by reason of being the Independent Director of a “bankruptcy remote” Affiliate shall be qualified to serve as an Independent Director of the Borrower, provided that the fees that such individual earns from serving as an Independent Director of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year.

“Indorsement” has the meaning specified in Section 8-102(a)(11) of the UCC, and “Indorsed” has a corresponding meaning.

“Ineligible Portion” has the meaning assigned to that term in Section 1.05.

“Initial Advance” means the first Advance made pursuant to Article II.

“Initial Notice of Borrowing” means a Notice of Borrowing that (i) specifies a requested Advance of not less than $1,000,000, (ii) specifies an Advance Date not more than sixty (60) days after the Closing Date and (iii) is revocable by the Borrower only if, at any time prior to the specified Advance Date, the Advances Outstanding exceed $1,000,000.

“Institutional Lender” means (i) ▇▇▇▇▇ Fargo and (ii) each financial institution other than a Conduit Lender which may from time to time become a Lender hereunder by executing and delivering a Joinder Supplement to the Administrative Agent and the Borrower as contemplated by Section 2.20.

“Instrument” has the meaning specified in Section 9-102(a)(47) of the UCC.

“Insurance Policy” means, with respect to any Loan, an insurance policy covering liability and physical damage to, or loss of, the Underlying Collateral.

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“Insurance Proceeds” means any amounts received on or with respect to a Loan under any Insurance Policy or with respect to any condemnation proceeding or award in lieu of condemnation other than (i) any such amount received which is required to be used to restore, improve or repair the related property or required to be paid to the Obligor under the Underlying Instrument or (ii) any such amount for which the Borrower or the Collateral Manager has consented, in its reasonable business discretion, to be used to restore, improve or repair the related property or otherwise to be paid to the Obligor under the Underlying Instrument.

“Interest” means, with respect to any period and any Loan, for the Obligor on such Loan and any of its parents or Subsidiaries that are obligated under the Underlying Instrument for such Loan (determined on a consolidated basis without duplication in accordance with GAAP), the meaning of “Interest” or any comparable definition in the Underlying Instrument for each such Loan and in any case that “Interest” or such comparable definition is not defined in such Underlying Instrument, all interest in respect of Indebtedness (including the interest component of any payments in respect of Capital Lease Obligations) accrued or capitalized during such period (whether or not actually paid during such period).

“Interest Collection Account” means account number ▇▇▇▇▇▇▇▇ at the Account Bank in the name of the Borrower subject to the Lien of the Collateral Agent for the benefit of the Secured Parties including any sub-account thereof; provided, that the funds deposited therein (including any interest and earnings thereon) from time to time shall constitute the property and assets of the Borrower, and the Borrower shall be solely liable for any Taxes payable with respect to the Interest Collection Account.

“Interest Collections” means, (i) with respect to any Loan, all payments and collections attributable to interest on such Loan, including, without limitation, all scheduled payments of interest and payments of interest relating to principal prepayments, all guaranty payments attributable to interest and proceeds of any liquidations, sales, dispositions or securitizations attributable to interest on such Loan and (ii) amendment fees, late fees, waiver fees, prepayment fees or other fees received in respect of Loans.

“Interest Coverage Ratio” means, with respect to any Loan for any Relevant Test Period, either (a) the meaning of “Interest Coverage Ratio” or comparable definition set forth in the related Underlying Instrument, or (b) in the case of any Loan with respect to which the related Underlying Instrument does not include a definition of “Interest Coverage Ratio” or comparable definition, the ratio of (i) EBITDA to (ii) Cash Interest Expense of such Obligor as of such Relevant Test Period, as calculated by a Borrower Advisor in good faith.

“Joinder Supplement” means an agreement among the Borrower, a Lender, its Lender Agent and the Administrative Agent in the form of Exhibit E to this Agreement (appropriately completed) delivered in connection with a Person becoming a Lender hereunder after the Closing Date.

“Lender” means any Institutional Lender or Conduit Lender, and/or any other Person to whom an Institutional Lender or Conduit Lender assigns any part of its rights and obligations under this Agreement and the other Transaction Documents in accordance with the terms of Section 12.04.

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“Lender Agent” means, with respect to (i) ▇▇▇▇▇ Fargo, ▇▇▇▇▇ Fargo; (ii) each Conduit Lender which may from time to time become party hereto, the Person designated as the “Lender Agent” with respect to such Conduit Lender in the applicable Joinder Supplement and (iii) each Institutional Lender which may from time to time become a party hereto, each shall be deemed to be its own Lender Agent, and, in each case, each of their respective successors and assigns (and each shall be deemed to be its own Lender Agent).

“Lender Fee Letter” means each fee letter agreement that shall be entered into by and among the Borrower, the applicable Lender and the related Lender Agent, if applicable, in connection with the transactions contemplated by this Agreement, as amended, modified, waived, supplemented, restated or replaced from time to time.

“LIBOR” means, for any day during the Collection Period, with respect to any Advance (or portion thereof) (a) the rate per annum appearing on Reuters Screen LIBOR01 Page (or any successor or substitute page) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m., London time, for such day, provided, if such day is not a Business Day, the immediately preceding Business Day, for a three-month maturity; and (b) if no rate specified in clause (a) of this definition so appears on Reuters Screen LIBOR01 Page (or any successor or substitute page), the interest rate per annum at which dollar deposits of $5,000,000 and for a three-month maturity are offered by the principal London office of ▇▇▇▇▇ Fargo in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, for such day.

“Lien” means any mortgage or deed of trust, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, claim, preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale, lease or other title retention agreement, sale subject to a repurchase obligation, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing); provided that, in no event shall an operating lease in and of itself be deemed to be a Lien.

“Lien Release Dividend” has the meaning assigned to that term in Section 2.07(e).

“Lien Release Dividend Date” means the date specified by the Borrower, which date may be any Business Day, provided written notice is given in accordance with Section 2.07(e).

“Liquidity Agreement” means any agreement entered into in connection with this Agreement pursuant to which a Liquidity Bank agrees to make purchases from or advances to, or purchase assets from, any Conduit Lender in order to provide liquidity support for such Conduit Lender’s Advances hereunder.

“Liquidity Bank” means the Person or Persons who provide liquidity support to any Conduit Lender pursuant to a Liquidity Agreement in connection with the issuance by such Conduit Lender of Commercial Paper Notes.

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“LLC Agreement” means the Limited Liability Company Agreement of the Borrower, dated as of the date hereof, as amended, supplemented or otherwise modified from time to time.

“Loan” means (i) a Loan Asset or (ii) prior to the occurrence of the Required Sale Date, a Senior Secured Bond.

“Loan Asset” means the portion of any commercial loan or note that the Borrower Advisors direct the Borrower to fund to or acquire from the Seller or any third party seller, which loan or note includes, without limitation, (i) the Required Loan Documents and Loan File, and (ii) all right, title and interest of such seller in and to such loan or note and any Underlying Collateral, but excluding, in each case, the Retained Interest and Excluded Amounts, and which loan or note was acquired from or funded to and owned by the Borrower on the applicable Cut-Off Date (as set forth on the Loan Tape delivered on such Cut-Off Date).

“Loan Checklist” means an electronic or hard copy, as applicable, of a checklist delivered by or on behalf of the Borrower to the Collateral Custodian, for each Loan, of all Required Loan Documents to be included within the respective Loan File, which shall specify whether such document is an original or a copy and which shall include the identification number and name of the Obligor with respect to such Loan.

“Loan File” means, with respect to each Loan, a file containing (a) each of the documents and items as set forth on the Loan Checklist with respect to such Loan and (b) duly executed originals (to the extent required by the definition of “Required Loan Documents”) and copies of any other reasonably available Records relating to such Loans and Portfolio Assets pertaining thereto.

“Loan Register” has the meaning assigned to that term in Section 5.01(hh).

“Loan Tape” means the loan tape to be delivered in connection with each Collateral Management Report and on each applicable Cut-Off Date, which tape shall include (but not be limited to) the aggregate Outstanding Balance of all Loans and, with respect to each Loan, the following information:

(a)                                 name of the related Obligor;

(b)                                 if such Loan is a Senior Secured Loan or a Senior Secured Bond of an Obligor that is not an Energy-Related Obligor, calculation of (i) the Senior Net Leverage Ratio provided in the applicable Approval Notice (provided that if any other positions in such Loan existed on the date of such Approval Notice, then the Senior Net Leverage Ratio utilized for the position with the earliest of such other Cut-Off Dates shall apply) and for the most recent Relevant Test Period and (ii) the Interest Coverage Ratio provided in the applicable Approval Notice (provided that if any other positions in such Loan existed on the date of such Approval Notice, then the Interest Coverage Ratio utilized for the position with the earliest of such other Cut-Off Dates shall apply) and for the most recent Relevant Test Period;

(c)                                  if such Loan is a First Lien Energy Loan, a Second Lien Energy Loan or a Senior Secured Bond of an Energy-Related Obligor, calculation of (i) the borrowing base and/or

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the borrowing base of any related Senior Revolving Loan, (ii) the Total Net Leverage Ratio on the applicable Cut-Off Date (provided that if any other positions in such Loan existed on such Cut-Off Date, then the Total Net Leverage Ratio utilized for the position with the earliest of such other Cut-Off Dates shall apply) and for the most recent Relevant Test Period and (iii) the Collateral Coverage Ratio;

(d)                                 collection status (number of days past due);

(e)                                  loan status (whether in default or on non-accrual status);

(f)                                   scheduled maturity date;

(g)                                  date and amount of next Scheduled Payment;

(h)                                 loan rate of interest (and reference rate, if applicable);

(i)                                     LIBOR floor (if applicable);

(j)                                    Outstanding Balance;

(k)                                 par amount;

(l)                                     the portion of the Outstanding Balance of such Loan that is in excess of the threshold set forth in clauses (b), (g), (u), (w), (z), (aa) and/or (dd) of the definition of “Eligible Loan”;

(m)                             Assigned Value;

(n)                                 Purchase Price;

(o)                                 Moody’s asset and Obligor rating (if available);

(p)                                 S&P asset and Obligor rating (if available);

(q)                                 Loan type (Senior Secured Loan, First Lien Energy Loan or Second Lien Energy Loan);

(r)                                    whether such Loan is a DIP Loan, a fixed-rate Loan or a Delayed Draw Loan;

(s)                                   the applicable industry classification set forth on Schedule III;

(t)                                    whether such Loan has been subject to a Value Adjustment Event (and of what type);

(u)                                 whether such Loan has been subject to any Material Modification;

(v)                                 the applicable Cut-Off Date;

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(w)                               the Adjusted Borrowing Value of such Loan;

(x)                                 the EBITDA of such Loan over the twelve-month period for the most Relevant Test Period;

(y)                                 the revenue of the related Obligor(s) during the twelve-month period for the most Relevant Test Period;

(z)                                  the Collateral Manager’s risk rating of such Loan, as determined in accordance with its current internal rating system; and

(aa)                          the PDP PV-10 for each Obligor per such Obligor’s most recently delivered reserve report, together with components of such calculation.

“Management Agreement” means the Collateral Management Agreement, dated as of the date hereof, between the Borrower and the Collateral Manager relating to the management of the Collateral Portfolio of the Borrower, as amended, supplemented or otherwise modified from time to time.

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U or X of the Federal Reserve Board.

“Material Adverse Effect” means, with respect to any event or circumstance, a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance or properties of the Seller, any Borrower Advisor or the Borrower, (b) the validity, enforceability or collectability of this Agreement or any other Transaction Document or the validity, enforceability or collectability of the Loans generally or any material portion of the Loans, (c) the rights and remedies of the Collateral Agent, the Collateral Custodian, the Account Bank, the Administrative Agent, any Lender, any Lender Agent and the Secured Parties with respect to matters arising under this Agreement or any other Transaction Document, (d) the ability of each of the Borrower and Collateral Manager to perform their respective obligations under the Transaction Documents, or (e) the status, existence, perfection, priority or enforceability of the Collateral Agent’s, the Administrative Agent’s or the other Secured Parties’ lien on the Collateral Portfolio, in each case as determined in the reasonable discretion of the Required Lenders.

“Material Modification” means:

(x) any amendment or waiver of, or modification or supplement to, a Underlying Instrument governing a Loan executed or effected on or after the Cut-Off Date for such Loan which:

(a)                                 reduces or forgives any or all of the principal amount due under such Loan;

(b)                                 (i) waives one or more interest payments, (ii) permits any interest due in cash to be deferred or capitalized and added to the principal amount of such Loan (other than (x) any deferral or capitalization already allowed by the terms of the Underlying Instrument of any

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PIK Loan or (y) in addition to existing cash interest payments), or (iii) reduces the spread or coupon when the Interest Coverage Ratio for any Relevant Test Period with respect to such Loan is less than 1.50:1.00 (prior to giving effect to such reduction in the spread or coupon) (for the avoidance of doubt, automatic changes in grid pricing existing on the Cut-Off Date do not constitute “Material Modifications” under this clause (b));

(c)                                  contractually or structurally subordinates such Loan by operation of (i) any priority of payment provisions, (ii) turnover provisions, (iii) the transfer of assets in order to limit recourse to the related Obligor (other than where such transfer is not intended to avoid or limit recourse but is a bona fide disposition transaction which results in the repayment of indebtedness from any net proceeds) or (iv) the granting of Liens (other than Permitted Liens) on any of the Underlying Collateral securing such Loan;

(d)                                 substitutes, alters or releases the Underlying Collateral securing such Loan and each such substitution, alteration or release, as determined in the sole discretion of the Administrative Agent, materially and adversely affects the value of such Loan;

(e)                                  amends, waives, forbears, supplements or otherwise modifies (i) the meaning of “Senior Net Leverage Ratio”, “Interest Coverage Ratio”, “Total Net Leverage Ratio”, “Current Ratio”, “PDP PV-10” or Collateral Coverage Ratio” or any respective comparable definitions in the applicable Underlying Instruments for such Loan or (ii) any term or provision of such Underlying Instrument referenced in or utilized in the calculation of the “Senior Net Leverage Ratio”, “Interest Coverage Ratio”, “Total Net Leverage Ratio”, “Current Ratio”, “PDP PV-10” or “Collateral Coverage Ratio” or any respective comparable definitions for such Loan, in either case in a manner that, in the sole discretion of the Administrative Agent, is materially adverse to the Secured Parties;

(f)                                   delays or extends (i) any Scheduled Payments on such Loan if, after giving effect to such delay or extension, the Average Life of such Loan is increased by 0.50 years or more or (ii) the stated maturity date of such Loan; or

(g)                                  changes the calculation or calculation methodology of the borrowing base for any (i) First Lien Energy Loan or (ii) Senior Revolving Loan that corresponds to a Second Lien Energy Loan; or

(y)                                 any material change in any reserve or assumption used by the administrative agent, collateral agent any similar person under the applicable Underlying Instrument in valuing any First Lien Energy Loan or with respect to any Second Lien Energy Loan, the relevant Senior Revolving Loan.

“Maximum Facility Amount” means the aggregate Commitments as then in effect, after giving effect to any decrease pursuant to Section 2.17 or increase pursuant to Section 2.20; provided that at all times after the Reinvestment Period, the Maximum Facility Amount shall mean the aggregate Advances Outstanding at such time and the Aggregate Unfunded Exposure Amount at such time.  As of the Closing Date, the Maximum Facility Amount is $200,000,000.

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“Minimum Equity Amount” means the greater of (i) the sum of the Adjusted Borrowing Value of all Eligible Loans attributable to the four Obligors collectively comprising the largest aggregate Adjusted Borrowing Value included in the Borrowing Base and (ii) $50,000,000.

“Moody’s” means ▇▇▇▇▇’▇ Investors Service, Inc. (or its successors in interest).

“Mortgage” means the mortgage, deed of trust or other instrument creating a Lien on an interest in real property securing a Loan, including the assignment of leases and rents related thereto.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate contributes or has any obligation to contribute on behalf of its employees or to which the Borrower or any ERISA Affiliate has any liability.

“Non-Usage Fee” means, with respect to any Lender and/or Lender Agent, the “non-usage fee” set forth in the applicable Lender Fee Letter.

“Noteless Loan” means a Loan with respect to which the Underlying Instruments (i) do not require the Obligor to execute and deliver a promissory note to evidence the indebtedness created under such Loan or (ii) require any holder of the indebtedness created under such Loan to affirmatively request a promissory note from the related Obligor.

“Notice and Request for Consent to Lien Release Dividend” has the meaning assigned to that term in Section 2.07(e)(i).

“Notice of Borrowing” means an irrevocable (other than to the extent set forth on the Initial Notice of Borrowing) written notice of borrowing from the Borrower to the Administrative Agent and each Lender Agent in the form attached hereto as Exhibit F.

“Notice of Reduction” means a notice of (a) any reduction of the Advances Outstanding pursuant to Section 2.17(a), in the form attached hereto as Exhibit G or (b) any termination of this Agreement or reduction in part of the Maximum Facility Amount pursuant to Section 2.17(b), in the form attached hereto as Exhibit H.

“Obligations” means all present and future indebtedness and other liabilities and obligations (howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or due or to become due) of the Borrower to the Lenders, the Lender Agents, the Administrative Agent, the Account Bank, the Collateral Agent or the Collateral Custodian arising under this Agreement and/or any other Transaction Document and shall include, without limitation, all liability for principal of and interest on the Advances, Breakage Fees, indemnifications and other amounts due or to become due by the Borrower to the Lenders, the Lender Agents, the Administrative Agent, the Collateral Agent, the Collateral Custodian and the Account Bank under this Agreement and/or any other Transaction Document, any Lender Fee Letter and costs and expenses payable by the Borrower to the Lenders, the Lender Agents, the Administrative Agent, the Account Bank, the Collateral Agent or the Collateral Custodian, in each case, under the Transaction Documents, including attorneys’ fees, costs and expenses,

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including without limitation, interest, fees and other obligations that accrue after the commencement of an insolvency proceeding (in each case whether or not allowed as a claim in such insolvency proceeding).

“Obligor” means, collectively, each Person obligated to make payments under a Underlying Instrument, including any guarantor thereof.

“Officer’s Certificate” means a certificate signed by a director, a manager, the president, the secretary, an assistant secretary, the chief financial officer, treasurer, assistant treasurer or any vice president, as an authorized officer, of any Person.

“Opinion of Counsel” means a written opinion of counsel, which opinion and counsel are acceptable to the Administrative Agent in its sole discretion.

“Outstanding Balance” means the principal balance of a Loan, expressed exclusive of PIK Interest and any other accrued and unpaid interest, and inclusive of any Unfunded Exposure Amount.

“Participant Register” has the meaning assigned to that term in Section 2.13(b).

“Payment Date” means the 15th day of each March, June, September and December or, if such day is not a Business Day, the next succeeding Business Day, commencing December 2014; provided, that the final Payment Date shall occur on the Collection Date.

“Payment Duties” has the meaning assigned to that term in Section 10.02(b)(ii).

“PDP PV-10” means, with respect to any Proved Developed Producing Reserves owned by an Obligor at any time, the net present value, discounted at 10% per annum, of the future net revenues expected to accrue to such Obligor’s interest in such reserves during the remaining expected economic lives of such reserves, based upon the economic assumptions acceptable to the Administrative Agent in its sole discretion. Each calculation of such expected future net revenues shall be made in accordance with the Definitions for Oil and Gas Reserves promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in effect at such time, but in any event (i) appropriate deductions shall be made for severance and ad valorem taxes, and for operating, gathering, transportation and marketing costs required for the production and sale of such reserves, (ii) appropriate adjustments shall be made for commodity and basis hedging activities and (iii) the cash-flows derived from the pricing assumptions set forth in clause (ii) above shall be further adjusted to account for the historical basis differential.  The methodology (including the pricing assumptions)  for calculating PDP PV-10 for each Obligor shall be set forth on the related Approval Notice and may only be modified with the prior written consent of the Administrative Agent.

“Pension Plan” has the meaning assigned to that term in Section 4.01(x).

“Permitted Investments” means any of:

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(a)                                 direct obligations of, and obligations fully guaranteed as to full and timely payment by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States);

(b)                                 demand deposits, time deposits or certificates of deposit of depository institutions or trust companies incorporated under the laws of the United States or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided that at the time of the Issuer’s investment or contractual commitment to invest therein, the commercial paper, if any, and short-term unsecured debt obligations (other than such obligation whose rating is based on the credit of a Person other than such institution or trust company) of such depository institution or trust company shall have a credit rating from Moody’s and S&P in the Highest Required Investment Category granted by Moody’s and S&P;

(c)                                  commercial paper having, at the time of the issuer’s investment or contractual commitment to invest therein, a rating in the Highest Required Investment Category granted by Moody’s and S&P;

(d)                                 demand deposits, time deposits or certificates of deposit that are fully insured by the FDIC and either have a rating on their certificates of deposit or short-term deposits from Moody’s and S&P of “P-1” and “A-1+” respectively;

(e)                                  notes that are payable on demand or bankers’ acceptances issued by any depository institution or trust company referred to in clause (b) above;

(f)                                   investments in taxable money market funds or other regulated investment companies having, at the time of the Issuer’s investment or contractual commitment to invest therein, a rating of the Highest Required Investment Category from Moody’s or S&P;

(g)                                  time deposits (having maturities of not more than 90 days) by an entity the commercial paper of which has, at the time of the Issuer’s investment or contractual commitment to invest therein, a rating of the Highest Required Investment Category granted by Moody’s and S&P;

(h)                                 Eligible Repurchase Obligations with a rating of the Highest Required Investment Category from Moody’s and a rating of “A-1” or higher from S&P;

(i)                                     ▇▇▇▇▇ Fargo Advantage Money Market Funds — Government Money Market Fund;

(j)                                    ▇▇▇▇▇ Fargo Money Market Deposit Account; or

(k)                                 any similar investment approved by the Administrative Agent.

Permitted Investments may include, without limitation, those investments issued by or made with ▇▇▇▇▇ Fargo or for which ▇▇▇▇▇ Fargo or an Affiliate provided services and receives compensation; provided, that notwithstanding the foregoing clauses (a) through (k), after the occurrence of the Required Sale Date, Permitted Investments may only include

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obligations or securities that constitute cash equivalents for purposes of the rights and assets in paragraph (c)(8)(i)(B) of the exclusions from the definition of “covered fund” for purposes of the ▇▇▇▇▇▇▇ Rule.

