Execution Version
____________________________________________________________________________________________________________
MSC Income Fund, Inc.
$150,000,000
6.34% Series A Senior Notes due May 31, 2029
___________________________
Master Note Purchase Agreement
___________________________
Dated March 12, 2026
____________________________________________________________________________________________________________
NAI-5010897739v9
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Schedule A
—
Defined Terms
Schedule 1
—
Form of 6.34% Series A Senior Notes due May 31, 2029
Schedule 2.3
—
Form of Subsidiary Guaranty
Schedule 4.1
—
Form of Opinion of Special Counsel for the Obligors
Schedule 5.3
—
Disclosure Materials
Schedule 5.4
—
Subsidiaries of the Company and Ownership of Subsidiary Stock
Schedule 5.5
—
Financial Statements
Schedule 5.15
—
Existing Indebtedness
Schedule 10.1
—
Transactions with Affiliates
Schedule 10.5
—
Liens
Schedule 10.7
—
Investments
Schedule 10.8
—
Excluded Assets
Purchaser Schedule —
Information Relating to Purchasers
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MSC Income Fund, Inc.
1300 Post Oak Boulevard, 8th Floor
Houston, TX 77056
$150,000,000 6.34% Series A Senior Notes due May 31, 2029
March 12, 2026
To Each of the Purchasers Listed in the
Purchaser Schedule Hereto:
Ladies and Gentlemen:
MSC Income Fund, Inc., a Maryland corporation (the “Company”), agrees with each of
the Purchasers as follows:
Section 1.
Authorization of Notes.
Section 1.1.
Authorization of Series A Notes. The Company will authorize the issue
and sale of $150,000,000 aggregate principal amount of its 6.34% Series A Senior Notes due May
31, 2029 (as amended, restated or otherwise modified from time to time pursuant to Section 17 and
including any such notes issued in substitution therefor pursuant to Section 13, the “Series A
Notes”). The Series A Notes shall be substantially in the form set out in Schedule 1 hereto. Certain
capitalized and other terms used in this Agreement are defined in Schedule A and, for purposes of
this Agreement, the rules of construction set forth in Section 22.4 shall govern. The Series A Notes
are also referred to as the “Notes” (such term shall also include any such notes as amended, restated
or otherwise modified from time to time pursuant to Section 17 and including any such notes issued
in substitution therefor pursuant to Section 13).
Section 1.2.
Changes in Interest Rate.
(a) If at any time a Below Investment Grade Event occurs, then:
(i)
as of the date of the occurrence of a Below Investment Grade Event to and
until the date on which such Below Investment Grade Event is no longer continuing (as
evidenced by the receipt and delivery to the holders of the Notes of any Rating necessary
to cure such Below Investment Grade Event), the Notes shall bear interest at the Below
Investment Grade Adjusted Interest Rate; and
(ii)
the Company shall promptly, and in any event within ten (10) Business
Days after a Below Investment Grade Event has occurred, notify the holders of the Notes
in writing, sent in the manner provided in Section 18, that a Below Investment Grade Event
has occurred, and confirming the effective date of the Below Investment Grade Event and
that the Below Investment Grade Adjusted Interest Rate will accrue from the date on which
such Below Investment Grade Event shall have occurred and will be payable on each
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subsequent interest payment date until such Below Investment Grade Event is no longer
continuing, in consequence thereof.
(b)
The fees and expenses of any Rating Agency and all other costs incurred in
connection with obtaining, affirming or appealing a Rating pursuant to this Section 1.2 shall be
borne solely by the Company.
(c)
If at any time a Secured Debt Ratio Event occurs, then:
(i)
as of the earlier of (x) the date of the occurrence of a Secured Debt Ratio
Event and (y) the last day of the applicable fiscal quarter or fiscal year for which financial
statements delivered pursuant to Section 7.1 or Section 7.2 evidence the occurrence of a
Secured Debt Ratio Event to and until the date on which such Secured Debt Ratio Event is
no longer continuing (as evidenced by the receipt and delivery to the holders of the Notes
of a certificate from a Senior Financial Officer of the Company certifying that such Secured
Debt Ratio Event has been cured), the Notes shall bear interest at the Debt Ratio Adjusted
Interest Rate; and
(ii)
to the extent the Company has knowledge thereof, the Company shall
promptly, and in any event within ten (10) Business Days after the Company has
knowledge that a Secured Debt Ratio Event has occurred, notify the holders of the Notes
in writing, sent in the manner provided in Section 18, that a Secured Debt Ratio Event has
occurred and confirming the effective date of the Secured Debt Ratio Event and that the
Debt Ratio Adjusted Interest Rate will accrue from such effective date and will be payable
on each subsequent interest payment date until such Secured Debt Ratio Event is no longer
continuing, in consequence thereof.
(d)
If at any time an Unsecured Debt Coverage Ratio Event occurs, then:
(i)
as of the earlier of (x) the date of the occurrence of an Unsecured Debt
Coverage Ratio Event and (y) the last day of the applicable fiscal quarter or fiscal year for
which financial statements delivered pursuant to Section 7.1 or Section 7.2 evidence the
occurrence of an Unsecured Debt Coverage Ratio Event to and until the date on which such
Unsecured Debt Coverage Ratio Event is no longer continuing (as evidenced by the receipt
and delivery to the holders of the Notes of a certificate from a Senior Financial Officer of
the Company certifying that such Unsecured Debt Coverage Ratio Event has been cured),
the Notes shall bear interest at the Debt Ratio Adjusted Interest Rate; and
(ii)
to the extent the Company has knowledge thereof, the Company shall
promptly, and in any event within ten (10) Business Days after the Company has
knowledge that an Unsecured Debt Coverage Ratio Event has occurred, notify the holders
of the Notes in writing, sent in the manner provided in Section 18, that an Unsecured Debt
Coverage Ratio Event has occurred and confirming the effective date of the Unsecured
Debt Coverage Ratio Event and that the Debt Ratio Adjusted Interest Rate will accrue from
such effective date and will be payable on each subsequent interest payment date until such
Unsecured Debt Coverage Ratio Event is no longer continuing, in consequence thereof.
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(e)
Notwithstanding anything to the contrary, if a Below Investment Grade Event, a
Secured Debt Ratio Event and an Unsecured Debt Coverage Ratio Event are continuing at the
same time, then as of the date on which such events first simultaneously existed and are continuing
until the earliest date on which either or all events are no longer continuing, the Notes shall bear
interest at an interest rate per annum which is 2.00% above the stated rate of the Notes (or above
the Default Rate based on the stated interest rate for the Note, as the case may be); provided that
after such date if either the Below Investment Grade Event, the Secured Debt Ratio Event or the
Unsecured Debt Coverage Ratio Event (but not all) shall continue, then the Notes shall bear interest
at the Below Investment Grade Adjusted Interest Rate or the Debt Ratio Adjusted Interest Rate, as
applicable.
(f)
As used herein, “Below Investment Grade Adjusted Interest Rate” means the
interest rate per annum which is 1.00% above the stated rate of the Notes (or above the Default
Rate based on the stated interest rate for the Note, as the case may be). For the avoidance of doubt,
the Below Investment Grade Adjusted Interest Rate shall not apply unless and until a Below
Investment Grade Event has occurred.
(g)
As used herein, “Debt Ratio Adjusted Interest Rate” means the interest rate per
annum which is 1.50% above the stated rate of the Notes (or above the Default Rate based on the
stated interest rate for the Note, as the case may be). For the avoidance of doubt, the Debt Ratio
Adjusted Interest Rate shall not apply unless and until a Secured Debt Ratio Event or an Unsecured
Debt Coverage Ratio Event has occurred.
(h)
As used herein, a “Below Investment Grade Event” shall occur if:
(i)
at any time the Company has obtained a Rating of the Notes from only one
Rating Agency, the then most recent Rating received from such Rating Agency that is in
full force and effect (not having been withdrawn) is below Investment Grade;
(ii)
at any time the Company has obtained a Rating of the Notes from two
Rating Agencies, the then lower of the most recent Ratings received from the Rating
Agencies that are in full force and effect (not having been withdrawn) is below Investment
Grade; or
(iii)
at any time the Company has obtained a Rating of the Notes from three or
more Rating Agencies, the then second lowest of the most recent Ratings received from
the three Rating Agencies that is in full force and effect (not having been withdrawn) is
below Investment Grade (provided, for the avoidance of doubt, if two or more of the most
recent Ratings are equal or equivalent to the lowest such Rating, then such equal or
equivalent Ratings will be deemed to be the second lowest Rating for purposes of such
determination).
For the avoidance of doubt, the Below Investment Grade Event shall end immediately upon
the delivery of one or more Ratings by the Company such that the foregoing conditions are no
longer triggered. Upon the end of the Below Investment Grade Event, the applicable interest rate
shall automatically return to the stated interest rate for the Notes or, if applicable, the Debt Ratio
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Adjusted Interest Rate (or the Default Rate based on the stated interest rate for the Notes, as the
case may be).
(i)
As used herein, a “Secured Debt Ratio Event” shall occur if at any time the
Company’s Secured Debt Ratio is greater than 0.50:1.00.
