AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

AMENDED AND RESTATED

REVOLVING CREDIT AGREEMENT

 

dated as of September 20, 2005

among

MCG CAPITAL CORPORATION,

as Borrower

and

BAYERISCHE HYPO-UND VEREINSBANK AG,

NEW YORK BRANCH,

as Administrative Agent

and

Various Lenders

 

 

TABLE OF CONTENTS

1.          DEFINITIONS .            1

2.          REVOLVING CREDIT FACILITY .    10

2.1        Amounts Available for Borrowing .         10

2.2.       Conversion Options .      12

2.2.1.    Conversion to Different Type of Revolving Credit Loan .             12

2.2.2.    Continuation of Type of Loan .    12

2.2.3.    LIBOR Loans . 12

2.3.       Interest .             12

2.3.1.    In General .        12

2.3.2.    Default Interest .             13

2.3.3.    Interest Rate Limitation .             13

3.          CHANGES IN CIRCUMSTANCES, ETC .     14

3.1.       Inability to Determine Eurodollar Rate .   14

3.2.       Illegality .            14

3.3.       Change in Circumstances .          15

3.4.       Certificate .         15

3.5.       Indemnity .         15

4.          FEES AND PAYMENTS .        15

5.          REPRESENTATIONS AND WARRANTIES .            17

6.          CONDITIONS PRECEDENT .            20

7.          COVENANTS .            22

7.1.       Affirmative Covenants .   22

7.2.       Negative Covenants .      24

8.          EVENTS OF DEFAULT; ACCELERATION .             25

9.          SETOFF .          27

10.        THE AGENT .   27

11.        MISCELLANEOUS .    27

12.        CONFIDENTIALITY .             23

13.        WAIVER OF JURY TRIAL, ETC .       24

14.        BENEFITS OF AGREEMENT, PARTICIPATIONS AND ASSIGNMENTS .            33

 

 

 

Exhibits

Exhibit A                                   Loan Request

Exhibit B                                   Form of Promissory Note

Exhibit C                                   Form of Confidentiality Agreement

Exhibit D                                   Form of Assignment and Assumption Agreement

 

 

 

 

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (as further defined in Section 1, this "Credit Agreement") is made as of September 20, 2005 , by and among MCG CAPITAL CORPORATION , a Delaware corporation having its chief executive office at 1100 Wilson Boulevard, Suite 3000, Arlington, Virginia ("Borrower"), and BAYERISCHE HYPO-UND VEREINSBANK AG, NEW YORK BRANCH, as Administrative Agent ("Agent") and each of the financial institutions that are from time to time signatory hereto together with their assignees pursuant to Section 14.3 hereof (each a "Lender" and collectively, the "Lenders"). The Credit Agreement amends, restates and supersedes in its entirety that Revolving Credit and Security Agreement dated as of September 10, 2004 (the "Prior Credit Agreement") by and between Borrower and BAYERISCHE HYPO-UND VEREINSBANK AG, NEW YORK BRANCH.

   DEFINITIONS .  

Defined Terms . The following terms shall have the meanings set forth in this Section 1 or elsewhere in the provisions of this Credit Agreement referred to below:

Accumulated Funding Deficiency : Any accumulated funding deficiency as defined in Section 302(a) of ERISA or Section 412(a) of the Code.

Agent : Bayerische Hypo-und Vereinsbank AG, New York Branch, as contractual representative for the Lenders under the terms of this Credit Agreement, and any of its successors and assigns permitted in accordance with the terms hereof.

Approved Change of Control : A Change of Control that is approved or consented to by the Board of Directors of Borrower.

Asset Coverage Ratio : As measured as of any date of determination for Borrower and its Subsidiaries on a consolidated basis, the ratio of (a) Available Debt Investments to (b) the sum of the following: (1) 100% of Unsecured Debt ( excluding the Indebtedness under this Credit Agreement) and (2) 150% of the aggregate unpaid principal amount of Indebtedness outstanding under this Credit Agreement.

Assignment and Acceptance Agreement : An Assignment and Acceptance agreement among a Lender, an Assignee and the Agent, substantially in the form of Exhibit D hereto.

Available Debt Investments : As measured as of any date of determination for Borrower and its Subsidiaries on a consolidated basis, an amount equal to the sum of the following, without duplication: (a) 100% of each Eligible Debt Investment having a Level 1 Investment Rating, a Level 2 Investment Rating, Level 3 Investment Rating or a Level 4 Investment Rating, and (b) 20% of each Eligible Debt Investment having a Level 5 Investment Rating that either (i) is secured by a first priority security interest in all or a material portion of the assets of the underlying obligor or (ii) is otherwise senior in right of payment to other funded debt of the underlying obligor, and (c) 50% of each Debt Investment that (i) would be an Eligible Debt Investment but for the application of Clauses "(f)" or "(g)" of such definition and (ii) is past due beyond the end of any applicable grace period with respect to any interest or principal payment by more than 60 days but not by more than 120 days. For purposes of determining "Available Debt Investments," Investments shall be valued at their Fair Market Value as of any date of determination.

Bankruptcy Code : The Federal Bankruptcy Reform Act of 1978, as codified under Title 11 of the United States Code, and as implemented and supplemented by the Bankruptcy Rules promulgated thereunder, as amended.

Borrower : As defined in the preamble .

Business Day : Any day other than a Saturday or a Sunday on which banking institutions in New York, New York and in Arlington, Virginia are open for the transaction of banking business and, in the case of LIBOR Loans, also a day which is a Eurodollar Business Day.

Change of Control : An event or series of events by which any person or group of persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934), without the consent or approval of the Board of Directors of Borrower, shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act), directly or indirectly, of fifty-one percent (51%) or more of the outstanding shares of common stock of Borrower.

Charter Documents : The certificate of incorporation and the by-laws of Borrower.

Closing Date : The date on which all conditions precedent to the effectiveness of this Credit Agreement set forth in Section 6 have been satisfied.