“Permitted Liens” means,

(a)                                 with respect to the interest of the Borrower in the Loans included in the Collateral, Liens in favor of the Collateral Agent created pursuant to this Agreement; and

(b)                                 with respect to the interest of the Borrower in the rest of the Collateral Portfolio (including any Underlying Collateral): (i) materialmen’s, warehousemen’s, mechanics’ and other Liens arising by operation of law in the ordinary course of business for sums not due or sums that are being contested in good faith, (ii) purchase money security interests in certain items of equipment, (iii) Liens for Taxes if such Taxes shall not at the time be due and payable or if a Person shall currently be contesting the validity thereof in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of such Person, (iv) other customary Liens permitted with respect thereto, (v) Liens in favor of the Collateral Agent created pursuant to this Agreement, (vi) with respect to Agented Loans or Third Party Agented Loans, Liens in favor of the lead agent, the collateral agent or the paying agent for the benefit of all holders of Indebtedness of such Obligor and (vii) with respect to any Underlying Collateral, Liens permitted by the applicable Underlying Instrument.

“Person” means an individual, partnership, corporation (including a statutory or business trust), limited liability company, joint stock company, trust, unincorporated association, sole proprietorship, joint venture, government (or any agency or political subdivision thereof) or other entity.

“Petroleum Industry Standards” means the Definitions for Oil and Gas Reserves promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in effect at the time in question.

“PIK Interest” means interest accrued on a Loan that is added to the principal amount of such Loan instead of being paid as interest as it accrues.

“PIK Loan” means a Loan which provides for a portion of the interest that accrues thereon to be added to the principal amount of such Loan for some period of the time prior to such Loan requiring the current cash payment of such previously capitalized interest, which cash payment shall be treated as an Interest Collection at the time it is received.

“Pledge” means the pledge of any Eligible Loan or other Portfolio Asset pursuant to Article II.

“Portfolio Assets” means all Loans owned by the Borrower, together with all proceeds thereof and other assets or property related thereto, including all right, title and interest of the Borrower in and to:

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(a)                                 any amounts on deposit in any cash reserve, collection, custody or lockbox accounts securing the Loans;

(b)                                 all rights with respect to the Loans to which the Seller or any third party seller is entitled as lender under the applicable Underlying Instrument;

(c)                                  the Controlled Accounts, together with all cash and investments in each of the foregoing other than amounts earned on investments therein;

(d)                                 any Underlying Collateral securing a Loan and all Recoveries related thereto, all payments paid in respect thereof and all monies due, to become due and paid in respect thereof accruing after the applicable Cut-Off Date and all liquidation proceeds;

(e)                                  all Required Loan Documents, the Loan Files related to any Loan, any Records, and the documents, agreements, and instruments included in the Loan Files or Records;

(f)                                   all Insurance Policies with respect to any Loan;

(g)                                  all Liens, guaranties, indemnities, warranties, letters of credit, accounts, bank accounts and property subject thereto from time to time purporting to secure or support payment of any Loan, together with all UCC financing statements, mortgages or similar filings signed or authorized by an Obligor relating thereto;

(h)                                 the Purchase and Sale Agreement (including, without limitation, rights of recovery of the Borrower against the Seller) and the assignment to the Collateral Agent, for the benefit of the Secured Parties, of all UCC financing statements filed by the Borrower against the Seller under or in connection with the Purchase and Sale Agreement;

(i)                                     the Management Agreement (including, without limitation, any rights of the Borrower against the Collateral Manager);

(j)                                    all records (including computer records) with respect to the foregoing; and

(k)                                 all collections, income, payments, proceeds and other benefits of each of the foregoing.

“Portfolio Subsidiary” means any Person (a) in which the Borrower (i) has made an investment in the ordinary course of business that is accounted for under GAAP as a portfolio investment of the Borrower, (ii) has received an equity interest in connection with an REO Asset, (iii) has received an “equity kicker” in connection with its acquisition of any Loan, (iv) owns an equity interest and that is created as a “blocker” vehicle to address tax-specific issues or (v) has acquired an equity interest in connection with a relatively contemporaneous exchange or conversion of a Loan into equity interests and (b) that meets each of the requirements set forth in each of Section 5.01(b) and Section 5.02(a).

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“Prime Rate” means the rate announced by ▇▇▇▇▇ Fargo from time to time as its prime rate in the United States, such rate to change as and when such designated rate changes.  The Prime Rate is not intended to be the lowest rate of interest charged by ▇▇▇▇▇ Fargo or any other specified financial institution in connection with extensions of credit to debtors.

“Principal Collection Account” means account number ▇▇▇▇▇▇▇▇ at the Account Bank in the name of the Borrower subject to the Lien of the Collateral Agent for the benefit of the Secured Parties including any sub-account thereof; provided, that the funds deposited therein (including any interest and earnings thereon) from time to time shall constitute the property and assets of the Borrower, and the Borrower shall be solely liable for any Taxes payable with respect to the Principal Collection Account.

“Principal Collections” means (i) any amounts deposited by the Borrower in accordance with Section 2.06(a)(i) or Section 2.07, (ii) with respect to any Loan, all amounts received which are not Interest Collections, including, without limitation, all Recoveries, all Insurance Proceeds, all scheduled payments of principal and principal prepayments and all guaranty payments and proceeds of any liquidations, sales, dispositions or securitizations, in each case, attributable to the principal of such Loan, (iii) all earnings on investments in any Principal Collection Account and (iv) all payments made by the Collateral Manager to the Borrower pursuant to Section 14 of the Management Agreement.

“Pro Rata Share” means, with respect to each Lender, the percentage obtained by dividing the Commitment of such Lender (as determined under clause (i) of the definition of “Commitment”), by the aggregate Commitments of all the Lenders (as determined under clause (i) of the definition of “Commitment”).

“Proceeds” means, with respect to any Collateral Portfolio, all property that is receivable or received when such Collateral Portfolio is collected, sold, liquidated, foreclosed, exchanged, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes all rights to payment with respect to any insurance relating to such Collateral Portfolio.

“Proved Developed Producing Reserves” means oil and gas reserves that, in accordance with Petroleum Industry Standards, are classified as both “Proved Reserves” and “Developed Producing Reserves.”

“Purchase and Sale Agreement” means that certain purchase and sale agreement, dated the date of this Agreement, by and between the Seller, as the seller, and the Borrower, as the purchaser, as such agreement may from time to time be amended, supplemented or otherwise modified in accordance with the terms thereof.

“Purchase Price” means, with respect to any Loan, an amount (expressed as a percentage) equal to (i) the aggregate purchase price paid by the Borrower (as applicable) for such Loan (expressed exclusive of accrued interest and original issue discount) (or if different principal amounts of such Loan were purchased at different purchase prices, the weighted average of such purchase prices) divided by (ii) the principal balance of such Loan outstanding as of the date of such purchase (expressed exclusive of accrued interest and original issue discount); provided that any Loan acquired by the Borrower in connection with a primary

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syndication of such Loan and with a “Purchase Price” equal to or greater than 95% (including, for the avoidance of doubt, in excess of 100%) shall be deemed to have a “Purchase Price” equal to 100%.

“Records” means all documents relating to the Loans, including books, records and other information executed in connection with the origination or acquisition of the Collateral Portfolio or maintained with respect to the Collateral Portfolio and the related Obligors that the Borrower, the Seller or the Collateral Manager have generated, in which the Borrower or the Seller has obtained an interest.

“Recoveries” means, as of the time any Underlying Collateral with respect to any Loan is sold, discarded or abandoned (after a determination by the Borrower or the Collateral Manager that such Underlying Collateral has little or no remaining value) or otherwise determined to be fully liquidated by the Borrower or the Collateral Manager, the proceeds from the sale of the Underlying Collateral, the proceeds of any related Insurance Policy, any distributions from a Portfolio Subsidiary formed to hold an REO Asset, any other recoveries with respect to such Loan, as applicable, the Underlying Collateral, and amounts representing late fees and penalties, net of any amounts received that are required under such Loan, as applicable, to be refunded to the related Obligor.

“Register” has the meaning assigned to that term in Section 2.13(a).

“Reinvestment Period” shall mean the date commencing on the Closing Date and ending on the earliest to occur of (i) September 9, 2017 and (ii) the Facility Maturity Date.

“Relevant Test Period” means, with respect to any Loan, the relevant test period for the reporting and calculation of the applicable financial covenants included in the Underlying Instrument for each such Loan, including financial covenants comparable to Total Net Leverage Ratio, Senior Net Leverage Ratio or Interest Coverage Ratio, as applicable, for such Loan in the applicable Underlying Instrument or, if no such period is provided for therein, for Obligors delivering monthly financing statements, each period of the last 12 consecutive reported calendar months, and for Obligors delivering quarterly financing 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 Underlying Instrument, if an Obligor is a newly-formed entity or such Loan has been newly issued or amended and restated 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.

“REO Asset” means, with respect to any Loan, any Underlying Collateral that has been foreclosed on or repossessed from the current Obligor by the Borrower, and is being managed by a Borrower Advisor on behalf of and in the name of any Portfolio Subsidiary, for the benefit of the Secured Parties and any other equity holder of such Portfolio Subsidiary.

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“REO Management Standard” has the meaning assigned to that term in Section 6.05(a).

“Reportable Event” has the meaning assigned to that term in Section 4.01(x).

“Reporting Date” means the date that is (a) one Business Day before each Payment Date and (b) the seventh Business Day after each Reporting Determination Date.

“Reporting Determination Date” means the 20th day of each January, February, April, May, July, August, October and November, or, if such day is not a Business Day, the next succeeding Business Day, commencing October 2014.

“Required Lenders” means (a) at any time when there are two or fewer Lenders, each Lender and (b) at all other times, the Lenders representing an aggregate of more than 50% of the aggregate Commitments of the Lenders then in effect; provided that with respect to clause (b), at least two Lenders will be required, one of which is ▇▇▇▇▇ Fargo; provided further that the Commitment held or deemed held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“Required Loan Documents” means, for each Loan, the following documents or instruments, all as specified on the related Loan Checklist:

(a)                                 other than in the case of a Noteless Loan, (i) if the Borrower is the sole lender on such Loan or in the case of any Agented Loan, the original or, if accompanied by an original “lost note” affidavit and indemnity, a copy of the executed underlying promissory note, endorsed by the Borrower or the prior holder of record either in blank or to the Collateral Agent (and evidencing an unbroken chain of endorsements from each prior holder thereof evidenced in the chain of endorsements either in blank or to the Collateral Agent) with any endorsement to the Collateral Agent to be in the following form: “▇▇▇▇▇ Fargo Bank, National Association, as Collateral Agent for the Secured Parties” or (ii) in the case of any Third Party Agented Loan, a copy of the executed underlying promissory note, endorsed by the Borrower or the prior holder of record either in blank or to the Collateral Agent (and evidencing an unbroken chain of endorsements from each prior holder thereof evidenced in the chain of endorsements either in blank or to the Collateral Agent) with any endorsement to the Collateral Agent to be in the following form: “▇▇▇▇▇ Fargo Bank, National Association, as Collateral Agent for the Secured Parties”;

(b)                                 in the case of any Noteless Loan, (i) an executed copy of each assignment and assumption agreement, transfer document or instrument specified in the related Underlying Instrument (or, if no form is specified, the Loan Syndications and Trading Association form of assignment) relating to such Loan evidencing the assignment of such Noteless Loan either (1) from the Seller to the Borrower and from the Borrower either to the Collateral Agent or in blank or (2) from any prior third party owner thereof directly to the Borrower (at the direction of a Borrower Advisor) and from the Borrower either to the Collateral Agent or in blank, and (ii) in the case of an Agented Loan or a Third Party Agented Loan, a copy of the Loan Register with respect to such Noteless Loan, as described in Section 5.01(hh);

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(c)                                  originals or copies of each of the following, to the extent applicable to the related Loan: (i) any related loan agreement, credit agreement, note purchase agreement, security agreement (if separate from any Mortgage) and (ii) if the Borrower is the sole lender on such Loan or in the case of any Agented Loan, any sale and servicing agreement, acquisition agreement, subordination agreement, intercreditor agreement or similar instruments, guarantee, Insurance Policy or similar material operative document, in each case together with any amendment or modification thereto; and

(d)                                 if any Loan is secured by a Mortgage, either (x) if the Borrower is the sole lender on such Loan or in the case of any Agented Loan, (I) the original executed Mortgage, the original executed assignment of leases and rents, if any, and the originals of all intervening assignments, if any, of the Mortgage and assignments of leases and rents with evidence of recording thereon or (II) copies thereof certified by the public recording offices where such documents were recorded to be true and complete copies thereof in those instances where the public recording offices retain the original or where the original recorded documents are lost, or (y) in the case of any Third Party Agented Loan, copies thereof certified by the Borrower, by closing counsel or by a title company or escrow company to be true and complete copies thereof where the originals have been transmitted for recording; provided that, solely for purposes of the Review Criteria, the Collateral Custodian shall have no duty to ascertain whether any certification set forth in this subsection (d)(y) has been received, other than a certification which has been clearly delineated as being provided by the Borrower or (z) copies certified by the public recording offices where such documents were recorded to be true and complete copies thereof in those instances where the public recording offices retain the original or where the original recorded documents are lost.

“Required Reports” means, collectively, the Collateral Management Report required pursuant to Section 6.07(b), the Collateral Manager Certificate required pursuant to Section 6.07(c), the financial statements of the Equityholder required pursuant to Section 6.07(d), the financial statements and valuation reports of each Obligor required pursuant to Section 6.07(e), the annual statements as to compliance required pursuant to Section 6.08, and the annual independent public accountant’s report required pursuant to Section 6.09.

“Required Sale Assets” means all Permitted Investments that would disqualify the Borrower from using the “loan securitization exemption” under the ▇▇▇▇▇▇▇ Rule (as determined by the Administrative Agent in its reasonable discretion) and all Senior Secured Bonds.

“Required Sale Date” means the date immediately prior to July 21, 2015 (or the date immediately prior to such later date as shall be determined by written order of the Board of Governors of the Federal Reserve System with respect to the required conformance with the ▇▇▇▇▇▇▇ Rule by banking entities generally); provided that, if the Administrative Agent receives advice of nationally recognized counsel satisfactory to it in its sole discretion that (A) the ownership of the Required Sale Assets will not cause the Borrower to be a “covered fund” under the ▇▇▇▇▇▇▇ Rule, (B) the Advances are not considered to constitute “ownership interests” under the ▇▇▇▇▇▇▇ Rule or (C) ownership of the Advances will be otherwise exempt from the ▇▇▇▇▇▇▇ Rule, then the Required Sale Date shall not occur; provided, further, that upon receipt of further official guidance from or on behalf of the Board of Governors of the Federal Reserve System with respect to compliance with the ▇▇▇▇▇▇▇ Rule, the Administrative Agent, the Lenders and the

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Borrower shall negotiate in good faith in respect of amendments or modifications to the Transaction Documents appropriate to assure compliance with or exemption from the ▇▇▇▇▇▇▇ Rule.

“Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on account of any class of membership interests of the Borrower now or hereafter outstanding, except a dividend paid solely in interests of that class of membership interests or in any junior class of membership interests of the Borrower; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any class of membership interests of the Borrower now or hereafter outstanding, (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 membership interests of the Borrower now or hereafter outstanding, and (iv) any payment of management fees by the Borrower.  For the avoidance of doubt, (x) payments and reimbursements due to a Borrower Advisor in accordance with this Agreement or any other Transaction Document do not constitute Restricted Junior Payments, and (y) distributions by the Borrower to holders of its membership interests of Loan or of cash or other proceeds relating thereto which have been substituted or transferred in connection with a Lien Release Dividend by the Borrower in accordance with this Agreement shall not constitute Restricted Junior Payments.

“Retained Interest” means, with respect to any Loan, (a) all obligations of the Borrower to make advances thereon after the related Cut-Off Date, (b) all of the obligations of the Borrower, if any, of or owing to the agent(s) under the documentation evidencing such Loan and (c) the applicable portion of the interests, rights and obligations under the documentation evidencing such Loan that relate to such portion(s) of the indebtedness that is owned by another lender.  Notwithstanding the foregoing, the “Retained Interest” shall exclude the Unfunded Exposure Amount.

“Review Criteria” has the meaning assigned to that term in Section 11.02(b)(i).

“S&P” means Standard & Poor’s Ratings Group, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. (or its successors in interest).

“Scheduled Payment” means each scheduled payment of principal and/or interest required to be made by an Obligor on the related Loan, as adjusted pursuant to the terms of the related Underlying Instrument.

“Second Lien Energy Loan” means any Loan Asset that (x) (i) is made to an Energy-Related Obligor, (ii) is secured by a pledge of collateral (including all of the applicable Obligor’s assets constituting collateral for such Loan Asset (whether or not there is also a security interest of a higher or lower priority in additional collateral)) which security interest is validly perfected and second priority under Applicable Law (subject to security interests securing a Senior Revolving Loan and Liens described in clause (b) (other than clause (v) thereof) of the definition of Permitted Liens), (iii) is pari passu in right of payment with the Indebtedness of the holders of the first priority security interest (other than with respect to receipt of the proceeds of liquidated collateral following an event of default) and (iv) pursuant to an intercreditor agreement between the Borrower (or the applicable agent) and the holder of such first priority

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security interest, the amount of Indebtedness covered by such first priority security interest is limited in terms of aggregate outstanding amount or percent of outstanding principal or (y) is not a Senior Secured Loan, First Lien Energy Loan or Senior Secured Bond and is designated by the Administrative Agent on the related Approval Notice as a “Second Lien Energy Loan”.

“Secured Party” means each of the Administrative Agent, each Lender (together with its successors and assigns), each Lender Agent, each Affected Party, each Indemnified Party, the Collateral Custodian, the Collateral Agent and the Account Bank.

“Securities Account Control Agreement” means the Securities Account Control Agreement, dated as of the date hereof, among the Borrower, the Collateral Agent and ▇▇▇▇▇ Fargo as the Securities Intermediary, as the same may be amended, modified, waived, supplemented or restated from time to time.

“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Seller” means FS Energy and Power Fund, in its capacity as the seller under the Purchase and Sale Agreement, together with its successors and assigns in such capacity.

“Senior Net Leverage Ratio” means, with respect to any Loan for any Relevant Test Period, the meaning of “Senior Net Leverage Ratio” or any comparable definition relating to first lien senior secured (or such applicable lien or applicable level within the capital structure) indebtedness (including, without limitation, such Loan) in the Underlying Instrument for each such Loan, and in any case that “Senior Net Leverage Ratio” or such comparable definition is not defined in such Underlying Instrument, the ratio of (a) first lien senior secured (or such applicable lien or applicable level within the capital structure) Indebtedness (including, without limitation, such Loan) of the applicable Obligor as of the date of determination minus the Unrestricted Cash of such Obligor as of such date to (b) EBITDA of such Obligor with respect to the applicable Relevant Test Period, in each case as calculated by the Borrower or the Collateral Manager in good faith using information from and calculations consistent with relevant compliance statements and financial reporting packages provided by the relevant Obligor.

“Senior Revolving Loan” means a commercial loan to an Energy-Related Obligor that (i) is governed by a borrowing base (which borrowing base is subject to (x) review at least semi-annually and (y) adjustment based on a “reserve report”), (ii) is not (and cannot by its terms become) subordinate in right of payment to any obligation of such Obligor in any bankruptcy, reorganization, insolvency, moratorium or liquidation proceedings and (iii) is secured by a pledge of collateral, which security interest is validly perfected and first priority under Applicable Law (subject to Liens described in clause (b) (other than clause (v) thereof) of the definition of Permitted Liens).

“Senior Secured Bond” means any bond or note (other than a note delivered pursuant to a term loan agreement or other similar credit agreement) that (i) pays a coupon at a fixed rate or floating rate, (ii) is not (and cannot by its terms become) subordinate in right of payment to any unsecured obligation of the Obligor in any bankruptcy, reorganization, insolvency, moratorium or liquidation proceedings, (iii) is secured by a pledge of collateral,

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which security interest is validly perfected and first priority under Applicable Law (subject to Liens described in clause (b) (other than clause (v) thereof) of the definition of Permitted Liens), (iv) the Borrower or the Collateral Manager determines in good faith that the value of the collateral securing such 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 bond plus the aggregate outstanding balances of all other loans of equal or higher seniority secured by the same collateral and (v) is registered pursuant to Section 5 of the Securities Act or is issued pursuant to Section 4(a)(2) of the Securities Act or Rule 144A thereunder.

“Senior Secured Loan” means a Loan Asset that (i) is made to an Obligor that is not an Energy-Related Obligor, (ii) is not (and cannot by its terms become) subordinate in right of payment to any obligation of the Obligor in any bankruptcy, reorganization, insolvency, moratorium or liquidation proceedings, (iii) is secured by a pledge of collateral, which security interest is validly perfected and first priority under Applicable Law (subject to Liens described in clause (b) (other than clause (v) thereof) of the definition of Permitted Liens), and (iv) the Borrower or the Collateral Manager determines in good faith that the value of the collateral securing the loan (or the enterprise value of the underlying business) on or about the time of origination equals or exceeds the outstanding principal balance of the loan plus the aggregate outstanding balances of all other loans of equal or higher seniority secured by the same collateral.

“Solvent” means, as to any Person at any time, having a state of affairs such that all of the following conditions are met:  (a) the fair value of the property of such Person is greater than the amount of such Person’s liabilities (including contingent liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code; (b) the present fair saleable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in a business or a transaction, and does not propose to engage in a business or a transaction, for which such Person’s property assets would constitute unreasonably small capital.

“State” means one of the fifty states of the United States or the District of Columbia.

“Stated Maturity Date” means September 9, 2019.

“Subsidiary” means with respect to a person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such person.

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“Substitution” has the meaning set forth in Section 2.07(a).

“Taxes” means any and all present or future taxes, levies, imposts, deductions, fees, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority.

“Third Party Agented Loan” means any Loan which is agented by a Person other than the Seller or any of its Affiliates as part of a syndicated loan transaction.