For the avoidance of doubt, the Secured Debt Ratio Event shall end immediately upon the
receipt and delivery to the holders of the Notes of a certificate from a Senior Financial Officer of
the Company certifying that the Secured Debt Ratio is less than or equal to 0.50:1.00 (provided
that the Secured Debt Ratio is in fact less than or equal to 0.50:1.00). Upon the end of the Secured
Debt Ratio Event, the applicable interest rate shall automatically return to the stated interest rate
for the Notes or, if applicable, the Below Investment Grade Adjusted Interest Rate (or the Default
Rate based on the applicable interest rate for the Notes, as the case may be).
(j)
As used herein, an “Unsecured Debt Coverage Ratio Event” shall occur if at any
time the Company’s Unsecured Debt Coverage Ratio is greater than 1.50:1.00.
For the avoidance of doubt, the Unsecured Debt Coverage Ratio Event shall end
immediately upon the receipt and delivery to the holders of the Notes of a certificate from a Senior
Financial Officer of the Company certifying that the Unsecured Debt Coverage Ratio is less than
or equal to 1.50:1.00 (provided that the Unsecured Debt Coverage Ratio is in fact less than or equal
to 1.50:1.00). Upon the end of the Unsecured Debt Coverage Ratio Event, the applicable interest
rate shall automatically return to the stated interest rate for the Notes or, if applicable, the Below
Investment Grade Adjusted Interest Rate (or the Default Rate based on the applicable interest rate
for the Notes, as the case may be).
(k)
Following the occurrence and during the continuance of an Event of Default, the
Notes shall bear interest at the Default Rate.
Section 2.
Sale and Purchase of Notes.
Section 2.1.
Sale and Purchase of Series A Notes. Subject to the terms and conditions
of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will
purchase from the Company, at each Closing provided for in Section 3, Series A Notes in the
principal amount specified opposite such Purchaser’s name in the Purchaser Schedule at the
purchase price of 100% of the principal amount thereof. The Purchasers’ obligations hereunder
are several and not joint obligations and no Purchaser shall have any liability to any Person for the
performance or non-performance of any obligation by any other Purchaser hereunder.
Section 2.2.
[Reserved].
Section 3.
Closing.
Section 3.1.
Closing. The sale and purchase of the Series A Notes to be purchased by
each Purchaser shall occur at the offices of Jones Day, at 250 Vesey Street, New York, NY 10281-
1047, at 10:00 a.m. New York time (or such other place and time agreed by the Company and the
Purchasers) (the “Closing”), on March 13, 2026 or on such other Business Day as may be agreed
upon by the Company and the Purchasers (the “Closing Day”). At the Closing, the Company will
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deliver to each Purchaser the Series A Notes to be purchased by such Purchaser at the Closing in
the form of a single Series A Note (or such greater number of Series A Notes in denominations of
at least $100,000 as such Purchaser may request), dated the date of the Closing and registered in
such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the
Company or its order of immediately available funds in the amount of the purchase price therefor
by wire transfer of immediately available funds to the account of the Company set forth in the
applicable funding instructions delivered pursuant to Section 4.1(k) in connection with the
Closing. If at the Closing the Company shall fail to tender the Series A Notes to any Purchaser as
provided above in this Section 3.1, or any of the conditions specified in Section 4 shall not have
been fulfilled to the satisfaction of any Purchaser, such Purchaser shall, at its election, be relieved
of all further obligations under this Agreement, without thereby waiving any rights such Purchaser
may have by reason of such failure by the Company to tender such Series A Notes or any of the
conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction.
Section 3.2.
[Reserved].
Section 4.
Conditions to Closings.
Section 4.1.  Conditions to Closing. Each Purchaser’s obligation to purchase and pay
for the Notes to be sold to such Purchaser at a Closing is subject to the fulfillment to such
Purchaser’s satisfaction, prior to or at such Closing of the following conditions:
(a)
Representations and Warranties.
The representations and warranties of the
Company in this Agreement and of each Initial Subsidiary Guarantor in the Subsidiary Guaranty
to which it is party shall be correct in all material respects when made and at such Closing (except
for representations and warranties which apply to a specific earlier date which shall be correct in
all material respects as of such earlier date); provided that the Company shall be permitted to make
additions and deletions to any of Schedules 5.4, 5.5 and 5.15 after the Effective Date but prior to
any subsequent Closing Day, so long as the Company shall have provided updated copies of the
relevant Schedules to such Purchaser not less than five Business Days prior to such Closing Day.
(b)
Performance; No Default. The Company shall have performed and complied with
all agreements and conditions contained in this Agreement, and each Initial Subsidiary Guarantor
shall have performed and complied with all agreements and conditions contained in the Subsidiary
Guaranty, required to be performed or complied with by it prior to or at the Closing. Before and
after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 5.14) at the applicable Closing, no Change in Control or Event of Default
shall have occurred and be continuing.
(c)
Officer’s Certificate.  The Company shall have delivered to such Purchaser an
Officer’s Certificate, dated the date of the applicable Closing certifying that the conditions
specified in Sections 4.1(a), 4.1(b) and 4.1(j) have been fulfilled.
(d)
Secretary’s Certificate. With respect to the applicable Closing, the Obligors shall
have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date
of such Closing certifying as to (i) the resolutions attached thereto and other corporate proceedings
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relating to the authorization, execution and delivery of the Note Documents to which it is a party
and (ii) such Obligor’s organizational documents as then in effect.
(e)
Opinion of Counsel. With respect to the applicable Closing, such Purchaser shall
have received customary opinions in form and substance reasonably satisfactory to such Purchaser,
dated the date of such Closing, from Dechert LLP, special counsel for the Obligors, covering the
matters set forth in Schedule 4.1(a) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or its counsel may reasonably request (and the Company
hereby instructs its counsel to deliver such opinion to the Purchasers).
(f)
Purchase Permitted By Applicable Law, Etc. On the date of the applicable Closing,
such Purchaser’s purchase of relevant Notes shall (i) be permitted by the laws and regulations of
each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as
section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance
companies without restriction as to the character of the particular investment, (ii) not violate any
applicable law or regulation (including Regulation T, U or X of the Board of Governors of the
Federal Reserve System) and (iii) not subject such Purchaser to any tax, penalty or liability under
or pursuant to any applicable law or regulation, which law or regulation was not in effect on the
date hereof. If requested by such Purchaser, such Purchaser shall have received an Officer’s
Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable
such Purchaser to determine whether such purchase is so permitted.
(g)
Sale of Other Notes.
Contemporaneously with the applicable Closing, the
Company shall sell to each other Purchaser and each other Purchaser shall purchase the relevant
Notes to be purchased by it at such Closing, as specified in the Purchaser Schedule.
(h)
Payment of Special Counsel Fees. Without limiting Section 15.1, the Company
shall have paid on or before the applicable Closing, the reasonable and documented out-of-pocket
fees, charges and disbursements of the Purchasers’ special counsel to the extent reflected in a
statement of such counsel rendered to the Company prior to such Closing.
(i)
Private Placement Number. A Private Placement Number issued by CUSIP Global
Services (in cooperation with the SVO) shall have been obtained for the relevant Notes.
(j)
Changes in Legal Structure.  No Obligor shall have changed its jurisdiction of
organization or been a party to any merger or consolidation or succeeded to all or any substantial
part of the liabilities of any other entity (in each case, other than as permitted under Section 10.2),
at any time following the date of the most recent financial statements referred to in Schedule 5.5
(as may be updated by the Company for each Closing).
(k)  Funding Instructions. At least two (2) Business Days prior to the date of the
applicable Closing, each Purchaser shall have received written instructions signed by a
Responsible Officer on letterhead of the Company confirming the information specified in
Section 3 including (i) the name and address of the transferee bank, (ii) such transferee bank’s
ABA number and (iii) the account name and number into which the purchase price for the relevant
Notes is to be deposited.
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(l)
Rating.The relevant Notes shall have received a Rating of “BBB-” (or its
equivalent) or better by a Rating Agency and if such Rating is a Private Rating, the related Private
Rating Rationale Report with respect to such Private Rating.
(m)
Subsidiary Guaranty. Each Initial Subsidiary Guarantor shall have duly authorized,
executed and delivered the Subsidiary Guaranty and each Purchaser shall have received a copy
thereof.
(n)
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 such Purchaser and its special counsel, and
such Purchaser and its special counsel shall have received all such counterpart originals or certified
or other copies of such documents as such Purchaser or such special counsel may reasonably
request.
Section 4.2.
[Reserved].
Section 5.
Representations and Warranties of the Company.
The Company represents and warrants to each Purchaser as of the date of the applicable
Closing (or, if any such representations and warranties expressly relate to an earlier date, then as
of such earlier date) that:
Section 5.1.
Organization; Power and Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of its jurisdiction of incorporation,
and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which
such qualification is required by law, except where the failure to be so qualified or in good standing
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. The Company has the corporate power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business it transacts and proposes
to transact (except where the failure to do so would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect), to execute and deliver this Agreement and the
Notes and to perform the provisions hereof and thereof.
Section 5.2.
Authorization, Etc.
This Agreement and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights
generally and (ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Section 5.3.