Code : The Internal Revenue Code of 1986, as amended from time to time.

Commitment : The amount specified with respect to each Lender on the signature pages of this Credit Agreement or pursuant to the relevant Assignment and Assumption Agreement as such Lender's maximum commitment with respect to Loans pursuant to this Credit Agreement.

Commitment Fee : As defined in Section 2.5.2 .

Commonly Controlled Entity : An entity, whether or not incorporated, that is under common control with Borrower within the meaning of Section 4001(a)(14) of ERISA or is part of a group that includes Borrower and that is treated as a single employer under Section 414(b, c, m or o) of the Code.

Consent : In respect of any person or entity, any permit, license or exemption from, approval, consent of, registration or filing with any local, state or federal governmental or regulatory agency or authority, required under applicable law.

Consolidated Stockholders' Equity : As measured as of any date of determination for Borrower and its Subsidiaries on a consolidated basis, the stockholders' equity of Borrower and its Subsidiaries as determined in accordance with Generally Accepted Accounting Principles (as applicable to a business development company as defined in the ICA 1940).

Conversion Request : As defined in Section 2.2.1 .

Credit Agreement : As defined in the preamble , which term shall include this Credit Agreement and the Schedules and Exhibits hereto, all as may be amended, modified, supplemented and/or restated and in effect from time to time.

Credit and Collection Policy : The written credit and collection policy of Borrower by which Borrower from time to time originates, manages, services and collects its investments as in effect on the Closing Date, as such credit and collection policy may be amended or supplemented from time to time in accordance with the provisions of Section 7.1(i) of this Credit Agreement.

Debt Investment : An Investment constituting an obligation for borrowed money, whether secured or unsecured, but specifically excluding accounts payable, trade payables and/or accrued expenses arising in the ordinary course of business.

Dollars or $ : Dollars in lawful currency of the United States of America.

Domestic Lending Office : The address designated by each Lender as the office from which it shall make and maintain Loans hereunder or by Agent as of the office to which Borrower is to make any payments of the Obligations hereunder, which shall be the address of such party set forth on the signature page hereto, or such other addresses as such party from time to time hereafter may designate in writing to Borrower.

Drawdown Date : In respect of any Loan, the date on which such Loan is made to Borrower.

Eligible Debt Investments : Debt Investments that have been originated, purchased or otherwise acquired by Borrower or any of its Subsidiaries in the ordinary course of business; provided that no such Investment shall be an Eligible Debt Investment unless (a) such Investment is evidenced by an instrument or agreement that has been duly authorized, executed and delivered and is enforceable against the obligor thereof, and (b) such Investment is denominated and payable in Dollars or in the currency of any other Permitted Country, and (c) such Investment is not subject to any Lien and, if such Investment is owned by a Subsidiary of Borrower, Borrower shall not have pledged or otherwise encumbered the stock of, or similar equity interest in, such Subsidiary or any direct or indirect parent thereof, and (d) no right of rescission, set-off, counterclaim, defense or other material dispute has been asserted with respect to such Investment, and (e) the obligor in respect of such Investment is not (1) organized or incorporated under the laws of a jurisdiction other than the United States of America or another Permitted Country, or (2) the subject, as a debtor, of an insolvency event of the type described in Section 8(e) ( unless such Investment is a DIP (debtor in possession) financing that has been separately approved by Borrower's Investment Committee or Credit Committee), and (f) such Investment is not 120 days or more past due (beyond the end of any applicable grace period) with respect to any interest or principal payment and otherwise is not and should not be considered a non-accrual or charge-off loan in accordance with Borrower's Credit and Collection Policy, and (g) such Investment has not been subject to a material modification due to an inability of the obligor thereunder to make a required payment of periodic interest to Borrower or due to a material financial deterioration in the underlying obligor's ability to repay the Investment in accordance with its terms unless (1) the underlying obligor in respect of such Investment makes all regularly scheduled payments of periodic interest in immediately available funds for a period of six (6) calendar months after such modification or event at a rate of at least LIBOR plus two and one half percent (2.5%) per annum or (2) the Agent otherwise determines that such modification as a result of such inability to pay or such deterioration does not constitute a material modification. Notwithstanding the foregoing , the retained residual interest of Borrower or any Subsidiary of Borrower in a Securitization Transaction shall not qualify as an Eligible Debt Investment.

Eligible Transferee : (a) a Lender, an Affiliate of any Lender or a pledgee or funding source of a Lender and (b) any other Person (other than a natural person) that is at the time of such assignment (1) a commercial bank organized under the laws of the United States of America or any state thereof, having combined capital and surplus in excess of $500,000,000, or (2) a commercial bank organized under the laws of any other country that is a member of the Organization of Economic Cooperation and Development, or a political subdivision of any such country, having combined capital and surplus in excess of $500,000,000, or (3) a finance company, insurance company or other financial institution which in the ordinary course of business extends credit of the type extended hereunder and that has total assets in excess of $500,000,000.

Environmental Laws : All laws pertaining to environmental matters, including the Resource Conservation and Recovery Act, the Comprehensive Environmental Response Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water Act, the Federal Clean Air Act, and the Toxic Substances Control Act, in each case as amended, and all rules, regulations, judgments, decrees, orders and licenses arising under all such laws.

Equity Interests : With respect to any Person, shares of capital stock of (or membership, partnership, trust, other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or membership, partnership, trust, other ownership or profit interests in) such Person, or securities convertible into or exchangeable for shares of capital stock of (or membership, partnership, trust, other ownership or profit interests in) such Person or for warrants, rights or options for the purchase or other acquisition from such Person of such shares of capital stock of (or membership, partnership, trust, other ownership or profit interests in) such Person.

ERISA : The Employee Retirement Income Security Act of 1974, as amended, and all rules, regulations, judgments, decrees, and orders arising thereunder.

ERISA Affiliate : Any Person which is treated as a single employer with Borrower under Section 414 of the Code.