“Total Net Leverage Ratio” means, with respect to any Loan for any Relevant Test Period, the meaning of “Total Net Leverage Ratio” or any comparable definition in the Underlying Instrument for each such Loan, and in any case that “Total Net Leverage Ratio” or such comparable definition is not defined in such Underlying Instrument, the ratio of (a) Indebtedness minus Unrestricted Cash to (b) EBITDA, in each case as calculated by the Borrower or the Collateral Manager in good faith using information from and calculations consistent with relevant compliance statements and financial reporting packages provided by the relevant Obligor.

“Transaction Documents” means this Agreement, the Variable Funding Note(s), any Joinder Supplement, the Advisory Agreements, the Indemnity Letter, the LLC Agreement, the Management Agreement, the Purchase and Sale Agreement, the Securities Account Control Agreement, the ▇▇▇▇▇ Fargo Corporate Trust Fee Letter, each Lender Fee Letter and any additional document the execution of which is necessary or appropriate to carrying out the terms of the foregoing documents.

“Transferee Letter” has the meaning assigned to that term in Section 12.04(a).

“UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

“Underlying Collateral” means, with respect to a Loan, any property or other assets designated and pledged or mortgaged as collateral to secure repayment of such Loan, as applicable, including, without limitation, mortgaged property and/or a pledge of the stock, membership or other ownership interests in the related Obligor and all proceeds from any sale or other disposition of such property or other assets.

“Underlying Instrument” means the loan agreement, credit agreement, indenture or other agreement pursuant to which a Loan has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Loan or of which the holders of such Loan are the beneficiaries.

“Unfunded Exposure Account” means account number ▇▇▇▇▇▇▇▇ at the Account Bank in the name of the Borrower subject to the Lien of the Collateral Agent for the benefit of the Secured Parties including any sub-account thereof; provided, that the funds deposited therein (including any interest and earnings thereon) from time to time shall constitute the property and assets of the Borrower, and the Borrower shall be solely liable for any Taxes payable with respect to the Unfunded Exposure Account.

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“Unfunded Exposure Amount” means, on any date of determination, with respect to any Loan, the aggregate amount (without duplication) of all (i) unfunded commitments and (ii) all contingent commitments, in each case required to be funded pursuant to the terms of the related Underlying Instruments with respect to such Loan.

“Unfunded Exposure Equity Amount” means, on any date of determination, with respect to any Loan, an amount equal to the result of (a) the Unfunded Exposure Amount of such Loan minus (b) the product of (i) the Unfunded Exposure Amount of such Loan, (ii) the Assigned Value of such Loan and (iii) the Applicable Percentage of such Loan.

“Unfunded Exposure Equity Shortfall” means (a) the aggregate Unfunded Exposure Equity Amount of all Loans minus (b) the amount on deposit in the Unfunded Exposure Account.

“United States” means the United States of America.

“Unmatured Collateral Manager Event of Default” means any event that, if it continues uncured, will, with lapse of time, notice or lapse of time and notice, constitute a Collateral Manager Event of Default.

“Unmatured Event of Default” means any event that, if it continues uncured, will, with lapse of time, notice or lapse of time and notice, constitute an Event of Default.

“Unrestricted Cash” means the meaning of “Unrestricted Cash” or any comparable definition in the Underlying Instrument for each such Loan, and in any case that “Unrestricted Cash” or such comparable definition is not defined in such Underlying Instrument, all cash available for use for general corporate purposes and not held in any reserve account or legally or contractually restricted for any particular purposes or subject to any lien (other than blanket liens permitted under or granted in accordance with such Underlying Instrument).

“Value Adjustment Event” means, with respect to any Loan, the occurrence of any one or more of the following events after the related Cut-Off Date:

(a)                                 with respect to any Senior Secured Loan or Senior Secured Bond of any Obligor that is not an Energy-Related Obligor, (i) the Interest Coverage Ratio for any Relevant Test Period of the related Obligor with respect to such Loan is (A) less than 85% of the Interest Coverage Ratio with respect to such Loan provided in the applicable Approval Notice (provided that if any other positions in such Loan existed on its Cut-Off Date then the Interest Coverage Ratio utilized for the position with the earliest of such other Cut-Off Dates shall apply) and (B) less than 1.50 to 1.00 or (ii) the Senior Net Leverage Ratio for any Relevant Test Period of the related Obligor with respect to such Loan is (A) more than 0.50x higher than such Senior Net Leverage Ratio provided in the applicable Approval Notice (provided that if any other positions in such Loan existed on its Cut-Off Date then the Senior Net Leverage Ratio utilized for the position with the earliest of such other Cut-Off Dates shall apply) and (B) greater than 3.50 to 1.00;

(b)                                 with respect to any First Lien Energy Loan, Second Lien Energy Loan or Senior Secured Bond of any Obligor who is an Energy-Related Obligor (i) a borrowing

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base breach exists with respect to such Loan (or, in the case of a Second Lien Energy Loan, with respect to the related Senior Revolving Loan), (ii) the Current Ratio for any Relevant Test Period of the related Obligor with respect to such Loan is less than 1.00x, (iii) the Total Net Leverage Ratio for any Relevant Test Period of the related Obligor with respect to such Loan is (A) more than 0.50x higher than such Total Net Leverage Ratio provided in the applicable Approval Notice (provided that if any other positions in such Loan existed on its Cut-Off Date then the Total Net Leverage Ratio utilized for the position with the earliest of such other Cut-Off Dates shall apply) and (B) greater than 4.50 to 1.00 or (iv) the Collateral Coverage Ratio is (A) less than 85% of the Collateral Coverage Ratio provided in the applicable Approval Notice and (B) less than 1.50 to 1.00 (or, if such Loan is a Second Lien Energy Loan, less than 1.00 to 1.00);

(c)                                  an Obligor payment default under such Loan (after giving effect to any grace and/or cure period set forth in the Underlying Instrument, but not to exceed three (3) Business Days);

(d)                                 any Obligor default (other than a payment default) under any Loan for which the Borrower (or agent or required lenders pursuant to the related Underlying Instrument, as applicable) has elected to exercise any of its rights and remedies under the applicable Underlying Instrument in case of such default thereunder (including, but not limited to, acceleration of the debt);

(e)                                  a Bankruptcy Event with respect to the related Obligor;

(f)                                   the occurrence of a Material Modification (in accordance with clauses (x)(b)-(g) and/or (y) of the definition thereof) with respect to such Loan;

(g)                                  the occurrence of a Material Modification (in accordance with clause (x)(a) of the definition thereof) with respect to such Loan;

(h)                                 the failure of the Borrower to deliver any financial reporting package monthly, quarterly or annually with respect to such Loan pursuant to Section 6.07(e) no later than 45 days after the end of each month, 60 days after the end of each quarter and 130 days after the end of each fiscal year, respectively (or such greater number of days as allowed by the applicable Underlying Instrument (including any grace periods thereunder), but which shall in no case exceed 150 days after the end of each fiscal year), unless otherwise agreed to by the Administrative Agent in its sole discretion;

(i)                                     the Borrower decides not to defend the right, title and interest of the Collateral Agent on such Loan because the cost to defend the applicable claims exceeds the value of such Loan pursuant to Section 5.01(u); or

(j)                                    with respect to any DIP loan, any other event specified as a “Value Adjustment Event” on the related Approval Notice.

“Variable Funding Note” has the meaning assigned to such term in Section 2.01(a).

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“▇▇▇▇▇▇▇ Rule” means Section 13 of the U.S. Bank Holding Company Act of 1956, as amended, and the applicable rules and regulations thereunder.

“Weighted Average Coupon” means, as of any date of determination, the number obtained by dividing:

(a)                                 the Aggregate Coupon; by

(b)                                 the aggregate Outstanding Balance of all fixed-rate Loans as of such date.

“▇▇▇▇▇ Fargo” means ▇▇▇▇▇ Fargo Bank, National Association, a national banking association, in its individual capacity, and its successors and assigns.

“▇▇▇▇▇ Fargo Corporate Trust Fee Letter” means the ▇▇▇▇▇ Fargo Corporate Trust Fee Letter, dated as of the date hereof, between the Collateral Agent, the Collateral Custodian, the Account Bank, the Borrower and the Administrative Agent, as such letter may be amended, modified, supplemented, restated or replaced from time to time.

“Yield” means with respect to any Collection Period, the sum for each day in such Collection Period determined in accordance with the following formula:

provided that (i) no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by Applicable Law and (ii) Yield shall not be considered paid by any distribution if at any time such distribution is later required to be rescinded by any Lender to the Borrower or any other Person for any reason including, without limitation, such distribution becoming void or otherwise avoidable under any statutory provision or common law or equitable action, including, without limitation, any provision of the Bankruptcy Code.

“Yield Rate” means, as of any date of determination, an interest rate per annum equal to LIBOR for such date plus the Applicable Spread; provided that if a Lender shall have notified the applicable Lender Agent in writing that a Eurodollar Disruption Event has occurred, the Yield Rate shall be equal to the Base Rate plus the Applicable Spread until such Lender Agent shall have notified the Administrative Agent that such Eurodollar Disruption Event has ceased.

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Section 1.02                             Other Terms.

All accounting terms used but not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and used but not specifically defined herein, are used herein as defined in such Article 9.

Section 1.03                             Computation of Time Periods.

Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.”

Section 1.04                             Instruction by Borrower Advisors.

If any Secured Party receives contradictory instructions or direction from the Borrower or any one or more Borrower Advisors pursuant to the terms of this Agreement or any other Transaction Document, such Secured Party shall seek clarification from the Collateral Manager (and shall be entitled to rely on such instructions or directions in accordance with terms hereof or thereof) and shall not be liable for any action taken or omitted to be taken in connection with any such instructions or directions.

Section 1.05                             Paydown of Partially Eligible Loans.

If any portion of a Loan is not an Eligible Loan solely because of the threshold set forth in clause (b), (g), (u), (w), (z), (aa) and/or (dd) of the definition of “Eligible Loan” (each such portion, an “Ineligible Portion”), each decrease in the Outstanding Balance of such Loan shall be applied pro rata to both the Eligible Loan and the Ineligible Portion; provided that if the Borrower is selling such Loan in accordance with the terms hereof, the decrease in the Outstanding Balance of such Loan shall be applied first to the Ineligible Portion and then to the Eligible Loan.  If the Outstanding Balance of such Eligible Loan portion is reduced below the threshold set forth in clause (b), (g), (u), (w), (z), (aa) and/or (dd) of the definition of “Eligible Loan”, the Borrower may submit the Ineligible Portion of such Loan for approval by the Administrative Agent in its sole discretion as an Eligible Loan.

Section 1.06                             Interpretation.

In each Transaction Document, unless a contrary intention appears:

(a)                                 the singular number includes the plural number and vice versa;

(b)                                 reference to any Person includes such Person’s successors and assigns but only if such successors and assigns are not prohibited by the Transaction Documents;

(c)                                  reference to any gender includes each other gender;

(d)                                 reference to day or days without further qualification means calendar days;

(e)                                  reference to any time means Charlotte, North Carolina time;

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(f)                                   reference to the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”;

(g)                                  reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, waived, supplemented, restated or replaced and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other Transaction Documents, and reference to any promissory note includes any promissory note that is an extension or renewal thereof or a substitute or replacement therefor;

(h)                                 reference to any Applicable Law means such Applicable Law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any Section or other provision of any Applicable Law means that provision of such Applicable Law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such Section or other provision;

(i)                                     reference to the “occurrence” of an Event of Default means after any grace period applicable to such Event of Default and shall not include any Event of Default that has been waived in accordance with the terms of this Agreement; and

(j)                                    for purposes of this Agreement, a Collateral Manager Event of Default or an Event of Default shall be deemed to be continuing unless it is waived in accordance with Section 12.01.

ARTICLE II.

THE FACILITY

Section 2.01                             Variable Funding Note and Advances.

(a)                                 Variable Funding Note. The Borrower has heretofore delivered or shall, on the date hereof (and on the terms and subject to the conditions hereinafter set forth), deliver, to each Lender Agent, at the address set forth on Annex A to this Agreement, and on the effective date of any Joinder Supplement, to each additional Lender Agent, at the address set forth in the applicable Joinder Supplement, a duly executed variable funding note (the “Variable Funding Note”), in substantially the form of Exhibit I, in an aggregate face amount equal to the applicable Lender’s Commitment as of the Closing Date or the effective date of any Joinder Supplement, as applicable, and otherwise duly completed. Interest shall accrue on the Variable Funding Note, and the Variable Funding Note shall be payable, as described herein.

(b)                                 Advances. On the terms and conditions hereinafter set forth, from time to time from the Closing Date until the end of the Reinvestment Period, the Lenders shall make Advances under the Variable Funding Notes, secured by the Collateral Portfolio, to the Borrower.  Under no circumstances shall any Lender be required to make any Advance if after giving effect to such Advance and the addition to the Collateral Portfolio of the Eligible Loans being acquired by the Borrower using the proceeds of such Advance, (i) an Event of Default or

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Collateral Manager Event of Default has occurred and is continuing or would result therefrom or an Unmatured Event of Default exists or would result therefrom or (ii) the aggregate Advances Outstanding would exceed the Borrowing Base. Notwithstanding anything to the contrary herein, no Lender shall be obligated to provide the Borrower with aggregate funds in connection with an Advance that would exceed the lesser of (x) such Lender’s unused Commitment then in effect and (y) the aggregate unused Commitments then in effect.

(c)                                  Notations on Variable Funding Note. Each Lender Agent is hereby authorized to enter on a schedule attached to the Variable Funding Note with respect to each Conduit Lender and each Institutional Lender a notation (which may be computer generated) with respect to each Advance under the Variable Funding Note made by the applicable Lender of:  (i) the date and principal amount thereof, and (ii) each repayment of principal thereof, and any such recordation shall, absent manifest error, constitute prima facie evidence of the accuracy of the information so recorded.  The failure of any Lender Agent to make any such notation on the schedule attached to any Variable Funding Note shall not limit or otherwise affect the obligation of the Borrower to repay the Advances in accordance with their respective terms as set forth herein.

Section 2.02                             Procedure for Advances.

(a)                                 Subject to the limitations set forth in Section 2.01(b), the Borrower may request an Advance from the Lenders by delivering at the specified times the information and documents set forth in this Section 2.02.

(b)                                 No later than 2:00 p.m. at least one (1) Business Day and not more than five (5) Business Days prior to the proposed Advance Date, the Borrower shall, or shall cause the Collateral Manager to, deliver:

(i)                                     to the Administrative Agent (with a copy to the Collateral Agent and the Collateral Custodian) written notice of such proposed Advance Date (including a duly completed Borrowing Base Certificate updated to the date such Advance is requested and giving pro forma effect to the Advance requested and the use of the proceeds thereof);

(ii)                                  to the Administrative Agent a wire disbursement and authorization form, to the extent not previously delivered; and

(iii)                               to the Administrative Agent (with a copy to the Collateral Agent and the Collateral Custodian) a duly completed Notice of Borrowing which shall (A) specify the desired amount of such Advance, which amount must be at least equal to $500,000 (or, with respect to any Delayed Draw Loan, the amount of the draw request made by the applicable Obligor), to be allocated to each Lender in accordance with its Pro Rata Share, (B) specify the proposed Advance Date for such Advance, (C) specify the Loan(s), if any, to be financed on such Advance Date (including the appropriate file number, a description of the Obligor, original loan balance, Outstanding Balance, Assigned Value and Purchase Price for each Loan and identifying each Loan by type and proposed Applicable Percentage applicable to each such Loan), (D) with respect to any Delayed Draw Loan, include the Unfunded Exposure Amount with respect to such Loan and the

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draw request made by the applicable Obligor and (E) include a representation that all conditions precedent for an Advance described in Article III hereof have been met.  Each Notice of Borrowing shall be irrevocable.  If any Notice of Borrowing is received by the Administrative Agent after 2:00 p.m. on the Business Day prior to the Business Day for which such Advance is requested or on a day that is not a Business Day, such Notice of Borrowing shall be deemed to be received by the Administrative Agent at 9:00 a.m. on the next Business Day.

(c)                                  On the proposed Advance Date, subject to the limitations set forth in Section 2.01(b) and upon satisfaction of the applicable conditions set forth in Article III, (i) each Lender shall make available to the Administrative Agent in same day funds, at such bank or other location reasonably designated by the Administrative Agent from time to time, an amount equal to such Lender’s Pro Rata Share of the least of (A) the amount requested by the Borrower for such Advance, (B) the aggregate unused Commitments then in effect and (C) an amount equal to the amount by which the Borrowing Base exceeds Advances Outstanding on such Advance Date (after giving effect to the use of such Advance for the purchase of Eligible Loans) and (ii) the Administrative Agent shall make the aggregate amount received from the Lenders available to the Borrower at such bank or other location reasonably designated by Borrower in the Notice of Borrowing given pursuant to this Section 2.02.

(d)                                 On each Advance Date, the obligation of each Lender to remit its Pro Rata Share of any such Advance shall be several from that of each other Lender and the failure of any Conduit Lender or Institutional Lender to so make such amount available to the Borrower shall not relieve any other Lender of its obligation hereunder.

(e)                                  Subject to Section 2.04 and the other terms, conditions, provisions and limitations set forth herein, the Borrower may (i) borrow, repay or prepay and reborrow Advances without any penalty, fee or premium on and after the Closing Date and prior to the end of the Reinvestment Period and (ii) repay or prepay Advances without any penalty, on and after the Closing Date and prior to the Facility Maturity Date.

Section 2.03                             Yield and Non-Usage Fees.

(a)                                 The Borrower shall pay Yield to the Administrative Agent in accordance with Section 2.04 for pro rata distribution to each applicable Lender (either directly or through the applicable Lender Agent).  The Administrative Agent shall calculate the Yield in accordance with each Lender Fee Letter for each Lender’s portion of the Advances (including unpaid Yield related thereto, if any, due and payable on a prior Payment Date) to be paid by the Borrower on each Payment Date for the related Collection Period and shall advise the Borrower Advisors and the Collateral Agent thereof on the third Business Day prior to such Payment Date.

(b)                                 The Borrower shall pay Non-Usage Fee to the Administrative Agent in accordance with Section 2.04 for pro rata distribution to each applicable Lender (either directly or through the applicable Lender Agent).  The Administrative Agent shall determine the Non-Usage Fee in accordance with each Lender Fee Letter accrued with respect to each Lender’s unutilized Commitment to be paid by the Borrower on each Payment Date for the related

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Collection Period and shall advise the Borrower Advisors and the Collateral Agent thereof on the third Business Day prior to such Payment Date.

(c)                                  Any determination that a Eurodollar Disruption Event has occurred shall be communicated to the Borrower by written notice from the Administrative Agent promptly after the Administrative Agent learns of such occurrence.

Section 2.04                             Remittance Procedures. Subject to its ability to apply collections received to the Unfunded Exposure Account after the end of the Reinvestment Period as set forth in Section 2.18(a), the Borrower shall cause the Collateral Manager and, if it fails to do so, the Administrative Agent may, instruct the Collateral Agent, to apply funds on deposit in the Controlled Accounts as described in this Section 2.04; provided that, at any time after delivery of Notice of Exclusive Control (as defined in the Securities Account Control Agreement) during the occurrence and continuance of an Event of Default, the Administrative Agent shall instruct the Collateral Agent to apply funds on deposit in the Controlled Accounts as described in this Section 2.04.

(a)                                 Interest Payments Absent an Event of Default.  On each Payment Date prior to the Facility Maturity Date, so long as no Event of Default has occurred and is continuing, the Collateral Agent shall (as directed pursuant to the first paragraph of this Section 2.04) transfer Interest Collections held by the Account Bank in the Interest Collection Account, in accordance with the Collateral Management Report, to the following Persons in the following amounts, calculated as of the Determination Date immediately preceding any Payment Date, and priority:

(i)                                     pari passu to (a) the Collateral Agent, in payment in full of all accrued Collateral Agent Fees and Collateral Agent Expenses, (b) the Collateral Custodian in payment in full of all accrued Collateral Custodian Fees and Collateral Custodian Expenses and (c) the Account Bank in payment in full of all accrued fees and expenses due under the ▇▇▇▇▇ Fargo Corporate Trust Fee Letter; provided that amounts payable with respect to Collateral Agent Expenses, Collateral Custodian Expenses and the Account Bank pursuant to this clause (i) (and Section 2.04(b)(i) and (c)(i), if applicable) shall not, collectively, exceed $100,000 per annum;

(ii)                                  to the Administrative Agent in payment in full of all costs and expenses (other than as set forth in clause (a)(iii)) incurred in connection with the exercise of its rights during a Collateral Manager Event of Default;

(iii)                               to the agents and advisers retained by the Administrative Agent in payment of fees and expenses incurred in connection with the Administrative Agent’s exercise of its rights during a Collateral Manager Event of Default; provided that amounts payable pursuant to this clause (iii) during any calendar year shall not exceed an amount equal to 0.50% of the average aggregate Outstanding Balance during such calendar year;

(iv)                              to the Collateral Manager, in payment in full of any accrued and unpaid Collateral Management Fee;

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(v)                                 pro rata, in accordance with the amounts due under this clause, to each Lender Agent, for the account of the applicable Lender, all Yield, Commitment Reduction Fee and the Non-Usage Fee that is accrued and unpaid as of the last day of the related Collection Period;

(vi)                              pro rata, to each Lender Agent (for the account of the applicable Lender) and the Administrative Agent, all accrued and unpaid fees, expenses (including attorneys’ fees, costs and expenses) and indemnity amounts payable by the Borrower to the Administrative Agent, any Lender Agent or any Lender under the Transaction Documents;

(vii)                           to the Unfunded Exposure Account in an amount (A) during the Reinvestment Period, equal to the aggregate Unfunded Exposure Equity Shortfall and (B) after the end of the Reinvestment Period, necessary to cause the amount on deposit in the Unfunded Exposure Account to equal the Aggregate Unfunded Exposure Amount;

(viii)                        to each Lender Agent for the account of the applicable Lender, an amount necessary to satisfy any existing Borrowing Base Deficiency, pro rata in accordance with the amount of Advances Outstanding;

(ix)                              pari passu to (a) the Collateral Agent, in payment in full of all accrued Collateral Agent Expenses to the extent not previously paid, (b) the Collateral Custodian in payment in full of all accrued Collateral Custodian Expenses to the extent not previously paid, and (c) the Account Bank in payment in full of all accrued expenses to the extent not previously paid;

(x)                                 to pay any other amounts due (other than with respect to the repayment of Advances) under this Agreement and the other Transaction Documents (including any indemnity amounts due from the Borrower hereunder and thereunder); and

(xi)                              to the Borrower, any remaining amounts.