Disclosure.
(a)  This Agreement and the financial statements listed in Schedule 5.5 (as may be
updated by the Company for each Closing) and the documents, certificates or other writings
delivered to the Purchasers by or on behalf of the Company (other than financial projections, pro
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forma financial information and other forward-looking information referenced in Section 5.3(b),
information relating to third parties and general economic information) prior to December 31, 2025
in connection with the transactions contemplated hereby and identified in Schedule 5.3 (this
Agreement and such documents, certificates or other writings and such financial statements
delivered to each Purchaser being referred to, collectively, as the “Disclosure Documents”), taken
as a whole, did not, as of December 31, 2025, 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,
since December 31, 2025, there has been no change in the financial condition, operations, business
or properties of the Company or any Subsidiary except changes that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. There is no fact known
to the Company that would reasonably be expected to have a Material Adverse Effect that has not
been set forth herein or in the Disclosure Documents (and after taking account all updates thereto
and the same having been delivered to the Purchasers).All financial projections, pro forma
financial information and other forward-looking information which has been delivered to each
Purchaser by or on behalf of the Company in connection with the transactions contemplated by
this Agreement are based upon good faith assumptions and, in the case of financial projections and
pro forma financial information of the Company, good faith estimates, in each case, believed to be
reasonable at the time made, it being recognized that (i) such financial information as it relates to
future events is subject to significant and inherent uncertainty and contingencies (many of which
are beyond the control of the Company) and that no assurance can be given that such financial
information will be realized, and are therefore not to be viewed as fact, and (ii) actual results during
the period or periods covered by such financial information may materially differ from the results
set forth therein.
Section 5.4.
Organization and Ownership of Shares of Subsidiaries.
(a)
Schedule 5.4 (as may be updated by the Company for each Closing) contains
(except as noted therein) complete and correct lists as of the date of the applicable Closing of (i)
the Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of
its organization, the percentage of shares of each class of its capital stock or similar equity interests
outstanding owned by the Company and each other Subsidiary and whether such Subsidiary is a
Subsidiary Guarantor and (ii) the Company’s directors and senior officers.
(b)
All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 (as may be updated by the Company for each Closing) as being
owned by the Company and its Subsidiaries have been validly issued, and, to the extent applicable,
are fully paid and non-assessable and are owned by the Company or another Subsidiary free and
clear of any Lien that is prohibited by this Agreement.
(c)
Each Subsidiary is a corporation or other legal entity duly organized, validly
existing and, where applicable, in good standing under the laws of its jurisdiction of organization,
and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good
standing in each jurisdiction in which such qualification is required by law, except where the
failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own or hold under
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lease and to transact the business it transacts and proposes to transact, except where the failure to
do so would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(d)
No Subsidiary is subject to any legal, regulatory, contractual or other restriction
(other than the agreements listed on Schedule 5.4 (as may be updated by the Company for each
Closing), any agreements governing Indebtedness of such Subsidiaries permitted to be incurred
hereunder and customary limitations imposed by corporate law or similar statutes) restricting the
ability of such Subsidiary to pay dividends out of profits or make any other similar distributions
of profits to the Company or any other Obligor that owns outstanding shares of capital stock or
similar equity interests of such Subsidiary.
Section 5.5.
Financial Statements.The Company has delivered to each Purchaser
copies of the financial statements of the Company and its consolidated subsidiaries. All of such
financial statements (including in each case the related schedules and notes, but excluding all
financial projections, pro forma financial information and other forward-looking information)
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 and lack of footnotes).
Section 5.6.
Compliance with Laws, Other Instruments, Etc. The execution, delivery
and performance by the Company of this Agreement and the Notes will not (i) contravene, result
in any breach of, or constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Subsidiary under, any (A) indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease or any other agreement or instrument to which the
Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound or affected or (B) the corporate charter or by-laws of the
Company, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of
any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable
to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or any Subsidiary, in each
case, except where any of the foregoing (other than clause (i)(B) above), individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse Effect.
Section 5.7.
GovernmentalAuthorizations,Etc.
Noconsent,approvalor
authorization of, or registration, filing or declaration with, any Governmental Authority is required
in connection with the execution, delivery or performance by the Company of this Agreement or
the Notes, other than any filing required under the Exchange Act or the rules or regulations
promulgated thereunder on Form 8-K, Form 10-Q or Form 10-K.
Section 5.8.
Litigation; Observance of Agreements, Statutes and Orders.
(a)There are no actions, suits, investigations or proceedings pending or, to the knowledge
of the Company, threatened against or affecting the Company or any Subsidiary or any property
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of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by
any Governmental Authority that would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(b)
Neither the Company nor any Subsidiary is (i) in default under any agreement or
instrument to which it is a party or by which it is bound, (ii) in violation of any order, judgment,
decree or ruling of any court, any arbitrator of any kind or any Governmental Authority or (iii) in
violation of any applicable law, ordinance, rule or regulation of any Governmental Authority
(including Environmental Laws, the USA PATRIOT Act or any of the other laws and regulations
that are referred to in Section 5.16), which default or violation would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.9.
Taxes.
The Company and its Subsidiaries (other than Immaterial
Subsidiaries) have filed all federal and state income and other material tax returns that are required
to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such
returns and all other taxes and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable and before they
have become delinquent, except for any taxes and assessments (i) the nonpayment of which would
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect,
(ii) the amount, applicability or validity of which is currently being contested in good faith by
appropriate proceedings, or (iii) with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP.
Section 5.10. Title to Property. The Company and its 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 referred to in
Section 5.5 or purported to have been acquired by the Company or any Subsidiary after such date
(except as sold or otherwise disposed of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement.
Section 5.11. Licenses, Permits, Etc.
(a) The Company and its 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, except for any such conflicts that, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect.
(b)
To the knowledge of the Company, no product or service of the Company or any
of its Subsidiaries infringes in any material respect any license, permit, franchise, authorization,
patent, copyright, proprietary software, service mark, trademark, trade name or other right owned
by any other Person, except for any such infringements that, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect.
(c)
To the knowledge of the Company, there is no Material violation by any Person of
any right of the Company or any other Obligor with respect to any license, permit, franchise,
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authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other
right owned or used by the Company or any other Obligor.
Section 5.12. Compliance with Employee Benefit Plans.
(a) The Company and each ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of noncompliance as have not
resulted in and would not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect. Except as has not resulted in or would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect: (i) neither the Company
nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3(3)
of ERISA), and (ii) no event, transaction or condition has occurred or exists that could, individually
or in the aggregate, reasonably be expected to result in the incurrence of any such liability by the
Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties
or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA
or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or
section 4068 of ERISA or by the granting of a security interest in connection with the amendment
of a Pension Plan under section 412 of the Code.
(b)
The present value of the aggregate benefit liabilities under each of the Pension
Plans, determined as of the end of such Pension Plan’s most recently ended plan year on the basis
of the actuarial assumptions specified for funding purposes in such Pension Plan’s most recent
actuarial valuation report, did not exceed the aggregate current value of the assets of such Pension
Plan allocable to such benefit liabilities by an amount that has resulted in or could, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect. The term “benefit
liabilities” has the meaning specified in section 4001(a)(16) of ERISA and the terms “current
value” and “present value” have the meaning specified in section 3(26) and section 3(27),
respectively, of ERISA.
(c)
The Company and its ERISA Affiliates have not incurred withdrawal liabilities
(and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the aggregate have resulted in or would
reasonably be expected to result in a Material Adverse Effect.
(d)
The expected postretirement benefit obligation (determined as of the last day of the
Company’s most recently ended fiscal year in accordance with Financial Accounting Standards
Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable
to continuation coverage mandated by section 4980B of the Code) of the Company and its
Subsidiaries is not reasonably likely to result in a Material Adverse Effect.
(e)
The execution and delivery of this Agreement and the issuance and sale of the Notes
hereunder do not involve any transaction that is subject to the prohibitions of section 406(a) of
ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D)
of the Code. The representation by the Company to each Purchaser in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s
representation in Section 6.2.
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(f)
The Company and its Subsidiaries do not have any Non-U.S. Plans the acts or
omissions of or facts related to which have resulted or could, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
Section 5.13. Private Offering by the Company. Neither the Company nor anyone
acting on its behalf has offered the Series A Notes or any substantially similar debt Securities for
sale to, or solicited any offer to buy the Series A Notes or any substantially similar debt Securities
from, or otherwise approached or negotiated in respect thereof with, any Person other than the
Purchasers, which have been offered the Series A Notes at a private sale for investment. Neither
the Company nor anyone acting on its behalf has taken, or will take, any action that would subject
the issuance or sale of the Series A Notes to the registration requirements of section 5 of the
Securities Act or to the registration requirements of any Securities or blue sky laws of any
applicable jurisdiction.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the
proceeds of the sale of the Series A Notes hereunder for the general corporate purposes of the
Company and its subsidiaries, including to make investments, repay existing debt and make
distributions permitted by this Agreement. No part of the proceeds from the sale of the Series A
Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve
System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under
such circumstances as to involve the Company in a violation of Regulation X of said Board (12
CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR
220). Margin stock does not constitute more than 25% of the value of the consolidated assets of
the Company and its subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 25% of the value of such assets. As used in this Section, the terms
“margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them
in said Regulation U.