Eurocurrency Reserve Rate : For any day with respect to a LIBOR Loan, the maximum rate (expressed as a decimal) at which any Lender subject thereto would be required to maintain reserves under Regulation D of the Board of Governors of the Federal Reserve System (or any successor or similar regulations relating to such reserve requirements) against "Eurocurrency Liabilities" (as that term is used in Regulation D), if such liabilities were outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on and as of the effective date of any change in such maximum rate.

Eurodollar Business Day : Any Business Day on which commercial banks are open for international business (including dealings in U.S. dollar deposits) in London or such other London interbank market as may be selected by Agent in its sole discretion acting in good faith and in a commercially reasonable manner.

Event of Default : Any of the events listed in Section 8 .

Fair Market Value : With respect to any Investment, the fair market value of such Investment as required by, and determined in accordance with, the ICA 1940 and any orders of the SEC issued to Borrower, all as determined by the board of directors of Borrower and its independent auditors. With respect to any Eligible Debt Investment owned by a Subsidiary (whether or not such Subsidiary is a Wholly-Owned Subsidiary), the Fair Market Value of such Eligible Debt Investment together with the Fair Market Value of all other Eligible Debt Investments owned by the same Subsidiary shall be adjusted so that the aggregate Fair Market Value of all such Eligible Debt Investments owned by the same Subsidiary shall collectively reflect a deduction for the amount of all liabilities owed by such Subsidiary. In addition, with respect to any Eligible Debt Investment owned by a Subsidiary that is not a Wholly-Owned Subsidiary, the Fair Market Value of such Eligible Debt Investment shall be an amount equal to Fair Market Value of such Eligible Debt Investment multiplied by Borrower's ownership percentage in such Subsidiary.

Financials : In respect of any period, the balance sheet of any Person as at the end of such period, and the related statement of income and statement of cash flow for such period, each setting forth in comparative form the figures for the previous comparable fiscal period, all in reasonable detail and prepared in accordance with Generally Accepted Accounting Principles (to the extent with respect to Borrower, then as such principles are applicable to a business development company as defined in the ICA 1940).

Generally Accepted Accounting Principles : Principles that are (a) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time, and (b) consistently applied with past financial statements adopting the same principles (other than such changes, with respect to Borrower, as are appropriate to reflect Borrower's election to become a business development company under the ICA 1940), provided that in each case referred to in this definition of "Generally Accepted Accounting Principles" a certified public accountant would, insofar as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion ( other than a qualification regarding changes in Generally Accepted Accounting Principles) as to financial statements in which such principles have been properly applied.

Guaranteed Pension Plan : Any employee pension benefit plan within the meaning of Section 3(2) of ERISA maintained or contributed to by Borrower or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

ICA 1940 : The Investment Company Act of 1940, as amended, and all rules, regulations, judgments, decrees, and orders arising thereunder.

Indebtedness : In respect of Borrower, all obligations of Borrower for borrowed money, whether secured or unsecured, but specifically excluding accounts payable, trade payables and/or accrued expenses arising in the ordinary course of business.

Interest Expense : As measured as of any date of determination for any period for Borrower and its Subsidiaries on a consolidated basis, the total interest expense ( including capitalized interest expense and interest expense attributable to obligations in respect of capital leases and, on a net basis, expenses and income under interest rate protection or other hedging agreements) of Borrower and its Subsidiaries for such period, and in any event, shall include all interest expense with respect to any debt obligation in respect of which Borrower or any of its Subsidiaries is wholly or partially liable ( other than pursuant to interest rate protection and other hedging agreements).

Interest Payment Date : (i) As to any Prime Rate Loan, the last day of any fiscal quarter of Borrower; and (ii) as to any LIBOR Loan, the last day of the Interest Period relating to such LIBOR Loan ( provided that , for any LIBOR Loan with an Interest Period in excess of three months, such Interest Payment Date shall be the last day of each three month period therein).

Interest Period : Subject to Section 2.4.1 , with respect to each Loan, (a) initially , the period commencing on the initial Drawdown Date of such Loan and ending on the last day of one of the following periods, as selected by Borrower in a Loan Request: (i) for any Prime Rate Loan, the last day of the fiscal quarter of Borrower; and (ii) for any LIBOR Loan, 1, 2, 3 or 6 months; and (b) thereafter , each period commencing on the last day of the immediately preceding Interest Period applicable to such Loan and ending on the last day of the period selected or deemed selected by Borrower pursuant to Section 2.2.2 ; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

(A) if any Interest Period with respect to a LIBOR Loan would otherwise end on a day that is not a Eurodollar Business Day, then that Interest Period shall be extended to the next succeeding Eurodollar Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Eurodollar Business Day; and

(B) if any Interest Period with respect to a Prime Rate Loan would end on a day that is not a Business Day, then that Interest Period shall end on the next succeeding Business Day and interest shall accrue until such next succeeding Business Day; and

(C) with respect to any LIBOR Loan, any Interest Period that begins on the last Eurodollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Eurodollar Business Day of a calendar month that is 1, 2, 3, or 6 months later (depending upon the duration selected or deemed selected by Borrower for such Interest Period).

Interest Rate Determination Date : Each date for calculating the LIBOR for purposes of determining the interest rate in respect of an Interest Period. The Interest Rate Determination Date shall be the second Business Day prior to the first day of the related Interest Period for such LIBOR Loan.

Investment : Any investment in any Person, whether by means of purchase or acquisition of obligations or securities of such Person, capital contributions to such Person, loan or advance to such Person, making of a time deposit with such Person, guaranty or assumption of any obligation of such Person or otherwise.

Investment Ratings Policy : The written policy of Borrower by which Borrower from time to time assigns an investment rating to each investment of Borrower as in effect on the Closing Date, as such investment rating policy may be amended or supplemented from time to time in accordance with the provisions of Section 7.1(i) of this Credit Agreement.

Lender : As defined in the preamble , and shall include a Lender's successor and assigns, as permitted hereunder.