(b)                                 Principal Payments Absent an Event of Default. On each Payment Date, so long as no Event of Default has occurred and is continuing, and in any case prior to the Facility Maturity Date, the Collateral Agent shall (as directed pursuant to the first paragraph of this Section 2.04) transfer Principal Collections held by the Account Bank in the Principal Collection Account, in accordance with the Collateral Management Report, to the following Persons in the following amounts, calculated as of the Determination Date immediately preceding any Payment Date, and priority:

(i)                                     to pay amounts due under Section 2.04(a)(i) through (v), to the extent not paid thereunder;

(ii)                                  (A) during the Reinvestment Period, at the discretion of the Collateral Manager, (x) to the Unfunded Exposure Account in an amount equal to the aggregate Unfunded Exposure Equity Shortfall and (y) to each Lender Agent for the account of the applicable Lender, an amount necessary to satisfy any existing Borrowing Base Deficiency, pro rata in accordance with the amount of Advances Outstanding and (B) 

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after the end of the Reinvestment Period, (x) to the Unfunded Exposure Account in an amount necessary to cause the amount on deposit in the Unfunded Exposure Account to equal the Aggregate Unfunded Exposure Amount and (y) to each Lender Agent for the account of the applicable Lender, an amount necessary to pay the Advances Outstanding pro rata in accordance with each Lender’s Pro Rata Share of the Advances Outstanding until paid in full;

(iii)                               prior to the end of the Reinvestment Period and during the continuance of a Collateral Manager Event of Default, to each Lender Agent for the account of the applicable Lender, an amount equal to each Lender’s Pro Rata Share of the Advances Outstanding;

(iv)                              pari passu to (a) the Collateral Agent, in payment in full of all accrued Collateral Agent Expenses to the extent not previously paid, (b) the Collateral Custodian in payment in full of all accrued Collateral Custodian Expenses to the extent not previously paid, and (c) the Account Bank in payment in full of all accrued expenses to the extent not previously paid;

(v)                                 to pay any other amounts due under this Agreement and the other Transaction Documents (including any indemnity amounts due from the Borrower hereunder and thereunder); and

(vi)                              to the Borrower, any remaining amounts.

(c)                                  Payment Date Transfers Upon the Occurrence of an Event of Default. On each Payment Date or as requested by the Administrative Agent on any Business Day, if an Event of Default has occurred and is continuing, or in any case after the Facility Maturity Date, the Collateral Agent shall (as directed pursuant to the first paragraph of this Section 2.04) transfer collected funds held by the Account Bank in the Interest Collection Account and the Principal Collection Account, in accordance with the Collateral Management Report, to the following Persons in the following amounts, calculated as of the Determination Date immediately preceding any Payment Date, and priority:

(i)                                     pari passu to (a) the Collateral Agent, in payment in full of all accrued Collateral Agent Fees and Collateral Agent Expenses, (b) the Collateral Custodian in payment in full of all accrued Collateral Custodian Fees and Collateral Custodian Expenses and (c) the Account Bank in payment in full of all accrued fees and expenses due under the ▇▇▇▇▇ Fargo Corporate Trust Fee Letter; provided that amounts payable with respect to Collateral Agent Expenses, Collateral Custodian Expenses and the Account Bank pursuant to this clause (i) (and Section 2.04(a)(i) and (b)(i), if applicable) shall not, collectively, exceed $100,000 per annum;

(ii)                                  to the Administrative Agent in payment in full of all costs and expenses (other than as set forth in clause (c)(iii)) incurred in connection with the exercise of its rights during a Collateral Manager Event of Default;

(iii)                               to the agents and advisers retained by the Administrative Agent in payment of fees and expenses incurred in connection with the Administrative Agent’s

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exercise of its rights during a Collateral Manager Event of Default; provided that amounts payable with respect to this clause (iii) during any calendar year shall not exceed an amount equal to 0.50% of the average aggregate Outstanding Balance during such calendar year

(iv)                              to the Collateral Manager, in payment in full of any accrued and unpaid Collateral Management Fee;

(v)                                 pro rata, in accordance with the amounts due under this clause, to each Lender Agent, for the account of the applicable Lender, all Yield, Commitment Reduction Fee and the Non-Usage Fee that is accrued and unpaid as of the last day of the related Collection Period;

(vi)                              pro rata, to each Lender Agent (for the account of the applicable Lender) and the Administrative Agent, as applicable, all accrued and unpaid fees, expenses (including attorneys’ fees, costs and expenses) and indemnity amounts payable by the Borrower to the Administrative Agent, any Lender Agent or any Lender under the Transaction Documents;

(vii)                           to the Unfunded Exposure Account in an amount necessary to cause the amount on deposit in the Unfunded Exposure Account to equal the Aggregate Unfunded Exposure Amount;

(viii)                        to each Lender Agent for the account of the applicable Lender, an amount equal to each Lender’s Pro Rata Share of the Advances Outstanding;

(ix)                              pari passu to (a) the Collateral Agent, in payment in full of all accrued Collateral Agent Expenses to the extent not previously paid, (b) the Collateral Custodian in payment in full of all accrued Collateral Custodian Expenses to the extent not previously paid, and (c) the Account Bank in payment in full of all accrued expenses to the extent not previously paid;

(x)                                 to pay any other amounts due under this Agreement and the other Transaction Documents (including any indemnity amounts due from the Borrower hereunder and thereunder); and

(xi)                              to the Borrower, any remaining amounts.

(d)                                 Insufficiency of Funds. For the sake of clarity, the parties hereby agree that if the funds on deposit in the applicable Controlled Account are insufficient to pay any amounts due and payable on a Payment Date or otherwise, the Borrower shall nevertheless remain responsible for, and shall pay when due, all amounts payable under this Agreement and the other Transaction Documents in accordance with the terms of this Agreement and the other Transaction Documents.

Section 2.05                             Instructions to the Collateral Agent and the Account Bank. All instructions and directions given to the Collateral Agent or the Account Bank by the Borrower or on behalf of the Borrower by a Borrower Advisor or by the Administrative Agent pursuant to

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Section 2.04 shall be in writing (and instructions and directions transmitted to the Collateral Agent or the Account Bank by facsimile or e-mail shall constitute “in writing” for this purpose), and such written instructions and directions shall be delivered with a written certification that such instructions and directions are in compliance with the provisions of Section 2.04. The Borrower shall, or shall cause any Borrower Advisor to, immediately transmit to the Administrative Agent by facsimile or e-mail a copy of all instructions and directions given to the Collateral Agent or the Account Bank by or on behalf of the Borrower pursuant to Section 2.04. The Administrative Agent shall promptly transmit to the Borrower Advisors and the Borrower by facsimile or e-mail a copy of all instructions and directions given to the Collateral Agent or the Account Bank by the Administrative Agent, pursuant to Section 2.04. If either the Administrative Agent or Collateral Agent disagrees with the computation of any amounts to be paid or deposited by the Borrower or on behalf of the Borrower, under Section 2.04 or otherwise pursuant to this Agreement, or upon their respective instructions, it shall so notify the Borrower, the Borrower Advisors and the Collateral Agent in writing and in reasonable detail to identify the specific disagreement. If such disagreement cannot be resolved within two (2) Business Days, the determination of the Administrative Agent as to such amounts shall be conclusive and binding on the parties hereto absent manifest error.  In the event the Collateral Agent or the Account Bank receives instructions from any Borrower Advisor or the Borrower after the occurrence and during the continuation of an Event of Default which conflict with any instructions received from the Administrative Agent, the Collateral Agent or the Account Bank, as applicable, shall rely on and follow the instructions given by the Administrative Agent.

Section 2.06                             Borrowing Base Deficiency Payments.

(a)                                 Notwithstanding any other obligation of the Borrower to cure any Borrowing Base Deficiency pursuant to the terms of this Agreement, if, on any day prior to the Collection Date, any Borrowing Base Deficiency exists, then the Borrower shall, within 3 Business Days from the date of the occurrence of such Borrowing Base Deficiency (or such longer period as provided below in connection with a Cure Plan), eliminate such Borrowing Base Deficiency in its entirety by effecting (or, in the case of clause (iv), initiating) one or more (or any combination thereof) of the following actions in order to eliminate such Borrowing Base Deficiency as of such date of determination: (i) deposit cash in Dollars into the Principal Collection Account (including, without limitation, cash contributed by the Equityholder), (ii) repay Advances (together with any Breakage Fees, and all accrued and unpaid costs and expenses of the Administrative Agent, the Lender Agents and the Lenders, in each case in respect of the amount so prepaid), (iii) subject to the approval of the Administrative Agent, in its sole discretion, Pledge additional Eligible Loans and/or (iv) submit a Cure Plan that satisfies the requirements of Section 2.06(c) and is approved in writing (which approval must be given within 3 Business Days from the date of the occurrence of such Borrowing Base Deficiency and may be by electronic communication) by the Administrative Agent in its sole discretion.  If the Borrower initiates a Cure Plan in accordance with clause (iv) above, then the Borrower must eliminate such Borrowing Base Deficiency in accordance with such Cure Plan within 10 Business Days from the date of the occurrence of such Borrowing Base Deficiency.

(b)                                 No later than 2:00 p.m. on the Business Day prior to any proposed repayment of Advances or Pledge of additional Eligible Loans pursuant to Section 2.06(a), the Borrower (or the Collateral Manager on its behalf) shall deliver (i) to the Administrative Agent

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(with a copy to the Collateral Agent and the Collateral Custodian), notice of such repayment or Pledge and a duly completed Borrowing Base Certificate, updated to the date such repayment or Pledge is being made and giving pro forma effect to such repayment or Pledge, and (ii) to the Administrative Agent, if applicable, a description of any Eligible Loan and each Obligor of such Eligible Loan to be Pledged and added to the updated Loan Tape.  Any notice pertaining to any repayment or any Pledge pursuant to this Section 2.06 shall be irrevocable.

(c)                                  Each Cure Plan submitted pursuant to Section 2.06(a)(iv) shall include, as applicable, (i) a request for an Approval Notice for each Loan to be purchased, Pledged or sold pursuant to such Cure Plan, (ii) trade tickets identifying each Loan to be purchased, Pledged or sold and the related settlement dates (which settlement dates must be no later than 10 Business Days after the related Borrowing Base Deficiency occurred), (iii) the amount to be deposited into the Principal Collection Account, (iv) the amount of Advances to be repaid and (v) a written certification the Borrower has caused the Collateral Manager to provide with respect to such Cure Plan that the Collateral Manager believes that such Cure Plan will produce sufficient proceeds to cure the related Borrowing Base Deficiency and that such proceeds will be applied within 10 Business Days of the date the related Borrowing Base Deficiency occurred to cure such Borrowing Base Deficiency.

Section 2.07                             Discretionary Sales, Substitutions, Lien Release Dividends, Purchases and the Required Sale Date.

(a)                                 Substitutions.  Subject to Sections 2.07(c) and (d), during the Reinvestment Period the Borrower may, or to the extent a Substitution is required under the Purchase and Sale Agreement, shall sell and replace or exchange any Loan with another Eligible Loan (each such sale and replacement or exchange, a “Substitution”) so long as (i) immediately after giving effect to such Substitution, no Event of Default, Unmatured Event of Default or Collateral Manager Event of Default shall have occurred and be continuing, (ii) each substitute Loan acquired by the Borrower in connection with a Substitution shall be an Eligible Loan, (iii) 100% of the proceeds from the sale or exchange of the Loan(s) to be replaced in connection with such Substitution are either applied by the Borrower to acquire the substitute Loan(s) or deposited in the Collection Account, (iv) all conditions precedent set forth in Section 3.02 have been satisfied with respect to each Loan to be acquired by the Borrower in connection with such Substitution and (v) immediately after giving effect to such Substitution, no Borrowing Base Deficiency exists; provided that, notwithstanding anything to the contrary set forth in Section 3.02, in the event a Borrowing Base Deficiency shall have existed immediately prior to giving effect to such Substitution, the Borrower may effect a Substitution so long as, immediately after giving effect to such Substitution and any other action taken pursuant to Section 2.06 substantially contemporaneous therewith, such Borrowing Base Deficiency is reduced or cured.

(b)                                 Discretionary Sales. Upon not less than one (1) Business Day’s prior written notice to the Administrative Agent, the Borrower shall be permitted, subject to clauses (c) and (d) below, to sell Loans (each, a “Discretionary Sale”) so long as (i) immediately after giving effect to such Discretionary Sale, no Event of Default, Unmatured Event of Default or Collateral Manager Event of Default shall have occurred and be continuing, (ii) unless the Administrative Agent shall have provided prior written consent, the sale price of any such Loan

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sold pursuant to a Discretionary Sale shall be equal to or greater than its Adjusted Borrowing Value, (iii) immediately after giving effect to such Discretionary Sale, no Borrowing Base Deficiency exists and (iv) 100% of the proceeds from the sale of the Loan(s) in connection with such Discretionary Sale are deposited in the Collection Account; provided that, in the event a Borrowing Base Deficiency shall have existed immediately prior to giving effect to such Discretionary Sale, the Borrower may, with the prior consent of the Administrative Agent in its sole discretion, effect a Discretionary Sale so long as, immediately after giving effect to such Discretionary Sale and any other action taken pursuant to Section 2.06 substantially contemporaneous therewith, such Borrowing Base Deficiency is reduced or cured.

(c)                                  Conditions to Sales and Substitutions.  Any Discretionary Sale or sale pursuant to a Substitution effected pursuant to Sections 2.07 (a) or (b) shall be subject to the satisfaction of the following conditions:

(i)                                     the Borrower shall deliver a Borrowing Base Certificate to the Administrative Agent;

(ii)                                  the Borrower shall deliver a list of all Loans to be sold or substituted to the Administrative Agent and the Trustee;

(iii)                               the Borrower shall be deemed to have certified to the Administrative Agent that no selection procedures adverse to the interests of the Administrative Agent or the Lenders were utilized by the Borrower in the selection of the Loans to be sold or substituted;

(iv)                              the Borrower shall notify the Administrative Agent and the Account Bank of any amount to be deposited into the Collection Account in connection with any sale or substitution;

(v)                                 the Borrower shall be deemed to have certified to the Administrative Agent that the representations and warranties contained in Section 4.01 and 4.02 hereof shall continue to be correct in all material respects following any sale or substitution, except to the extent any such representation or warranty relates to an earlier date;

(vi)                              any repayment of Advances Outstanding in connection with any sale or substitution of Loans hereunder shall comply with the requirements set forth in Section 2.17(b);

(vii)                           the Administrative Agent shall have provided its prior written consent to any such sale or substitution to an Affiliate of the Borrower or any Borrower Advisor;

(viii)                        the Administrative Agent shall have provided its prior written consent to any such sale or substitution after the occurrence of an Unmatured Event of Default, Event of Default or a Collateral Manager Event of Default;

(ix)                              the Borrower shall pay an amount equal to all Breakage Fees and other accrued and unpaid costs and expenses (including, without limitation, reasonable legal fees) of the Administrative Agent, the Lenders and the Collateral Custodian in connection

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with any such sale or substitution (including, but not limited to, expenses incurred in connection with the release of the Lien of the Collateral Agent on behalf of the Secured Parties and any other party having an interest in the Loan in connection with such sale or substitution).

(d)                                 Limitations on Sales, Substitutions and Lien Release Dividends.

(i)                                     The aggregate Outstanding Balance of all Loans subject to a Value Adjustment Event described in clauses (c), (e) or (g) of the definition thereof which are included in a Lien Release Dividend or sold by the Borrower to the Seller in connection with a Substitution or a Discretionary Sale permitted hereunder on any date of determination shall not exceed 10% of the aggregate Outstanding Balance of all Loans conveyed by the Seller to the Borrower pursuant to the Purchase and Sale Agreement through such date (the Outstanding Balance of each such Loan, for purposes of this Section 2.07(d)(i), being that on the date of conveyance under the Purchase and Sale Agreement), exclusive of (i) Loans sold to the Seller or conveyed pursuant to a Substitution, in each case only if such sale or conveyance is required under Article VI of the Purchase and Sale Agreement and (ii) Required Sale Assets sold to the Seller for purposes of compliance with Section 2.07(g).

(ii)                                  The aggregate Outstanding Balance of all Loans which are sold by the Borrower in connection with a Substitution or a Discretionary Sale or included in a Lien Release Dividend shall not exceed (i) during the first 12 months after the Closing Date, 50% of the highest aggregate Outstanding Balance of the Collateral Portfolio during any month of such 12-month period and (ii) during any 12 month rolling period thereafter (or such lesser number of months as shall have elapsed since the one-year anniversary of the Closing Date), 20% of the highest aggregate Outstanding Balance of the Collateral Portfolio during any month of such 12 month period (or such lesser period); provided that, the foregoing limitation set forth in this clause (d) shall not apply with respect to any Substitution, Discretionary Sale or Lien Release Dividend (A) with the prior written consent of the Administrative Agent, of a Loan which is reasonably expected to be refinanced or paid off in full by the applicable Obligor, (B) of a Credit Risk Loan, (C) of a Loan with an Assigned Value of zero or (D) in connection with a Cure Plan Sale; and provided, further, that, notwithstanding the foregoing, the aggregate Outstanding Balance of all Loans which are sold connection with a Substitution or a Discretionary Sale or included in a Lien Release Dividend by the Borrower to the Seller permitted hereunder on any date of determination shall not exceed 20% of the aggregate Outstanding Balance of all Loans conveyed by the Seller to the Borrower pursuant to the Purchase and Sale Agreement through such date (the Outstanding Balance of each such Loan, for purposes of this proviso, being that on the date of conveyance under the Purchase and Sale Agreement), exclusive of (i) Loans sold to the Seller or conveyed pursuant to a Substitution, in each case only if such sale or conveyance is required under Article VI of the Purchase and Sale Agreement and (ii) Required Sale Assets sold to the Seller for purposes of compliance with Section 2.07(g).

(e)                                  Lien Release Dividend. Notwithstanding any provision contained in this Agreement to the contrary, provided no Event of Default or Collateral Manager Event of Default

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has occurred and no Unmatured Event of Default exists, on a Lien Release Dividend Date, the Borrower may dividend any Loan, or portions thereof, to the Equityholder (each, a “Lien Release Dividend”), subject to the restrictions set forth in clauses (d)(i) and (ii) above and the following terms and conditions, as certified by the Borrower to the Administrative Agent (with a copy to the Collateral Agent and the Collateral Custodian):

(i)                                     The Borrower and the Equityholder shall have given the Administrative Agent, with a copy to the Collateral Agent and the Collateral Custodian, at least five (5) Business Days prior written notice requesting that the Administrative Agent consent to the effectuation of a Lien Release Dividend, in the form of Exhibit Q hereto (a “Notice and Request for Consent to Lien Release Dividend”), which consent shall be given in the sole and absolute discretion of the Administrative Agent;

(ii)                                  On any Lien Release Dividend Date, no more than four Lien Release Dividends shall have been made during the 12-month period immediately preceding the proposed Lien Release Dividend Date;

(iii)                               After giving effect to the Lien Release Dividend on the Lien Release Dividend Date, (A) no Borrowing Base Deficiency, Event of Default, Collateral Manager Event of Default or Unmatured Event of Default shall exist, (B) the representations and warranties contained in Sections 4.01 and 4.02 and in the Management Agreement shall continue to be correct, except to the extent relating to an earlier date, (C) the eligibility of any Loan remaining as part of the Collateral Portfolio after the Lien Release Dividend will be redetermined as of such date, (D) no claim shall have been asserted or proceeding commenced challenging the enforceability or validity of any of the Required Loan Documents and (E) there shall have been no Material Adverse Effect on any Borrower Advisor or the Borrower;

(iv)                              Such Lien Release Dividend must be in compliance with Applicable Law and may not (A) be made with the intent to hinder, delay or defraud any creditor of the Borrower or (B) leave the Borrower, immediately after giving effect to the Lien Release Dividend, not Solvent;

(v)                                 On or prior to the Lien Release Dividend Date, the Borrower shall have (A) delivered to the Administrative Agent, the Collateral Agent and the Collateral Custodian, a list specifying all Loans or portions thereof to be transferred pursuant to such Lien Release Dividend and the Administrative Agent shall have approved the same in its sole discretion and (B) obtained all corporate or similar authorizations, consents and approvals required to effectuate the Lien Release Dividend;

(vi)                              A portion of a Loan may be transferred pursuant to a Lien Release Dividend provided that (A) such transfer does not have an adverse effect on the portion of such Loan remaining as a part of the Collateral Portfolio, any other aspect of the Collateral Portfolio, the Lenders, the Lender Agents, the Administrative Agent or any other Secured Party and (B) a new promissory note (other than with respect to a Noteless Loan) for the portion of the Loan remaining as a part of the Collateral Portfolio has been

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executed, and the original thereof has been endorsed to the Collateral Agent and delivered to the Collateral Custodian;

(vii)                           Unless waived by the Administrative Agent in its sole discretion, each Loan, or portion thereof, as applicable, shall be transferred at a value equal to the Outstanding Balance thereof, exclusive of any accrued and unpaid interest or PIK Interest thereon;

(viii)                        The Borrower shall deliver a Borrowing Base Certificate (including a calculation of the Borrowing Base after giving effect to such Lien Release Dividend) to the Administrative Agent;

(ix)                              The Borrower shall have paid in full an aggregate amount equal to the sum of all amounts due and owing to the Administrative Agent, the Lenders, the Lender Agents, the Collateral Agent or the Collateral Custodian, as applicable, under this Agreement and the other Transaction Documents, to the extent accrued to such date (including, without limitation, Breakage Fees) with respect to the Loans to be transferred pursuant to such Lien Release Dividend and incurred in connection with the transfer of such Loans pursuant to such Lien Release Dividend; and

(x)                                 The Borrower hereby agrees to pay the reasonable legal fees and expenses of the Administrative Agent, the Collateral Agent and the Collateral Custodian in connection with any Lien Release Dividend (including, but not limited to, expenses incurred in connection with the release of the Lien of the Collateral Agent, on behalf of the Secured Parties, and any other party having an interest in the Loan in connection with such Lien Release Dividend).