Section 5.15. Existing Indebtedness; Future Liens.
(a) Except as described therein, Schedule 5.15 (as may be updated by the Company for
each Closing) sets forth a complete and correct list as of March 12, 2026 of all outstanding Material
Indebtedness for borrowed money of the Company and its Subsidiaries (provided that the
aggregate amount of all Indebtedness for borrowed money not listed on Schedule 5.15 does not
exceed $100,000,000) as of March 12, 2026, since which date there has been no Material change
in the amounts, interest rates, sinking funds, installment payments or maturities of the Material
Indebtedness of the Company or its Subsidiaries. As of March 12, 2026, neither the Company nor
any Subsidiary is in default (other than Immaterial Subsidiaries) and no waiver of default is
currently in effect, in the payment of any principal or interest on any Indebtedness of the Company
or such Subsidiary and, to the knowledge of the Company, no event or condition exists with respect
to any Material Indebtedness of the Company or any Subsidiary (other than Immaterial
Subsidiaries) that would permit (or that with notice or the lapse of time, 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.
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(b)
Except as disclosed in Schedule 5.15 (as may be updated by the Company for each
Closing) or as would be permitted under Section 10.5 hereunder, neither the Company nor any
Subsidiary (other than Immaterial Subsidiaries) has agreed or consented to cause or permit any of
its property, whether now owned or hereafter acquired, to be subject to a Lien that secures
Indebtedness or 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 that secures
Indebtedness.
(c)
Neither the Company nor any Subsidiary (other than Immaterial Subsidiaries) is a
party to, or otherwise subject to any provision contained in, any instrument evidencing Material
Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other
agreement (including its charter or any other organizational document) which limits the amount
of, or otherwise imposes restrictions on the incurring of, Material Indebtedness of the Company,
except as disclosed in Schedule 5.15 (as may be updated by the Company for each Closing).
Section 5.16. Foreign Assets Control Regulations, Etc.
(a) Neither the Company nor any Controlled Entity (i) is a Blocked Person, (ii) has been
notified that its name appears or may in the future appear on a State Sanctions List or (iii) is a
target of sanctions that have been imposed by the United Nations or the European Union.
(b)
Neither the Company nor any Controlled Entity (i) has violated, been found in
violation of, or been charged or convicted under, any applicable Economic Sanctions Laws, Anti-
Money Laundering Laws or Anti-Corruption Laws or (ii) to the Company’s knowledge, is under
investigation by any Governmental Authority for possible violation of any Economic Sanctions
Laws, Anti-Money Laundering Laws or Anti-Corruption Laws.
(c)
No part of the proceeds from the sale of the Notes hereunder:
(i)
constitutes or will constitute funds obtained on behalf of any Blocked
Person or will otherwise be used by the Company or any Controlled Entity, directly or
indirectly, (A) in connection with any investment in, or any transactions or dealings with,
any Blocked Person, (B) for any purpose that would cause any Purchaser to be in violation
of any Economic Sanctions Laws or (C) otherwise in violation of any Economic Sanctions
Laws;
(ii)
will be used, directly or indirectly, in violation of, or cause any Purchaser
to be in violation of, any applicable Anti-Money Laundering Laws; or
(iii)
will be used, directly or indirectly, for the purpose of making any improper
payments, including bribes, to any Governmental Official or commercial counterparty in
order to obtain, retain or direct business or obtain any improper advantage, in each case
which would be in violation of, or cause any Purchaser to be in violation of, any applicable
Anti-Corruption Laws.
(d)
The Company has established procedures and controls which it reasonably believes
are adequate (and otherwise comply with applicable law) to ensure that the Company and each
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Controlled Entity is and will continue to be in compliance with all applicable Economic Sanctions
Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.
Section 5.17. Environmental Matters.
(a) Neither the Company nor any Subsidiary has received any written claim and no
proceeding has been instituted asserting any claim against the Company or any of its Subsidiaries
or with respect to any real property now or formerly owned, leased or operated by any of them,
alleging any damage to the environment or violation of any Environmental Laws, except, in each
case, such as would not reasonably be expected to result in a Material Adverse Effect.
(b)
Neither the Company nor any Subsidiary has knowledge of any facts which would
reasonably be expected to give rise to any claim, public or private, of violation of or liability under
Environmental Laws by the Company or any Subsidiary, except, in each case, such as would not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(c)
Neither the Company nor any Subsidiary has handled, stored, or disposed of any
Hazardous Materials on real properties now or formerly owned, leased or operated by any of them
in a manner which has violated any Environmental Law that would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(d)
Neither the Company nor any Subsidiary has had a release of any Hazardous
Materials in a manner which would reasonably be expected to give rise to liability under any
Environmental Law that would, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.
Section 5.18. Investment Company Act.
(a)
The Company has elected to be regulated as a “business development company”
within the meaning of the Investment Company Act and qualifies as a RIC.
(b)
The business and other activities of the Company and its Subsidiaries, including
the issuance of the Notes hereunder, the application of the proceeds and repayment thereof by the
Company and the consummation of the transactions contemplated by this Agreement do not result
in a violation or breach in any material respect of the provisions of the Investment Company Act
or any rules, regulations or orders issued by the SEC thereunder, in each case that are applicable
to the Company and its Subsidiaries.
(c)
The Company is in compliance in all respects with the Investment Policies, except
to the extent that the failure to so comply would not reasonably be expected to have a Material
Adverse Effect.
Section 5.19. Priority of Obligations. The payment obligations of the Company under
this Agreement and the Notes, and the payment obligations of any Subsidiary Guarantor under its
Subsidiary Guaranty, rank at least pari passu, without preference or priority, with all other
unsecured and unsubordinated Indebtedness of the Company or such Subsidiary Guarantor, as
applicable.
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Section 6.
Representations of the Purchasers.
Section 6.1.
Purchase for Investment. Each Purchaser severally represents that it is
purchasing the Notes for its own account or for one or more separate accounts maintained by such
Purchaser or for the account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all
times be within such Purchaser’s or their control. Each Purchaser understands that the 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 to register the Notes.
Section 6.2.
Source of Funds. Each Purchaser severally represents that at least one of
the following statements is an accurate representation as to each source of funds (a “Source”) to
be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser
hereunder:
(a)
the Source is an “insurance company general account” (as the term is defined in the
United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect
of which the reserves and liabilities (as defined by the annual statement for life insurance
companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account
contract(s) held by or on behalf of any employee benefit plan together with the amount of the
reserves and liabilities for the general account contract(s) held by or on behalf of any other
employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE
95-60) or by the same employee organization in the general account do not exceed 10% of the total
reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus
as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or
(b)
the Source is a separate account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any
employee benefit plan (or its related trust) that has any interest in such separate account (or to any
participant or beneficiary of such plan (including any annuitant)) are not affected in any manner
by the investment performance of the separate account;
(c)
the Source is either (i) an insurance company pooled separate account, within the
meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38
and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no
employee benefit plan or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund;
(d)  the Source constitutes assets of an “investment fund” (within the meaning of Part
VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset
manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee
benefit plan’s assets that are managed by the QPAM in such investment fund, when combined
with the assets of all other employee benefit plans established or maintained by the same employer
or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer
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or by the same employee organization and managed by such QPAM, represent more than 20% of
the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM
Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM
maintains an ownership interest in the Company that would cause the QPAM and the Company to
be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such
QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund,
when combined with the assets of all other employee benefit plans established or maintained by
the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption)
of such employer or by the same employee organization, represent 10% or more of the assets of
such investment fund, have been disclosed to the Company in writing pursuant to this clause (d);
(e)
the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of
PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM”
(within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and
(h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or
controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM
Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and
(ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been
disclosed to the Company in writing pursuant to this clause (e);
(f)
the Source is a governmental plan (as defined in section 3(32) of ERISA), a church
plan (as defined in section 3(33) of ERISA) that has not made an election under section 410(d) of
the Code, or a Non-U.S. Plan;
(g)
the Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been heretofore
identified to the Company in writing pursuant to this clause (g); or
(h)the Source does not include assets of any employee benefit plan.
As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan” and
“separate account” shall have the respective meanings assigned to such terms in section 3 of
ERISA.
Section 6.3.
Investment Experience;  Access  to  Information.
Each Purchaser
severally represents that it (a) is an institutional “accredited investor” as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act, an “Institutional Account” as defined in
FINRA Rule 4512(c) and a Qualified Institutional Buyer, (b) either alone or together with its
representatives has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of this investment and make an informed decision to so
invest, and has so evaluated the risks and merits of such investment, (c) has the ability to bear the
economic risks of this investment and can afford a complete loss of such investment,
(d) understands the terms of and risks associated with the purchase of the Notes, including, without
limitation, a lack of liquidity, pricing availability and risks associated with the industry in which
the Company operates, (e) has had the opportunity to review (i) the Disclosure Documents, (ii) the
Annual Report on Form 10-K for the Company for the fiscal year ended December 31, 2025 and
(iii) such other disclosure regarding the Company, its business and its financial condition as such
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Purchaser has determined to be necessary in connection with the purchase of the Notes, and (f) has
had an opportunity to ask such questions and make such inquiries concerning the Company, its
business, its management and its financial affairs and condition, in each case, as such Purchaser
has deemed appropriate in connection with such purchase and to receive satisfactory answers to
such questions and inquiries.