Level 1 Investment Rating : As of any date and in respect of any Investment, an Investment that is classified, in accordance with the Investment Ratings Policy, as having an Investment Rating of 1 as of such date.

Level 2 Investment Rating : As of any date and in respect of any Investment, an Investment that is classified, in accordance with the Investment Ratings Policy, as having an Investment Rating of 2 as of such date.

Level 3 Investment Rating : As of any date and in respect of any Investment, an Investment that is classified, in accordance with the Investment Ratings Policy, as having an Investment Rating of 3 as of such date.

Level 4 Investment Rating : As of any date and in respect of any Investment, an Investment that is classified, in accordance with the Investment Ratings Policy, as having an Investment Rating of 4 as of such date.

Level 5 Investment Rating : As of any date and in respect of any Investment, an Investment that is classified, in accordance with the Investment Ratings Policy, as having an Investment Rating of 5 as of such date.

LIBOR : For any Interest Period with respect to a LIBOR Loan, the London interbank offered rate (rounded to the nearest 1/100th of one percent (0.01%)), equal to the offered rate for deposits in Dollars for a period equal to such Interest Period, commencing on the first day of such Interest Period, which appears on Page LIBOR01 of the Reuters Screen (or, if a quotation by Reuters is not available, then as published by Bloomberg or Dow Jones-Telerate and displayed on page 3750 as the BBA LIBOR) (or, in any such instance, as published by such other or successor service or displayed on such other page as may replace such service or page for the purpose of displaying London interbank offered rates of major banks) as of 11:00 a.m., London time, on the Interest Rate Determination Date with respect to such Interest Period. If LIBOR for an Interest Period cannot be determined pursuant to the preceding sentence, then LIBOR for such Interest Period shall be determined on the basis of the average rates at which deposits in Dollars are offered to Agent, by at least three (3) financial institutions the long-term debt securities of which are rated at least "A" by Standard & Poor's, at Agent's principal London office at approximately 11:00 a.m., London time, on the Interest Rate Determination Date with respect to such Interest Period, and on an amount approximately equal to the principal amount of the LIBOR Loans to which such Interest Period is applicable.

LIBOR Loans : Loans bearing interest calculated by reference to LIBOR.

Liens : Any encumbrance, mortgage, pledge, hypothecation, charge or other security interest of any kind securing any obligation of any Person.

Loan : Any loan or advance made or to be made to Borrower pursuant to Section 2 .

Loan Documents : This Credit Agreement, the Note and any and all other agreements, documents and instruments as hereafter shall be executed or delivered by or on behalf of Borrower to Agent and Lenders evidencing or relating to the Loans advanced pursuant to this Credit Agreement, in each case as the same from time to time may be amended, modified, supplemented, extended or restated.

Loan Request : As defined in Section 2.1(b) .

Margin Stock : "Margin stock" or "margin securities", as such terms are used in Regulations U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

Materially Adverse Effect : Any materially adverse effect on the consolidated financial condition or business operations of Borrower and its Subsidiaries taken as a whole or any material impairment to the ability of Borrower to perform its material obligations under the Loan Documents.

Maturity Date : The last day of the Revolving Credit Availability Period then in effect.

Maximum Aggregate Available Loan Amount : As of any date, the aggregate principal amount of the Loans outstanding hereunder (including, if such date is a Drawdown Date, the Loan requested to be advanced on such Drawdown Date), not to exceed $50,000,000, as such amount may be increased or decreased from time to time in accordance with Section 2.4.3 or as may be reduced to zero upon the acceleration of the Obligations during the occurrence of an Event of Default pursuant to Section 8 .

Multiemployer Plan : Any multiemployer plan within the meaning of Section 3(37) of ERISA maintained or contributed to by Borrower or any ERISA Affiliate.

Note : As defined in Section 2.1(c) .

Obligations : All obligations for monetary amounts owing by Borrower to Agent and Lenders, whether due or to become due, matured or unmatured, liquidated or unliquidated, contingent or non-contingent, of any kind or nature, present or future, arising under or in respect of any of the Loan Documents. This term includes all principal, interest (including interest that accrues after the commencement against Borrower of any action under the Bankruptcy Code), and any and all other reasonable fees, expenses, costs or other sums chargeable to Borrower under any of the Loan Documents.

PBGC : The Pension Benefit Guaranty Corporation created by Section 4002 of ERISA and any successor entity or entities having similar responsibilities.

Permitted Country : Each of the following: Australia, Austria, Belgium, Bermuda, Canada, Cayman Islands, Denmark, Finland, France, Germany, Ireland, Israel, Japan, Luxembourg, Portugal, Spain, Sweden, The Netherlands, The United Kingdom or the United States of America (including any state, territory or insular area thereof).

Permitted Liens : Liens, security interests and other encumbrances permitted by Section 7.2 .

Person : Any individual, corporation, limited liability company, association, joint venture, partnership, trust or other entity.

Prime Rate : A variable rate of interest per annum equal to the rate of interest from time to time published by the Board of Governors of the Federal Reserve System in Federal Reserve statistical release H.15(519) entitled "Selected Interest Rates" (or any comparable successor publication) as the Bank prime loan rate (or its equivalent). Any change in such Prime Rate shall take effect as of the date that such changed rate is published. In the event that the Board of Governors of the Federal Reserve System ceases to publish a Bank prime loan rate or equivalent, then the term "Prime Rate" shall mean a variable rate of interest per annum equal to the annual rate of interest determined from time to time by Agent as its "prime rate" for commercial borrowings by its customers or the similar prime rate or reference rate for commercial borrowings announced by any of its successors. Any change in the Prime Rate announced by Agent, or any of its successors, shall take effect as of the opening of business of such institution on the Business Day after notice thereof has been provided to Borrower. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer.

Prime Rate Loans : Loans bearing interest calculated by reference to the Prime Rate.

Prior Credit Agreement : As defined in the preamble .