(f)                                   Purchases.  The Borrower may (i) with the prior written consent of the Administrative Agent in its sole discretion, purchase Loans other than Eligible Loans and (ii) purchase Loans that are not Eligible Loans solely because of the threshold set forth in clause (b), (g), (u), (w), (z), (aa) and/or (dd) of the definition of “Eligible Loan”.  For the avoidance of doubt, no such purchases may be made with amounts on deposit in any Controlled Account or any Advance proceeds.

(g)                                  Required Sale Date.  Notwithstanding anything else in this Agreement to the contrary, the Borrower shall divest itself of all Required Sale Assets on or prior to the Required Sale Date.

Section 2.08                             Payments and Computations, Etc.

(a)                                 All amounts to be paid or deposited by the Borrower hereunder shall be paid or deposited in accordance with the terms hereof no later than 2:00 p.m. on the day when due in lawful money of the United States in immediately available funds to the Collection Account or such other account as is designated by the Administrative Agent. The Borrower shall, to the extent permitted by Applicable Law, pay to the Secured Parties interest on all amounts not paid or deposited when due (taking into account any grace periods) to any of the Secured Parties hereunder at 2.0% per annum above the Base Rate (other than with respect to any Advances Outstanding, which shall accrue at the Yield Rate), payable on demand, from the date of such

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nonpayment until such amount is paid in full (as well after as before judgment); provided, that such interest rate shall not at any time exceed the maximum rate permitted by Applicable Law. Any Obligation hereunder shall not be reduced by any distribution of any portion of Available Collections if at any time such distribution is rescinded or required to be returned by any Lender to the Borrower or any other Person for any reason. All computations of interest and all computations of Yield, Non-Usage Fees and other fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed, other than calculations with respect to the Base Rate, which shall be based on a year consisting of 365 or 366 days, as applicable.

(b)                                 Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall instead be due on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of Yield or any fee payable hereunder, as the case may be.

(c)                                  If any Advance requested by the Borrower and approved by the Lender Agents and the Administrative Agent pursuant to Section 2.02 is not for any reason whatsoever, except as a result of the gross negligence or willful misconduct of, or failure to fund such Advance on the part of, the Lenders, the Administrative Agent or an Affiliate thereof, made or effectuated, as the case may be, on the date specified therefor, the Borrower shall indemnify such Lender against any loss, cost or expense incurred by such Lender related thereto (other than any such loss, cost or expense solely due to the gross negligence or willful misconduct or failure to fund such Advance on the part of the Lenders, the Administrative Agent or an Affiliate thereof), including, without limitation, any loss (including cost of funds and reasonable out-of-pocket expenses), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund Advances or maintain the Advances. Any such Lender shall provide to the Borrower documentation setting forth the amounts of any loss, cost or expense referred to in the previous sentence, such documentation to be conclusive absent manifest error.

Section 2.09                             Increased Costs; Capital Adequacy.

(a)                                 If, due to either (i) the introduction of or any change following the date hereof (including, without limitation, any change by way of imposition or increase of reserve requirements) in or in the interpretation, administration or application arising following the date hereof of any Applicable Law (including, without limitation, any law or regulation that subjects an Affected Party to any Taxes (other than (1) Excluded Taxes and (2) Taxes imposed on payments under this Agreement) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto), in each case whether foreign or domestic or (ii) the compliance with any guideline or request following the date hereof from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to the Administrative Agent, any Lender, any Lender Agent, any Liquidity Bank or any Affiliate, successor or assign thereof (each of which shall be an “Affected Party”) of agreeing to make or making, funding or maintaining any Advance (or any reduction of the amount of any payment (whether of principal, interest, fee, compensation or otherwise) to any Affected Party hereunder), as the case may be, or there shall be any reduction in the amount of any sum received or receivable by an Affected Party under this

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Agreement, under any other Transaction Document or any Liquidity Agreement, the Borrower shall, from time to time, after written demand by the Administrative Agent (which demand shall be accompanied by a statement setting forth in reasonable detail the basis for such demand), on behalf of such Affected Party, pay to the Administrative Agent, on behalf of such Affected Party, additional amounts sufficient to compensate such Affected Party for such increased costs or reduced payments within thirty (30) days after such demand; provided, that the amounts payable under this Section 2.09 shall be without duplication of amounts payable under Section 2.10; provided, further, that an Affected Party claiming additional amounts under this Section 2.09 agrees to use commercially reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different lending office if the making of such a designation would avoid the need for, or reduce the amount of, such increased cost that may thereafter accrue and would not, in the reasonable judgment of such Affected Party, be otherwise disadvantageous to such Affected Party.

(b)                                 If either (i) the introduction of or any change following the date hereof in or in the interpretation, administration or application arising following the date hereof of any law, guideline, rule or regulation, directive or request or (ii) the compliance by any Affected Party with any law, guideline, rule, regulation, directive or request following the date hereof, from any central bank, any Governmental Authority or agency, including, without limitation, compliance by an Affected Party with any request or directive regarding capital adequacy, has or would have the effect of reducing the rate of return on the capital of any Affected Party, as a consequence of its obligations hereunder or any related document or arising in connection herewith or therewith to a level below that which any such Affected Party could have achieved but for such introduction, change or compliance (taking into consideration the policies of such Affected Party with respect to capital adequacy), by an amount deemed by such Affected Party to be material, then, from time to time, after demand by such Affected Party (which demand shall be accompanied by a statement setting forth in reasonable detail the basis for such demand), the Borrower shall pay the Administrative Agent on behalf of such Affected Party such additional amounts as will compensate such Affected Party for such reduction.

(c)                                  If as a result of any event or circumstance similar to those described in clause (a) or (b) of this Section 2.09, any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with this Agreement or the funding or maintenance of Advances hereunder, then within ten days after demand by such Affected Party, the Borrower shall pay to such Affected Party such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts payable or paid by it.

(d)                                 In determining any amount provided for in this Section 2.09, the Affected Party may use any reasonable averaging and attribution methods. The Administrative Agent, on behalf of any Affected Party making a claim under this Section 2.09, shall submit to the Borrower a certificate setting forth in reasonable detail the basis for and the computations of such additional or increased costs, which certificate shall be conclusive absent manifest error.

(e)                                  Failure or delay on the part of any Affected Party to demand compensation pursuant to this Section 2.09 shall not constitute a waiver of such Affected Party’s right to demand or receive such compensation; provided, however, that the Borrower shall not be

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responsible for costs under this Section 2.09 arising more than 90 days prior to receipt by the Borrower of the demand from the Affected Party pursuant to this Section 2.09.

Section 2.10                             Taxes.

(a)                                 All payments made by or on behalf of the Borrower under this Agreement and the other Transaction Documents will be made free and clear of and without deduction or withholding for or on account of any Taxes, except as required by Applicable Law.  If any Taxes are required by Applicable Law to be withheld from any amounts payable to any Indemnified Party (including, for purposes of this Section 2.10(a) and Section 2.10(b), any assignee, participant, or successors), then the amount payable to such Person will be increased (the amount of such increase, an “Additional Amount”) such that every net payment received under this Agreement and the other Transaction Documents, after withholding for or on account of any Taxes (including, without limitation, any Taxes on such increase) is not less than the amount that would have been received had no such deduction or withholding been made.  The foregoing obligation to pay Additional Amounts with respect to payments required to be made under this Agreement will not, however, apply with respect to (i) Taxes imposed on or measured by net income (however denominated), branch profits Taxes, or franchise Taxes imposed on the relevant Indemnified Party, in each case, (x) by a taxing jurisdiction in which any such Person is organized or conducts business, or (y) as a result of any other present or former connection between such Indemnified Party and the jurisdiction imposing such Tax (other than connections arising  as a result of such Person having executed, delivered or performed its obligations or received payments under, or enforced, this Agreement or any of the other Transaction Documents), (ii) in the case of any Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender pursuant to a law in effect on the date on which (x) such Lender becomes a party hereto or (y) such Lender changes its lending office (other than pursuant to a request by the Borrower), except, in each case, to the extent that, pursuant to this Section 2.10, amounts with respect to such Taxes were payable either to such Lender’s transferor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (iii) Taxes attributable to an Indemnified Party’s failure to comply with Section 2.10(d), and (iv) any Taxes imposed under FATCA (“Excluded Taxes”).

(b)                                 The Borrower will indemnify each Indemnified Party and each of its beneficial owners for the full amount of Taxes that are not Excluded Taxes and are payable by such Person in respect of payments made under this Agreement or any other Transaction Documents, and for the full amount of Taxes that are not Excluded Taxes imposed by any jurisdiction on amounts payable under this Section 2.10 imposed on or paid by such Person, and for any liability (including penalties, interest and expenses) arising therefrom or with respect thereto.  All payments in respect of this indemnification shall be made within 10 days from the date a written invoice therefor is delivered to the Borrower, which invoice shall be conclusive absent manifest error.

(c)                                  Within 30 days after the date of any payment by or on behalf of the Borrower of any Taxes, the Borrower will furnish to the applicable Indemnified Party, and to the Administrative Agent at the applicable address set forth on this Agreement, evidence reasonably satisfactory to the applicable Indemnified Party and the Administrative Agent of payment thereof.

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(d)                                 (i)  If any Lender is not created or organized under the laws of the United States or a political subdivision thereof, such Lender shall, if it is legally able to do so, deliver to the Borrower, with a copy to the Administrative Agent, (x) on or prior to the date on which such Lender becomes a party to this Agreement, or at other times reasonably requested by the Borrower, two (or such other number as may from time to time be reasonably requested by the Borrower) duly completed copies of IRS Form W-8BEN-E or Form W-8ECI or Form W-8IMY (together with appropriate attachments) (or any successor forms), as appropriate, and (y) copies (in such numbers as may from time to time be reasonably requested by the Borrower) of such additional, amended or successor forms, certificates or statements as the Borrower requests that may be required under Applicable Law to permit the Borrower to make payments hereunder for the account of such Lender without or at a reduced rate of deduction or withholding of United States federal income or similar Taxes, provided, that such Lender shall not be required to deliver any form, certificate, or statement pursuant to clause (y) of this Section 2.10(d)(i) if in such Lender’s reasonable judgment the completion, execution or delivery of such form, certificate or statement would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)                                  If a Lender is a United States Person (as that term is defined in Section 7701(a)(30) of the Code), such Lender shall deliver to the Borrower, with a copy to the Administrative Agent, on or prior to the date such Lender becomes a party to this Agreement, or at other times reasonably requested by the Borrower, two duly completed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax.

(iii)                               If a payment made to a Lender under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Applicable Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(iv)                              Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 2.10(d) expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

(e)                                  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified or paid Additional Amounts pursuant to this Section 2.10, it shall pay to the indemnifying party an amount equal to

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such refund (but only to the extent of indemnity payments made or Additional Amounts paid under this Section with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (e) (plus any penalties, 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 (e), in no event will the indemnified party be required to pay any amount to any indemnifying party pursuant to this paragraph (e) 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 indemnification payments or Additional Amounts giving rise to such refund 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.

(f)                                   Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower (and, with respect to the obligations to provide refunds of amounts paid under this Section 2.10 pursuant to subsection (e), the other parties) contained in this Section 2.10 shall survive the termination of this Agreement.

Section 2.11                             Assignment of Certain Documents. The Borrower hereby assigns to the Administrative Agent, for the ratable benefit of the Secured Parties to secure the Obligations hereunder, all of the Borrower’s right, title and interest in and to, but none of its obligations under, the Purchase and Sale Agreement and the Management Agreement and any UCC financing statements filed thereunder or in connection therewith.  In furtherance and not in limitation of the foregoing, the Borrower hereby assigns collaterally to the Administrative Agent for the benefit of the Secured Parties to secure the Obligations its right to indemnification under 9.1 of the Purchase and Sale Agreement.  The Borrower confirms that the Administrative Agent, on behalf of the Secured Parties, shall have the right to enforce the Borrower’s rights and remedies under the Purchase and Sale Agreement, the Management Agreement and any UCC financing statements filed thereunder or in connection therewith for the benefit of the Secured Parties, upon the occurrence and during the continuation of an Event of Default.  The parties hereto agree that such collateral assignment to the Collateral Agent, for the benefit of the Secured Parties, shall automatically terminate upon the Collection Date.  Notwithstanding anything to the contrary herein or in the Management Agreement, the Administrative Agent agrees that the assignment of the Management Agreement provided for in this Section 2.11 does not include an assignment of the Borrower’s right to terminate the Management Agreement or the Collateral Manager’s rights and responsibilities thereunder.

Section 2.12                             Grant of a Security Interest. To secure the prompt, complete and indefeasible payment in full when due, whether by lapse of time, acceleration or otherwise, of the Obligations and the performance by the Borrower of all of the covenants and obligations to be performed by it pursuant to this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, the Borrower hereby grants a security interest to the Collateral Agent, on behalf of the Secured Parties, in all of the Borrower’s right, title and interest in, to and under (but none of the

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obligations under) all of the Collateral Portfolio, whether now existing or hereafter arising or acquired by the Borrower, and wherever the same may be located. For the avoidance of doubt, the Collateral Portfolio shall not include any Excluded Amounts, and the Borrower does not hereby assign, pledge or grant a security interest in any such amounts. Anything herein to the contrary notwithstanding, (a) the Borrower shall remain liable under the Collateral Portfolio to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Collateral Agent, for the benefit of the Secured Parties, of any of its rights in the Collateral Portfolio shall not release the Borrower from any of its duties or obligations under the Collateral Portfolio and (c) none of the Administrative Agent, the Collateral Agent, any Lender (nor its successors and assigns), any Lender Agent, any Liquidity Bank nor any Secured Party shall have any obligations or liability under the Collateral Portfolio by reason of this Agreement, nor shall the Administrative Agent, the Collateral Agent, any Lender (nor its successors and assigns), any Lender Agent, any Liquidity Bank nor any Secured Party be obligated to perform any of the obligations or duties of the Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

Section 2.13                             Evidence of Debt. (a) The Administrative Agent shall maintain, solely for this purpose as the agent of the Borrower, at its address referred to in Section 12.02, a copy of each assignment and acceptance agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders, and the principal amounts and stated interest owing to each Lender pursuant to the terms of this Agreement and the other Transaction Documents (the “Register”). No assignment by a Lender of its rights hereunder or under any Transaction Document shall be effective unless a corresponding entry is made in the Register pursuant to this Section 2.13(a).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent, each Lender and each Lender Agent shall treat each person whose name is recorded in the Register as a Lender under this Agreement for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender Agent at any reasonable time and from time to time upon reasonable prior notice.

(b)                                 Each Lender that sells a participation of its rights hereunder shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain (or cause to be maintained) a register (the “Participant Register”) on which it will record the name and address of each participant and the principal amounts and stated interest of each participant’s interest in such rights.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement.  No Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person except to the extent that such disclosure is necessary to establish that an interest under this Agreement with respect to which the Lender has sold a participation is maintained “in registered form” within the meaning of Treasury Regulations Section 5f.103-1(c).  The Borrower agrees that each participant shall be entitled to the benefits of Sections 2.09 and 2.10 (subject to the requirements and limitations therein, including the requirement to provide certain documentation pursuant to Section 2.10(d) (it being understood that the documentation required under Section 2.10(d) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment.

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Section 2.14                             Survival of Representations and Warranties. It is understood and agreed that the representations and warranties set forth in Sections 4.01, 4.02 and in Section 4 of the Management Agreement are made and are true and correct on the date of this Agreement and on each Cut-Off Date unless such representations and warranties are made as of a specific date.

Section 2.15                             Release of Loans.

(a)                                 The Borrower may obtain the release of (i) any Loan (and the related Portfolio Assets pertaining thereto) sold or substituted in accordance with the applicable provisions of Section 2.07 and any Portfolio Assets pertaining to such Loan and (ii) any part of the Collateral Portfolio that expires by its terms and all amounts in respect thereof have been paid in full by the related Obligor and deposited in the Collection Account. The Collateral Agent, for the benefit of the Secured Parties, shall at the sole expense of the Borrower and at the direction of the Administrative Agent, execute such documents and instruments of release as may be prepared by the Borrower (or the Collateral Manager on its behalf), give notice of such release to the Collateral Custodian (in the form of Exhibit M) (unless the Collateral Custodian and Collateral Agent are the same Person) and take other such actions as shall reasonably be requested by the Borrower to effect such release of the Lien created pursuant to this Agreement. Upon receiving such notification by the Collateral Agent as described in the immediately preceding sentence, if applicable, the Collateral Custodian shall deliver the Required Loan Documents to the Borrower.

(b)                                 Upon the occurrence of the Collection Date, the respective remaining interests in the Portfolio Assets of each Lender, each Lender Agent, the Collateral Agent and the Administrative Agent, including their security interest therein, shall be automatically released to the Borrower, for no consideration but at the sole expense of the Borrower, free and clear of any Lien resulting solely from an act by any Lender, any Lender Agent, the Collateral Agent or the Administrative Agent but without any other representation or warranty, express or implied, by or recourse against any Lender, any Lender Agent, the Collateral Agent or the Administrative Agent, and the Collateral Agent or the Administrative Agent shall promptly provide evidence of any such release as the Borrower may request, at the sole expense of the Borrower (and the Collateral Agent shall take the actions contemplated by Section 2.15(a) with respect to such release).

Section 2.16                             Treatment of Amounts Received by the Borrower. Amounts received by the Borrower pursuant to Section 2.07 on account of Loans shall be treated as payments of Principal Collections or Interest Collections, as applicable, on Loans hereunder.

Section 2.17                             Repayment; Reduction of Commitments.

(a)                                 Except as expressly permitted or required herein, including, without limitation, any repayment necessary to cure a Borrowing Base Deficiency, Advances may only be prepaid in whole or in part at the option of the Borrower at any time by delivering a Notice of Reduction (which notice shall include a Borrowing Base Certificate) to the Administrative Agent, the Collateral Agent and the Lender Agents no later than 2:00 p.m. at least one Business Day prior to such reduction.  Upon any prepayment (x) in part, the Borrower shall also pay all accrued and unpaid costs and expenses of Administrative Agent, Lender Agents and Lenders

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related to such prepayment and (y) in whole, the Borrower shall also pay in full all accrued and unpaid Yield, Breakage Fees (solely to the extent such prepayment occurs on any day other than a Payment Date) and all accrued and unpaid costs and expenses of Administrative Agent, Lender Agents and Lenders related to such prepayment; provided that no reduction in Advances Outstanding shall be given effect unless sufficient funds have been remitted to pay all such amounts in full, as determined by the Administrative Agent, in its sole discretion. The Administrative Agent shall apply amounts received from the Borrower pursuant to this Section 2.17(a) to the payment of any Breakage Fees and to the pro rata reduction of the Advances Outstanding. Any notice relating to any repayment pursuant to this Section 2.17(a) shall be irrevocable.

(b)                                 The Borrower may, at any time, upon three (3) Business Days’ prior delivery of a Notice of Reduction (which notice shall include a Borrowing Base Certificate) to the Administrative Agent, the Collateral Agent and the Lender Agents, either (i) cause the Collection Date to occur upon payment in full of all Advances Outstanding, all accrued and unpaid Yield, any Breakage Fees, any Commitment Reduction Fee, all accrued and unpaid costs and expenses of the Administrative Agent, Lender Agents and Lenders and all other Obligations (other than unmatured contingent indemnification obligations) or (ii) reduce in part the portion of the Maximum Facility Amount that exceeds the sum of all Advances Outstanding, all accrued and unpaid Non-Usage Fee and Commitment Reduction Fee (pro rata with respect to the portion of the Maximum Facility Amount so reduced) and all accrued and unpaid costs and expenses of the Administrative Agent, Lender Agents and Lenders relating to such partial termination.  Any termination of this Agreement shall be subject to Section 12.05.

Section 2.18                             Collections and Allocations.

(a)                                 Collections. The Borrower shall cause the Collateral Manager to promptly identify any collections received as being on account of Interest Collections or Principal Collections and shall transfer, or cause to be transferred, all such Available Collections received directly by it to the Collection Account by the close of business not later than one (1) Business Day after such Collections are received. Upon the transfer of Available Collections to the Collection Account, the Borrower shall cause the Collateral Manager to segregate Principal Collections and Interest Collections and transfer the same to the Principal Collection Account and the Interest Collection Account, respectively; provided that, any Collections received by the Collateral Manager after the end of the Reinvestment Period shall be applied first to the Unfunded Exposure Account in the amount, if any, necessary to make the amount on deposit in the Unfunded Exposure Account equal to the Aggregate Unfunded Exposure Amount and second to the appropriate subaccount of the Collection Account as set forth above. The Borrower shall cause the Collateral Manager to report the amount of Principal Collections and Interest Collections on deposit in the Principal Collection Account and the Interest Collection Account, in each case on each Reporting Date in the Collateral Management Report delivered pursuant to Section 6.07(b).

(b)                                 Initial Deposits.  On and after the Cut-Off Date with respect to any Loan, the Borrower shall cause each Borrower Advisor to deposit into the Collection Account all Available Collections received in respect of Eligible Loans being transferred to and included as part of the Collateral Portfolio on such date.

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(c)                                  Excluded Amounts.  The Borrower may (or may cause the Collateral Manager to) withdraw from the applicable Controlled Account any deposits thereto constituting Excluded Amounts if the Borrower has caused the Collateral Manager to, prior to such withdrawal, deliver to the Administrative Agent and the Collateral Agent a report setting forth the calculation of such Excluded Amounts and the Administrative Agent agrees in writing that the form and substance of the report is satisfactory to the Administrative Agent in its sole discretion.

(d)                                 Investment of Funds.  Prior to Notice of Exclusive Control (as defined in the Securities Account Control Agreement), the Borrower or the Collateral Manager may, pursuant to written instruction (which may be in the form of standing instructions), direct the Collateral Agent to invest, or cause the investment of, funds on deposit in the Controlled Accounts in Permitted Investments, from the date of this Agreement until the Collection Date. Absent any such written instruction, such funds shall not be invested. A Permitted Investment acquired with funds deposited in any Controlled Account shall mature not later than the Business Day immediately preceding any Payment Date, and shall not be sold or disposed of prior to its maturity. All such Permitted Investments shall be registered in the name of the Account Bank or its nominee and shall be credited to a Controlled Account; provided that compliance shall be the responsibility of the Borrower and not the Collateral Agent and Account Bank. All income and gain realized from any such investment, as well as any interest earned on deposits in any Controlled Account shall be distributed in accordance with the provisions of Article II hereof. During the occurrence and continuation of a Borrowing Base Deficiency, the Borrower shall deposit in the Collection Account (with respect to investments made hereunder of funds held therein), an amount equal to the amount of any actual loss incurred, in respect of any such investment, promptly upon realization of such loss. None of the Account Bank, the Collateral Agent, the Administrative Agent, any Lender Agent or any Lender shall be liable for the amount of any loss incurred, in respect of any investment, or lack of investment, of funds held in any Controlled Account, other than with respect to fraud or their own gross negligence or willful misconduct. The parties hereto acknowledge that Permitted Investments may include those investments in which the Collateral Agent or any of its Affiliates provides services and receives reasonable compensation.