Section 6.4.
Authorization. Each Purchaser, or Assignee following an assignment in
accordance with Section 13.2, as applicable, severally represents that (a) it has full power and
authority to enter into this Agreement and (b) this Agreement, when executed and delivered by
such Purchaser or assigned to an Assignee in accordance with Section 13.2, will constitute valid
and legally binding obligations of such Purchaser or Assignee, as applicable, enforceable in
accordance with their terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and any other laws of general application
affecting enforcement of creditors’ rights generally, and as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable remedies.
Section 6.5.
Restricted Securities. Each Purchaser understands that the Notes have not
been, and will not be, registered under the Securities Act by reason of a specific exemption from
the registration provisions of the Securities Act which depends upon, among other things, the bona
fide nature of the investment intent and the accuracy of each Purchaser’s representations as
expressed herein. Each Purchaser understands that the Notes are “restricted securities” under
applicable U.S. federal and state securities laws and that, pursuant to these laws, each Purchaser
must hold the Notes indefinitely unless they are registered with the SEC and qualified by state
authorities, or an exemption from such registration and qualification requirements is available.
Each Purchaser acknowledges that the Company has no obligation to register or qualify the Notes
for resale. Each Purchaser further acknowledges that if an exemption from registration or
qualification is available, it may be conditioned on various requirements including, but not limited
to, the time and manner of sale, the holding period for the Notes, and on requirements relating to
the Company which are outside of such Purchaser’s control, and which the Company is under no
obligation and may not be able to satisfy.
Section 6.6.
No Public Market. Each Purchaser understands that no public market now
exists for the Notes, and that the Company has made no assurances that a public market will ever
exist for the Notes.
Section 6.7.
Legends. Each Purchaser understands that the Notes may be notated with
one or both of the following legends:
(a)
“THE NOTE REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF.
NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR UNLESS AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 IS AVAILABLE.”
(b)
Any legend required by the securities laws of any state to the extent such laws are
applicable to the Notes represented by the certificate, instrument or book entry so legended.
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Section 7.
Information as to Company.
Section 7.1.
Financial and Business Information. The Company shall deliver to each
Purchaser and each holder of a Note that, in each case, is an Institutional Investor:
(a)
Quarterly Statements — within 60 days (or such shorter period as is the earlier of
(x) 15 days greater than the period applicable to the filing of the Company’s Quarterly Report on
Form 10-Q (the “Form 10-Q”) with the SEC regardless of whether the Company is subject to the
filing requirements thereof and (y) the date by which such financial statements are required to be
delivered under any Material Credit Facility or the date on which such corresponding financial
statements are delivered under any Material Credit Facility if such delivery occurs earlier than
such required delivery date) after the end of each quarterly fiscal period in each fiscal year of the
Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of:
(i)
consolidated balance sheets of the Company as at the end of such quarter,
and
(ii)
consolidated statements of operations of the Company for such quarter and
for the portion of the fiscal year ending with such quarter and consolidated statements of
changes in net assets and consolidated statements of cash flows of the Company for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding periods in the
previous fiscal year (to the extent applicable), all in reasonable detail, prepared in accordance with
GAAP applicable to quarterly financial statements generally (other than absence of footnotes and
year-end adjustments), and certified by a Senior Financial Officer as fairly presenting, in all
material respects, the financial position of the Company and its consolidated subsidiaries being
reported on and their results of operations and cash flows, subject to changes resulting from year-
end adjustments;
(b)
Annual Statements — within 105 days (or such shorter period as is the earlier of (x)
15 days greater than the period applicable to the filing of the Company’s Annual Report on Form
10-K (the “Form 10-K”) with the SEC regardless of whether the Company is subject to the filing
requirements thereof and (y) the date by which such financial statements are required to be
delivered under any Material Credit Facility or the date on which such corresponding financial
statements are delivered under any Material Credit Facility if such delivery occurs earlier than
such required delivery date) after the end of each fiscal year of the Company, duplicate copies of:
(i)
a consolidated balance sheet of the Company and its consolidated
subsidiaries as at the end of such year, and
(ii)
consolidated statements of operations, changes in net assets and cash flows
of the Company and its consolidated subsidiaries for such year,
setting forth in each case in comparative form the figures for the previous fiscal year (to the extent
applicable), all in reasonable detail, prepared in accordance with GAAP, and accompanied by an
opinion thereon (without a “going concern” qualification or exception as to the Company (other
than as a result of the impending maturity or any prospective default under any credit document of
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the Company, including this Agreement and the Notes) and without any qualification or exception
as to the scope of the audit on which such opinion is based) of independent public accountants of
recognized national standing, which opinion shall state that such financial statements present
fairly, in all material respects, the financial position of the companies being reported upon and
their results of operations and cash flows and have been prepared in conformity with GAAP, and
that the examination of such accountants in connection with such financial statements has been
made in accordance with generally accepted auditing standards, and that such audit provides a
reasonable basis for such opinion in the circumstances;
(c)
SEC and Other Reports — promptly upon their becoming available, one copy of
(i) each financial statement, report, notice, proxy statement or similar document sent by the
Company or any other Obligor to its public Securities holders generally, and (ii) each regular or
periodic report, each registration statement (without exhibits except as expressly requested by such
holder), and each prospectus and all amendments thereto filed by the Company or any other
Obligor with the SEC and of all press releases and other statements made available generally by
the Company or any other Obligor to the public concerning developments that are Material;
(d)
Notice of Event of Default — promptly, and in any event within 5 Business Days,
after a Responsible Officer becoming aware of the existence of any Event of Default or that any
Person (other than a Purchaser or a holder of a Note (except with respect to any claimed default of
the type referred to in Section 11(a) or 11(b) provided by any single holder of a Note)) has given
any notice or taken any action with respect to a claimed default hereunder or that any Person (other
than a Purchaser or a holder of a Note) has given any notice or taken any action with respect to a
claimed default of the type referred to in Section 11(f), a written notice specifying the nature and
period of existence thereof and what action the Company is taking or proposes to take with respect
thereto;
(e)
Employee Benefits Matters — promptly, and in any event within 5 days, after a
Responsible Officer becoming aware of any of the following, a written notice setting forth the
nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with
respect thereto:
(i)
with respect to any Pension Plan, any reportable event, as defined in
section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not
been waived pursuant to such regulations as in effect on the date hereof, which in the case
of any Pension Plan sponsored or maintained by an ERISA Affiliate would reasonably be
expected to have a Material Adverse Effect;
(ii)
the taking by the PBGC of steps to institute, or the threatening by the PBGC
of the institution of, proceedings under section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan which in the case of any
Pension Plan sponsored or maintained by an ERISA Affiliate would reasonably be
expected to have a Material Adverse Effect, or the receipt by the Company or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan (to the extent such action would reasonably
be expected to result in a Material Adverse Effect);
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(iii)
any event, transaction or condition that would reasonably be expected to
result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in section 3(3) of ERISA), or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability
or Lien, taken together with any other such liabilities or Liens then existing, would
reasonably be expected to have a Material Adverse Effect; or
(iv) receipt of notice of the imposition of a financial penalty (which for this
purpose shall mean any tax, penalty or other liability, whether by way of indemnity or
otherwise) with respect to one or more Non-U.S. Plans that would reasonably be expected
to have a Material Adverse Effect;
(f)  Notices from Governmental Authority — promptly, and in any event within 30 days
of receipt thereof, copies of any notice to the Company or any other Obligor from any
Governmental Authority relating to any order, ruling, statute or other law or regulation that would
reasonably be expected to have a Material Adverse Effect and to the extent such notice is required
to be disclosed in connection with any regulation or disclosure obligations under the Securities
Act;
(g)
Resignation or Replacement of Auditors — within 10 days following the date on
which the Company’s auditors resign or the Company elects to change auditors, as the case may
be, notification thereof, together with such further information as the Required Holders may
request; and
(h)
Requested Information — with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition, assets or properties of
the Company or any other Obligor or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be reasonably requested by a
holder of the Notes, in each case to the extent reasonably available to the Company.
Section 7.2.