Private Placement Debt : Any senior, unsecured Indebtedness of Borrower issued from time to time in a private placement transactin pursuant to a Note Purchase Agreement or other similar agreement executed by Borrower (as such agreement may be amended and other modified from time to time).

Regulations U and X : Regulations U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

Required Lenders : As of any date, Lenders having at least 51% of the aggregate amount of the Commitments, or if the Commitments have been terminated or reduced to zero, Lenders holding at least 51% of the principal amount of the Loans.

Requirement of Law : In respect of any Person, any law, treaty, rule, regulation or determination of an arbitrator, court, or other governmental authority, in each case applicable to or binding upon such Person or affecting any of such Person's property.

Revolving Credit Availability Period : The period commencing with the Closing Date and ending on the day that is the 364th day following the Closing Date, as such period may be extended from time to time in the sole and absolute discretion of Lenders; provided that if the last day of Revolving Credit Availability Period then in effect is not a Business Day, then the last date of the Revolving Credit Availability Period shall be the Business Day immediately preceding such last day.

SEC : The Securities & Exchange Commission of the United States, or any successor thereto.

Securitization Transaction : Any securitization financing transaction pursuant to which financial assets of Borrower or any of its Subsidiaries are sold on a "true sale" basis to a bankruptcy-remote vehicle that is a direct or indirect Subsidiary of Borrower.

Senior Unsecured Debt : Any Private Placement Debt and any other unsecured Indebtedness of Borrower with a principal amount in excess of $15 million that is not in any manner subordinated in right of payment or security in any respect to the Indebtedness of Borrower under this Credit Agreement.

Standard & Poor's : Standard & Poor's, a division of The McGraw-Hill Companies, Inc.

Structuring Fee : As defined in Section 2.5.1 .

Subsidiary : In respect of any Person, any business entity of which the designated parent of such person or entity at any time owns or controls directly or indirectly more than fifty percent (50%) of the outstanding equity ownership interests having voting power, regardless of whether such right to vote depends upon the occurrence of a contingency; provided , however , with respect to Borrower, a Subsidiary only includes such business entities as are consolidated with Borrower for financial reporting purposes in accordance with Generally Accepted Accounting Principles applicable to a business development company as defined in the ICA 1940.

TTM Cash Net Investment Income : As measured as of any date of determination for the applicable period for Borrower and its Subsidiaries on a consolidated basis, (a) net operating income for such period (for avoidance of doubt, as determined before any gains and losses), less (b) all "payment in kind" (PIK) interest and dividends that are accrued by but not paid to Borrower during such period with respect to any Investment of Borrower or its Subsidiaries, plus (c) all "payment in kind" (PIK) interest and dividends that are paid to Borrower during such period but that were accrued by but not paid to Borrower during a prior period with respect to any Investment of Borrower or its Subsidiaries, in each instance as measured for the twelve consecutive trailing calendar months most recently ended and as determined in accordance with Generally Accepted Accounting Principles (as applicable to a business development company as defined in the ICA 1940).

Unsecured Debt : As measured as of any date of determination, the aggregate unpaid principal amount of all Indebtedness of Borrower and its Subsidiaries other than Indebtedness of Borrower or any Subsidiary secured by any Lien.

Wholly-Owned Subsidiary : Any Subsidiary, one hundred percent (100%) of all of the equity interests (except directors' or similar qualifying shares) and voting interests of which are owned by any one or more of Borrower and Borrower's other Wholly-Owned Subsidiaries at such time.

Rules of Interpretation .   

(a)         A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Credit Agreement.

(b)         The singular includes the plural, and the plural includes the singular.

(c)         A reference to any law includes any amendment or modification to such law.

(d)         A reference to any Person includes its permitted successors and permitted assigns.

(e)         Any accounting term not otherwise defined herein has the meaning assigned to it by Generally Accepted Accounting Principles applied on a consistent basis by the accounting entity to which such term refers.

(f)          Any phrase containing or list preceded by the words "include", "includes", "including", "among other", "among other things" or other words or phrases of similar import is not limiting and is to be interpreted to mean such "without limitation" (whether or not such additional phrase is actually added). In other words, such words and phrases connote an illustrative example or list rather than an exclusive example or list.

(g)         Reference to a particular "Section" or to the "preamble" refers to that section or to the preamble, as the case may be, of this Credit Agreement unless otherwise indicated.

(h)         The words "herein", "hereof", "hereunder" and words of like import shall refer to this Credit Agreement as a whole and not to any particular section or subdivision of this Credit Agreement.

(i)          Unless otherwise expressly indicated, in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including," the words "to" and "until" each mean "to but excluding," and the word "through" means "to and including."

(j)          This Credit Agreement and the other Loan Documents are the result of negotiation among, and have been reviewed by counsel to, among others, the Agent and Borrower and are the product of discussions and negotiations among all parties.

(k)         The captions in this Credit Agreement are for convenience of reference only and shall not define or limit the provisions hereof.

(l)          A reference to "material" as a qualifier with respect to or in connection with any occurrence, event or condition applicable to or right, agreement or property of Borrower means material to Borrower and its Subsidiaries taken as a whole.

   REVOLVING CREDIT FACILITY .  

Amounts Available for Borrowing .

(a)         Upon the terms and subject to the conditions of this Credit Agreement, from time to time during the Revolving Credit Availability Period, Borrower may request and each Lender shall advance to Borrower Loans hereunder in available funds, denominated in Dollars, by following the procedures for requesting Loans set forth in this Section 2.1 , provided that (i) the sum of the outstanding principal amount of all Loans (after giving effect to all amounts requested) made by any given Lender shall not at any time exceed such Lender's Commitment in effect at such time, and (ii) the sum of the outstanding principal amount of all Loans made by all Lenders (after giving effect to all amounts requested) shall not at any time exceed the Maximum Aggregate Available Loan Amount in effect at such time.