(e)                                  Unfunded Exposure Account.

(i)                                     If, at the end of the Reinvestment Period, the Aggregate Unfunded Exposure Amount is greater than $0, the Borrower shall be deemed to have made a timely request for an Advance pursuant to Section 2.02 in an amount equal to the Aggregate Unfunded Exposure Amount at the end of the Reinvestment Period.  All of the conditions to funding such Advance (including, without limitation, the conditions set forth in Sections 2.07(c) and 3.02) shall be deemed to have been satisfied and, on the last day of the Reinvestment Period, the Lender shall fund such requested Advance into the Unfunded Exposure Account.

(ii)                                  Amounts on deposit in the Unfunded Exposure Account may be withdrawn (A) by the Collateral Custodian pursuant to Section 2.18(e)(iii) to fund any draw requests of the relevant Obligors under any Delayed Draw Loan or (B) if the amount on deposit in the Unfunded Exposure Account exceeds the Aggregate Unfunded

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Exposure Amount, by the Borrower (or the Collateral Manager on the Borrower’s behalf) to make a deposit into the Principal Collection Account to the extent of such excess.

(iii)                               After the end of the Reinvestment Period, any draw request made by an Obligor under a Delayed Draw Loan, along with wiring instructions for the applicable Obligor, shall be forwarded by the Collateral Manager (on the Borrower’s behalf) to the Collateral Custodian (with a copy to the Lender) along with an instruction to the Collateral Custodian to withdraw the applicable amount from the Unfunded Exposure Account.  Upon receipt of, and in accordance with, such instruction, the Collateral Custodian shall fund such draw request directly from the Unfunded Exposure Account.

(f)                                   Rights of Withdrawal.  Until the Collection Date, neither the Borrower nor any Borrower Advisor shall have any rights of direction or withdrawal, with respect to amounts held in any Controlled Account, except to the extent explicitly set forth in Section 2.04 or Section 2.19.

Section 2.19                             Reinvestment of Principal Collections.

On the terms and conditions hereinafter set forth as certified in writing to the Collateral Agent, the Lender Agents and Administrative Agent, prior to the end of the Reinvestment Period, the Borrower may (or may cause the Collateral Manager), to the extent of any Principal Collections on deposit in the Principal Collection Account:

(a)                                 withdraw such funds for the purpose of reinvesting in additional Eligible Loans to be Pledged hereunder; provided that the following conditions are satisfied:

(i)                                     all conditions precedent set forth in Section 3.02 have been satisfied;

(ii)                                  (x) no Event of Default, Unmatured Event of Default or Collateral Manager Event of Default has occurred or exists or would result from such withdrawal and reinvestment, and (y) no Borrowing Base Deficiency exists or would result from such withdrawal and reinvestment; provided that if as a result of such withdrawal and reinvestment any Borrowing Base Deficiency would be decreased, such withdrawal and reinvestment will be permitted;

(iii)                               the representations and warranties contained in Sections 4.01, 4.02 and in Section 4 of the Management Agreement shall be correct in all respects on the date of such withdrawal, except to the extent relating to an earlier date;

(iv)                              the Borrower provides or causes the Collateral Manager to provide, same day written notice to the Administrative Agent and the Collateral Agent by facsimile or email (to be received no later than 2:00 p.m. on such day) of the request to withdraw Principal Collections and the amount of such request;

(v)                                 the notice required in clause (iv) above shall be accompanied by an Approval Notice, a Disbursement Request and a Borrowing Base Certificate, each executed by the Borrower and an Authorized Person of the Collateral Manager; and

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(vi)                              the Borrower provides (or causes the Collateral Manager to provide) to the Administrative Agent by facsimile (to be received no later than 2:00 p.m. on that same day) a statement reflecting the total amount on deposit as of the opening of business on such day in the Principal Collection Account; or

(b)                                 withdraw such funds for the purpose of making payments in respect of the Advances Outstanding at such time in accordance with and subject to the terms of Section 2.17.

Upon the satisfaction of the applicable conditions set forth in this Section 2.19 (as certified by the Borrower to the Collateral Agent and the Administrative Agent), the Collateral Agent will release funds from the Principal Collection Account to the Borrower in an amount not to exceed the lesser of (A) the amount requested and (B) the amount on deposit in the Principal Collection Account on such day.

Section 2.20                             Commitment Increases and Joinder of New Lenders.  The Borrower may, with the prior written consent of the Administrative Agent, (i) add additional Persons as Lenders and/or (ii) increase the Commitment of any Lender, in each case which shall increase the Maximum Facility Amount by the amount of the Commitment of each such existing or additional Lender.  Each additional Lender and its applicable Lender Agent shall become a party hereto by executing and delivering to the Administrative Agent and the Borrower a Joinder Supplement and a Transferee Letter.  Along with its written consent, the Administrative Agent will deliver to the Borrower an updated Annex B reflecting the new or increased Commitment of each such existing or additional Lender.

Section 2.21                             Defaulting Lenders.

(a)                                 Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

(i)                                     such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 12.01;

(ii)                                  any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, or otherwise), shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as the Borrower may request (so long as no Unmatured Event of Default, Collateral Manager Event of Default or Event of Default exists), to the funding of any Advance in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of such Defaulting Lender to fund Advances under this Agreement; fourth, so long as no Unmatured Event of Default, Collateral Manager Event of Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by such Borrower against such Defaulting Lender as a result of such

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Defaulting Lender’s breach of its obligations under this Agreement; and fifth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section 2.21 shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto;

(iii)                               during any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to Advances, the Commitment of such Defaulting Lender shall be deemed to be zero; and

(iv)                              for any period during which such Lender is a Defaulting Lender, such Defaulting Lender shall not be entitled to receive any Non-Usage Fee for any period during which such Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to such Defaulting Lender).

(b)                                 If the Administrative Agent determines in its sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), such Lender will, to the extent applicable, purchase that portion of outstanding Advances of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Advances to be held on a pro rata basis by the Lenders in accordance with their respective Commitments (without giving effect to Section 2.21(a)(iii) above), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while such Lender was a Defaulting Lender; provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

ARTICLE III.

CONDITIONS PRECEDENT

Section 3.01                             Conditions Precedent to Effectiveness.

(a)                                 This Agreement shall be effective upon satisfaction of the conditions precedent that:

(i)                                     each Transaction Document shall have been duly executed by, and delivered to, the parties thereto, and the Administrative Agent shall have received copies of the Advisory Agreements and such other documents, instruments, agreements, certificates and legal opinions as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement, each in form and substance satisfactory to the Administrative Agent;

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(ii)                                  any and all information submitted to each Lender, Lender Agent and the Administrative Agent by any Borrower Party or any of their Affiliates is true, accurate, complete in all material respects and not misleading in any material respect;

(iii)                               each Borrower Party’s underwriting, servicing, collection, operating, and reporting procedures and systems are satisfactory to the Administrative Agent in its sole discretion;

(iv)                              a satisfactory review by the Administrative Agent of all organizational documents and material contracts of each Borrower Party (including, without limitation, the Advisory Agreements);

(v)                                 a satisfactory review by the Administrative Agent of business, financial, legal, tax and accounting due diligence relating to transactions contemplated hereby, each Borrower Party and the transactions contemplated hereunder are satisfactory to the Administrative Agent in its sole discretion;

(vi)                              in the reasonable judgment of the Administrative Agent and each Lender Agent, there not having been any change in Applicable Law which adversely affects any Lender’s or the Administrative Agent’s entering into the transactions contemplated by the Transaction Documents or material disruption after December 31, 2013 in the financial, banking or commercial loan or capital markets generally;

(vii)                           the Administrative Agent and the Lenders shall have received, sufficiently in advance of the Closing Date, all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56;

(viii)                        a satisfactory due diligence review by the Administrative Agent of each Loan submitted for consideration in the initial Collateral Portfolio;

(ix)                              the Administrative Agent and each Institutional Lender shall have received each required approval (including, without limitation, from its internal credit committee);

(x)                                 the Administrative Agent and the Lenders shall have received the fees (including fees, disbursements and other charges of counsel to the Administrative Agent) to be received on the Closing Date referred to herein or in any other Transaction Document;

(xi)                              since December 31, 2013, no material adverse change has occurred in the financial condition of the Equityholder, the Seller, any Borrower Advisor or the Borrower or in any material portion of the assets in the initial Collateral Portfolio;

(xii)                           the Administrative Agent shall have received satisfactory evidence that the Seller, the Borrower and the Collateral Manager have obtained all required consents and

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approvals of all Persons to the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby or thereby;

(xiii)                        the Collateral Manager and the Borrower shall each have delivered to the Administrative Agent a certificate as to whether such Person is Solvent in the form of Exhibit P;

(xiv)                       the Borrower and the Collateral Manager shall have delivered to the Administrative Agent a certification that no Unmatured Event of Default, Event of Default or Collateral Manager Event of Default has occurred and is continuing;

(xv)                          the Administrative Agent shall have received (i) the customary executed legal opinion or opinions of Dechert LLP, counsel to the Borrower and the Collateral Manager, covering enforceability, grant and perfection of the security interests on the Collateral Portfolio and non-consolidation of the Borrower and (ii) bring-down legal opinions of Dechert LLP covering the enforceability of the Advisory Agreements as of the Closing Date, in each case, in form and substance acceptable to the Administrative Agent in its reasonable discretion;

(xvi)                       all corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement and the other Transaction Documents shall be reasonably satisfactory in form and substance to the Administrative Agent;

(xvii)                    each Lender shall have received a duly executed copy of its Variable Funding Note, in a principal amount equal to the Commitment of such Lender;

(xviii)                 the UCC-1 financing statement is in proper form for filing in the filing office of the appropriate jurisdiction;

(xix)                       the Administrative Agent shall have received a secretary’s certificate of each of the Collateral Manager and the Borrower that includes a copy of the resolutions (or other authorizing instruments, if applicable), in form and substance satisfactory to the Administrative Agent, of the Board of Directors (or similar governing or managing body) of such Person authorizing (i) the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party, (ii) in the case of the Borrower, the borrowings contemplated hereunder, and (iii) in the case of the Borrower, the granting by it of the Liens created pursuant to the Transaction Documents, certified by the Secretary or an Assistant Secretary (or other authorized Person) of such Person as of the Closing Date, which certification shall be in form and substance satisfactory to the Administrative Agent and shall state that the resolutions, or other authorizing instruments, if applicable, thereby certified have not been amended, modified, revoked or rescinded;

(xx)                          the Administrative Agent shall have received a certification of each of the Collateral Manager and the Borrower, dated the Closing Date, as to the incumbency and signature of the officers of such Person executing any Transaction Document, which

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certification may be included in the certificate delivered in respect of such Person pursuant to Section 3.01(a)(xix) and satisfactory in form and substance to the Administrative Agent and shall be executed by an Authorized Person of such Person;

(xxi)                       the Administrative Agent shall have received true and complete copies of the organizational documents of each of the Collateral Manager and the Borrower, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary (or other authorized Person) of such Person, which certification shall be included in the certificate delivered in respect of such Person pursuant to Section 3.1(a)(xix) and shall be in form and substance satisfactory to the Administrative Agent;

(xxii)                    the Administrative Agent shall have received certificates dated as of a recent date from the Secretary of State or other appropriate authority, evidencing the good standing of each of the Collateral Manager and the Borrower (i) in the jurisdiction of its organization and (ii) in each other jurisdiction where its ownership, lease or operation of property or the conduct of its business requires it to qualify as a foreign Person except, as to this subclause (ii), where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect;

(xxiii)                 the Administrative Agent shall have received evidence in form and substance satisfactory to it that all filings, recordings, registrations and other actions, including, without limitation, the filing of duly executed financing statements on form UCC-1 necessary or, in the opinion of the Administrative Agent, desirable to perfect the Liens created, or purported to be created, by the Transaction Documents shall have been completed;

(xxiv)                the Administrative Agent shall have received the results of a recent search by a Person satisfactory to the Administrative Agent, of the UCC, judgment and tax lien filings which may have been filed with respect to personal property of the Borrower, and bankruptcy and pending lawsuits with respect to the Borrower and the results of such search shall be satisfactory to the Administrative Agent;

(xxv)                   the Borrower shall have received the executed legal opinion or opinions of ▇▇▇▇▇ Lord LLP, counsel to the Collateral Agent, the Collateral Custodian and the Account Bank, covering enforceability of the Transaction Documents to which the each such Person is a party; and

(xxvi)                the Administrative Agent (with a copy to the Collateral Custodian and the Collateral Agent) shall have received the Initial Notice of Borrowing.

(b)                                 By its execution and delivery of this Agreement, the Borrower hereby certifies that each of the conditions precedent to the effectiveness of this Agreement set forth in this Section 3.01 have been satisfied.

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Section 3.02                             Conditions Precedent to All Advances. Each Advance under this Agreement, each Pledge of a Loan hereunder, each Substitution and each Discretionary Sale (each, a “Transaction”) shall be subject to the further conditions precedent that:

(a)                                 On the related Advance Date, the following statements shall be true and correct, and the Borrower by entering into such Transaction shall be deemed to have certified that:

(i)                                     the Borrower shall have delivered, or shall have caused the Collateral Manager to deliver, to the Administrative Agent (with a copy to the Collateral Custodian and the Collateral Agent) no later than 2:00 p.m. on the Business Day prior to such Transaction: (A) if such Transaction is an Advance, a Notice of Borrowing, (B) a Borrowing Base Certificate and (C) an updated Loan Tape;

(ii)                                  if the Advance Date is a Cut-Off Date, the Borrower shall have delivered to the Collateral Custodian (with a copy to the Administrative Agent), no later than 2:00 p.m. on the date of such Advance, (A) an Approval Notice, (B) an executed copy of each assignment and assumption agreement, transfer document or instrument relating to each Loan to be Pledged evidencing the assignment of such Loan from any prior third party owner thereof directly to the Borrower, and (C) a faxed or e-mailed copy of the duly executed original promissory notes of the Loans to be Pledged (and, in the case of any Noteless Loan, a fully executed assignment agreement) and if any Loans to be Pledged are closed in escrow, a certificate (in the form of Exhibit J) from the closing attorneys of such Loans certifying the possession of the Required Loan Documents; provided that, notwithstanding the foregoing, the Borrower shall cause the Loan Checklist and the Required Loan Documents to be in the possession of the Collateral Custodian within two (2) Business Days of any related Advance Date as to any Loans;

(b)                                 On and as of the date of such Transaction, after giving effect to such Transaction the Borrower shall certify as follows:

(i)                                     no Unmatured Event of Default, Collateral Manager Event of Default, event which, if it continues uncured, will, with notice or lapse of time, constitute a Collateral Manager Event of Default, Event of Default or Borrowing Base Deficiency exists or would result from such Transaction (other than, with respect to any Pledge of an Eligible Loan necessary to cure a Borrowing Base Deficiency in accordance with Section 2.06, an Unmatured Event of Default arising solely pursuant to such Borrowing Base Deficiency);

(ii)                                  since the Closing Date, no material adverse change has occurred in the ability of the Seller, any Borrower Advisor or the Borrower to perform its obligations under any Transaction Document;

(iii)                               other than Permitted Liens, no Liens exist in respect of Taxes which are prior to the lien of the Collateral Agent on the Eligible Loans to be Pledged on the date of such Transaction; and

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(iv)                              the representations and warranties contained in Sections 4.01, 4.02 and in Section 4 of the Management Agreement are true and correct in all respects, and there exists no breach of any covenant contained in Sections 5.01, 5.02, or Section 5 of the Management Agreement before and after giving effect to the Transaction to take place on the date of such Transaction and to the application of proceeds therefrom, on and as of such day as though made on and as of such date (other than any representation and warranty that is made as of a specific date).

(c)                                  The Administrative Agent shall have approved in its sole and absolute discretion each of the Eligible Loans identified on an updated Loan Tape for inclusion in the Collateral Portfolio on the applicable Advance Date (the “Approval Right”).

(d)                                 No Applicable Law shall prohibit, and no order, judgment or decree of any federal, state or local court or governmental body, agency or instrumentality shall prohibit or enjoin, the making of such Advances by any Lender or the proposed Pledge of Eligible Loans in accordance with the provisions hereof.

(e)                                  With respect to an Advance, the proposed Advance Date shall be during the Reinvestment Period.

(f)                                   All terms and conditions of the Purchase and Sale Agreement required to be satisfied in connection with the assignment of each Eligible Loan being Pledged hereunder on such Advance Date (and the Portfolio Assets related thereto), including, without limitation, the perfection of the Borrower’s interests therein, shall have been satisfied in full, and all filings (including, without limitation, UCC filings) required to be made by any Person and all actions required to be taken or performed by any Person in any jurisdiction to give the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest (subject only to Permitted Liens) in such Eligible Loans and the Portfolio Assets related thereto and the proceeds thereof shall have been made, taken or performed.

(g)                                  The Borrower shall have paid all fees then required to be paid, including all fees required hereunder and under the applicable Lender Fee Letters and the ▇▇▇▇▇ Fargo Corporate Trust Fee Letter and shall have reimbursed the Lenders, the Administrative Agent, each Lender Agent, the Collateral Custodian, the Account Bank and the Collateral Agent for all fees, reasonable and documented out-of-pocket costs and expenses of closing the transactions contemplated hereunder and under the other Transaction Documents, including the reasonable and documented attorney fees and any other legal and document preparation costs incurred by the Administrative Agent.

(h)                                 All filings (including, without limitation, UCC filings) required to be made by any Person and all actions required to be taken or performed by any Person in any jurisdiction to give the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest (subject only to Permitted Liens) in any Eligible Loans to be Pledged in connection with such Transaction and the Portfolio Assets related thereto and the proceeds thereof shall have been made, taken or performed.

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The failure of the Borrower to satisfy any of the foregoing conditions precedent in respect of any Advance (that has not been waived by the Administrative Agent in its sole discretion) shall give rise to a right of the Administrative Agent, at the direction of the Required Lenders, to rescind the related Advance and direct the Borrower to pay to the Administrative Agent, for the pro rata accounts of the Lenders, an amount equal to the Advances made during any such time that any of the foregoing conditions (that were not waived by the Administrative Agent in its sole discretion) precedent were not satisfied.

Section 3.03                             Advances Do Not Constitute a Waiver. No Advance made hereunder shall constitute a waiver of any condition to any Lender’s obligation to make such an advance unless such waiver is in writing and executed by such Lender.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

Section 4.01                             Representations and Warranties of the Borrower.  The Borrower hereby represents and warrants, as of the Closing Date, as of each applicable Cut-Off Date, as of each applicable Advance Date, as of each Determination Date and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made (unless a specific date is specified below):

(a)                                 Organization, Good Standing and Due Qualification.  The Borrower is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware, has the power and all licenses necessary to own its assets, to transact the business in which it is engaged and to enter into and perform its obligations pursuant to this Agreement, and is duly qualified and in good standing under the laws of each jurisdiction where the transaction of such business, the ownership of the Loans and the Collateral Portfolio and the entering into and performance of its obligations pursuant to this Agreement requires such qualification.

(b)                                 Power and Authority; Due Authorization; Execution and Delivery.  The Borrower has the limited liability company power, authority and legal right to make, deliver and perform this Agreement and each of the Transaction Documents to which it is a party and all of the transactions contemplated hereby and thereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement and each of the Transaction Documents to which it is a party, and to grant to the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest in the Collateral Portfolio on the terms and conditions of this Agreement, subject only to Permitted Liens.

(c)                                  Binding Obligation.  This Agreement and each of the Transaction Documents to which the Borrower is a party constitutes the legal, valid and binding obligation of the Borrower, enforceable against it in accordance with their respective terms, except as the enforceability hereof and thereof may be limited by Bankruptcy Laws and by general principles of equity (whether such enforceability is considered in a proceeding in equity or at law).

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(d)                                 All Consents Required.  No consent of any other party and no consent, license, approval or authorization of, or registration or declaration with, any Governmental Authority, bureau or agency is required in connection with the execution, delivery or performance by the Borrower of this Agreement or any Transaction Document to which it is a party or the validity or enforceability of this Agreement or any such Transaction Document or the Loans or the transfer of an ownership interest or security interest in such Loans, other than such as have been met or obtained and are in full force and effect.

(e)                                  No Violation.  The execution, delivery and performance of this Agreement and all other agreements and instruments executed and delivered or to be executed and delivered pursuant hereto or thereto in connection with the Pledge of the Collateral Portfolio will not (i) create any Lien on the Collateral Portfolio other than Permitted Liens or (ii) violate any Applicable Law or the formation documents of the Borrower or (iii) violate any material contract or other material agreement to which the Borrower is a party or by which the Borrower or any property or assets of the Borrower may be bound.

(f)                                   No Proceedings.  There is no litigation or administrative proceeding or investigation pending or, to the actual knowledge of the Borrower, threatened against the Borrower or any properties of the Borrower, before any Governmental Authority (i) asserting the invalidity of this Agreement or any other Transaction Document to which the Borrower is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which the Borrower is a party or (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect on the Transaction Documents or the transactions contemplated hereby or thereby.

(g)                                  Selection Procedures.  In selecting the Loans to be Pledged pursuant to this Agreement, no selection procedures were employed which are intended to be adverse to the interests of the Lenders.

(h)                                 Bulk Sales.  The grant of the security interest in the Collateral Portfolio by the Borrower to the Collateral Agent, for the benefit of the Secured Parties, pursuant to this Agreement, is in the ordinary course of business for the Borrower and is not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction.

(i)                                     Pledge of Collateral Portfolio.  Except as otherwise expressly permitted by the terms of this Agreement, no item of Collateral Portfolio has been sold, transferred, assigned or pledged by the Borrower to any Person, other than as contemplated by Article II and the Pledge of such Collateral Portfolio to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the terms of this Agreement.