Officer’s Certificate.Each set of financial statements delivered to a
Purchaser or holder of a Note pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied
by a certificate of a Senior Financial Officer:
(a)
Covenant Compliance — setting forth the information from such financial
statements that is required in order to establish whether the Company was in compliance with the
requirements of Section 10.8 during the quarterly or annual period covered by the financial
statements then being furnished (including with respect to each such provision that involves
mathematical calculations, the information from such financial statements that is required to
perform such calculations) and detailed calculations of the maximum or minimum amount, ratio
or percentage, as the case may be, permissible under the terms of such Section, and the calculation
of the amount, ratio or percentage then in existence. In the event that the Company or any other
Obligor has made an election to measure any financial liability using fair value (which election is
being disregarded for purposes of determining compliance with this Agreement pursuant to
Section 22.2) as to the period covered by any such financial statement, such Senior Financial
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Officer’s certificate as to such period shall include a reconciliation from GAAP with respect to
such election;
(b)
Event of Default — certifying that such Senior Financial Officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her supervision, a review
of the transactions and conditions of the Company and the other Obligors from the beginning of
the quarterly or annual period covered by the statements then being furnished to the date of the
certificate and that such review shall not have disclosed the existence during such period of any
condition or event that constitutes an Event of Default or, if any such condition or event existed or
exists (including any such event or condition resulting from the failure of the Company or any
other Obligor to comply with any Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have taken or proposes to take with respect
thereto; and
(c)
Subsidiary Guarantors – setting forth a statement of any changes to the list of all
Subsidiaries that are Subsidiary Guarantors since the most recent statement delivered pursuant to
this Section 7.2 and certifying that each Subsidiary that is required to be a Subsidiary Guarantor
pursuant to Section 9.7 is a Subsidiary Guarantor, in each case, as of the date of such certificate of
Senior Financial Officer.
Section 7.3.
Visitation.
The Company shall permit the representatives of each
Purchaser and each holder of a Note that, in each case, is an Institutional Investor:No Default —
if no Event of Default then exists and is continuing, at the expense of such holder and upon at least
ten (10) Business Days’ prior notice to the Company, to visit the principal executive office of the
Company, to discuss the affairs, finances and accounts of the Company and the other Obligors
with the Company’s officers, and (with the consent of the Company, which consent will not be
unreasonably withheld and so long as a Senior Financial Officer or his or her delegee is given
reasonable notice and the opportunity to be present during such discussions) its independent public
accountants, and (with the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company and each other Obligor, all at
such reasonable times and as often as may be reasonably requested in writing; provided, that such
visitation rights set forth in this clause (a) may only be exercised once per calendar year for all
holders of the Notes, collectively, on a mutually agreed date; and
(b)
Default — if an Event of Default then exists and is continuing, at the expense of
the Company and upon at least ten (10) Business Days’ prior notice to the Company, to visit and
inspect any of the offices or properties of the Company or any other Obligor, to examine all their
respective books of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the Company and the other Obligors
so long as a Senior Financial Officer or his or her delegee is given reasonable notice and the
opportunity to be present during such discussions), all at such reasonable times and as often as
may be reasonably requested.
Section 7.4.
Electronic Delivery.
Financial statements, opinions of independent
certified public accountants, other information and Officer’s Certificates that are required to be
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delivered by the Company pursuant to Sections 7.1(a), (b) or (c) and Section 7.2 shall be deemed
to have been delivered if the Company satisfies any of the following requirements with respect
thereto:
(a)
such financial statements satisfying the requirements of Section 7.1(a) or (b) and
related Officer’s Certificate satisfying the requirements of Section 7.2 and any other information
required under Section 7.1(c) are delivered to each holder of a Note by e-mail at the e-mail address
set forth in such holder’s Purchaser Schedule as communicated from time to time in a separate
writing delivered to the Company;
(b)
the Company shall have timely filed such Form 10–Q or Form 10–K, satisfying the
requirements of Section 7.1(a) or Section 7.1(b), as the case may be, with the SEC on EDGAR and
shall have made such form accessible from its home page on the internet, which is located at
www.mscincomefund.com as of the date of this Agreement and shall have delivered and, with
respect to Section 7.1(a) or Section 7.1(b), the related Officer’s Certificate satisfying the
requirements of Section 7.2 to each holder of a Note by electronic mail;
(c)
such financial statements satisfying the requirements of Section 7.1(a) or Section
7.1(b) and related Officer’s Certificate(s) satisfying the requirements of Section 7.2 and any other
information required under Section 7.1(c), as applicable, is or are timely posted by or on behalf of
the Company on IntraLinks or on any other similar website to which each holder of Notes has free
access; or
(d)
the Company shall have timely filed any of the items referred to in Section 7.1(c)
with the SEC on EDGAR and shall have made such items available on its home page on the internet
or on IntraLinks or on any other similar website to which each holder of Notes has free access;
provided however, that in no case shall access to such financial statements, other information and
Officer’s Certificates be conditioned upon any waiver or other agreement or consent (other than
confidentiality provisions consistent with Section 20 of this Agreement or customary disclaimers
included in the Company’s website); provided further, that, in the case of any of clause (b), (c) or
(d), the Company shall have given each holder of a Note prior written notice, which may be by e-
mail, included in the Officer’s Certificate delivered pursuant to Section 7.2 or in accordance with
Section 18, of such posting or filing in connection with each delivery; provided further, that upon
request of any holder to receive paper copies of such forms, financial statements, other information
and Officer’s Certificates or to receive them by e-mail, the Company will promptly e-mail them
or deliver such paper copies, as the case may be, to such holder.
Section 8.
Payment and Prepayment of the Notes.
Section 8.1.
Maturity. As provided therein, the entire unpaid principal balance of each
Note shall be due and payable on the Maturity Date thereof.
Section 8.2.
Optional Prepayments with Prepayment Settlement Amount.
The
Company may, at its option, upon notice as provided below, prepay at any time all, or from time
to time any part of, any Series or tranche of the Notes, in an amount not less than 10% of the
aggregate principal amount of such Series or tranche of Notes then outstanding in the case of a
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partial prepayment, at 100% of the principal amount so prepaid, and the Prepayment Settlement
Amount applicable to such Series or tranche of Notes determined for the prepayment date with
respect to such principal amount. The Company will give each holder of such Series or tranche of
Notes written notice of each optional prepayment under this Section 8.2 not less than 10 days and
not more than 60 days prior to the date fixed for such prepayment unless the Company and the
holders of greater than 50.00% in principal amount of such Series or tranche of Notes at the time
outstanding (exclusive of Notes then owned by the Affiliated Holders) agree to another time period
pursuant to Section 17. Each such notice shall specify such date (which shall be a Business Day),
the aggregate principal amount of such Series or tranche of Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in accordance with
Section 8.3), and the interest in such Series or tranche to be paid on the prepayment date with
respect to such principal amount being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated Prepayment Settlement Amount applicable to such
Series or tranche of Notes due in connection with such prepayment (calculated as if the date of
such notice were the date of the prepayment), setting forth the details of such computation. Two
Business Days prior to such prepayment, the Company shall deliver to each holder of Notes in
such Series or tranche a certificate of a Senior Financial Officer specifying the calculation of such
Prepayment Settlement Amount applicable to such Series or tranche of Notes as of the specified
prepayment date.
Section 8.3.
Allocation of Partial Prepayments. In the case of each partial prepayment
of any Series or tranche of Notes pursuant to Section 8.2, the principal amount of such Series or
tranche of Notes to be prepaid shall be allocated among all of the Notes in such Series or tranche
at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment. For the avoidance of doubt, so long as no
Event of Default then exists, the Company may optionally prepay any Series or tranche of Notes
without the allocation of such prepayment among all of the Notes at the time outstanding, if such
Series or tranche, as applicable, is paid in full when the Prepayment Settlement Amount for such
Series or tranche, as applicable, is zero.
Section 8.4.
Maturity; Surrender, Etc. In the case of each prepayment of any Series
or tranche of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid
shall mature and become due and payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the applicable Prepayment Settlement
Amount, if any, or 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
Prepayment Settlement Amount, if any, or Make-Whole Amount, if any, as aforesaid, interest on
such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered
to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any
prepaid principal amount of any Note.
Section 8.5.
Purchase of Notes. The Company will not and will not permit any Affiliate
to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding
Notes except (a) upon the payment or prepayment of such Notes in accordance with this
Agreement and such Notes or (b) pursuant to an offer to purchase made by the Company or an
Affiliate pro rata to the holders of all Notes in any Series or tranche at the time outstanding upon
the same terms and conditions. Any such offer shall provide each applicable holder with sufficient
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information to enable it to make an informed decision with respect to such offer, and shall remain
open for at least 10 Business Days. If the holders of more than 25% of the principal amount of the
Notes in such Series or tranche then outstanding accept such offer, the Company shall promptly
notify the remaining holders Notes in such Series or tranche of such fact and the expiration date
for the acceptance by holders of Notes in such Series or tranche of such offer shall be extended by
the number of days necessary to give each such remaining holder at least 5 Business Days from its
receipt of such notice to accept such offer. The Company will promptly cancel such Notes
acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of such Notes
pursuant to this Agreement and no Notes may be issued in substitution or exchange for any such
Notes. For the avoidance of doubt, no Prepayment Settlement Amount shall be owed in connection
with any prepayment made pursuant to this Section 8.5(b).
Section 8.6.
Make-Whole Amount; Prepayment Settlement Amount.
“Prepayment Settlement Amount” means with respect to any Series A Note, an amount
equal to the “Prepayment Settlement Amount”, as follows:
Prepaid during the period
Prepayment Settlement Amount
Make-Whole Amount of the principal amount
to be prepaid
On or before February 28, 2029
After February 28, 2029
Zero
“Make-Whole Amount” means, with respect to any Note, an amount equal to the excess,
if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such 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:
“Called Principal” means, with respect to any Note, the principal of such Note that is to
be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
“Discounted Value” means, with respect to the Called Principal of any 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 the Notes is payable) equal to the Reinvestment
Yield with respect to such Called Principal.
