Amended, Restated and Consolidated Note Agreement

Exhibit 10.1

Allied Capital Corporation

Series A-1 Senior Notes Due June 15, 2010
Series A-2 Senior Notes Due June 15, 2010
Series B-1 Senior Notes Due June 15, 2011
Series B-2 Senior Notes Due June 15, 2011
Series C-1 Senior Notes Due March 31, 2012
Series C-2 Senior Notes Due March 31, 2012
Series CMW Senior Notes Due April 1, 2012

______________

Amended, Restated and Consolidated Note Agreement

_____________

Dated as of August 28, 2009

1.

BACKGROUND 1

 

2.

AUTHORIZATION OF AMENDMENT, RESTATEMENT AND

 

Schedule 6.3(a) — Organization and Ownership of Shares of Consolidated Subsidiaries

ALLIED CAPITAL CORPORATION
1919 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, DC 20006

Series A-1 Senior Notes due June 15, 2010
Series A-2 Senior Notes due June 15, 2010
Series B-1 Senior Notes due June 15, 2011
Series B-2 Senior Notes due June 15, 2011
Series C-1 Senior Notes due March 31, 2012
Series C-2 Senior Notes due March 31, 2012
Series CMW Senior Notes due April 1, 2012

Dated as of August 28, 2009

To Each of The Existing Noteholders Listed in
Schedule A Hereto:

Ladies and Gentlemen:

ALLIED CAPITAL CORPORATION (the “ Company ”), a Maryland corporation, agrees with each of the holders of Existing Notes (as defined below) whose names appear on Schedule A attached hereto (each, an “ Existing Noteholder ” and, collectively, the “ Existing Noteholders ”), which Existing Noteholders hold 100% of the Existing Notes, to this Amended, Restated and Consolidated Note Agreement (this “ Agreement ”) upon the terms and conditions set forth below:

1.

BACKGROUND.

The Company is currently a party to:

(a) that certain Note Agreement, dated as of May 14, 2003, between the Company and each of the institutions party thereto (together with their respective successors and assigns, the “ 2003 Noteholders ”), as amended by that certain First Amendment to Note Agreement dated as of February 29, 2008, that certain First Omnibus Waiver and Amendment to the Note Agreements dated as of July 25, 2008 and that certain Second Omnibus Amendment to the Note Agreements dated as of December 30, 2008 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, the “ Existing 2003 Note Agreement ”), pursuant to which, among other things, the Company issued $147,000,000 in original principal amount of its 7.05% Senior Notes, Series B, due May 14, 2010 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, collectively, the “ 2003 Notes ”),

(b) that certain Note Agreement, dated as of November 15, 2004, between the Company and each of the institutions party thereto (together with their respective successors and assigns, the “ 2004 Noteholders ”), as amended by that certain First Amendment to Note Agreement dated as of February 29, 2008, that certain First Omnibus Waiver and Amendment to the Note Agreements dated as of July 25, 2008 and that certain Second Omnibus Amendment to the Note Agreements dated as of December 30, 2008 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, the “ Existing 2004 Note Agreement ”), pursuant to which the Company issued (i) $252,500,000 in original principal amount of its 6.53% Senior Notes, Series A, due November 15, 2009 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, collectively, the “ 2004 Series A Notes ”), and (ii) $72,500,000 in original principal amount of its 6.99% Senior Notes, Series B, due November 15, 2011 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, collectively, the “ 2004 Series B Notes ”, together with the 2004 Series A Notes, collectively, the “ 2004 Notes ”),

(c) that certain Note Agreement, dated as of October 13, 2005, between the Company and each of the institutions party thereto (together with their respective successors and assigns, the “ 2005 Noteholders ”), as amended by that certain First Amendment to Note Agreement dated as of February 29, 2008, that certain First Omnibus Waiver and Amendment to the Note Agreements dated as of July 25, 2008 and that certain Second Omnibus Amendment to the Note Agreements dated as of December 30, 2008 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, the “ Existing 2005 Note Agreement ”), pursuant to which the Company issued (i) $261,000,000 in original principal amount of its 7.15% Senior Notes, Series A, due October 13, 2010 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, collectively, the “ 2005 Series A Notes ”), and (ii) $89,000,000 in original principal amount of its 7.34% Senior Notes, Series B, due October 13, 2012 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, collectively, the “ 2005 Series B Notes ”, together with the 2005 Series A Notes, collectively, the “ 2005 Notes ”), and

(d) that certain Note Agreement, dated as of June 20, 2008, between the Company and each of the institutions party thereto (together with their respective successors and assigns, the “ 2008 Noteholders ”), as amended by that certain First Omnibus Waiver and Amendment to the Note Agreements dated as of July 25, 2008 and that certain Second Omnibus Amendment to the Note Agreements dated as of December 30, 2008 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, the “ Existing 2008 Note Agreement ”, together with the Existing 2003 Note Agreement, the Existing 2004 Note Agreement and the Existing 2005 Note Agreement, collectively, the “ Existing Note Agreements ”), pursuant to which the Company issued (i) $140,500,000 in original principal amount of its 8.82% Senior Notes, Series 2008-A, due June 20, 2013 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, collectively, the “ 2008 Series A Notes ”) and (ii) $52,500,000 in original principal amount of its 9.14% Senior Notes, Series 2008-B, due June 20, 2015 (as amended and as in effect on the date hereof prior to the effectiveness of this Agreement, collectively, the “ 2008 Series B Notes ”, together with the 2008 Series A Notes, collectively, the “ 2008 Notes ” and together with the 2003 Notes, the 2004 Notes and the 2005 Notes, the “ Existing Notes ”).

Certain capitalized terms used in this Agreement are defined in Schedule B; references to a “Schedule”, an “Annex” or an “Exhibit” are, unless otherwise specified, to a Schedule, Annex or an Exhibit attached to this Agreement.

2.

AUTHORIZATION OF AMENDMENT, RESTATEMENT AND CONSOLIDATION OF EXISTING NOTE AGREEMENTS.

The Company agrees and, subject to the satisfaction or waiver of the conditions precedent set forth in Section 5 of this Agreement, each Existing Noteholder, by its execution of this Agreement, hereby agrees and consents to the amendment and restatement in its entirety of each Existing Note Agreement to which it is a party, and the consolidation, into a single document, of the terms of each Existing Note Agreement, as so amended and restated, with the terms of each other Existing Note Agreement which, by the terms of this Agreement, is also being amended and restated, and upon the satisfaction or waiver of such conditions precedent, the Existing Note Agreements shall be deemed to be so amended, restated, superseded, replaced and consolidated into one instrument evidenced by this Agreement.

3.

AMENDMENT AND RESTATEMENT OF EXISTING NOTES; SENIOR NOTE EXCHANGES.

3.1. Amendment and Restatement of Existing Notes. The Company agrees, and subject to the satisfaction of the conditions precedent set forth in Section 5 of this Agreement, each Existing Noteholder, by its execution of this Agreement, hereby agrees and consents to the amendment and restatement of the Existing Notes in their entirety, and such Existing Notes shall, without any further action required on the part of any other Person, be cancelled and replaced by notes having the terms provided in Exhibit 3.1(a)(i) (the “ Series A-1 Senior Notes ”), Exhibit 3.1 (a)(ii) (the “ Series A-2 Senior Notes ”, together with the Series A-1 Senior Notes, collectively the “ Series A Senior Notes ”), Exhibit 3.1(b)(i) (the “ Series B-1 Senior Notes ”), Exhibit 3.1(b)(ii) (the “ Series B-2 Senior Notes ”, together with the Series B-1 Senior Notes, collectively, the “ Series B Senior Notes ”), Exhibit 3.1(c)(i) (the “ Series C-1 Senior Notes ”), Exhibit 3.1(c)(ii) (the “ Series C-2 Senior Notes ”), and Exhibit 3.1(c)(iii) (the “ Series CMW Senior Notes ”, together with the Series C-1 Senior Notes and the Series C-2 Senior Notes, collectively, the “ Series C Senior Notes ”) to this Agreement (in each case as to each respective Existing Noteholder, with the principal amount and the payee of each Senior Note (as defined below) and the series of such Senior Note as set forth on Schedule A), which Series A Senior Notes, Series B Senior Notes and Series C Senior Notes shall be hereinafter referred to, individually, as a “ Senior Note ” and, collectively, as the “ Senior Notes ”; and the term “ Senior Notes ” as used herein shall include each Senior Note delivered pursuant to any provision of this Agreement, and each Senior Note delivered in substitution or exchange for any such Senior Note pursuant to any such provision. At the Closing (as defined below), each Existing Noteholder shall deliver to the Company for cancellation the Existing Notes held by it or a lost note affidavit substantially in the form of Exhibit 3.1 hereto, and, subject to the receipt thereof, the Company will issue and deliver a Senior Note or Senior Notes in the form attached hereto as Exhibit 3.1(a)(i), Exhibit 3.1(a)(ii), Exhibit 3.1(b)(i), Exhibit 3.1(b)(ii), Exhibit 3.1(c)(i), Exhibit 3.1(c)(ii) or Exhibit 3.1(c)(iii), as applicable, in favor of such holder in replacement of such holder’s Existing Note or Existing Notes.

3.2. Senior Note Exchanges.

(a) Schedule A Exchange . Schedule A sets forth the principal amounts and Series of Senior Notes to be issued to each Existing Noteholder at the Closing. For the avoidance of doubt it is agreed and understood that the Indebtedness evidenced by the Existing Notes prior to the Closing is the same Indebtedness evidenced by the Senior Notes after giving effect to the Closing. Schedule A sets forth, with respect to each Existing Noteholder that has elected to receive the Make-Whole Fee, an amount equal to the Make-Whole Amount which would have been due to such Existing Noteholder on August 10, 2009 with respect to the principal amount of such Noteholder’s Existing Notes had such Existing Notes been prepaid in full on August 10, 2009 pursuant to Section 2.2 of each of the Existing Note Agreements.