(b)         To request the advance of a Loan hereunder, Borrower shall notify Agent in writing in the form of Exhibit A hereto (or telephonic notice confirmed in writing with such form) of each Loan requested hereunder (a " Loan Request ") (i) no later than 12:00 noon, New York time, on the proposed Drawdown Date of any Prime Rate Loan and (ii) no later than 11:00 am, New York time, on the date that is two (2) Eurodollar Business Days prior to the proposed Drawdown Date for any LIBOR Loan. Each such notice shall specify (A) the principal amount of the Loan requested, (B) the proposed Drawdown Date of such Loan, and (C) whether such Loan shall be a Prime Rate Loan or a LIBOR Loan (and, if the requested Loan is a LIBOR Loan, the initial Interest Period for such Loan). Each such Loan Request shall be irrevocable and binding on Borrower and shall obligate Borrower to accept the Loan requested from Lenders on the proposed Drawdown Date. Agent will transmit by telecopy a copy of each Loan Request (or the information contained in the Loan Request) to each Lender promptly upon receipt by Agent, specifying therein each Lender's ratable portion of the requested Loan. Notwithstanding anything to the contrary contained herein, subject to the provisions of this Section 2.1 and so long as no Event of Default is continuing, Borrower may make Loan Requests for additional Loans prior to the repayment of any previously outstanding Loans, and the proceeds of such additional Loans may be for any permitted purpose, including the repayment (or refinancing) of Loans previously made. Each Loan Request for a Prime Rate Loan shall be in a minimum aggregate amount of $100,000, and each Loan Request for a LIBOR Loan shall be in a minimum aggregate amount of $250,000. There shall not be more than three (3) outstanding Loans that are LIBOR Loans at any time.

(c)         The obligation of Borrower to repay to each Lender the principal of the Loans and interest accrued thereon, at the request of such Lender, may be evidenced by one or more promissory notes (collectively, the " Note ") in a stated aggregate principal amount not to exceed such Lender's Commitment, executed and delivered by Borrower and payable to the order of such Lender, in form and substance substantially similar to Exhibit B hereto or otherwise reasonably satisfactory to such Lender and Borrower. Upon receipt of an affidavit of an officer of any Lender as to the loss, theft, destruction or mutilation of the Note or any other Loan Document which is not of public record and, in the case of any such loss, theft, destruction or mutilation, upon cancellation of such Note or other Loan Document, Borrower will issue, in lieu thereof, a replacement note (in the same principal amount and otherwise of like tenor) or other Loan Documents.

(d)         No later than 2:00 p.m. on the date specified in the Loan Request, each Lender will make available to Agent, in immediately available funds, the portion of the Loan to be made by such Lender. With respect to all such Loans, unless Agent shall have been notified by any Lender prior to the specified date of borrowing that such Lender does not intend to make available to Agent the Loan to be made by such Lender on such date, Agent may assume that such Lender will make the proceeds of the Loan available to Agent on the date of the requested borrowing, and in reliance upon such assumption, Agent may, but shall not be obligated to, make available to Borrower the amount of the Loan to be provided by such Lender. Subject to satisfaction of the applicable conditions precedent, Agent shall make the proceeds of such borrowing available to Borrower no later than 4:00 p.m on the date and at the account specified by Borrower in its Loan Request.

(e)         Agent shall record in a register each Loan from time to time advanced and each repayment or prepayment in respect of the principal amount thereof. Any such recordation shall be presumed correct and binding on Borrower and Lenders, absent manifest error; provided that failure to make any such recordation, or any error in such recordation, shall not affect Borrower's Obligations in respect of any applicable Loans.

Conversion Options .

Conversion to Different Type of Revolving Credit Loan . Borrower from time to time at the end of the then-current Interest Period for such Loan may elect to convert any outstanding Loan from a Prime Rate Loan to a LIBOR Loan or from a LIBOR Loan to a Prime Rate Loan by giving notice thereof to Agent (a "Conversion Request") indicating the relevant Loan and the amount thereof that is to be so converted , provided that (i) with respect to any such conversion of a Prime Rate Loan to a LIBOR Loan, Borrower shall give Agent at least two (2) Eurodollar Business Days prior written notice of such election and shall specify the initial Interest Period that is to be applicable with respect thereto, and (ii) no Loan may be converted into a LIBOR Loan (without Required Lender's prior consent) while any Event of Default is continuing , and (iii) no such conversion shall extend the Maturity Date of the relevant Loan . Agent will transmit by telecopy a copy of each Conversion Request (or the information contained in such Conversion Request) to each Lender promptly upon receipt by Agent. All or any part of the outstanding Loans may be converted as provided herein, provided that partial conversions of Prime Rate Loans to LIBOR Loans shall be in an aggregate principal amount of at least $250,000, and partial conversions of LIBOR Loans to Prime Rate Loans shall be in an aggregate principal amount of at least $100,000. Each Conversion Request relating to the conversion of a Loan to a LIBOR Loan shall be irrevocable by Borrower.

Continuation of Type of Loan . Any Prime Rate Loan or LIBOR Loan may be continued as such upon the expiration or termination of an Interest Period with respect thereto by compliance by Borrower with the provisions contained in Section 2.2.1 ; provided that no LIBOR Loan may be continued as such when any Event of Default is continuing, but shall be automatically converted to a Prime Rate Loan on the last day of the first Interest Period relating thereto ending during the continuance of any such Event of Default and shall remain a Prime Rate Loan even if such Event of Default shall be cured until the end of the then-current Interest Period. If Borrower fails to provide any such notice with respect to the continuation or conversion of any Loan as such, then (i) any such LIBOR Loan shall be automatically continued as a LIBOR Loan on the last day of the then - current Interest Period relating thereto for an Interest Period of the same duration as the Interest Period ending on such last day, provided that , if such a continuation would result in an Interest Period that would extend beyond the Maturity Date, then such LIBOR Loan shall automatically be converted to a LIBOR Loan for the longest permitted Interest Period that does not extend beyond the Maturity Date for such LIBOR Loan (or, if no such Interest Period exists, then to a Prime Rate Loan) on such last day, and (ii) any such Prime Rate Loan shall be automatically continued as a Prime Rate Loan. No continuation referred to in this Section 2.2.2 shall extend the Maturity Date.