“Reinvestment Yield” means, with respect to the Called Principal of any Note, the sum
of (a) 0.50% plus (b) the yield to maturity implied by the “Ask Yield(s)” 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 (“Reported”) having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S.
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Treasury securities Reported having a maturity equal to such Remaining Average Life, then such
implied yield to maturity will be determined by (i) converting U.S. Treasury bill quotations to
bond equivalent yields in accordance with accepted financial practice and (ii) interpolating linearly
between the “Ask Yields” Reported for the applicable most recently issued actively traded on-the-
run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining
Average Life and (2) 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 Note.
If such yields are not Reported or the yields Reported as of such time are not ascertainable
(including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called
Principal of any Note, the sum of (x) 0.50% plus (y) the yield to maturity implied by the U.S.
Treasury constant maturity 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 (or any comparable successor publication)
for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. If there is no such U.S. Treasury constant maturity
having a term equal to such Remaining Average Life, such implied yield to maturity will be
determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported
with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury
constant maturity so reported with the term 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 Note.
“Remaining Average Life” means, with respect to any Called Principal of any Note, the
number of years 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, computed on the basis of a 360-day
year comprised of twelve 30-day months and calculated to two decimal places, 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
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 Notes, 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 8.2 or Section 12.1.
“Settlement Date” means, with respect to the Called Principal of any Note, the date on
which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared
to be immediately due and payable pursuant to Section 12.1, as the context requires.
Section 8.7.
Payments Due on Non-Business Days. Anything in this Agreement or the
Notes to the contrary notwithstanding, (x) except as set forth in clause (y), any payment of interest
on any Note that is due on a date that is not a Business Day shall be made on the next succeeding
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Business Day without including the additional days elapsed in the computation of the interest
payable on such next succeeding Business Day; and (y) any payment of principal of or Make-
Whole Amount on, or the Prepayment Settlement Amount on, any Note (including principal due
on the Maturity Date of such Note) that is due on a date that is not a Business Day shall be made
on the next succeeding Business Day and shall include the additional days elapsed in the
computation of interest payable on such next succeeding Business Day.
Section 8.8.
Change in Control.
(a) Notice of Change in Control. The Company will, within fifteen Business Days after
any Responsible Officer has knowledge of the occurrence of any Change in Control, give written
notice of such Change in Control to each holder of Notes. Such notice shall contain and constitute
an offer to prepay Notes as described in subparagraph (b) of this Section 8.8 and shall be
accompanied by the certificate described in subparagraph (e) of this Section 8.8.
(b)
Offer to Prepay Notes. The offer to prepay Notes contemplated by subparagraph
(a) of this Section 8.8 shall be an offer to prepay, in accordance with and subject to this Section
8.8, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect
of any 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 “Section 8.8 Proposed Prepayment
Date”). Such date shall be not less than 30 days and not more than 60 days after the date of such
offer (if the Section 8.8 Proposed Prepayment Date shall not be specified in such offer, the Section
8.8 Proposed Prepayment Date shall be the first Business Day after the 45th day after the date of
such offer).
(c)
Acceptance/Rejection.  A holder of Notes may accept the offer to prepay made
pursuant to this Section 8.8 by causing a notice of such acceptance to be delivered to the Company
not later than 15 Business Days after receipt by such holder of the most recent offer of prepayment.
A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.8
shall be deemed to constitute rejection of such offer by such holder.
(d)
Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.8
shall be at 100% of the principal amount of such Notes, together with interest on such Notes
accrued to, but excluding, the date of prepayment, but without Make-Whole Amount, Prepayment
Settlement Amount or other premium.
(e)
Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 8.8
shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and
dated the date of such offer, specifying: (i) the Section 8.8 Proposed Prepayment Date; (ii) that
such offer is made pursuant to this Section 8.8; (iii) the principal amount of each Note offered to
be prepaid; (iv) the interest that would be due on each Note offered to be prepaid, accrued to, but
excluding, the Section 8.8 Proposed Prepayment Date; (v) that the conditions of this Section 8.8
have been fulfilled; and (vi) in reasonable detail, the nature and date of the Change in Control.
(f)
Definitions.
“Change in Control” means (i) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Exchange Act as in
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effect on the date hereof) (other than any Affiliate of the Investment Advisor or the Company) of
shares representing more than 35% of the aggregate ordinary voting power represented by the
issued and outstanding Equity Interests in the Investment Advisor or the Company; or (ii) the
Company shall cease to be managed by the Investment Advisor.
Section 9.
Affirmative Covenants.
The Company covenants from the Effective Date and thereafter so long as any of the Notes
are outstanding that:
Section 9.1.
Compliance with Laws. Without limiting Section 10.4, the Company will,
and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject (including ERISA, Environmental Laws, the USA
PATRIOT Act and the other laws and regulations that are referred to in Section 5.16) and will
obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to the conduct of their
respective businesses, in each case to the extent necessary to ensure that non-compliance with such
laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental authorizations would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.2.
Insurance. The Company will, and will cause each of its Subsidiaries that
are Obligors to, maintain insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of similarly situated entities engaged in the same or a
similar business.
Section 9.3.
Maintenance of Properties. The Company will, and will cause each of its
Subsidiaries (other than Immaterial Subsidiaries) to, maintain and keep, or cause to be maintained
and kept, their respective properties in good repair, working order and condition (other than
ordinary wear and tear), provided that this Section 9.3 shall not prevent the Company or any
subsidiary from discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has concluded that such
discontinuance would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
Section 9.4.
Payment of Taxes and Claims. The Company will, and will cause each of
its Subsidiaries (other than Immaterial Subsidiaries) to, file all federal and state income and other
material tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown
to be due and payable on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises, to the extent the
same have become due and payable and before they have become delinquent and all claims for
which sums have become due and payable that have or might become a Lien on properties or assets
of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need
pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in
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appropriate proceedings, and the Company or a Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of the Company or such Subsidiary and (ii) the
nonpayment of all such taxes, assessments, charges, levies and claims would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.5.
Corporate Existence, Etc. Subject to Section 10.2, the Company will at
all times preserve and keep its corporate existence in full force and effect. Subject to Section 10.2,
the Company will at all times preserve and keep in full force and effect the corporate existence of
each of its Subsidiaries (other than Immaterial Subsidiaries) (unless merged into the Company or
a Wholly-Owned Subsidiary) and all rights and franchises of the Company and its Subsidiaries
(other than Immaterial Subsidiaries) unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect such corporate existence,
right or franchise would not, individually or in the aggregate, have a Material Adverse Effect.
Section 9.6.
Books and Records.The Company will, and will cause each of its
Subsidiaries (other than Immaterial Subsidiaries) to, maintain proper books of record and account
in conformity with GAAP and in all material respects with all applicable requirements of any
Governmental Authority having legal or regulatory jurisdiction over the Company or such
Subsidiary, as the case may be. The Company will, and will cause each of its Subsidiaries (other
than Immaterial Subsidiaries) to, keep books, records and accounts which, in reasonable detail,
accurately reflect all transactions and dispositions of assets. The Company and its Subsidiaries
(other than Immaterial Subsidiaries) have devised a system of internal accounting controls
sufficient to provide reasonable assurances that their respective books, records, and accounts
accurately reflect all transactions and dispositions of assets and the Company will, and will cause
each of its Subsidiaries to, continue to maintain such system.
Section 9.7.
Subsidiary Guarantors.
(a)
The Company will cause each of its Subsidiaries (other than Excluded Subsidiaries)
that guarantees or otherwise becomes liable at any time, whether as a borrower or an additional or
co-borrower or otherwise, for or in respect of any Indebtedness under any Material Credit Facility
for which the Company is a borrower or guarantor to concurrently therewith:enter into (A) an
agreement in form and substance reasonably satisfactory to the Required Holders providing for the
guaranty by such Subsidiary, on a joint and several basis with all other such Subsidiaries providing
a guaranty, of (x) the prompt payment in full when due of all amounts payable by the Company
pursuant to the Notes (whether for principal, interest, Prepayment Settlement Amount, Make-
Whole Amount or otherwise) and this Agreement, including all indemnities, fees and expenses
payable by the Company thereunder and (y) the prompt, full and faithful performance, observance
and discharge by the Company of each and every covenant, agreement, undertaking and provision
required pursuant to the Notes or this Agreement to be performed, observed or discharged by it (a
“Subsidiary Guaranty”) or (B) a joinder to the Subsidiary Guaranty; and
(ii)
deliver the following to each holder of a Note:
(A)
thereto;
an executed counterpart of such Subsidiary Guaranty or a joinder
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(B)
a certificate signed by an authorized responsible officer of such
Subsidiary containing representations and warranties on behalf of such Subsidiary
to the same effect, mutatis mutandis, as those contained in Sections 5.1, 5.2, 5.6
and 5.7 of this Agreement (but with respect to such Subsidiary and such Subsidiary
Guaranty rather than the Company);
(C) all documents as may be reasonably requested by the Required
Holders to evidence the due organization, continuing existence and, where
applicable, good standing of such Subsidiary and the due authorization by all
requisite action on the part of such Subsidiary of the execution and delivery of such
Subsidiary Guaranty and the performance by such Subsidiary of its obligations
thereunder; and
(D)
upon request of the Required Holders (at the time such Subsidiary
is to be joined as a Subsidiary Guarantor or if otherwise provided under a Material
Credit Facility), a customary opinion of counsel reasonably satisfactory to the
Required Holders covering such matters relating to such Subsidiary and such
Subsidiary Guaranty as the Required Holders may reasonably request.