(b) Applicable Prepayment Exchange . Upon the occurrence of any Applicable Prepayment, each holder of a MWA Senior Note receiving such Applicable Prepayment shall receive two Senior Notes in exchange for such MWA Senior Note which is the subject of such Applicable Prepayment. The first such Senior Note shall be a Series CMW Senior Note in a principal amount equal to the same amount of Make-Whole Amount paid in cash to such Noteholder on the applicable date of prepayment in accordance with Section 10.3 (subject to Section 12.2(b)) and/or Section 10.4. The second such Senior Note shall be a Series A-1 Senior Note, Series B-1 Senior Note or a Series C-1 Senior Note of the type being so prepaid and exchanged in connection with such Applicable Prepayment in a principal amount equal to (i) the principal amount of such Senior Note being exchanged minus (ii) the principal amount of the Applicable Prepayment being made in respect of such MWA Senior Note minus (iii) the principal amount of such Series CMW Senior Note. For the avoidance of doubt, (x) under no circumstances shall the Noteholders be required to make any payments in cash to the Company as consideration for the receipt of any Series CMW Senior Notes and (y) it is agreed and understood that the Indebtedness evidenced by the Series CMW Senior Notes represents existing Indebtedness of the Company.

4.

CLOSING.

The closing shall occur at the offices of Bingham McCutchen LLP, 399 Park Avenue, New York, New York 10022, at 10:00 a.m., local time, on August 28, 2009 or on such other Business Day thereafter as may be agreed upon by the Company and the Noteholders (the “ Closing ”).

5.

CONDITIONS TO EFFECTIVENESS.

The effectiveness of the obligations of the Existing Noteholders hereunder is subject to the waiver or fulfillment, prior to or at the Closing, of the following conditions, and the failure by the Company to satisfy all such conditions (that have not been waived) prior to or at the Closing shall relieve the Existing Noteholders, at their respective election, of all such obligations; it being understood and agreed that, except as otherwise specified in, and subject to the terms and provisions of, a post-closing letter agreement between the Company and the Noteholders, all such conditions shall be deemed satisfied or waived upon consummation of the Closing:

5.1. Representations and Warranties. The representations and warranties of the Company in this Agreement and the other Financing Documents shall be correct when made and at the time of the Closing.

5.2. Performance; No Default. Except for the Applicable Events of Default waived pursuant to Section 18.13(b), no Default or Event of Default shall have occurred and be continuing.

5.3. Compliance Certificates.

(a)  Officer’s Certificate. The Company shall have delivered to each Existing Noteholder an Officer’s Certificate, dated the date of the Closing, certifying that, to such officer’s knowledge, the conditions specified in Sections 5.1, 5.2, and 5.13 have been fulfilled.

(b)  Secretary’s Certificate. The Grantors shall have delivered to the Collateral Agent a secretary’s certificate, in form and substance reasonably satisfactory to the Existing Noteholders, dated the date of the Closing, certifying as to (i) each Grantor’s Organization Documents (which Organization Documents (or forms thereof) have been previously provided or made available to each of the Existing Noteholders or their respective counsel), (ii) the resolutions of each Grantor’s Board of Directors (or similar governing body) authorizing the execution, delivery and performance of this Agreement and the other Financing Documents, in each case, to which such Grantor is a party and (iii) specimen signatures of the persons authorized to execute such documents on such Grantor’s behalf. Each Existing Noteholder shall also have received a copy of a certificate of good standing for each Grantor (dated no earlier than 30 days prior to the Closing) from the office of the secretary of the state of such Grantor’s organization, with, if available from such secretary of state, a listing of charter documents on file with such secretary of state.

(c)  Legal Officer’s Certificate . The Company shall have delivered to each Existing Noteholder a certificate regarding the Grantors’ assets, in form and substance reasonably satisfactory to the Existing Noteholders, executed by a legal officer of the Company.

5.4. Amendment and Restatement Permitted by Applicable Law, Etc. On the date of the Closing, the amendment and restatement of the Existing Note Agreements and the Existing Notes as contemplated hereunder shall not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System). If requested by any Existing Noteholder, such Existing Noteholder shall have received an Officer’s Certificate from the Company certifying as to such matters of fact regarding the Company as such Existing Noteholder may reasonably specify to enable such Existing Noteholder to determine whether such investment is so permitted.

5.5. Senior Notes. Each Existing Noteholder shall have received an original executed Senior Note or Senior Notes executed by the Company in favor of such Existing Noteholder (as more particularly set forth on Schedule A) in replacement of each of such Existing Noteholder’s Existing Notes which shall have been cancelled pursuant to Section 3.1.

5.6. Collateral Documents. On or prior to the Closing, the Company shall execute and deliver, and cause the Subsidiary Grantors to execute and deliver, as applicable, the Collateral Documents covering the Collateral described in the Collateral Documents as follows:

(a)  Security Agreement. The Company will, and will cause each Subsidiary Grantor to, grant to the Collateral Agent, for the benefit of the Secured Parties, subject to Permitted Liens, a valid and perfected security interest in all of its personal property (other than personal property which constitutes Excluded Assets and for purposes of perfection, Second Tier Collateral not subject to the Perfection Requirement) whether tangible or intangible (including, without limitation, all cash, portfolio investments, marketable securities, accounts, chattel paper, instruments, documents, books, records, inventory, machinery, equipment, trademarks, patents, copyrights, other intellectual property, payment intangibles, other general intangibles, commercial tort claims, Equity Interests in Consolidated Subsidiaries, other investment property and other personal property described in the Security Agreement, whether now owned or hereafter acquired, and all products and cash and noncash proceeds thereof), with perfection, in the case of any instruments, investment property or letters of credit, being effected by the Collateral Agent or its agent or designee obtaining control of such instruments, investment property or letters of credit, in addition to filing a compliant UCC financing statement with respect to such instruments, investment property or letters of credit, all to the extent required or provided for in the Security Agreement and the other Collateral Documents, which shall each be in form and substance reasonably satisfactory to the parties hereto, together with (to the extent required or provided for in the Security Agreement):

(i) (A) evidence that the originals of the certificates evidencing the Equity Interests pledged pursuant to the Security Agreement either (1) were delivered to the Collateral Agent, or (2) are held in a Custodial Account that is subject to a Custody Control Agreement (as defined in the Security Agreement and as used herein as therein defined) that has been duly executed in favor of the Collateral Agent in form and substance reasonably satisfactory to the Collateral Agent (acting at the direction of the Required Secured Creditors) and that original undated equity powers with respect to such Equity Interests have been executed and delivered to the Collateral Agent, (B) evidence that original instruments evidencing the debt pledged pursuant to the Security Agreement are held in a Custodial Account that is subject to a duly executed Custody Control Agreement and (C) copies of any and all third party consents received with respect to the Equity Interests and the debt pledged pursuant to the Security Agreement;

(ii) copies of proper financing statements in form appropriate for filing under the Uniform Commercial Code of all jurisdictions that the Collateral Agent (acting at the direction of the Required Secured Creditors) may deem reasonably necessary or customary in order to perfect the Liens created under the Security Agreement, covering the Collateral described in the Security Agreement to the extent such Liens may be perfected by the filing of such financing statements;

(iii) completed requests for information, dated on or before the date of the Closing, listing all effective financing statements filed in the jurisdictions referred to in clause (ii) above that name any Grantor as debtor, together with copies of such other financing statements;

(iv) reasonably satisfactory evidence of the completion of all other actions, recordings and filings of or with respect to the Security Agreement that the Collateral Agent (acting at the direction of the Required Secured Creditors) may deem reasonably necessary or customary in order to perfect the Liens on the Collateral (other than Second Tier Collateral not subject to the Perfection Requirement) created thereby; and

(v) an original or facsimile (followed promptly by an original) of the Control Agreements for each of the deposit accounts, securities accounts and custodial accounts set forth on Schedule 5.6(a)(v) hereto, duly executed by the appropriate parties.

(b)  Insurance. The Company will, and will cause each Subsidiary Grantor to, deliver to the Collateral Agent certificates of insurance and endorsements to insurance policies naming the Collateral Agent as loss payee/mortgagee and/or additional insured, as applicable, with respect to all Collateral, as may be required by the Collateral Documents.

(c)  Opinion(s). The Company shall cause special counsel to the Company and the Subsidiary Grantors to deliver to the Noteholders one or more opinions of counsel covering the matters set forth in Exhibit 5.6(c) hereto and covering such other matters incident to the transactions contemplated hereby as the Noteholders or their counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion(s) to the Noteholders).

(d)  Requested Information . The Company will, and will cause each Subsidiary Grantor to, execute and deliver and cause to be executed and delivered such further documents and instruments as the Collateral Agent (acting at the direction of the Required Secured Creditors) reasonably deems necessary or customary to evidence and perfect its Liens in the Collateral (other than with respect to Second Tier Collateral not subject to the Perfection Requirement) as set forth in the Collateral Documents.

5.7. Continuing Guaranty Agreement. The Collateral Agent shall have received one or more Continuing Guaranty Agreements substantially in the form of Exhibit 5.7, which shall have been duly executed and delivered by each Consolidated Subsidiary (other than Allied Capital Beteiligungsberatung GmbH, a dormant Consolidated Subsidiary being liquidated) and be in full force and effect and no default shall exist in the performance of any obligation thereunder.

5.8. Intercreditor Agreement. The Existing Noteholders shall have received an executed counterpart of the Intercreditor Agreement, which shall be an original or facsimile (followed promptly by originals), in form reasonably satisfactory to the Existing Noteholders, duly executed by the Noteholders, the Collateral Agent, the Administrative Agent and the Banks and acknowledged by the Grantors.

