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FIRST AMENDMENT TO CREDIT AGREEMENT AND TO SECURITY AGREEMENT

Security Agreement

FIRST AMENDMENT TO CREDIT AGREEMENT AND TO SECURITY AGREEMENT | Document Parties: FS INVESTMENT CORP | BROAD STREET FUNDING LLC | DEUTSCHE BANK AG You are currently viewing:
This Security Agreement involves

FS INVESTMENT CORP | BROAD STREET FUNDING LLC | DEUTSCHE BANK AG

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Title: FIRST AMENDMENT TO CREDIT AGREEMENT AND TO SECURITY AGREEMENT
Governing Law: New York     Date: 7/19/2010
Law Firm: Richards Layton;Sutherland Asbill    

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Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT AND TO SECURITY AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND TO SECURITY AGREEMENT, dated as of July 13, 2010 (together with all schedules and exhibits hereto, this “ First Amendment ”), is entered into by and among BROAD STREET FUNDING LLC, a Delaware limited liability company (the “ Borrower ”), and DEUTSCHE BANK AG, NEW YORK BRANCH (the “ Lender ”). Capitalized terms used herein and not otherwise defined herein have the meanings assigned to such terms in the Credit Agreement described below.

RECITALS:

A. The Borrower and Lender are parties to a Credit Agreement dated as of March 10, 2010 (the “ Credit Agreement ”), which provides, among other things, for revolving Loans to be made by the Lenders to the Borrower in an aggregate principal amount not exceeding $140,000,000 and to a Security Agreement dated as of March 10, 2010 (the “ Security Agreement ”) which, inter alia, secures the Borrower’s obligations to the Lender under the Credit Agreement.

B. The Borrower and the Lender desire, among other things, to (i) increase the aggregate amount of the Lender’s Maximum Commitment to $240,000,000, (ii) change the dates for certain reports to be delivered, (iii) change the Additional Margin Requirement for certain Securities, and (iv) make certain other related amendments that are set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

Section 1. Amendment of Credit Agreement . Effective as of the date hereof, the Credit Agreement is hereby amended as follows:

(a) The preamble of the Credit Agreement is amended by replacing “This Credit Agreement, dated as of March 10, 2010 (this “ Agreement ”)” with “This Credit Agreement, dated as of March 10, 2010 (as amended from time to time, this “ Agreement ”)”.

(b) Section 6.01(a)(i) of the Credit Agreement is hereby replaced in its entirety with the following:

“On the 20th day of each calendar month (or, if such date is not a Business Day, then the next following Business Day), the Borrower shall furnish to the Lender a written statement (a “ Collateral Report ”) certified by the Manager on behalf of the Borrower, in each case as of the Reporting Date which shall include among other things (to the extent applicable):”

(c) The definition of “Applicable Margin” in Annex I to the Credit Agreement is hereby amended by replacing “2.50% per annum” with “2.23% per annum.”


(d) The definition of “Commitment Fee” in Annex I to the Credit Agreement is hereby replaced in its entirety by the following:

““Commitment Fee” means, (a) for any day occurring from the date that is four (4) months after the Closing Date to, but excluding, the date that is four (4) months after the First Amendment Closing Date, the greater of (i) (1) the Unused Amount as of such day less $100,000,000 multiplied by (2) a fraction, the numerator of which is 0.75% and the denominator of which is 360, and (ii) zero; and (b) for each day thereafter (i) the Unused Amount as of such day multiplied by (ii) a fraction, the numerator of which is 0.75% and the denominator of which is 360.”

(e) The definition of “Credit Document” in Annex I to the Credit Agreement is hereby amended by inserting the following after “instrument or document”: “(including amendments from time to time of any of the foregoing).”

(f) The definition of “Maximum Commitment” in Annex I to the Credit Agreement is hereby amended by replacing “$140,000,000” with “240,000,000”.

(g) The definition of “Reporting Date” in Annex I to the Credit Agreement is hereby replaced in its entirety by the following:

““ Reporting Date ” means the seventh Business Day prior to the 20th day of each calendar month, commencing on May 11, 2010.”

(h) The following definition is hereby added to Annex I to the Credit Agreement in the applicable alphabetical location:

““ First Amendment Closing Date ” means July 13, 2010”.

(i) The definition of “Additional Margin Requirements” in the Collateral Valuation Schedule is hereby amended as follows:

(1) Subsection (vii) is hereby replaced in its entirety by the following:

“(vii) in the case of each Bank Loan or Security for which (i) the Number of Pricing Sources equals 2 or (ii) the Outstanding Facility Size is greater than or equal to $75,000,000 and less than $150,000,000, the percentage specified in Annex II-B-7 determined based upon the Market Value of all such Bank Loans and Securities;”

(2) Subsection (ix) is hereby amended by deleting the “and” at the end thereof;

 

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(3) Subsection (x) is hereby amended by replacing the period at the end thereof with the following “; and”; and

(4) The following is added as a new Subsection (xi):

“(xi) in the case of Securities with any Number of Pricing Sources, the percentage specified in Annex II-C-4 .”