(j)                                    Indebtedness.  The Borrower has no Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) Indebtedness incurred under the terms of the Transaction Documents and (ii) Indebtedness incurred pursuant to certain ordinary business expenses arising pursuant to the transactions contemplated by this Agreement and the other Transaction Documents.

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(k)                                 Sole Purpose.  The Borrower has been formed solely for the purpose of engaging in transactions of the types contemplated by this Agreement, and has not engaged in any business activity other than the negotiation, execution and to the extent applicable, performance of this Agreement and the transactions contemplated by the Transaction Documents.

(l)                                     No Injunctions.  No injunction, writ, restraining order or other order of any nature adversely affects the Borrower’s performance of its obligations under this Agreement or any Transaction Document to which the Borrower is a party.

(m)                             Taxes.  The Borrower is an entity disregarded from its owner for U.S. federal income tax purposes. The Borrower has filed or caused to be filed (on a consolidated basis or otherwise) on a timely basis all tax returns (including, without limitation, all foreign, federal, state, local and other material tax returns) required to be filed by it (subject to any extensions to file properly obtained by the same), is not liable for material Taxes payable by any other Person and has paid or made adequate provisions for the payment of all material Taxes, assessments and other governmental charges due and payable from the Borrower except for those Taxes being contested in good faith by appropriate proceedings and in respect of which it has established proper reserves on its books. Other than a Permitted Lien, no Tax lien or similar adverse claim has been filed, and no claim is being asserted with respect to any such Tax, assessment or other governmental charge. Any Taxes, fees and other governmental charges due and payable by the Borrower, as applicable, in connection with the execution and delivery of this Agreement and the other Transaction Documents and the transactions contemplated hereby or thereby have been paid or shall have been paid if and when due.

(n)                                 Location.  The Borrower’s jurisdiction of formation (within the meaning of Article 9 of the UCC) is Delaware. The chief executive office of the Borrower (and the location of the Borrower’s records regarding the Collateral Portfolio (other than those delivered to the Collateral Custodian)) is located at the address set forth on Annex A to this Agreement (or at such other address as shall be designated by such party in a written notice to the other parties hereto).

(o)                                 Tradenames.  Except as permitted hereunder, the Borrower’s legal name is as set forth in this Agreement. Except as permitted hereunder, the Borrower has not changed its name since its formation; does not have tradenames, fictitious names, assumed names or “doing business as” names other than as disclosed on Schedule I hereto (as such schedule may be updated from time to by the Administrative Agent upon receipt of a notice delivered to the Administrative Agent pursuant to Section 5.02(p)); the Borrower’s only jurisdiction of formation is Delaware, and, except as permitted hereunder, the Borrower has not changed its jurisdiction of formation.

(p)                                 Solvency.  The Borrower is not the subject of any Bankruptcy Proceeding or Bankruptcy Event. The Borrower is Solvent, and the transactions under this Agreement and any other Transaction Document to which the Borrower is a party do not and will not render the Borrower not Solvent.  The Borrower is paying its debts as they become due (subject to any applicable grace period) and, after giving effect to the transactions contemplated hereby, will have adequate capital to conduct its business.

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(q)                                 No Subsidiaries.  The Borrower has no Subsidiaries, other than any Portfolio Subsidiaries.

(r)                                    Value Given. The Borrower has given fair consideration and reasonably equivalent value to the Seller or the applicable third party seller in exchange for the purchase of the Loans (or any number of them). No such transfer has been made for or on account of an antecedent debt and no such transfer is or may be voidable or subject to avoidance under any section of the Bankruptcy Code.

(s)                                   Information Accurate.  All information, financial statements of the Borrower, documents, books, records or reports furnished by the Borrower to any Secured Party in connection with this Agreement are true, complete and correct in all material respects; provided that, solely with respect to written or electronic information furnished to a Secured Party which was provided from an Obligor with respect to a Loan, such information need only be accurate, true and correct to the knowledge of the Borrower.

(t)                                    Exchange Act Compliance; Regulations T, U and X.  None of the transactions contemplated herein or in the other Transaction Documents (including, without limitation, the use of proceeds from the Pledge of the Collateral Portfolio) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The Borrower does not own or intend to carry or purchase, and no proceeds from the Advances will be used to carry or purchase, any “margin stock” within the meaning of Regulation U or to extend “purpose credit” within the meaning of Regulation U.

(u)                                 No Adverse Agreements.  There are no agreements in effect adversely affecting the rights of the Borrower to make, or cause to be made, the grant of the security interest in the Collateral Portfolio contemplated by Section 2.12.

(v)                                 Event of Default/Unmatured Event of Default.  No event has occurred which constitutes an Unmatured Event of Default or an Event of Default.

(w)                               Credit and Collection Policy.  Each of the Loans was underwritten or acquired and is being serviced in conformance with the standard underwriting, credit, collection, operating and reporting procedures and systems of the Collateral Manager.

(x)                                 ERISA.  Except as would not reasonably be expected to constitute a Material Adverse Effect, (i) the present value of all benefits vested under all “employee pension benefit plans,” as such term is defined in Section 3 of ERISA which are subject to Title IV of ERISA and maintained by the Borrower, or in which employees of the Borrower are entitled to participate, other than a Multiemployer Plan (the “Pension Plans”), does not exceed the value of the assets of the Pension Plan allocable to such vested benefits (based on the value of such assets as of the most recent annual financial statements reflecting such amounts), (ii) no non-exempt prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Pension Plan, (iii) no application for a waiver of the minimum funding standard pursuant to Section 412 of the Code has been made with respect to

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any Pension Plan, (iv) neither the Borrower nor any ERISA Affiliate has any withdrawal liability with respect to a Multiemployer Plan, (v) no reportable events within the meaning of 4043 of ERISA, other than those events as to which the 30 day notice period referred to in Section 4043(c) of ERISA has been waived, (each a “Reportable Event”) have occurred with respect to any Pension Plans that, in the aggregate, could subject the Borrower to any material tax, penalty or other liability and (vi) no notice of intent to terminate a Pension Plan has been filed, no Pension Plan been terminated under Section 4041(f) of ERISA, the Pension Benefit Guaranty Corporation has not instituted proceedings to terminate, or appoint a trustee to administer a Pension Plan, and no event has occurred or condition exists that constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan.  None of the Collateral Portfolio constitutes “plan assets” within the meaning of 29 CFR 2510.3-101, as amended by Section 3(42) of ERISA, by reason of a Pension Plan’s investment in the Borrower or its direct or indirect parent companies.

(y)                                 Allocation of Charges.  There is not any agreement or understanding between any Borrower Advisor and the Borrower (other than the Transaction Documents and other than as expressly set forth herein, as disclosed in writing to the Administrative Agent prior to the Closing Date, or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations to make payments or otherwise in respect of any taxes, fees, assessments or other governmental charges.

(z)                                  Broker-Dealer.  The Borrower is not required to register as a broker-dealer under the provisions of the Exchange Act.

(aa)                          Instructions to Obligors.  The Collection Account is the only account to which Obligors have been instructed by the Borrower, or a Borrower Advisor on the Borrower’s behalf, to send Principal Collections and Interest Collections on the Collateral Portfolio.  The Borrower has not granted any Person other than the Collateral Agent, on behalf of the Secured Parties, an interest in any Controlled Account.

(bb)                          Investment Company Act.  The Borrower is not required to register as an “investment company” under the provisions of the 1940 Act.

(cc)                            Compliance with Law.  The Borrower has complied in all respects with all Applicable Law to which it may be subject, and no item of the Collateral Portfolio contravenes any Applicable Law (including, without limitation, all applicable predatory and abusive lending laws, laws, rules and regulations related to licensing, truth in lending, fair credit billing, fair credit reporting equal credit opportunity, fair debt collection practices and privacy).

(dd)                          Set-Off, etc.  No Loan has been compromised, adjusted, extended, satisfied, subordinated, rescinded, set-off or modified by the Borrower, the Seller or the Obligor thereof, and no Collateral Portfolio is subject to compromise, adjustment, extension, satisfaction, subordination, rescission, set-off, counterclaim, defense, abatement, suspension, deferment, deduction, reduction, termination or modification, whether arising out of transactions concerning the Collateral Portfolio or otherwise, by the Borrower, the Seller or the Obligor with respect thereto, except, in each case, for amendments, extensions and modifications, if any, to such Collateral Portfolio otherwise permitted pursuant to the Management Agreement.

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(ee)                            Full Payment.  As of the applicable Cut-Off Date in respect of a Loan, the Borrower has no knowledge of any fact which should lead it to expect that such Loan will not be paid in full.

(ff)                              Environmental.  With respect to each item of Underlying Collateral as of the applicable Cut-Off Date for the Loan related to such Underlying Collateral, to the actual knowledge of an Authorized Person of the Borrower: (a) the related Obligor’s operations comply in all respects with all applicable Environmental Laws; (b) none of the related Obligor’s operations is the subject of a federal or state investigation evaluating whether any remedial action, involving expenditures, is needed to respond to a release of any Hazardous Materials into the environment; and (c) the related Obligor does not have any material contingent liability in connection with any release of any Hazardous Materials into the environment.  As of the applicable Cut-Off Date for the Loan related to such Underlying Collateral, none of the Borrower, the Seller nor any Borrower Advisor has received any written notice of, or written inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Underlying Collateral, nor does any such Person have knowledge or reason to believe that any such notice will be received or is being threatened.

(gg)                            USA PATRIOT Act.  Neither the Borrower nor any Affiliate of the Borrower is (i) a country, territory, organization, person or entity named on an Office of Foreign Asset Control (OFAC) list; (ii) a Person that resides or has a place of business in a country or territory named on such lists or which is designated as a “Non-Cooperative Jurisdiction” by the Financial Action Task Force on Money Laundering, or whose subscription funds are transferred from or through such a jurisdiction; (iii) a “Foreign Shell Bank” within the meaning of the USA PATRIOT Act, i.e., a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision; or (iv) a person or entity that resides in or is organized under the laws of a jurisdiction designated by the United States Secretary of the Treasury under Sections 311 or 312 of the USA PATRIOT Act as warranting special measures due to money laundering concerns.

(hh)                          Accuracy of Representations and Warranties.  Each representation or warranty by the Borrower contained herein or in any certificate or other document furnished by the Borrower pursuant hereto or in connection herewith is true and correct in all respects.

(ii)                                  Confirmation from Seller.  The Borrower has received in writing from the Seller confirmation that the Seller will not cause the Borrower to file a voluntary bankruptcy petition under the Bankruptcy Code.

(jj)                                [Reserved].

(kk)                          Security Interest.

(i)                                     This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Collateral Portfolio in favor of the Collateral Agent, on behalf of the Secured Parties, which security interest is prior to all other Liens (except for

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Permitted Liens), and is enforceable as such against creditors of and purchasers from the Borrower;

(ii)                                  the Collateral Portfolio may from time to time be comprised of “instruments”, “security entitlements”, “general intangibles”, “tangible chattel paper”, “accounts”, “certificated securities”, “uncertificated securities”, “securities accounts”, “deposit accounts”, “supporting obligations” or “insurance” (each as defined in the applicable UCC), real property and/or such other category of collateral under the applicable UCC as to which the Borrower has complied with its obligations under this Section 4.01(kk);

(iii)                               with respect to Collateral Portfolio that constitute “security entitlements”:

a.                                      all of such security entitlements have been credited to one of the Controlled Accounts and the securities intermediary for each Controlled Account has agreed to treat all assets credited to such Controlled Account as “financial assets” within the meaning of the applicable UCC;

b.                                      the Borrower has taken all steps necessary to cause the securities intermediary to identify in its records the Borrower as the Person having a security entitlement against the securities intermediary in each of the Controlled Accounts; and

c.                                       the Controlled Accounts are not in the name of any Person other than the Borrower, subject to the lien of the Collateral Agent, for the benefit of the Secured Parties.  The securities intermediary of any Controlled Account which is a “securities account” under the UCC has agreed to comply with the entitlement orders and instructions of the Borrower, the Collateral Manager and the Collateral Agent (acting at the direction of the Administrative Agent) in accordance with the Transaction Documents, including causing cash to be invested in Permitted Investments; provided that, upon the delivery of a Notice of Exclusive Control (as defined under the Securities Account Control Agreement) by the Collateral Agent (acting at the direction of the Administrative Agent) following the occurrence and during the continuance of an Event of Default, the securities intermediary has agreed to only follow the entitlement orders and instructions of the Collateral Agent, on behalf of the Secured Parties, including with respect to the investment of cash in Permitted Investments.

(iv)                              all Controlled Accounts constitute “securities accounts” as defined in the applicable UCC;

(v)                                 the Borrower owns and has good and marketable title to (or with respect to assets securing any Loans, a valid security interest in) the Collateral Portfolio free and clear of any Lien (other than Permitted Liens) of any Person;

(vi)                              the Borrower has received all consents and approvals required by the terms of any Loan to the granting of a security interest in the Loans hereunder to the Collateral Agent, on behalf of the Secured Parties;

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(vii)                           the Borrower has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect the security interest in the Collateral Portfolio and that portion of the Loans in which a security interest may be perfected by filing granted to the Collateral Agent, on behalf of the Secured Parties, under this Agreement; provided that filings in respect of real property shall not be required;

(viii)                        other than as expressly permitted by the terms of this Agreement and the security interest granted to the Collateral Agent, on behalf of the Secured Parties, pursuant to this Agreement, the Borrower has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Collateral Portfolio.  The Borrower has not authorized the filing of and is not aware of any financing statements against the Borrower that include a description of collateral covering the Collateral Portfolio other than any financing statement (A) relating to the security interests granted to the Borrower under the Purchase and Sale Agreement, or (B) that has been terminated and/or fully and validly assigned to the Collateral Agent on or prior to the date hereof. The Borrower is not aware of the filing of any judgment or Tax lien filings against the Borrower;

(ix)                              all original executed copies of each underlying promissory note or copies of each Loan Register, as applicable, that constitute or evidence each Loan has been, or subject to the delivery requirements contained herein, will be delivered to the Collateral Custodian;

(x)                                 other than in the case of Noteless Loans, the Borrower has received, or subject to the delivery requirements contained herein will receive, a written acknowledgment from the Collateral Custodian that the Collateral Custodian, as the bailee of the Collateral Agent, is holding the underlying promissory notes that constitute or evidence the Loans solely on behalf of and for the Collateral Agent, for the benefit of the Secured Parties; provided that the acknowledgement of the Collateral Custodian set forth in Section 11.11 may serve as such acknowledgement;

(xi)                              none of the underlying promissory notes, or Loan Registers, as applicable, that constitute or evidence the Loans has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Collateral Agent, on behalf of the Secured Parties;

(xii)                           with respect to any Collateral Portfolio that constitutes a “certificated security,” such certificated security has been delivered to the Collateral Custodian and, if in registered form, has been specially Indorsed to the Collateral Agent or in blank by an effective Indorsement or has been registered in the name of the Collateral Agent, upon original issue or registration of transfer by the Borrower of such certificated security and has been credited to a Controlled Account; and

(xiii)                        with respect to any Collateral Portfolio that constitutes an “uncertificated security”, that the Borrower has caused the issuance of such uncertificated security to be registered to the Collateral Agent, on behalf of the Secured Parties, as the registered owner of such uncertificated security.

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Section 4.02                             Representations and Warranties of the Borrower Relating to the Agreement and the Collateral Portfolio.  The Borrower hereby represents and warrants, as of the Closing Date, as of each applicable Cut-Off Date, as of each applicable Advance Date, as of each Determination Date and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made (unless a specific date is specified below):

(a)                                 Valid Transfer and Security Interest. This Agreement constitutes a grant of a security interest in all of the Collateral Portfolio to the Collateral Agent, for the benefit of the Secured Parties, which upon the filing of the financing statement referred to in Section 3.01, shall be a valid and first priority perfected security interest in the Loans forming a part of the Collateral Portfolio and in that portion of the Loans in which a security interest may be perfected by filing subject only to Permitted Liens.  Neither the Borrower nor any Person claiming through or under the Borrower shall have any claim to or interest in the Controlled Accounts, except for the interest of the Borrower in such property as a debtor for purposes of the UCC.

(b)                                 Eligibility of Collateral Portfolio. (i) The Loan Tape and the information contained in each Notice of Borrowing, is an accurate and complete listing of all the Loans contained in the Collateral Portfolio as of the related Cut-Off Date and the information contained therein with respect to the identity of such item of Collateral Portfolio and the amounts owing thereunder is true and correct as of the related Cut-Off Date, (ii) each Loan designated on the related Borrowing Base Certificate as an Eligible Loan and each Loan included as an Eligible Loan in the related calculation of Borrowing Base or Borrowing Base Deficiency is an Eligible Loan as of the date of such certificate or calculation and (iii) with respect to each item of Collateral Portfolio, all consents, licenses, approvals or authorizations of or registrations or declarations of any Governmental Authority or any Person required to be obtained, effected or given by the Borrower in connection with the transfer of a security interest in each item of Collateral Portfolio to the Collateral Agent, for the benefit of the Secured Parties, have been duly obtained, effected or given and are in full force and effect.

(c)                                  No Fraud. Each Loan was originated without any fraud or misrepresentation by the Seller or, to the best of the Borrower’s and each Borrower Advisor’s knowledge, on the part of the Obligor.

Section 4.03                             Representations and Warranties of the Collateral Agent.  The Collateral Agent in its individual capacity and as Collateral Agent represents and warrants as follows:

(a)                                 Organization; Power and Authority.  It is a duly organized and validly existing national banking association in good standing under the laws of the United States.  It has full corporate power, authority and legal right to execute, deliver and perform its obligations as Collateral Agent under this Agreement.

(b)                                 Due Authorization.  The execution and delivery of this Agreement and the consummation of the transactions provided for herein have been duly authorized by all necessary association action on its part, either in its individual capacity or as Collateral Agent, as the case may be.

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(c)                                  No Conflict.  The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with, result in any breach of its articles of incorporation or bylaws or any of the  terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Collateral Agent is a party or by which it or any of its property is bound.

(d)                                 No Violation.  The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with or violate, in any respect, any Applicable Law.

(e)                                  All Consents Required.  All approvals, authorizations, consents, orders or other actions of any Person or Governmental Authority applicable to the Collateral Agent, required in connection with the execution and delivery of this Agreement, the performance by the Collateral Agent of the transactions contemplated hereby and the fulfillment by the Collateral Agent of the terms hereof have been obtained.

(f)                                   Validity, Etc.  The Agreement constitutes the legal, valid and binding obligation of the Collateral Agent, enforceable against the Collateral Agent in accordance with its terms, except as such enforceability may be limited by applicable Bankruptcy Laws and general principles of equity (whether considered in a suit at law or in equity).

Section 4.04                             Representations and Warranties of each Lender.  Each Lender hereby individually represents and warrants, as to itself, that it is (a) either a Qualified Institutional Buyer under Rule 144A of the Securities Act or an institutional “Accredited Investor” as defined in Rule (1)-501(a)(1)-(3) or (7) under the Securities Act and (b) a “qualified purchaser” under the 1940 Act.

Section 4.05                             Representations and Warranties of the Collateral Custodian.  The Collateral Custodian in its individual capacity and as Collateral Custodian represents and warrants as follows:

(a)                                 Organization; Power and Authority.  It is a duly organized and validly existing national banking association in good standing under the laws of the United States.  It has full corporate power, authority and legal right to execute, deliver and perform its obligations as Collateral Custodian under this Agreement.

(b)                                 Due Authorization.  The execution and delivery of this Agreement and the consummation of the transactions provided for herein have been duly authorized by all necessary association action on its part, either in its individual capacity or as Collateral Custodian, as the case may be.

(c)                                  No Conflict.  The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with, result in any breach of its articles of incorporation or bylaws or any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Collateral Custodian is a party or by which it or any of its property is bound.

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(d)                                 No Violation.  The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with or violate, in any respect, any Applicable Law.

(e)                                  All Consents Required.  All approvals, authorizations, consents, orders or other actions of any Person or Governmental Authority applicable to the Collateral Custodian, required in connection with the execution and delivery of this Agreement, the performance by the Collateral Custodian of the transactions contemplated hereby and the fulfillment by the Collateral Custodian of the terms hereof have been obtained.

(f)                                   Validity, Etc.  The Agreement constitutes the legal, valid and binding obligation of the Collateral Custodian, enforceable against the Collateral Custodian in accordance with its terms, except as such enforceability may be limited by applicable Bankruptcy Laws and general principles of equity (whether considered in a suit at law or in equity).

ARTICLE V.

GENERAL COVENANTS

Section 5.01                             Affirmative Covenants of the Borrower.

From the Closing Date until the Collection Date:

(a)                                 Organizational Procedures and Scope of Business.  The Borrower will observe all organizational procedures required by its formation documents and the laws of its jurisdiction of formation. Without limiting the foregoing, the Borrower will limit the scope of its business to: (i) the acquisition of Loans and the ownership and management of the Portfolio Assets and the related assets in the Collateral Portfolio; (ii) the sale, transfer or other disposition of Loans and any equity issued by or assets of any Portfolio Subsidiary, as and when permitted under the Transaction Documents; (iii) entering into and performing under the Transaction Documents; (iv) consenting or withholding consent as to proposed amendments, waivers and other modifications of the Underlying Instruments to the extent not in conflict with the terms of this Agreement or any other Transaction Document; and (v) exercising any rights (including but not limited to voting rights and rights arising in connection with a Bankruptcy Event with respect to an Obligor or the consensual or non-judicial restructuring of the debt or equity of an Obligor) or remedies in connection with the Loans and participating in the committees (official or otherwise) or other groups formed by creditors of an Obligor to the extent not in conflict with the terms of this Agreement or any other Transaction Document; and (vi) engaging in any activity and to exercise any powers permitted to limited liability companies under the laws of the State of Delaware that are incident to the foregoing and necessary, convenient or advisable to accomplish the foregoing.