5.9. Bank Credit Agreement. The Existing Noteholders shall have received a fully executed copy, certified by a Responsible Officer of the Company as true and complete, of the Bank Credit Agreement, dated as of the date hereof, by and among the Company, the Administrative Agent and the Banks, in form and substance reasonably satisfactory to the Existing Noteholders.

5.10. Amendments to Organization Documents. The operating agreement of each Subsidiary Grantor that is a limited liability company shall have been amended to provide for, among other things, the pledge or grant of a security interest in each such Subsidiary Grantor’s membership interest to the Collateral Agent for the benefit of the Secured Parties and such amended operating agreements shall each be in form and substance reasonably satisfactory to the Existing Noteholders.

5.11. Payment of Fees and Expenses. Without limiting the provisions of Section 18.1, the Company shall have paid on or before the date of the Closing the reasonable fees, charges and disbursements of (i) the Existing Noteholders’ professional advisors (both legal and financial) as agreed among the parties, (ii) the Collateral Agent and the Collateral Agent’s counsel, to the extent agreed by the Company and the Collateral Agent pursuant to the schedule of fees dated as of July 28, 2009 and the Intercreditor Agreement and (iii) the Existing Noteholders’ former counsel, Chapman and Cutler LLP.

5.12. Private Placement Number. A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been obtained for each Series of Senior Notes.

5.13. Changes in Corporate Structure. The Company shall not have changed its jurisdiction of incorporation or been a party to any merger or consolidation and shall not have succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 6.5.

5.14. Payment on Existing Notes. The Company shall have paid in cash in full on the date of the Closing:

(a) to each Existing Noteholder all accrued and unpaid interest (including interest at the default rate) on the Existing Notes of such Existing Noteholder up to, but not including, the date of the Closing;

(b) to each holder of a 2004 Series A Note, in addition to the interest required by clause (a) above, with respect to each 2004 Series A Note, as additional interest, an amount equal to the amount of interest (computed on the basis of a 360 day year of twelve 30 day months) which would have accrued on the 2004 Series A Notes at an interest rate of 9% per annum from July 8, 2009 to, but excluding, the date of the Closing;

(c) each Existing Noteholder’s portion of the Closing Principal Paydown as set forth in Schedule A;

(d) a fee to each holder of Series A-2 Senior Notes, Series B-2 Senior Notes and Series C-2 Senior Notes as set forth in Schedule A (the “ Make-Whole Fee ”); and

(e) (i) a restructuring fee in an amount equal to $15,225,000 (the “ Closing Restructuring Fee ”) which shall be distributed to each Existing Noteholder as set forth in Schedule A and (ii) an amount equal to $50,000,000 (the “ Contingent Restructuring Fee ”) to be distributed to each Existing Noteholder pro rata which shall be credited as set forth in Section 10.4(b) or (c), as applicable.

5.15. Litigation.

(a) There shall be no actions, suits or proceedings pending or, to the Company’s knowledge, threatened in writing with respect to this Agreement or any other Financing Document.

(b) There shall not exist any judgment, order, injunction or other restraint issued or filed, or a hearing seeking injunctive relief or other restraint pending or notified, prohibiting or imposing materially adverse conditions upon the transactions contemplated by this Agreement or any other Financing Document.

5.16. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be reasonably satisfactory to each Existing Noteholder and its counsel, and each Existing Noteholder and its counsel shall have received copies of all such counterpart originals or certified or other copies of such documents as such Existing Noteholder or its counsel may reasonably request.

6.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

To induce the Existing Noteholders to enter into this Agreement, the Company represents and warrants to each Existing Noteholder that as of the date of Closing:

6.1. Existence; Power and Authority.

(a) The Company and each of its Consolidated Subsidiaries:

(i) is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization;

(ii) has all requisite power and authority and all necessary licenses and permits to own or hold under lease the properties it purports to own or hold under lease and to operate such properties and to carry on its business as now conducted and as presently proposed to be conducted, except where the failure to obtain such licenses or permits could not be reasonably expected to have a Material Adverse Effect; and

(iii) is duly licensed or qualified and is in good standing as a foreign corporation or limited liability company in each jurisdiction wherein the nature of the business transacted by it or the nature of the property owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified could not be reasonably expected to have a Material Adverse Effect.

(b) The Company (i) has elected to be regulated as a “business development company” under the Investment Company Act and (ii) qualifies for treatment as a RIC under the Code.

6.2. Authorization; No Contravention. The execution, delivery and performance by the Company and each Consolidated Subsidiary of each Financing Document to which the Company or such Consolidated Subsidiary is or is to be a party have been duly authorized by all necessary corporate or other organizational action, and do not and will not

(a) contravene the terms of any of the Company’s or such Consolidated Subsidiary’s Organization Documents;

(b) except to the extent such action or condition will not result in a Material Adverse Effect, conflict with or result in any breach or contravention of, or the creation of any Lien under (other than Liens contemplated by the Security Agreement), or require any payment to be made under:

(i) any loan agreement, indenture or other similar agreement evidencing material Indebtedness or any other agreement to which the Company or such Consolidated Subsidiary is a party or is subject, or by which the Company or such Consolidated Subsidiary or the properties of the Company or such Consolidated Subsidiary are bound; or

(ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Company or such Consolidated Subsidiary or their property is subject; or

(c) violate any law or regulation applicable to the Company or such Consolidated Subsidiary which could reasonably be expected to have a Material Adverse Effect.

6.3. Organization and Ownership of Shares of Consolidated Subsidiaries.

(a) Schedule 6.3(a) is a complete and correct list of the Company’s Consolidated Subsidiaries, showing, as to each Consolidated Subsidiary, the correct name thereof, the jurisdiction of its organization and the percentage of shares of each class of its outstanding Equity Interests owned by the Company and each other Consolidated Subsidiary.

(b) All of the outstanding Equity Interests of each Consolidated Subsidiary shown in Schedule 6.3(a) as being owned by the Company and its Consolidated Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Consolidated Subsidiary free and clear of any Lien (except for Permitted Liens).

(c) To the Company’s Knowledge, no Consolidated Subsidiary is a party to, or otherwise subject to any legal, regulatory, contractual or other restriction (other than this Agreement, the Bank Credit Agreement, the agreements listed on Schedule 6.3(c) and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Consolidated Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Consolidated Subsidiaries that owns outstanding Equity Interests of such Consolidated Subsidiary.

6.4. Disclosure. This Agreement and the documents or certificates delivered to the Existing Noteholders (or to the professional advisors for the Existing Noteholders) by or on behalf of the Company in connection with the transactions contemplated hereby, the Disclosure Documents and the financial statements listed in Schedule 6.5, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Disclosure Documents, this Agreement, the documents and certificates delivered in connection herewith or the financial statements listed in Schedule 6.5, since December 31, 2008, there has been no change in the financial condition, operations, business or properties of the Company and its Consolidated Subsidiaries, taken as whole, that could reasonably be expected to have a Material Adverse Effect. There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein, in the schedules attached hereto or in the Disclosure Documents.

6.5. Financial Statements; Material Liabilities. The Company has delivered or made available to each Existing Noteholder copies of the financial statements of the Company and its Consolidated Subsidiaries listed on Schedule 6.5. All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Consolidated Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). The Company and its Consolidated Subsidiaries do not have any Material liabilities that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.

6.6. Governmental Authorization; Other Consents. Except as set forth on Schedule 6.6, to the Company’s Knowledge, after reasonably inquiry, no approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with

(a) the execution, delivery or performance by, or enforcement against, any Grantor of this Agreement or any other Financing Document,

(b) the grant by any Grantor of the Liens granted by it pursuant to the Collateral Documents,

(c) except for the filing of appropriate UCC financing statements and the execution of the Control Agreements as contemplated by the Collateral Documents, the perfection or maintenance of the Liens created under the Collateral Documents, or

(d) the exercise by the Collateral Agent or any Noteholder of its rights under the Financing Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents,

except, in each case, (i) for any such approval, consent, exemption, authorization, action, notice or filing that has been obtained, given or made and is in full force and effect on the date of the Closing or (ii) as may be required by the terms of the contracts which are the subject of the Lien being granted under the Collateral Documents.

6.7. Litigation; Observance of Agreements, Statutes and Orders.

(a) Except as set forth on Schedule 6.7 or as otherwise disclosed on the Form 10-Q filed by the Company on August 10, 2009, there are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against the Company or any Consolidated Subsidiary or any property of the Company or any Consolidated Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(b) After giving effect to Section 18.13(b) and Section 12.10 of the Bank Credit Agreement, to the Company’s Knowledge, neither the Company nor any Consolidated Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws or the USA Patriot Act) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

6.8. No Default. After giving effect to Section 18.13(b) and Section 12.10 of the Bank Credit Agreement, no Default or Event of Default has occurred and is continuing.

6.9. Taxes. All tax returns required to be filed by the Company or any Consolidated Subsidiary in any jurisdiction have, in fact, been filed, and all taxes, assessments, fees and other governmental charges upon the Company or any Consolidated Subsidiary or upon any of their respective properties, income or franchises, which are shown to be due and payable in such returns have been paid, except to the extent such failure to file or to pay would not materially and adversely affect the properties, business, profits or condition (financial or otherwise) of the Company and its Consolidated Subsidiaries, taken as a whole. For all taxable years ending on or before December 31, 2004, the Federal income tax liability of the Company has been satisfied and either the period of limitations on assessment of additional Federal income tax has expired or the Company has entered into an agreement with the Internal Revenue Service closing conclusively the total tax liability for the taxable year. The Company does not know of any proposed additional tax assessment against it for which adequate provision has not been made on its accounts, and no material controversy in respect of additional Federal or state income taxes due since said date is pending or to the Company’s Knowledge threatened. To the Company’s Knowledge, the provisions for taxes in the financial statements of the Company and its Consolidated Subsidiaries are adequate for all open years.