(j) The definition of “Number of Pricing Sources” in the Collateral Valuation Schedule is hereby replaced in its entirety with the following:

““ Number of Pricing Sources ” means, as of any date of determination, (i) for each Bank Loan, the arithmetic average, over the five Business Days immediately preceding such date of determination, of the Maximum Number of Price Indications on such Business Day, and (ii) for Securities, the number of unique daily bid-side quotations that the Lender receives directly from the list of Approved Bond Dealers, except that (x) if the Lender believes in its sole discretion that quotations reported on FT Interactive Data or TRACE is duplicative of another quoting dealer, then that quote will be excluded from the calculation, and (y) if any of the quoting dealers’ 5 Year Ask CDS Spread is greater than 350 basis points, then their quotes will also be excluded from the analysis. On each date of determination, the Number of Pricing Sources shall be rounded up to the nearest whole number.

If the Lender is the source of one of the price indications for Bank Loans or is the source of one of the bid-side daily quotations for Securities and (i) there is only one other price indication or quotation, as applicable, then the Number of Pricing Sources will count as 3 instead of 2, or (ii) there is no other price indication or quotation, as applicable, then the Number of Pricing Sources will count as two instead of one, provided that the Lender can change the margin requirement for these positions in its sole discretion upon 8 business days notice to the Borrower.”

(k) The following definitions are hereby added to the Collateral Valuation Schedule at their applicable alphabetical location:

““ Approved Bond Dealers ” means each of dealers as set forth in Schedule 8 as revised by the lender from time to time.

FT Interactive Data ” means the [price/quotation] reporting service provided by the Interactive Data Corporation or any successor service thereto as determined by Lender.

TRACE ” means the Trade Reporting and Compliance Engine developed by the Financial Industry Regulatory Authority (“FINRA”) or any successor service thereto as determined by Lender.”

 

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(l) Annex II-B-7 is hereby amended as follows:

(1) The heading is hereby replaced in its entirety with “Additional Margin Requirements – Bank Loans and Securities.”

(2) The heading of the first column is hereby replaced in its entirety by the following:

“Aggregate Market Value for all Bank Loan or Security for which the Number of Pricing Sources equals 2 or the Outstanding Facility Size is greater than or equal to $75,000,000 and less than $150,000,000 as a percentage of the aggregate Market Value of all Eligible Investments”

(m) The following is hereby added to the Credit Agreement as “Annex II-C-4”:

Additional Margin Requirement – Securities

 

Securities with the following Approved Pricing Sources

  

Additional Margin
Requirement

 

Fewer than 2 Approved Pricing Sources

  

100

2 Approved Pricing Sources

  

13

Greater than 2 Approved Pricing Sources

  

0

(n) The following list of Approved Bond Dealers is hereby added as Schedule 8 of the Credit Agreement:

APPROVED BOND DEALERS

ABN

Barclays Bank PLC

BNP Paribas SA

Bank of NY Mellon (BNYM Capital Markets)

Citigroup, Inc.

Credit Suisse AG

Deutsche Bank

Fidelity Capital Markets

FT Interactive Data

Goldman Sachs

HSBC

JP Morgan Chase & Co.

Merrill Lynch & Co., Inc.

Morgan Stanley

 

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RBC Capital Markets

Royal Bank of Scotland Group Plc

Societe General

TRACE trades

UBS AG

Wachovia

Section 2. Amendment of Security Agreement . Effective as of the date hereof, the Security Agreement is hereby amended as follows:

(a) The preamble of the Security Agreement is amended by replacing “This Security Agreement (this “Agreement”), dated as of March 10, 2010” with “This Security Agreement, dated as of March 10, 2010 (as amended from time to time, this “ Agreement ”)”

(b) Section 1 of the Security Agreement is hereby amended by adding the following to the end of the definition of Credit Agreement (immediately before the period): “as amended”

Section 3. Conditions Precedent . It shall be a condition precedent to the effectiveness of this First Amendment that each of the following conditions are satisfied:

(a) Agreements. The Lender shall have received executed counterparts of this First Amendment and the Amendment Fee Agreement dated as of July 13, 2010 by and among Borrower and Lender (the “Amendment Fee Agreement”), each duly executed and delivered by an Authorized Representative of the Borrower.

(b) Evidence of Authority. The Lender shall have received:

(1) a certificate of an Authorized Representative of the Borrower and a Responsible Office


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