(b)                                 Special Purpose Entity Requirements.  The Borrower will at all times:  (i) maintain at least one Independent Director; (ii) maintain its own separate books and records and bank accounts; (iii) hold itself out to the public and all other Persons as a legal entity separate from any other Person; (iv) have a Board of Managers separate from that of any other

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Person; (v) file its own tax returns, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file taxes under Applicable Law, and pay any Taxes so required to be paid under Applicable Law, except for those Taxes being contested in good faith by appropriate proceedings and in respect of which the Borrower has established proper reserves on its books in accordance with GAAP; (vi) not commingle its assets with assets of any other Person; (vii) conduct its business in its own name and strictly comply with all organizational formalities to maintain its separate existence; (viii) maintain separate financial statements; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate if (A) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (B) such assets shall also be listed on the Borrower’s own separate books and records; (ix) pay its own liabilities only out of its own funds; (x) maintain an arm’s-length relationship with the Seller each of its other Affiliates; (xi) not hold out its credit or assets as being available to satisfy the obligations of others; (xii) allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including for shared office space; (xiii) use separate stationery, invoices and checks; (xiv) except as expressly permitted by this Agreement, not pledge its assets as security for the obligations of any other Person; (xv) correct any known misunderstanding regarding its separate identity; (xvi) maintain adequate capital in light of its contemplated business purpose, transactions and liabilities and pay its operating expenses and liabilities from its own assets; (xvii) cause its Board of Managers to meet at least annually or act pursuant to written consent and keep minutes of such meetings and actions and observe in all respects all other Delaware limited liability company formalities; (xviii) not acquire the obligations or any securities of its Affiliates; (xix) cause the managers, officers, agents and other representatives of the Borrower to act at all times with respect to the Borrower consistently and in furtherance of the foregoing and in the best interests of the Borrower; and (xx) maintain at least one special member, who, upon the dissolution of the sole member or the withdrawal or the disassociation of the sole member from the Borrower, shall immediately become the member of the Borrower in accordance with the LLC Agreement.

(c)                                  Preservation of Company Existence.  The Borrower will maintain its limited liability company existence in good standing under the laws of its jurisdiction of formation and will promptly obtain and thereafter maintain qualifications to do business as a limited liability company in any other jurisdiction in which it does business and in which it is required to so qualify under Applicable Law.

(d)                                 Compliance with Legal Opinions.  The Borrower shall take all other actions necessary to maintain the accuracy of the factual assumptions set forth in the legal opinions of Dechert LLP, as special counsel to the Borrower relating to the issues of substantive consolidation and true sale of the Loans.

(e)                                  Deposit of Collections.  The Borrower shall promptly (but in no event later than one Business Day after receipt) deposit or cause to be deposited into the Collection Account any and all Available Collections received by the Borrower, any Borrower Advisor or any of their respective Affiliates.

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(f)                                   Disclosure of Purchase Price.  The Borrower shall disclose to the Administrative Agent and the Lender Agents the Purchase Price for each Loan proposed to be transferred to the Borrower.

(g)                                  Obligor Defaults and Bankruptcy Events.  The Borrower shall give, or shall cause the Collateral Manager to give, notice to the Administrative Agent and the Lender Agents within two (2) Business Days of the Borrower’s, the Seller’s or any Borrower Advisor’s actual knowledge of the occurrence of any default by an Obligor under any Loan or any Bankruptcy Event with respect to any Obligor under any Loan.

(h)                                 Required Loan Documents.  The Borrower shall deliver to the Collateral Custodian a hard copy (or, unless an original signature is required, electronic copy) of the Required Loan Documents and the Loan Checklist pertaining to each Loan within two (2) Business Days of the Cut-Off Date pertaining to such Loan.

(i)                                     Taxes.  The Borrower will file or cause to be filed its tax returns and pay any and all Taxes imposed on it or its property as required by the Transaction Documents (except as otherwise contemplated in Section 4.01(m)).

(j)                                    Notice of Events of Default and Value Adjustment Events.  The Borrower will provide the Administrative Agent and each Lender Agent (with a copy to the Collateral Agent) with prompt written notice of the occurrence of each Value Adjustment Event, Collateral Manager Event of Default, Event of Default and each Unmatured Event of Default of which the Borrower has knowledge or has received notice. In addition, no later than two (2) Business Days following the Borrower’s knowledge or notification of the occurrence of any Event of Default, Collateral Manager Event of Default or Unmatured Event of Default, the Borrower will provide to the Administrative Agent and each Lender Agent a written statement of an Authorized Person of the Borrower setting forth the details of such event and the action that will be taken with respect thereto.

(k)                                 Notice of Material Events.  The Borrower shall promptly notify the Administrative Agent and each Lender Agent of any event or other circumstance that is reasonably likely to have a Material Adverse Effect.

(l)                                     Notice of Income Tax Liability.  The Borrower shall furnish to the Administrative Agent and each Lender Agent telephonic or facsimile notice within 10 Business Days (confirmed in writing within five (5) Business Days thereafter) of the receipt of revenue agent reports or other written proposals, determinations or assessments of the Internal Revenue Service or any other taxing authority which propose, determine or otherwise set forth positive adjustments (i) to the Tax liability of the Borrower or any “affiliated group” (within the meaning of Section 1504(a)(l) of the Code) of which the Borrower is a member in an amount equal to or greater than $1,000,000 in the aggregate, or (ii) to the Tax liability of the Borrower itself in an amount equal to or greater than $500,000 in the aggregate.  Any such notice shall specify the nature of the items giving rise to such adjustments and the amounts thereof.

(m)                             [Reserved].

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(n)                                 Notice of Breaches of Representations and Warranties under this Agreement.  The Borrower shall promptly notify the Administrative Agent and each Lender if any representation or warranty set forth in Section 4.01 or Section 4.02 was incorrect at the time it was given or deemed to have been given and at the same time deliver to the Collateral Agent, the Administrative Agent and the Lender Agents a written notice setting forth in reasonable detail the nature of such facts and circumstances.  In particular, but without limiting the foregoing, the Borrower shall notify the Administrative Agent and each Lender Agent in the manner set forth in the preceding sentence before any Cut-Off Date of any facts or circumstances within the knowledge of the Borrower which would render any of the said representations and warranties untrue at the date when such representations and warranties were made or deemed to have been made.

(o)                                 Notice of Breaches of Representations and Warranties under the Purchase and Sale Agreement.  Promptly after receiving knowledge or notice of the same, the Borrower confirms and agrees that the Borrower will send to the Administrative Agent, each Lender Agent and the Collateral Agent a notice of (i) any breach of any representation, warranty, agreement or covenant under the Purchase and Sale Agreement or (ii) any event or occurrence that, upon notice, or upon the passage of time or both, would constitute such a breach.

(p)                                 Notice of Proceedings.  The Borrower shall notify the Administrative Agent and each Lender Agent, as soon as possible and in any event within three (3) Business Days, after the Borrower receives notice or obtains knowledge thereof, of any settlement of, material judgment (including a material judgment with respect to the liability phase of a bifurcated trial) in or commencement of any material labor controversy, material litigation, material action, material suit or material proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Collateral Portfolio, the Transaction Documents, the Collateral Agent’s, for the benefit of the Secured Parties, interest in the Collateral Portfolio, or the Borrower, the Seller, any Borrower Advisor or any of their respective Affiliates. For purposes of this Section 5.01(p), (i) any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Collateral Portfolio, the Transaction Documents, the Collateral Agent’s, for the benefit of the Secured Parties, interest in the Collateral Portfolio, or the Borrower in excess of $500,000 shall be deemed to be material, (ii) any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting any Borrower Party, the Seller or any of their respective Affiliates (other than the Borrower, the Collateral Sub-Advisor or any Affiliates of the Collateral Sub-Advisor) in excess of $1,000,000 shall be deemed to be material and (iii) any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Collateral Sub-Advisor that would be reasonably likely to result in a Material Adverse Effect shall be deemed to be material.

(q)                                 Notice of ERISA Reportable Events.  The Borrower shall promptly notify the Administrative Agent and each Lender Agent after receiving notice of any Reportable Event, and provide them with a copy of such notice.

(r)                                    Notice of Accounting Changes.  As soon as possible and in any event within five (5) Business Days after the effective date thereof, the Borrower will provide to the Administrative Agent and, upon request, each Lender Agent notice of any change in the accounting policies of the Borrower.

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(s)                                   Additional Documents.  The Borrower shall provide the Administrative Agent and each Lender Agent with copies of such documents as the Administrative Agent or any Lender Agent may reasonably request evidencing the accuracy of the representations set forth in this Agreement.

(t)                                    Protection of Security Interest.  With respect to the Collateral Portfolio acquired by the Borrower, the Borrower will (i) (at the expense of the Borrower) take all action necessary to perfect, protect and more fully evidence the Borrower’s ownership of such Collateral Portfolio free and clear of any Lien other than the Lien created hereunder and Permitted Liens, including, without limitation, executing or causing to be executed such other instruments or notices as may be necessary or appropriate, (ii) (at the expense of the Borrower) take all action necessary to cause a valid, subsisting and enforceable first priority perfected security interest, subject only to Permitted Liens, to exist in favor of the Collateral Agent (for the benefit of the Secured Parties) in the Borrower’s interests in all of the Collateral Portfolio being Pledged hereunder including the filing of a UCC financing statement in the applicable jurisdiction adequately describing the Collateral Portfolio (which may include an “all asset” filing), and naming the Borrower as debtor and the Collateral Agent as the secured party, and filing continuation statements, amendments or assignments with respect thereto in such filing offices, (including any amendments thereto or assignments thereof), (iii) permit the Administrative Agent, any Lender or their respective agents or representatives to visit the offices of the Borrower during normal office hours and upon reasonable advance notice examine and make copies of all documents, books, records and other information concerning the Collateral Portfolio and discuss matters related thereto with any of the officers or employees of the Borrower having knowledge of such matters (provided that, unless an Event of Default shall be continuing, the Borrower shall only be liable for the costs and expenses of two such visits per calendar year), and (iv) take all additional action that the Administrative Agent, any Lender Agent or the Collateral Agent may reasonably request to perfect, protect and more fully evidence the respective first priority perfected security interests of the parties to this Agreement in the Collateral Portfolio, or to enable the Administrative Agent or the Collateral Agent to exercise or enforce any of their respective rights hereunder.

(u)                                 Liens. The Borrower will promptly notify the Administrative Agent and the Lender Agents of the existence of any Lien on the Collateral Portfolio (other than Permitted Liens) and the Borrower shall defend the right, title and interest of the Collateral Agent, for the benefit of the Secured Parties, in, to and under the Collateral Portfolio against all claims of third parties (unless the reasonably anticipated costs to defend such claims exceeds the value of any Loan and prior written notice has been provided to the Administrative Agent).

(v)                                 Other Documents.  At any time from time to time upon prior written request of the Administrative Agent or any Lender Agent, at the sole expense of the Borrower, the Borrower will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Administrative Agent or any Lender Agent may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement including the first priority security interest (subject only to Permitted Liens) granted hereunder and of the rights and powers herein granted (including, among other things, authorizing the filing of such UCC financing statements as the Administrative Agent may request).

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(w)          Compliance with Law.  The Borrower shall at all times comply in all material respects with all Applicable Law (including, without limitation, Environmental Laws and all federal securities laws), and the Borrower shall do or cause to be done all things necessary to preserve and maintain in full force and effect its legal existence, and all licenses material to its business.

(x)           Proper Records.  The Borrower shall at all times keep proper books of records and accounts in which full, true and correct entries shall be made of its transactions in accordance with GAAP and set aside on its books from its earning for each fiscal year all such proper reserves in accordance with GAAP.

(y)           Satisfaction of Obligations.  The Borrower shall pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves with respect thereto have been provided on the books of the Borrower.

(z)           Performance of Covenants.  The Borrower shall observe, perform and satisfy all the material terms, provisions, covenants and conditions required to be observed, performed or satisfied by it, and shall pay when due all costs, fees and expenses required to be paid by it, under the Transaction Documents.

(aa)         Tax Treatment.  The Borrower and the Lenders shall (and the Borrower shall cause the Seller to) treat the Advances advanced hereunder as indebtedness for U.S. federal income tax purposes and file any and all tax forms in a manner consistent therewith.

(bb)         Maintenance of Records.  The Borrower will maintain records with respect to the Collateral Portfolio and the conduct and operation of its business and will furnish the Administrative Agent and each Lender Agent, upon the reasonable request by the Administrative Agent and each Lender Agent, information with respect to the Collateral Portfolio and the conduct and operation of its business.

(cc)         Obligor Notification Forms.  The Borrower shall furnish the Collateral Agent and the Administrative Agent with an appropriate power of attorney to send (at the Administrative Agent’s discretion on the Collateral Agent’s behalf, after the occurrence of an Event of Default) Obligor notification forms to give notice to the Obligors of the Collateral Agent’s interest in the Collateral Portfolio and the obligation to make payments as directed by the Administrative Agent on the Collateral Agent’s behalf.

(dd)         Officer’s Certificate.  On each anniversary of the date of this Agreement, the Borrower shall deliver an Officer’s Certificate, in form and substance reasonably acceptable to the Collateral Agent and the Administrative Agent, providing (i) a certification, based upon a review and summary of UCC search results, that there is no other interest in the Collateral Portfolio perfected by filing of a UCC financing statement other than in favor of the Collateral Agent and Permitted Liens and (ii) a certification, based upon a review and summary of tax and judgment lien searches satisfactory to the Administrative Agent, that there is no other interest in the Collateral Portfolio based on any tax or judgment lien.

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(ee)         Continuation Statements. The Borrower shall, not earlier than six months and not later than three months prior to the fifth anniversary of the date of filing each financing statement filed pursuant to this Agreement or in connection with any Advance hereunder, unless the Collection Date shall have occurred, authorize and deliver and file or cause to be filed an appropriate continuation statement with respect to such financing statement.

(ff)          Disregarded Entity.  The Borrower will be disregarded as an entity separate from its owner pursuant to Treasury Regulation Section 301.7701-3(b), and neither the Borrower nor any other Person on its behalf shall make an election to be treated as other than an entity disregarded from its owner under Treasury Regulation Section 301.7701-3(c).

(gg)         Withholding. If the provisions of Sections 1471 through 1474 of the Code or any regulations promulgated thereunder become applicable to any payments to the Borrower made in respect of the Collateral Portfolio, the Borrower shall exercise its best efforts to avoid the imposition of any withholding tax in respect of such payments under those provisions.

(hh)         Loan Register. In the case of Agented Loans, the Borrower shall maintain, or cause to be maintained, with respect to each Noteless Loan a register (which may be in physical or electronic form and readily identifiable as the loan register) (each, a “Loan Register”) in which it will record, or cause to be recorded, (v) the amount of such Noteless Loan, (w) the amount of any principal or interest due and payable or to become due and payable from the Obligor thereunder, (x) the amount of any sum in respect of such Noteless Loan received from the Obligor, (y) the date of origination of such Noteless Loan and (z) the maturity date of such Noteless Loan.

Section 5.02          Negative Covenants of the Borrower.

From the Closing Date until the Collection Date:

(a)           Special Purpose Entity Requirements.  The Borrower shall not (i) guarantee any obligation of any Person, including any Affiliate or become obligated for the debts of any other Person or hold out its credit as being available to pay the obligations of any other Person; (ii) engage, directly or indirectly, in any business, other than the actions required or permitted to be performed under Section 5.01(a); (iii) incur, create or assume any Indebtedness, other than Indebtedness incurred under the Transaction Documents; (iv) make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person, except that the Borrower may invest in those Loans and other investments permitted under the Transaction Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Transaction Documents and permit the same to remain outstanding in accordance with such provisions; (v) fail to be Solvent; (vi) create, form or otherwise acquire any Subsidiaries or own any equity interest in any other entity, other than any Portfolio Subsidiaries, (vii) release, sell, transfer, convey or assign any Loan unless in accordance with the Transaction Documents, (viii) except for capital contributions or capital distributions permitted under the terms and conditions of this Agreement and properly reflected on the books and records of the Borrower, enter into any transaction with an Affiliate of the Borrower except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s-length transaction; (ix) identify itself as a department or division of any other

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Person; or (x) own any asset or property other than the Loans, the Portfolio Assets, any Portfolio Subsidiaries and the related assets in the Collateral Portfolio and incidental personal property necessary for the ownership or operation of these assets.

(b)           Requirements for Material Actions.  The Borrower shall not fail to provide (and at all times the Borrower’s organizational documents shall reflect) that the unanimous consent of all members (including the consent of the Independent Director(s)) is required for the Borrower to (i) seek to be adjudicated bankrupt or insolvent or seek any relief under any law relating to relief from debts or the protection of debtors, (ii) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (iii) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (iv) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower or a substantial part of its property, (v) make any assignment for the benefit of the Borrower’s creditors, (vi) admit in writing its inability to pay its debts generally as they become due, or (vii) take any action in furtherance of any of the foregoing.

(c)           Protection of Title.  The Borrower shall not take any action which would directly or indirectly impair or adversely affect Borrower’s title to the Collateral Portfolio.

(d)           Transfer Limitations.  The Borrower shall not transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any interest in the Collateral Portfolio to any person other than the Collateral Agent for the benefit of the Secured Parties, or engage in financing transactions or similar transactions with respect to the Collateral Portfolio with any person other than the Administrative Agent and the Lenders, in each case, except as otherwise expressly permitted by the terms of this Agreement.

(e)           Liens.  The Borrower shall not create, incur or permit to exist any lien, encumbrance or security interest in or on any of the Collateral Portfolio subject to the security interest granted by the Borrower pursuant to this Agreement, other than Permitted Liens.

(f)            Organizational Documents.  The Borrower shall not modify or terminate any of its organizational or operational documents without the prior written consent of the Administrative Agent.

(g)           Merger, Acquisitions, Sales, etc.  The Borrower shall not change its organizational structure, enter into any transaction of merger or consolidation or amalgamation, or asset sale (other than pursuant to Section 2.07), or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) without the prior written consent of the Administrative Agent.

(h)           Use of Proceeds.  The Borrower will use the proceeds of the Advances only to acquire Eligible Loans, to make distributions to its member in accordance with the terms hereof or to pay related expenses (including expenses payable hereunder).

(i)            Limited Assets.  The Borrower shall not hold or own any assets that are not part of the Collateral Portfolio (other than Excluded Amounts and Retained Interests).

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(j)            Tax Treatment.  The Borrower shall not elect to be treated as a corporation for U.S. federal income tax purposes and shall take all reasonable steps necessary to avoid being treated as a corporation (or as a publicly traded partnership, taxable mortgage pool or other entity taxable as a corporation) for U. S. federal income tax purposes.

(k)           Extension or Amendment of Loans.  The Borrower will not, unless so directed by the Collateral Manager in accordance with the Management Agreement, extend, amend or otherwise modify the terms of any Loan (including the related Underlying Collateral).

(l)            Purchase and Sale Agreement.  The Borrower will not amend, modify, waive or terminate any provision of the Purchase and Sale Agreement without the prior written consent of the Administrative Agent.

(m)          Restricted Junior Payments.  The Borrower shall not make any Restricted Junior Payment unless (i) no Event of Default, Collateral Manager Event of Default, Unmatured Collateral Manager Event of Default or Unmatured Event of Default (including, without limitation a Borrowing Base Deficiency) has occurred or would result therefrom and (ii) such Restricted Junior Payments are made with either (A) the proceeds of an Advance or (B) funds received by the Borrower pursuant to Section 2.04(a)(xi) or Section 2.04(b)(vi).

(n)           ERISA Matters.  The Borrower will not (a) engage, and will exercise its best efforts not to permit any ERISA Affiliate to engage, in any prohibited transaction with respect to a Pension Plan (within the meaning of ERISA Section 406(a) or (b) or Code Section 4975) for which an exemption is not available or has not previously been obtained from the United States Department of Labor, (b) fail to meet the minimum funding standard set forth in Section 302(a) of ERISA and Section 412(a) of the Code with respect to any Pension Plan other than a Multiemployer Plan, (c) fail to make any payments to a Multiemployer Plan that the Borrower or any ERISA Affiliate may be required to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto, (d) terminate any Pension Plan so as to result, directly or indirectly in any liability to the Borrower, or (e) permit to exist any occurrence of any Reportable Event.

(o)           Instructions to Obligors.  The Borrower will not make any change, or permit any Borrower Advisor to make any change, in its instructions to Obligors regarding payments to be made with respect to the Collateral Portfolio to the Collection Account unless the Administrative Agent has consented to such change.

(p)           Change of Jurisdiction, Location, Names or Location of Loan Files. The Borrower shall not change the jurisdiction of its formation, make any change to its limited liability company name or use any tradenames, fictitious names, assumed names, “doing business as” names or other names (other than those listed on Schedule I hereto, as such schedule may be revised from time to time to reflect name changes and name usage permitted under the terms of this Section 5.02(o) after compliance with all terms and conditions of this Section 5.02(o) related thereto) unless, prior to the effective date of any such change in the jurisdiction of its formation, name change or use, the Borrower receives prior written consent from the Administrative Agent of such change and delivers to the Administrative Agent such financing statements as the Administrative Agent may request to reflect such name change or

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use, together with such Opinions of Counsel and other documents and instruments as the Administrative Agent may request in connection therewith.  The Borrower will not change the location of its chief executive office unless prior to the effective date of any such change of location, the Borrower notifies the Administrative Agent of such change of location in writing. The Borrower will not move, or consent to the Collateral Custodian or any Borrower Advisor moving, the Loan Files from the location thereof on the Closing Date, unless the Administrative Agent shall consent to such move in writing (such consent not to be unreasonably withheld or delayed) and the Borrower shall, in advance of such move, provide the Administrative Agent with such Opinions of Counsel and other documents and instruments as the Administrative Agent may reasonably request in connection therewith.

(q)           Allocation of Charges.  The Borrower shall not suffer to exist any agreement or understanding between any Borrower Advisor and the Borrower (other than the Transaction Documents, and as expressly set forth herein, as disclosed to the Administrative Agent in writing prior to the Closing Date, or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations to make payments or otherwise in respect of any Taxes, fees, assessments or other governmental charges.

(r)            Taxable Mortgage Pool Matters.  The sum of the Outstanding Balances of all Loans owned by the Borrower that are principally secured by an interest in real property (within the meaning of Treasury Regulation Section 3.01.7701(i)-1(d)(3)) shall not at any time exceed 35% of the Outstanding Balance of the Collateral Portfolio.

Section 5.03          Affirmative Covenants of the Collateral Agent.

From the Closing Date until the Collection Date:

(a)           Compliance with Law.  The Collateral Agent will comply in all material respects with all Applicable Law.