6.10. Title to Property; Leases. The Company and its Consolidated Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet of the Company listed on Schedule 6.5 or purported to have been acquired by the Company or any of its Consolidated Subsidiaries after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case, to the Company’s Knowledge, free and clear of Liens prohibited by this Agreement. To the Company’s Knowledge, all leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects.

6.11. Licenses; Permits, Etc. The Company and its Consolidated Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others.

6.12. Compliance with ERISA.

(a) Assuming that the representations and warranties of each Noteholder set forth in Section 3.2 of the Existing Note Agreements as to the sources of funds used to pay the purchase price of the Existing Notes originally purchased by such Noteholder are true and correct in all respects, the consummation of the transactions provided for in this Agreement and compliance by the Company with the provisions thereof and of the Senior Notes issued hereunder in replacement of the Existing Notes will not involve any non-exempt prohibited transaction within the meaning of section 406(a) of ERISA or sections 4975(c)(1)(A)-(D) of the Code. The Company and each ERISA Affiliate has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and is in compliance with the presently applicable provisions of ERISA and the Code with respect to each Plan except for instances of noncompliance which would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has any contingent liability with respect to any post-retirement “welfare benefit plan” (as such term is defined in ERISA) other than liability under part 6 of subtitle B of Title I of ERISA.

(b) The Company and its ERISA Affiliates have never contributed to, or had any obligation to contribute to, any Plan or any Multiemployer Plan.

6.13. Existing Indebtedness; Future Liens.

(a) Except as described therein, Schedule 6.13 sets forth a complete and correct list of all outstanding Indebtedness of the Company and each of its Consolidated Subsidiaries as of August 18, 2009 (including, in the case of material Indebtedness, a description of the obligors and obligees, principal amount outstanding and collateral therefor, if any, and Guaranty thereof, if any), since which date there has been no material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Consolidated Subsidiaries. After giving effect to the transactions contemplated by this Agreement and the Bank Credit Agreement, neither the Company nor any Consolidated Subsidiary is in default beyond any applicable notice and/or grace period in the payment of principal or interest on any material Indebtedness nor is in default beyond any applicable notice and/or grace period under any instrument or instruments or agreements under and subject to which any such Indebtedness has been issued and no event has occurred and is continuing under the provisions of any such instrument or agreement, and no condition exists with respect to any such Indebtedness, which with the lapse of time or the giving of notice, or both, would permit one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

(b) To the Company’s Knowledge, neither the Company nor any Consolidated Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by Section 12.8.

6.14. Use of Proceeds; Margin Regulations. None of the transactions contemplated in this Agreement will violate or result in a violation of Section 7 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or any regulation issued pursuant thereto, including, without limitation, Regulations U, T and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The Company is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any “margin stock” within the meaning of said Regulation U. None of the proceeds from the sale of the Existing Notes has been used to purchase, or refinance any borrowing the proceeds of which were used to purchase, any such margin stock.

6.15. Status under Certain Statutes. Neither the Company nor any Consolidated Subsidiary is subject to regulation under the Public Utility Holding Company Act of 2005, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.

6.16. Insurance.

(a) The Company and its Consolidated Subsidiaries maintain insurance coverage with reputable insurers reasonably believed by the Company to be financially sound in such forms and amounts and against such risks as are customary for corporations and limited liability companies of established reputation engaged in the same or a similar business and owning and operating similar properties.

(b) Schedule 6.16 sets forth a description of all insurance maintained by or on behalf of the Grantors as of the Closing. As of the Closing, all premiums due in respect of such insurance have been paid.

6.17. Environmental Matters.

(a) To the Company’s Knowledge, neither the Company nor any Consolidated Subsidiary has received any written notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Consolidated Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to have a Material Adverse Effect;

(b) To the Company’s Knowledge, no facts exist which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by the Company or any Consolidated Subsidiary, except, in each case, such as could not reasonably be expected to have a Material Adverse Effect;

(c) Neither the Company nor any Consolidated Subsidiary has stored any Hazardous Materials on real properties now or, to the Company’s Knowledge formerly, owned, leased or operated by any of them and has not disposed of any Hazardous Materials, in each case, in a manner contrary to any Environmental Laws, and in each case, in any manner that could reasonably be expected to have a Material Adverse Effect; and

(d) To the Company’s Knowledge, all buildings on all real properties now owned, leased or operated by the Company or any Consolidated Subsidiary thereof are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to have a Material Adverse Effect.

6.18. Foreign Assets Control Regulations, Etc.

(a) The Company’s use of the proceeds of the sale of the Existing Notes did not violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.

(b) Neither the Company nor any Consolidated Subsidiary thereof (i) is a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (ii) to the Company’s Knowledge, engages in any dealings or transactions with any such Person. The Company and its Consolidated Subsidiaries are in compliance, in all material respects, with all applicable provisions of the USA Patriot Act.

(c) No part of the proceeds from the sale of the Existing Notes has been (and will not be) used, directly or indirectly, by the Company or any Consolidated Subsidiary, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such Act applies to the Company.

6.19. Solvency. To the Company’s Knowledge, immediately after the Closing and after giving effect to the transactions contemplated in this Agreement and each Grantor’s contribution rights from the other Grantors, (a) the fair value of the assets of each Grantor, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) each Grantor will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (c) no Grantor will have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and proposed to be conducted after the Closing.

6.20. Binding Effect. This Agreement has been, and each other Financing Document, when delivered hereunder, will have been, duly executed and delivered by the Company and each Consolidated Subsidiary that is party thereto. This Agreement constitutes, and each other Financing Document when so delivered will constitute, a legal, valid and binding obligation of the Company and each Consolidated Subsidiary that is a party thereto, enforceable against the Company and such Consolidated Subsidiary in accordance with its terms, subject to applicable bankruptcy, creditor’s rights and similar laws affecting the rights and remedies of creditors generally.

6.21. Collateral Documents. The provisions of the Collateral Documents are effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a legal, valid and enforceable Lien, on all right, title and interest of the respective Grantors in the Collateral described therein, subject to the terms and provisions thereof. Except with respect to the Mortgage referenced in Section 11.7(b), to the Company’s Knowledge, after reviewing applicable public records, the Lien created by the Collateral Documents constitutes a first priority Lien, subject to no other Liens (other than Permitted Liens).

7.

REPRESENTATIONS OF THE EXISTING NOTEHOLDERS.

Each Existing Noteholder represents to the Company that (a) each of the Financing Documents to which it is a party has been duly authorized, executed and delivered by such Existing Noteholder, and (b) it acquired the Existing Notes and is acquiring the Senior Notes in replacement of its Existing Notes for its own account or for one or more separate accounts maintained by it or for the account of one or more pension or trust funds and not with a view to a distribution that would require registration of the Senior Notes under the Securities Act, provided that the disposition of such Existing Noteholder’s or such pension or trust fund’s property shall at all times be within such Existing Noteholder’s or such pension or trust fund’s control. Each Existing Noteholder represents that it is (and each separate account for which it may be acting is) (x) an “accredited investor” described in Sections (1), (2), (3) or (7) of Rule 501(a) of Regulation D of the Securities Act, (y) a “qualified purchaser” as described in Section 3(c)(7) of the Investment Company Act, and (z) a “qualified institutional buyer” as described in Rule 144A under the Securities Act and that it has the ability to evaluate the merits and risks of the continuing investment in the Senior Notes and the ability to assume the economic risks involved in such an investment. Each Existing Noteholder understands that the Senior Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required, and does not intend, to register the Senior Notes under the Securities Act.

8.

TAXES.

8.1. Taxation.

(a) All payments of principal and interest in respect of the Senior Notes issued to Sun Life at the Closing in replacement of the Existing Notes (collectively, the “ Gross-up Notes ”) shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by the United States or any political subdivision or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In that event, the Company shall pay such additional amounts as will result in the receipt by Sun Life or its registered transferees (collectively, the “ Foreign Holders ”) of such amounts as would have been received by the Foreign Holders if no such withholding or deduction had been required, except that no such additional amounts shall be payable in respect of any tax, assessment or other governmental charge that:

(i) is imposed or withheld solely by reason of the existence of any present or former connection (other than the mere fact of being a Foreign Holder) between any Foreign Holder and the United States, including, without limitation, such Foreign Holder being or having been a citizen or resident of the United States or treated as being or having been a resident thereof;

(ii) is imposed or withheld solely by reason of any Foreign Holder (or any partnership, trust, estate, limited liability company or other fiscally transparent entity of which such Foreign Holder is a partner, beneficiary, settlor or member) (i) being or having been present in, or engaged in a trade or business in, the United States, (ii) being treated as having been present in, or engaged in a trade or business in, the United States, or (iii) having or having had a permanent establishment in the United States;

(iii) is imposed or withheld solely by reason of the Foreign Holder (or any partnership, trust, estate, limited liability company or other fiscally transparent entity of which the Foreign Holder is a partner, beneficiary, settlor or member) being or having been with respect to the United States a personal holding company, a controlled foreign corporation, a passive foreign investment company, a foreign private foundation or other foreign tax-exempt organization, or being a corporation that accumulates earnings to avoid United States federal income tax;

(iv) is an estate, inheritance, gift, sales, transfer, personal property or excise tax or any similar tax assessment or governmental charge;

(v) is imposed on a beneficial owner that actually or constructively owns 10% or more of the total combined voting power of all of the classes of stock of the Company that are entitled to vote within the meaning of section 871(h)(3) of the Code (as in effect on the date of this Agreement or, in the case of a transfer to another Foreign Holder, as in effect on the date of such transfer) or that is a bank making a loan entered into in the ordinary course of its trade or business within the meaning of section 881(c)(3)(A) of the Code (as in effect on the date of this Agreement, or in the case of a transfer to another Foreign Holder, as in effect on the date of such transfer);

(vi) would not have been imposed but for the failure of the beneficial owner or any Foreign Holder to comply with certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the United States of such beneficial owner or such Foreign Holder, if such compliance is required by statute or by regulation of the United States or of any political subdivision or taxing authority thereof or therein as a precondition to relief or exemption from such tax, duty, assessment or other governmental charge;

(vii) is payable otherwise than by withholding by the Company from payments on or in respect of any Gross-up Note held by any Foreign Holder;

(viii) is imposed by reason of the failure of any Foreign Holder or the beneficial owner to fulfill the statement requirements of sections 871(h) or 881(c) of the Code (as in effect on the date of this Agreement or in the case of a transfer to another Foreign Holder, as in effect on the date of such transfer);

(ix) if applicable, is imposed on a payment to an individual and required to be withheld pursuant to any European Union Directive on the taxation of savings implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000 or any law implementing or complying with, or introduced in order to conform to, such Directive; or

(x) any combination of items (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), and (ix).