LIBOR Loans . Any conversion to or from any LIBOR Loan and any continuation of any LIBOR Loan shall be in such amounts and shall be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of all LIBOR Loans having the same Interest Period shall not be less than $250,000.

Interest .   

In General . So long as no Event of Default has occurred and is continuing, (i) each Loan that is a LIBOR Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate of two percent (2.00%) per annum above the LIBOR determined for such Interest Period and (ii) each Loan that is a Prime Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate of one-half of one percent (0.50%) per annum above the Prime Rate. Borrower promises to pay interest on the Loans or any portion thereof outstanding during each Interest Period in arrears on each Interest Payment Date applicable to such Interest Period.

Default Interest . Any payment of principal or (to the extent permitted by applicable law) interest on the Loans that is past due by more than five (5) Business Days, at the election of the Required Lenders and upon notification thereof to Borrower, shall bear interest (payable on demand in respect of overdue amounts) at a rate that is equal two percent (2.0%) per annum in excess of the rate of interest then in effect pursuant to Section 2.3.1 with respect to each then-outstanding Loan until such amount is paid in full in immediately available funds.

Interest Rate Limitation . If, at any time, the rate of interest, together with all amounts that constitute interest and that are reserved, charged or taken by Lender as compensation for fees, services or expenses incidental to the making, negotiating or collection of the Loans evidenced hereby shall be deemed by any competent court of law, governmental agency or tribunal to exceed the maximum rate of interest permitted to be charged to Borrower under applicable law, then , during such time as such rate of interest would be deemed excessive, that portion of each sum paid attributable to that portion of such interest rate that exceeds the maximum rate of interest so permitted shall be deemed a voluntary prepayment of principal; provided , however , that if there is a change in the law that results in a higher permissible rate of interest, then this Credit Agreement and the other Loan Documents shall be governed by such new law as of its effective date.

2.4. Repayment .

2.4.1. Repayment at Maturity and Other Mandatory Repayments . Borrower hereby agrees to pay Agent and Lenders, on the Maturity Date, all outstanding Obligations hereunder, including the entire unpaid principal of and accrued but unpaid interest on and applicable fees with respect to, the Loans advanced to Borrower hereunder pursuant to Section 2.1 . If at any time the outstanding principal amount of the Loans shall exceed the Maximum Aggregate Available Loan Amount at such time, then Borrower shall immediately pay to Agent for the ratable benefit of Lenders and application to the Loans the amount of such excess, plus all accrued interest thereon (in each case ratably in accordance with the respective interests of Lenders therein).

2.4.2. Optional Repayment; Notice; Reborrowing; Etc . Borrower may elect to prepay the outstanding principal of all or any part of any Loan, without premium or penalty, in a minimum amount of $250,000 with respect to prepayment of any LIBOR Loan and in a minimum amount of $100,000 with respect to prepayment of any Prime Rate Loan, provided that any full or partial prepayment of the outstanding amount of any LIBOR Loans made on any date other than the last day of the Interest Period relating thereto shall be subject to Section 3.5 . Borrower shall give Agent prior written notice of any proposed prepayment of any Loan pursuant to this Section 2.4.2 , which notice shall be given no later than 12:00 noon New York time at least two (2) Eurodollar Business Days prior to any proposed prepayment of any LIBOR Loan. Each such notice shall specify the proposed date of such prepayment and the amount to be prepaid. Agent will provide such notice to Lenders promptly upon its receipt thereof. Borrower shall be entitled to reborrow such amounts at any time and from time to time during the Revolving Credit Availability Period upon the terms and subject to the conditions of this Credit Agreement. Each repayment or prepayment of principal of any Loan shall be accompanied by payment of the unpaid interest accrued to such date on the principal being repaid or prepaid.

2.4.3. Reduction or Termination of Maximum Aggregate Available Loan Amount .

(a) Voluntary Reductions . At any time and from time to time, Borrower may elect to reduce the Maximum Aggregate Available Loan Amount by a minimum principal amount of $1,000,000 or an integral multiple thereof, and/or Borrower may elect to terminate the Maximum Aggregate Available Loan Amount (thereby terminating its right to request further advances of Loan hereunder), in each case upon written notice to Agent given by 12:00 noon, New York time, at least one (1) Business Day prior to the date of such reduction or termination; provided , however , that, without the prior consent of Agent and each Lender, Borrower shall not be entitled to reinstate the Maximum Aggregate Available Loan Amount following such reduction or termination. Reductions of the Maximum Aggregate Available Loan Amount shall reduce, pro rata, the respective Commitments of Lenders.

(b) Mandatory Reduction Upon Certain Changes of Control . If an Approved Change of Control shall occur without the consent of Required Lenders, then at the election of Required Lenders (1) the Maximum Aggregate Available Loan Amount shall be reduced to $25 million and (2) Borrower contemporaneously therewith shall make a prepayment as and to the extent required in accordance with Section 2.4.1 . Any such required reduction to the Maximum Aggregate Available Loan Amount shall reduce, pro rata, the respective Commitments of Lenders.

2.5. Fees .

2.5.1     Structuring Fee . On or before the Closing Date, Borrower shall pay to Agent a one-time structuring fee (the " Structuring Fee ") equal to thirty (30) basis points (0.30%) of the Maximum Aggregate Available Loan Amount as of the Closing Date, which Structuring Fee shall be fully earned and nonrefundable when paid.

2.5.2     Commitment Fee . Borrower shall pay to Agent for the account of Lenders a commitment fee at the rate of twenty-five basis points (0.25%) per annum on the average daily un-borrowed portion of the Maximum Aggregate Available Loan Amount (the " Commitment Fee "), which Commitment Fee shall be payable quarterly in arrears on the first calendar day of each January, April, July and October (or, if later, within 10 Business Days after receiving an invoice therefor from Agent detailing the calculation thereof for the applicable quarterly period).