(b) In addition, the Company will not pay additional amounts to any Foreign Holder if it is a partnership, trust, estate, limited liability company or other fiscally transparent entity, or to any Foreign Holder if it is not the sole beneficial owner of the Gross-up Note held by it, as the case may be. This exception, however, will apply only to the extent that a beneficiary or settlor with respect to the trust or estate, or a beneficial owner or member of the partnership, limited liability company or other fiscally transparent entity, would not have been entitled to payment of an additional amount had the beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment.

(c) On the date of any transfer of a Gross-up Note by a Foreign Holder (including Sun Life) to another Foreign Holder, such transferee Foreign Holder shall provide the Company with a properly executed original United States Internal Revenue Service Form W-8BEN or W 8ECI, as appropriate, or any successor or other form prescribed by the United States Internal Revenue Service, certifying that it is not a United States person for United States federal income tax purposes. Thereafter such Foreign Holder shall provide additional Forms W-8BEN or W 8ECI (or any successor or other form prescribed by the United States Internal Revenue Service) (i) to the extent a form previously provided has become inaccurate, invalid or otherwise ceases to be effective or (ii) as requested in writing by the Company, unless such Foreign Holder is unable to provide such form solely as a result of any change in, or amendment to, the laws, regulations, or rulings of the United States or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws, regulations or rulings (including a holding by any court of competent jurisdiction), which change or amendment becomes effective on or after the date of the Closing.

(d) Any reference in this Agreement to principal or interest shall be deemed to include any additional amounts in respect of principal or interest (as the case may be) which may be payable under this Section 8.1.

(e) This Section 8.1 shall apply only with respect to the Foreign Holders. It shall not apply to payments made to any Holder other than the Foreign Holders.

8.2. Prepayment for Tax Reasons.

(a) The Company shall have an option to prepay the Gross-up Notes in whole, but not in part, at any time, on giving not less than 30 days nor more than 60 days’ notice to the Foreign Holders (which notice shall be irrevocable) by payment of the principal amount, together with interest accrued to the date fixed for prepayment, if (i) the Company (a) has or will become obliged to pay additional amounts as provided or referred to in Section 8.1 as a result of any change in, or amendment to, the laws, regulations or rulings of the United States or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws, regulations or rulings (including a holding by a court of competent jurisdiction), which change or amendment becomes effective on or after the Closing and (b) in its business judgment, determines that such obligation cannot be avoided by the use of reasonable measures available to it; or (ii) (a) any action has been taken by a taxing authority of, or any decision has been rendered by a court of competent jurisdiction in, the United States or any political subdivision or taxing authority thereof or therein, including any actions specified in (i) above, whether or not such action was taken or decision was rendered with respect to the Company, or any change, amendment, application or interpretation shall be officially proposed, which, in any such case, in the written opinion of independent legal counsel of recognized legal standing, will result in a material probability that the Company will become obligated to pay additional amounts and (b) in its business judgment the Company determines that such obligation cannot be avoided by the use of reasonable measures available to it; provided that no such notice of prepayment shall be given earlier than 60 days prior to the earliest date on which the Company would be obliged to pay such additional amounts if a payment in respect of such Gross-up Notes held by the Foreign Holders were then due.

(b) Prior to the giving of any notice of prepayment pursuant to this Section 8.2, the Company shall deliver to the Foreign Holder of any Gross-up Note to be prepaid (1) a certificate signed by two officers of the Company stating that the Company is entitled to effect such prepayment and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to prepay have occurred and (2) in the case of a determination under (ii) above, an opinion of independent legal advisers of recognized standing to the effect that there is a material probability that the Company will become obliged to pay such additional amounts as a result of such change or amendment. Upon the expiry of any such notice as is referred to in this Section 8.2, the Company shall be bound to prepay such Gross-up Note in accordance with this Section 8.2.

(c) Notwithstanding the foregoing, if the Company shall give a Foreign Holder notice of prepayment of any Gross-up Note pursuant to Section 8.2(a), such Foreign Holder, if it then holds one or more such Gross-up Notes in an aggregate principal amount equal to or greater than $5,000,000, shall have a one time option to reject such prepayment; provided however, if such Foreign Holder rejects such prepayment, Section 8.1(a) shall no longer be operative with respect to any Gross-up Notes held by such Foreign Holder. To exercise such option, such Foreign Holder shall provide a rejection notice to the Company within ten Business Days after its receipt of the Company’s notice of prepayment. Such notice by a Foreign Holder shall be irrevocable and shall be binding on all subsequent Foreign Holders of such Foreign Holder’s Gross-up Notes.

(d) The provisions of Sections 10.4, 10.5 and 10.6 shall not apply to any prepayment pursuant to this Section 8.2.

9.

APPLICABLE INTEREST RATES.

(a) The Series A Senior Notes shall bear interest (computed on the basis of a 360-day year of twelve 30 day months) on the unpaid principal balance thereof (i) from and including the date of Closing to and including December 31, 2009 at the rate of 8.50% per annum , and (ii) from and including January 1, 2010 and at all times thereafter at the rate of 9.25% per annum .

(b) The Series B Senior Notes shall bear interest (computed on the basis of a 360-day year of twelve 30 day months) on the unpaid principal balance thereof (i) from and including the date of Closing to and including December 31, 2009 at the rate of 9.00% per annum , (ii) from and including January 1, 2010 to and including December 31, 2010 at the rate of 9.50% per annum , and (iii) from and including January 1, 2011 and at all times thereafter at the rate of 9.75% per annum .

(c) The Series C Senior Notes shall bear interest (computed on the basis of a 360-day year of twelve 30 day months) on the unpaid principal balance thereof (i) from and including the date of Closing to and including December 31, 2009 at the rate of 9.50% per annum , (ii) from and including January 1, 2010 to and including December 31, 2010 at the rate of 10.00% per annum , (iii) from and including January 1, 2011 to and including December 31, 2011 at the rate of 10.25% and (iv) from and including January 1, 2012 and at all times thereafter at the rate of 10.75% per annum .

Interest on the Senior Notes is payable quarterly in arrears on the 15th day of each of March, June, September and December in each year (with the first such interest payment date being September 15, 2009) until such principal sum shall have become due and payable (whether at maturity, upon notice of prepayment or otherwise) and notwithstanding the foregoing, the Company shall pay on demand interest on any overdue principal and Make-Whole Amount (as provided herein) and, to the extent permitted by applicable law, on any overdue interest, from the due date thereof (whether by acceleration or otherwise) and, during the continuance of any other Event of Default, on the entire unpaid balance of the Senior Notes, at the Default Rate, until paid or until such Event of Default is no longer continuing, as the case may be.

10.

PAYMENT OF THE SENIOR NOTES.

10.1. Required Payments; Maturity.

(a) The entire outstanding principal amount of the Series A Senior Notes shall become due and payable on June 15, 2010.

(b) The entire outstanding principal amount of the Series B Senior Notes shall become due and payable on June 15, 2011.

(c) The entire outstanding principal amount of the Series C Senior Notes (excluding Series CMW Senior Notes) shall become due and payable on March 31, 2012.

(d) The entire outstanding principal amount of the Series CMW Senior Notes shall become due and payable on April 1, 2012.

(e) Upon prepayment in full of the Series C Senior Notes (excluding Series CMW Senior Notes) the Company shall pay the outstanding Series CMW Senior Notes as otherwise required by the terms of this Agreement or voluntarily prepay such Series CMW Senior Notes as otherwise permitted by the terms of this Agreement.

10.2. Prepayment of Notes Upon Change in Control.

(a)  Notice of Change in Control or Control Event. The Company will, within five (5) Business Days after any Responsible Officer has knowledge of the occurrence of any Control Event or Change in Control, give written notice of such Control Event or Change in Control to each Holder of Senior Notes. Such notice given in respect of a Change in Control shall contain and constitute an offer to prepay Senior Notes as described in subparagraph (b) of this Section 10.2 and shall be accompanied by the certificate described in subparagraph (e) of this Section 10.2. Notwithstanding the foregoing, in no event will the Company take any action, or permit any officer to take any action, to effect or participate in the completion of a Change in Control unless and until such notice shall have been given and the Change in Control is consummated contemporaneously with the prepayment of all Senior Notes to the extent required to be prepaid pursuant to this Section 10.2.