   CHANGES IN CIRCUMSTANCES, ETC .  

Inability to Determine LIBOR . If, prior to the commencement of any Interest Period relating to any LIBOR Loan, Agent shall reasonably determine that adequate and reasonable methods do not exist for ascertaining LIBOR that would otherwise determine the rate of interest to be applicable to any LIBOR Loan during any Interest Period, then Agent shall forthwith give written notice of such determination to Borrower. In such event (i) any Loan Request or Conversion Request with respect to any LIBOR Loan shall be automatically withdrawn and shall be deemed a request for a Prime Rate Loan, (ii) each LIBOR Loan will automatically, on the last day of the then current Interest Period thereof, become a Prime Rate Loan, and (iii) the obligation of each such Lender to make additional LIBOR Loans shall be suspended until the circumstances giving rise to such suspension no longer exist, whereupon such Lender shall so notify Borrower through Agent.

Illegality . Notwithstanding any other provisions herein, if any future law, regulation, treaty or directive or the interpretation or application thereof shall make it unlawful for any Lender to make or maintain LIBOR Loans, then such Lender shall forthwith give notice of such circumstances to Agent and Borrower and thereupon (i) the commitment of such Lender to make additional LIBOR Loans or convert Prime Rate Loans to LIBOR Loans shall forthwith be suspended and (ii) the Loans then outstanding as LIBOR Loans, if any, shall be converted automatically to Prime Rate Loans on the last day of each Interest Period applicable to such LIBOR Loans or within such earlier period as may be required by law.

Change in Circumstances . If, on or after the date hereof, any Lender determines that (i) the adoption of, or any change in, any applicable law, regulation, treaty or directive or the interpretation or application thereof (whether or not having the force of law), or (ii) compliance by such Lender with any newly adopted or change in any applicable regulatory guideline or directive (whether or not having the force of law), (A) shall subject such Lender to any tax, duty or other charge with respect to any Loan or any Note, or shall change the basis of taxation of payments to such Lender of the principal of or interest on, any Loans or in respect of any other amounts due under this Credit Agreement (other than with respect to taxes based upon such Lender's net income), or (B) shall impose, modify or deem applicable any reserve, special deposit or similar requirement (including any such requirements imposed by the Board of Governors of the Federal Reserve System, but excluding with respect to any LIBOR Loan any such requirement included in an applicable Eurocurrency Reserve Rate) against assets of, deposits with or for the account of, or credit extended by, such Lender, or shall impose on such Lender or the London interbank market any other condition affecting the Loans or the Note, and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining any LIBOR Loan, to reduce the amount of any sum received or receivable by such Lender under this Credit Agreement or under the Note with respect to any LIBOR Loan, or to require such Lender to make any payment or to forego any interest or other sum payable hereunder with respect to any LIBOR Loan, by an amount reasonably deemed by such Lender to be material, then , upon written demand by such Lender with a statement delivered to Borrower and Agent, setting forth the amount and calculation thereof, Borrower agrees to pay to such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction.

Certificate . A certificate setting forth any additional amounts payable pursuant to Section 3.3 and a brief explanation of such amounts that are due, submitted by such Lender to Borrower and Agent, shall be presumed correct, absent manifest error, that such amounts are owed. All additional amounts payable pursuant to Section 3.3 shall be due and payable fifteen (15) Business Days after receipt by Borrower of such certificate.

Indemnity . Borrower agrees to indemnify and hold each Lender harmless from and against any actual, direct cost or expense (excluding loss of anticipated profits or yield) that such Lender may sustain as a consequence of (a) Borrower's failure to pay the principal amount of any LIBOR Loan as and when due or the payment of any LIBOR Loan on a date that is not the last day of the Interest Period applicable thereto, (b) default by Borrower in making a borrowing or conversion after Borrower has given (or is deemed to have given) a Loan Request or a Conversion Request relating thereto in accordance with Section 2.1(b) or Section 2.2 , or (c) the making of any payment of a LIBOR Loan or the making of any conversion of any such LIBOR Loan to a Prime Rate Loan on a day that is not the last day of the applicable Interest Period with respect thereto, including interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain any such LIBOR Loans.

   PAYMENTS .  

Payments Generally . All payments to be made by Borrower hereunder or under any of the other Loan Documents shall be made in Dollars in immediately available funds at Agent's Domestic Lending Office, or such other place as Agent from time to time may specify in writing, not later than 12:00 noon New York time, without set-off or counterclaim and without any withholding or deduction for any taxes or other payments whatsoever. If any payment hereunder becomes due and payable on a day that is not a Business Day, then the due date of such payment shall be automatically extended to the next succeeding Business Day, and such extension of time shall include the computation of interest and fees in connection with such payment. All computations of interest payable hereunder shall be made by Agent on the basis of actual days elapsed and on a 360-day year ( provided that the computation of interest payable on Loans bearing interest at the Prime Rate shall be made by Agent on the basis of actual days elapsed and on a 365/6-day year). All payments shall be applied first to the payment of all fees, expenses and other amounts due to Agent (excluding principal and interest), then to accrued interest that is due and payable and the balance on account of outstanding principal; provided , however , that during the continuance of any Event of Default, payments will be applied to the Obligations as Agent (with the consent of Required Lenders) determines in their sole discretion.

Pro Rata Treatment . Except to the extent otherwise provided herein, each borrowing from Lenders shall be made from Lenders on a pro rata basis. Each payment received from Borrower shall be applied to the respective Commitments of Lenders, pro rata according to the amounts of their respective Commitments.

Sharing of Payments, Etc . If a Lender shall obtain payment of any principal of, or interest on, any Loan made by it to Borrower under this Agreement, or shall obtain payment on any ot