(b)  Offer to Prepay Notes. The offer to prepay Senior Notes contemplated by subparagraph (a) of this Section 10.2 shall be an offer to prepay, in accordance with and subject to this Section 10.2, all, but not less than all, of the Senior Notes held by each Holder (in this case only, “Holder” in respect of any Senior Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “ Proposed Prepayment Date ”) that is not less than 45 days (or 15 days if the Company shall have given each holder of Senior Notes written notice of the Control Event related to the Change in Control giving rise to such offer not less than 30 days prior to the occurrence of such Change in Control) and not more than 60 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the 45th day after the date of such offer).

(c)  Acceptance. A Holder of Senior Notes may accept the offer to prepay made pursuant to this Section 10.2 by causing a notice of such acceptance to be delivered in writing to the Company at least 5 days prior to the Proposed Prepayment Date. At least 15 days prior to the Proposed Prepayment Date, the Company shall give written notice to each Holder of Senior Notes that has not so accepted the offer, in which notice the Company shall (A) state the aggregate outstanding principal amount of Senior Notes in respect of which the offer has been accepted, (B) state the aggregate outstanding principal amount of Debt under the Bank Credit Agreement in respect of which any similar offer made pursuant to the Bank Credit Agreement has been accepted by any lender thereunder (it being understood that a mandatory prepayment upon a Change in Control shall constitute acceptance of any such prepayment offer), and (C) state that any Holder of Senior Notes may yet accept the offer, whether theretofore rejected or not, by causing a notice of such acceptance to be delivered to the Company at least 5 days prior to the Proposed Prepayment Date. A failure by a Holder of Senior Notes to respond to an offer to prepay made pursuant to this Section 10.2 shall be deemed to constitute an acceptance of such offer by such Holder.

(d)  Prepayment Notice. Prepayment of the Senior Notes to be prepaid pursuant to this Section 10.2 shall be at 100% of the principal amount of such Senior Notes, plus in the case of any MWA Senior Note (without duplication) the Make-Whole Amount determined as of two Business Days prior to the Prepayment Date with respect to the principal amount of such MWA Senior Notes so prepaid, together with interest on such Senior Notes accrued to but excluding the Prepayment Date and accrued fees and expenses. On the second Business Day preceding the Prepayment Date, the Company shall deliver to each Holder of Senior Notes being prepaid a certificate of a Senior Financial Officer of the Company showing the Make-Whole Amount due in connection with such prepayment and setting forth the details of the computation of such amount. The prepayment shall be made on the date (the “ Prepayment Date ”) which is the later of (i) the Proposed Prepayment Date or (ii) the date the Change in Control is actually consummated.

(e)  Officer’s Certificate. Each offer to prepay the Senior Notes pursuant to this Section 10.2 shall be accompanied by a certificate, executed by a Senior Financial Officer and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 10.2; (iii) the principal amount of each Senior Note offered to be prepaid; (iv) in the case of any MWA Senior Note, the estimated Make-Whole Amount, if any, due in connection with such prepayment (calculated as if the date of such certificate were the day of prepayment), and setting forth the details of such computation; (v) the amount of interest that would be due on each Senior Note offered to be prepaid, accrued to but excluding the Proposed Prepayment Date; (vi) that the conditions of this Section 10.2 have been fulfilled; and (vii) in reasonable detail, the nature and date of the actual or proposed Change in Control.

10.3. Prepayment in Connection with a Disposition.

If the Company or any Consolidated Subsidiary Disposes of any property in a transaction permitted by Section 12.2 which results in the realization by the Company or any Consolidated Subsidiary of Net Proceeds, the Company shall prepay the Senior Notes in accordance with Section 12.2(b).

10.4. Optional Prepayments.

(a) In addition to the payments required by Section 10.1, Section 10.2, and Section 10.3, upon compliance with Section 10.5 the Company shall have the privilege, at any time and from time to time, of prepaying the outstanding Senior Notes (except the Series CMW Senior Notes, unless all such other Senior Notes have been prepaid in full), either in whole or in part (but if in part then in a minimum principal amount of $1,000,000), and ratably among all outstanding Senior Notes (except the Series CMW Senior Notes, unless all such other Senior Notes have been prepaid in full) and in any event then ratably within each Series by payment of the principal amount of the Senior Notes (except the Series CMW Senior Notes, unless all such other Senior Notes have been prepaid in full), or portion thereof to be prepaid, and accrued interest thereon to but excluding the date of such prepayment, together with, in the case of a MWA Senior Note, the Make-Whole Amount, if any, determined as of two Business Days prior to the date of such prepayment pursuant to this Section 10.4.

(b) If, on or prior to January 31, 2010, the Company prepays all of the Senior Notes then outstanding, then

(i) the amount required to be paid to each Noteholder on the proposed prepayment date shall be reduced, without any further action on the part of the parties hereto, by an amount equal to the amount of such Noteholder’s pro rata share of the Contingent Restructuring Fee received pursuant to Section 5.14(e)(ii); it being understood that, notwithstanding the foregoing, prior to any such reduction, the entire outstanding principal amount of the Senior Notes (without giving effect to amounts received as the Contingent Restructuring Fee) shall continue to accrue interest in accordance with Section 9; and

(ii) each Holder of the MWA Senior Notes shall receive a payment equal to the amount of the Make-Whole Amount which would have been due on August 10, 2009 with respect to the principal amount of such Holder’s Existing Notes had all Existing Notes been prepaid in full on August 10, 2009 pursuant to Section 2.2 of each of the Existing Note Agreements, less any Make-Whole Amount previously received by such Holder in respect of such Holder’s MWA Senior Notes, it being understood that any payment received pursuant hereto shall be in lieu of any Make-Whole Amount otherwise payable to such Holders. Notwithstanding anything in this Agreement to the contrary, no holder of MWA Senior Notes that receives a payment in accordance with this Section 10.4(b)(ii) shall be entitled to receive any additional Make-Whole Amount on such Noteholder’s MWA Senior Notes.

(c) If, any of the Senior Notes remain outstanding as of February 1, 2010, then the amount equal to the portion of the Contingent Restructuring Fee received by each Noteholder pursuant to Section 5.14(e)(ii) shall be retained by such Noteholder as a restructuring fee. For the avoidance of doubt, such retained restructuring fee shall not reduce the principal amount of the Senior Notes then outstanding.

10.5. Notice of Optional Prepayments. The Company will give notice of any prepayment of the Senior Notes pursuant to Section 10.4 to each Holder thereof not less than 10 Business Days nor more than 60 days before the date fixed for such optional prepayment specifying (i) such date, (ii) the principal amount of the Holder’s Senior Notes to be prepaid on such date, (iii) in the case of a MWA Senior Note, that Make-Whole Amount, if any, may be payable, (iv) in the case of a MWA Senior Note, the date when such Make-Whole Amount, if any, will be calculated, (v) in the case of a MWA Senior Note, the estimated Make-Whole Amount, if any, and (vi) the accrued interest applicable to the prepayment. Notice of prepayment having been so given, the aggregate principal amount of the Senior Notes specified in such notice, together with accrued interest thereon and, in the case of a MWA Senior Note, the Make-Whole Amount, if any, payable with respect thereto shall become due and payable on the prepayment date specified in said notice. Not later than two Business Days prior to the prepayment date specified in such notice, the Company shall provide each Holder of a MWA Senior Note written notice of the Make-Whole Amount, if any, payable in connection with such prepayment and, whether or not any Make-Whole Amount is payable, a reasonably detailed computation of the Make-Whole Amount (which calculation shall be reasonably satisfactory to each Holder of the MWA Senior Notes to be prepaid).

10.6. Application of Payments.

The proceeds of any payments (including, but not limited to, principal, accrued interest and Make-Whole Amount, if any) received in respect of all or any outstanding Senior Notes as a result of any payment or prepayment of the Senior Notes (other than pursuant to Section 8.2, Section 10.1, Section 10.2, Section 10.3, Section 10.4 and Section 10.10) shall, in each case, be paid and applied as follows:

(i) First , to the payment of the reasonable costs, fees and expenses of the Collateral Agent and the Noteholders’ special counsel to the extent due and payable pursuant to the terms of this Agreement and the other Financing Documents;

(ii) Second , to the payment of all accrued and unpaid interest on the Senior Notes (other than the Series CMW Senior Notes) being so paid and in case such proceeds shall be insufficient to pay in full such amounts so unpaid, then ratably according to the aggregate amount of accrued and unpaid interest owing to each holder of a Senior Note (other than the Series CMW Senior Notes) being so prepaid;

(iii) Third , to the payment of the outstanding principal amounts of the Senior Notes (other than the Series CMW Senior Notes) being so paid (allocated ratably among and then within each Series of Senior Notes (other than the Series CMW Senior Notes)) and in case such proceeds shall be insufficient to pay in full such amounts, then ratably according to the aggregate amount of unpaid principal amounts owing to each holder of a Senior Note (other than the Series CMW Senior Notes) being so prepaid; and

(iv) Fourth , to the payment of Make-Whole Amounts due and owing under the Senior Notes being so prepaid, plus all amounts outstanding under the Series CMW Senior Notes and in case such proceeds shall be insufficient to pay in full such Make-Whole Amounts and amounts due and owing under the Series CMW Senior Notes, then ratably according to the amount of such Make-Whole Amount and such amounts due and owing under the Series CMW Senior Notes owing to each Noteholder.

10.7. Payments Due on Non-Business Days. Anything in this Agreement or the Senior Notes to the contrary notwithstanding, any payment of principal of or Make-Whole Amount or interest on any Senior Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day.

10.8. Maturity; Surrender, Etc . In the case of each repayment or prepayment of Senior Notes pursuant to this Section 10, the principal amount of each Senior Note to be prepaid shall mature and become due and payable on the date fixed for such repayment or prepayment together with interest on such principal amount accrued to such date and in the case of a MWA Senior Note the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Senior Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Senior Note shall be issued in lieu of any paid or prepaid principal amount of any Senior Note.

10.9. Make-Whole Amount . “Make-Whole Amount” means, with respect to any Series A-1 Senior Note, any Series B-1 Senior Note and any Series C-1 Senior Note (collectively, the “MWA Senior Notes” ), an amount payable in cash equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such MWA Senior Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

“Applicable Percentage” means 0.50% (fifty basis points).

“Called Principal” means, with respect to any MWA Senior Note, the principal of such MWA Senior Note that is to be prepaid pursuant to Section 10.2, Section 10.3 (if applicable) or Section 10.4 or has become or is declared to be immediately due and payable pursuant to Section 14.3, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any MWA Senior Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on such MWA Senior Note is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any MWA Senior Note, the Applicable Percentage over the yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15(519) (or any comparable successor publication) for U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.

In the case of each determination under clause (i) or clause (ii), as the case may be, of the preceding paragraph, such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the applicable U.S. Treasury security with the maturity closest to and greater than such Remaining Average Life and (2) the applicable U.S. Treasury security with the maturity closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable MWA Senior Note.

“Remaining Average Life” means, with respect to the Called Principal of any MWA Senior Note, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of any MWA Senior Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of such MWA Senior Note, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 10.2, Section 10.3 (if applicable), Section 10.4 or Section 14.3.

“Settlement Date” means, with respect to the Called Principal of any MWA Senior Note, the date on which such Called Principal is to be prepaid pursuant to Section 10.2, Section 10.3 (if applicable), Section 10.4 or has become or is declared to be immediately due and payable pursuant to Section 14.3, as the context requires.

10.10. Repurchase of Senior Notes.

(a) Neither any Consolidated Subsidiary or Affiliate of the Company, directly or indirectly, may repurchase or make any offer to repurchase any Senior Notes.

(b) The Company may not, directly or indirectly, repurchase or make any offer to repurchase any (a) Senior Notes (excluding Series CMW Senior Notes) unless an offer has been made to repurchase Senior Notes (excluding Series CMW Senior Notes), pro rata, from all holders of the Senior Notes (excluding Series CMW Senior Notes) at the same time and upon the same terms or (b) Series CMW Senior Notes unless (i) all other Senior Notes other than Series CMW Senior Notes have been prepaid in full and (ii) an offer has been made to repurchase Series CMW Senior Notes, pro rata, from all holders of the Series CMW Senior Notes at the same time and upon the same terms. The Company will promptly cancel all Senior Notes acquired by it pursuant to any payment or prepayment of Senior Notes pursuant to any provision of this Agreement and no Senior Notes may be issued in substitution or exchange for any such Senior Notes. Without limiting the foregoing, upon the repurchase or other acquisition of any Senior Notes by the Company such Senior Notes shall no longer be outstanding for purposes of any section of this Agreement relating to the taking by the holders of the Senior Notes of any actions with respect hereto, including without limitation, Section 14.3, Section 14.4 and Section 17.1.

11.

AFFIRMATIVE COVENANTS.

11.1. Corporate Existence, Etc. The Company will preserve and keep in full force and effect, and will cause each Consolidated Subsidiary to keep in full force and effect, its corporate existence and all registrations, licenses, permits and governmental approvals necessary to the proper conduct of its business, except where the failure to maintain such registrations, licenses, permits and governmental approvals could not reasonably be expected to have a Material Adverse Effect; provided, however, that the foregoing shall not prevent any transaction permitted by Section 12.2.

11.2. Insurance. The Company will maintain, and will cause each Consolidated Subsidiary to maintain, insurance coverage by reputable insurers reasonably believed by the Company to be financially sound in such forms and amounts and against such risks as are (a) customary for corporations and limited liability companies of established reputation engaged in the same or a similar business and owning and operating similar properties and (b) otherwise contemplated by the terms of the Financing Documents.

11.3. Taxes, Claims for Labor and Materials, Compliance with Laws.

(a)  Taxes, Claims for Labor and Materials. The Company will promptly pay and discharge, and will cause each Consolidated Subsidiary to pay and discharge, all lawful taxes, assessments and governmental charges or levies imposed upon the Company or such Consolidated Subsidiary, respectively, or upon or in respect of all or any part of the property or business of the Company or such Consolidated Subsidiary, all material trade accounts payable in accordance with usual and customary business terms, and all claims for work, labor or materials, which if unpaid might become a Lien upon any property of the Company or such Consolidated Subsidiary, provided , however , that the Company or such Consolidated Subsidiary shall not be required to pay any such tax, assessment, charge, levy, account payable or claim if (i) the validity, applicability or amount thereof is being contested in good faith by appropriate actions or proceedings which will prevent the forfeiture or sale of any material property of the Company or such Consolidated Subsidiary or any material interference with the use thereof by the Company or such Consolidated Subsidiary, and (ii) the Company or such Consolidated Subsidiary shall set aside on its books, reserves deemed by it to be adequate with respect thereto.

(b)  Compliance with Laws. The Company will, and will cause each Consolidated Subsidiary to, (i) promptly comply in all material respects with and not violate in any material respect the Investment Company Act so long as it is subject thereto, and (ii) promptly comply in all material respects with all other laws, ordinances or governmental rules and regulations to which it is subject, the violation of which could reasonably be expected to have a Material Adverse Effect or would result in any Lien (other than a Permitted Lien) on a material part of the property or assets of the Company or any Consolidated Subsidiary, including, without limitation, the Occupational Safety and Health Act of 1970, as amended, ERISA and all Environmental Laws.

11.4. Maintenance, Etc. The Company will maintain, preserve and keep, and will cause each of its Consolidated Subsidiaries to maintain, preserve and keep, its material properties which are used in the conduct of its business (whether owned in fee or a leasehold interest) in good repair and working order, ordinary wear and tear excepted, and from time to time will make all necessary repairs, replacements and renewals as the Company may determine to be appropriate to the conduct of its business.

11.5. Status of RIC and BDC. The Company will maintain its status as a RIC under the Code, and as a “business development company” under the Investment Company Act.

11.6. Collateral Requirements .

(a)  Collateral Documents . The Company will, and will cause each Subsidiary Grantor to, (i) comply with and perform in all material respects each of the terms, conditions and covenants set forth in the Collateral Documents to which it is a party, and (ii) cause the representations and warranties set forth in the Collateral Documents to be true and correct in all material respects as of the date of Closing as provided in the Collateral Documents.

(b)  Deed of Trust/Mortgage. Within the later of 90 days after the date of the Closing and 30 days after the date upon which the existing purchase agreement for the Mortgaged Property is terminated, but in no event later than 180 days from the date of the Closing, the Noteholders shall have received copies of the deed of trust, trust deed, deed to secure debt, or mortgage, as applicable, in form and substance reasonably satisfactory to the Noteholders, the Collateral Agent and their counsel covering all interests in real property held in fee simple by the Company or any Subsidiary Grantor (other than the properties listed on Schedule 11.6(b)) (collectively, the “ Mortgaged Property ”) duly executed by the appropriate Grantor (collectively, the “ Mortgage ”), together with:

(i) evidence that counterparts of the Mortgage have been duly executed, acknowledged and delivered and are in form suitable for filing or recording in all filing or recording offices that the Noteholders may reasonably deem necessary or customary in order to create a valid and subsisting Lien on the Mortgaged Property in favor of the Collateral Agent for the benefit of the Secured Parties, subject to no other Liens other than Permitted Liens, and that all filing, documentary, stamp, intangible and recording taxes and fees have been paid;

(ii) a fully paid American Land Title Association Lender’s Extended Coverage title insurance policy, on each Mortgaged Property, with endorsements and in amounts reasonably acceptable to the Noteholders, issued, coinsured and reinsured by title insurers acceptable to the Noteholders, insuring the Mortgage to be a valid and subsisting Lien on such Mortgaged Property, free and clear of all defects (including, but not limited to, mechanics’ and materialmen’s Liens) and encumbrances, excepting only Liens permitted under Section 12.8 and other Liens acceptable to the Noteholders, and providing for such other affirmative insurance (including such endorsements for mechanics’ and materialmen’s Liens and any additional endorsements as are reasonably required by the Noteholders but excluding endorsements for zoning or creditors’ rights coverage) and such coinsurance and direct access reinsurance as the Noteholders may deem necessary or desirable;

(iii) evidence that all other action that the Collateral Agent (acting at the direction of the Required Secured Creditors) may deem reasonably necessary in order to create valid and subsisting Liens on Mortgaged Property, subject to no other Liens other than Permitted Liens, has been taken; and

(iv) completed UCC fixture financing statements for the appropriate jurisdiction deemed reasonably necessary by the Collateral Agent (acting at the direction of the Required Secured Creditors) and the Noteholders to perfect the Collateral Agent’s (on behalf of the Secured Parties) security interest with respect to the fixtures, machinery and equipment located at the Mortgaged Property naming the applicable Grantor as debtor, and the Collateral Agent (on behalf of the Secured Parties) as secured party.

For the avoidance of doubt, the Mortgage for the REO shall be executed and delivered on the date of the Closing, with the understanding that the aforementioned requirements relating thereto shall be completed within the later of 90 days of the date of the Closing and 30 days after the date upon which the existing purchase agreement for the Mortgaged Property is terminated, but in no event later than 180 days from the date of the Closing.

(c)  Landlord Subordination Agreement. The Company shall use commercially reasonably efforts to deliver within 45 days of the date of the Closing an executed landlord subordination agreement for the property located at 1919 Pennsylvania Avenue, N.W., Washington, D.C. 20006 in form and substance reasonably satisfactory to the Required Holders.

(d)  Additional Collateral . If at any time the Company or any Consolidated Subsidiary shall grant to any one or more of the Collateral Agent or a holder of any Senior Secured Obligation additional credit support (excluding any Senior Secured Obligations, but including the Continuing Guaranty Agreement and any other Guaranty) or collateral of any kind as additional security to secure the Senior Secured Obligations, then the Company shall, or shall cause such Grantor or such Consolidated Subsidiary to, (A) grant or provide to the Collateral Agent for the benefit of the Secured Parties the same credit support or collateral so that the Senior Notes shall at all times be secured on an equal and ratable basis with the other Senior Secured Obligations, and (B) deliver an opinion of counsel (which may be issued by the general counsel or chief legal officer for the Company) to the effect that such additional credit support and the Collateral Documents relating to any such collateral have been duly authorized, executed and delivered by the Company, such Subsidiary Grantor or such Consolidated Subsidiary, as applicable, constitute the legal, valid and binding obligations of the Company, such Subsidiary Grantor or such Consolidated Subsidiary, as applicable, are enforceable against the Company, such Subsidiary Grantor or such Consolidated Subsidiary in accordance with the terms thereof, and covering such other matters as the Required Holders may reasonably request. In addition, any such credit support and new collateral shall at all times be subject to and governed by the terms of the Intercreditor Agreement.

(e)  Additional Consolidated Subsidiaries . (i) Within ten days after the time that any Person becomes a Consolidated Subsidiary (other than Allied Capital Beteiligungsberatung GmbH, a dormant Consolidated Subsidiary being liquidated) as a result of the creation of such Consolidated Subsidiary, a merger or other consolidation permitted by Section 12.2 of this Agreement or otherwise, or (ii) subject to the foregoing clause (i), concurrently with any Consolidated Subsidiary becoming a co-borrower or guarantor under the Bank Credit Agreement, the Company shall cause (A) such Consolidated Subsidiary to execute a joinder to the acknowledgement and consent to the Intercreditor Agreement reasonably satisfactory to the Collateral Agent (acting at the direction of the Required Secured Creditors), (B) such Consolidated Subsidiary to execute the Continuing Guaranty Agreement in substantially the form of Exhibit 5.7 hereto, (C) such Consolidated Subsidiary to become a party to the Security Agreement (other than any Pledge LLC) and grant a valid, perfected, and to the Company’s Knowledge, first priority security interest (subject to any Permitted Liens) in all of its real and personal property (other than real and personal property which constitute Excluded Assets (subject to the terms of the Security Agreement) and, with respect to perfection, other than Second Tier Collateral that is not subject to a Perfection Requirement) whether tangible or intangible, pursuant to a joinder agreement in form and substance reasonably satisfactory to the Collateral Agent (acting at the direction of the Required Secured Creditors), (D) 100% of such Consolidated Subsidiary’s Equity Interests (65% in the case of any Consolidated Subsidiary organized under the laws of any jurisdiction outside of the United States of America) to be pledged in favor of the Collateral Agent under the Collateral Documents to secure the Note Obligations, and (E) such Consolidated Subsidiary to deliver to the Collateral Agent such board resolutions, officer’s certificates, corporate and other documents and opinions of counsel (which may be issued by the general counsel or chief legal officer of the Company) as the Required Holders shall reasonably request in connection with the actions described in clauses (A), (B), (C) and (D) above.

(f)  Additional Undertakings . The Company will use commercially reasonable efforts to obtain the consent or approval of all third parties required to permit the Company and the Subsidiary Grantors to subject all of their assets (other than the Excluded Assets (subject to the terms of the Security Agreement) and, with respect to perfection, Second Tier Collateral that is not subject to a Perfection Requirement) to the Lien of the Collateral Documents. In determining whether to obtain any such consent or approval, the Company may take into account the cost or charges imposed by third parties (on either the Company or any entity in which the Company or a Consolidated Subsidiary has an investment) to grant any such consent or approval and/or any undue burden where the efforts would not justify obtaining such consent or approval in view of the value of the property proposed to be subject to such Lien as reasonably determined by the Company. In addition, the Company shall not be obligated to obtain consents or approvals in respect of assets which in the reasonable judgment of the Company cannot be pledged, or as to which the consent to pledge cannot be sought, without substantially impairing the value of the asset or the ability of the Company or a Subsidiary Grantor to manage the asset in the ordinary course of its business. Without limiting the obligation of the Company set forth above, to the extent any personal property of the Company or a Subsidiary Grantor cannot be pledged as Collateral on account of contractual limitations applicable to such property but may be transferred to a Pledge LLC, such personal property shall be transferred to a Pledge LLC. The Company shall use commercially reasonable efforts to ensure that the documents which govern Investments made subsequent to the date of the Closing do not restrict the ability of the Company to subject any such Investment to the Lien of the Collateral Documents; provided that , so long as it has used such efforts, the Company will not be precluded from making an Investment as to which the governing documents contain such a restriction.

11.7. Reports and Rights of Inspection. The Company will keep, and will cause each Consolidated Subsidiary to keep, proper books of record and account in which full and correct entries will be made of all material dealings or material transactions of, or in relation to, the business and affairs of the Company or such Consolidated Subsidiary, in accordance with GAAP consistently applied (except for changes disclosed in the financial statements furnished to the Holders pursuant to this Section 11.7 and concurred with by the independent registered public accounting firm referred to in clause (b) of this Section 11.7), and will furnish or make available to each Institutional Holder of the then outstanding Senior Notes (in duplicate if so specified below or otherwise requested):

(a)  Quarterly Statements . As soon as available and in any event within 50 days (or such period as is 5 Business Days greater than the period applicable to the required filing date of the Company’s Quarterly Report on Form 10-Q) after the end of each quarterly fiscal period (except the last) of each fiscal year, copies of:

(i) consolidated balance sheets of the Company and its Consolidated Subsidiaries as of the close of such quarterly fiscal period, setting forth in comparative form the consolidated figures for the fiscal year then most recently ended,

(ii) consolidated statements of operations of the Company and its Consolidated Subsidiaries for such quarterly fiscal period and for the portion of the fiscal year ending with such quarterly fiscal period, in each case setting forth in comparative form the consolidated figures for the corresponding periods of the preceding fiscal year, and

(iii) consolidated statements of changes in net assets and cash flows of the Company and its Consolidated Subsidiaries for the portion of the fiscal year ending with such quarterly fiscal period, setting forth in comparative form the consolidated figures for the corresponding period of the preceding fiscal year,

all in reasonable detail and certified as complete and correct in all material respects by a Senior Financial Officer of the Company;

(b)  Annual Statements . As soon as available and in any event within 95 days (or such period as is 5 Business Days greater than the period applicable to the required filing date of the Company’s Annual Report on Form 10-K) after the close of each fiscal year, copies of:

(i) consolidated balance sheets of the Company and its Consolidated Subsidiaries as of the close of such fiscal year,

(ii) consolidated statements of operations, changes in net assets and cash flows of the Company and its Consolidated Subsidiaries for such fiscal year, and

(iii) consolidated statement of investments of the Company and its Consolidated Subsidiaries as of the close of such fiscal year,

setting forth in comparative form the consolidated figures for the preceding fiscal year (except in the case of such statement of investments) and in each case all in reasonable detail and accompanied by a report thereon of an independent registered public accounting firm selected by the Company to the effect that the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company and its Consolidated Subsidiaries as of the end of the fiscal year being reported on and the consolidated results of their operations, changes in net assets and cash flows for said year in conformity with GAAP and that the examination of such accountants in connection with such financial statements has been conducted in accordance with generally accepted auditing standards and included such tests of the accounting records and such other auditing procedures as said accountants deemed necessary in the circumstances;

(c)  Audit Reports . Promptly upon receipt thereof, one copy of each interim or special audit made by an independent registered public accounting firm of the books of the Company or any Consolidated Subsidiary and any management letter received from such accountants;

(d)  SEC and Other Reports . (i) Promptly upon their becoming available (or in the case of registration statements, promptly after their becoming effective), copies of all effective registration statements (other than the exhibits thereto, any prospectus supplements, and any effective registration statements on Form S-8 or its equivalent), and reports on Form 10-K, 10-Q, and 8-K (or their equivalents) filed by the Company with the Securities and Exchange Commission (or any Governmental Authority substituted therefor) or any national securities exchange, provided that the Company shall have been deemed to have made such delivery to each Institutional Holder if it shall have timely made any such filing available on the Securities and Exchange Commission’s EDGAR filing database and shall have given each Noteholder prior notice of such availability on EDGAR, (ii) promptly upon the mailing thereof to the shareholders of the Company generally, copies of all financial statements, reports, and proxy statements so mailed, and (iii) promptly upon their becoming available, copies of any orders, judgments or decrees in excess of $25,000,000 that have been entered against the Company or any of its Consolidated Subsidiaries in any proceedings to which the Company or any Consolidated Subsidiary is a party, issued by any Governmental Authority;

(e)  ERISA Reports . Promptly upon a Responsible Officer of the Company becoming aware of the occurrence thereof, written notice of (i) a Reportable Event with respect to any Plan hereafter maintained by the Company or any ERISA Affiliate; (ii) the institution of any steps by the Company, any ERISA Affiliate, the PBGC or any other person to terminate any such Plan; (iii) the institution of any steps by the Company or any ERISA Affiliate to withdraw from any such Plan; (iv) a non-exempt “prohibited transaction” within the meaning of Section 406 of ERISA in connection with any such Plan; (v) any material contingent liability of the Company or any Consolidated Subsidiary with respect to any post-retirement welfare liability hereafter existing; or (vi) the taking of any action by, or the threatening of the taking of any action by, the Internal Revenue Service, the Department of Labor or the PBGC with respect to any of the foregoing;

(f)  Officer’s Certificates . Within the periods