(b)
At the election of the Company and by written notice to each holder of Notes, any
Subsidiary Guarantor may be discharged from all of its obligations and liabilities under its
Subsidiary Guaranty and shall be automatically released from its obligations thereunder without
the need for the execution or delivery of any other document by the holders, provided that (i) if
such Subsidiary Guarantor is a guarantor or is otherwise liable for or in respect of any Material
Credit Facility, then such Subsidiary Guarantor has been released and discharged (or will be
released and discharged concurrently with the release of such Subsidiary Guarantor under its
Subsidiary Guaranty) under such Material Credit Facility, (ii) at the time of, and after giving effect
to, such release and discharge, no Default or Event of Default shall be existing, (iii) no amount is
then due and payable under such Subsidiary Guaranty, (iv) if in connection with such Subsidiary
Guarantor being released and discharged under any Material Credit Facility (other than in
connection with a sale of such Subsidiary or its Equity Interests), any fee or other form of
consideration is given to any holder of Indebtedness under such Material Credit Facility
specifically for such release, the holders of the Notes shall receive equivalent consideration
(determined in the case of a fee as an equivalent proportion of outstanding commitments or
principal amount as applicable) substantially concurrently therewith and (v) each holder shall have
received a certificate of a Responsible Officer certifying as to the matters set forth in clauses (i)
through (iv).
Section 9.8.
Status of BDC and RIC. The Company shall at all times maintain its status
as a “business development company” under the Investment Company Act and its status as a RIC
under the Code.
Section 9.9.
Investment Policies. The Company shall at all times be in compliance with
its Investment Policies, except to the extent that the failure to so comply would not reasonably be
expected to result in a Material Adverse Effect.
Section 9.10. Rating Confirmation.
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(a)
The Company covenants and agrees that, at its sole cost and expense, it shall cause
to be maintained at all times a Rating from at least one Rating Agency that indicates that it will
monitor the rating on an ongoing basis. No later than March 13 of each year (beginning March 13,
2026), and promptly upon any change in the Rating, the Company further covenants and agrees it
shall provide a notice to each of the holders of the Notes sent in the manner provided in Section
18 with respect to all then current Ratings.
(b)
At any time that the Rating maintained pursuant to clause (a) above is not a public
rating, the Company will provide to each holder of a Note (x) at least annually (on or before each
anniversary of the date of the Closing) and (y) promptly upon any change in such Rating, an
updated Private Rating evidencing such Rating and an updated Private Rating Rationale Report
with respect to such Rating. In addition to the foregoing information, and any information
specifically required to be included in any Private Rating or Private Rating Rationale Report (as
set forth in the respective definitions thereof), if the SVO or any other Governmental Authority
having jurisdiction over any holder of any Notes from time to time requires any additional
information with respect to the Rating of the Notes, the Company shall use commercially
reasonable efforts to procure such information from the Rating Agency.
Section 9.11. Most Favored Lender.
(a) If at any time after the Effective Date, any other junior or pari passu unsecured
Indebtedness for borrowed money that is outstanding in an aggregate principal amount of at least
$25,000,000 shall include any MFL Financial Covenant or MFL Cure Right Provision and such
MFL Financial Covenant or MFL Cure Right Provision would be more beneficial to the holders
of Notes than the analogous restrictions, events of default, cure rights or provisions contained in
this Agreement (any such restriction, event of default, cure right or provision, an “Additional
Covenant”), then the Company shall provide a Most Favored Lender Notice to the holders of
Notes. Upon receipt of such notice by the holders of the Notes, such Additional Covenant
(including any associated cure right, cure period or grace period or any associated defined term)
shall be deemed automatically incorporated by reference into this Agreement, mutatis mutandis,
as if set forth fully herein, without any further action required on the part of any Person, effective
as of the date after the Effective Date when such Additional Covenant became effective under such
other junior or pari passu unsecured Indebtedness. Thereafter, upon the request of any holder of a
Note, the Company shall enter into any additional agreement or amendment to this Agreement
reasonably requested by such holder evidencing any of the foregoing.
(b)
Any Additional Covenant (including any associated cure right, cure period or grace
period and any associated defined term and all qualifications, limitations and exceptions thereto)
incorporated into this Agreement pursuant to Section 9.11(a) (herein referred to as an
“Incorporated Covenant”) (i) shall be deemed automatically amended herein to reflect any
subsequent waivers, supplements, modifications or amendments made to such Additional
Covenant (including any associated cure right, cure period or grace period and any associated
defined term and all qualifications, limitations and exceptions thereto) under such other junior or
pari passu unsecured Indebtedness that contains the relevant Additional Covenant and (ii) shall be
deemed automatically deleted from this Agreement at such time as such Additional Covenant is
deleted or otherwise removed from such other unsecured Indebtedness, including if such other
unsecured Indebtedness is terminated or otherwise no longer in effect. Upon the request of the
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Company, the holders of Notes shall (at the Company’s sole cost and expense) enter into any
additional agreement or amendment to this Agreement requested by the Company evidencing the
waiver, supplement, modification, amendment or deletion of any such Incorporated Covenant in
accordance with the terms hereof.
(c)
If at any time on or prior to the nine month anniversary of the Effective Date, the
Company incurs any other junior or pari passu unsecured Indebtedness for borrowed money that
is (x) outstanding in an aggregate principal amount greater than $25,000,000 and (y) has a maturity
date that occurs on or prior to the date that is forty-five (45) months after the Effective Date, to the
extent such junior or pari passu unsecured Indebtedness has an All-In Rate applicable thereto
which exceeds the All-In Rate then applicable to the Notes, then the stated rate of the Notes shall
be increased such that the then applicable All-In Rate of the Notes is equal to the All-In Rate of
such junior or pari passu unsecured Indebtedness.
(d) As used here, “All-In Rate” means the effective yield applicable to any
indebtedness, including but not limited to, the coupon rate and any interest rate floors plus
(determined as a proportion of the applicable total commitments), any original issue discount,
upfront fees, arrangement fees, commitment fees, structuring fees, underwriting fees, and/or any
similar fees paid to any purchaser, lender and/or arranger (or any of their respective affiliates) in
connection with the commitment, syndication or purchase of the Notes described herein or such
other obligation or issuance, as applicable; provided that (a) original issue discount and upfront
fees shall be equated to interest rate assuming a forty-five (45) month life to maturity (or, if less,
the stated life to maturity at the time of incurrence of the applicable Indebtedness), and (b) if any
such Indebtedness includes an interest rate floor, the stated rate of the Notes will not be increased
by the rate of such interest rate floor, but the All-In Rate of such Indebtedness shall be calculated
taking into account the interest rate floor applicable thereto at the time of the incurrence of such
Indebtedness.
Section 10.
Negative Covenants.
The Company covenants from the Effective Date and thereafter so long as any of the Notes
are outstanding that:
Section 10.1. Transactions with Affiliates. The Company will not, and will not permit
any other Obligor to, enter into directly or indirectly any transaction or group of related
transactions (including the purchase, lease, sale or exchange of properties of any kind or the
rendering of any service) with any Affiliate (other than the Company or any of its Subsidiaries)
involving payment in excess of $1,000,000, even if otherwise permitted under this Agreement,
except:
(a)
transactions in the ordinary course of business at prices and on terms and conditions
not less favorable to the Company or such other Obligor, as applicable, than could be obtained on
an arm’s-length basis from unrelated third parties;
(b)
transactions between or among the Company and any other Obligors not involving
any other Affiliate;
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(c)
transactions among the Company and/or its Subsidiaries pursuant to Section 10.2,
Investments permitted by Section 10.7 and Restricted Payments permitted by Section 10.6;
(d)
the Affiliate Agreement and the transactions provided in the Affiliate Agreement
(as such agreement is amended, modified or supplemented from time to time in a manner not
materially adverse to the holders of the Notes);
(e)
transactions described or referenced on Schedule 10.1;
(f)
any Investment that results in the creation of an Affiliate;
(g)
transactions with one (1) or more Affiliates as permitted by any SEC exemptive
order (as may be amended from time to time), exemptive rule or no action relief that a majority of
the independent directors of the board of directors of the Company determines is reasonable and
fair to the Company and does not involve overreaching of the Company on the part of the Affiliate;
(h)
any co-investment transaction to the extent not in violation of applicable law;
(i)
transactions between or among the Obligors and any Excluded Asset or any
“downstream affiliate” (as such term is used under the rules promulgated under the Investment
Company Act) (i) at prices and on terms and conditions not less favorable to the Obligors than
could be obtained at the time on an arm’s-length basis from unrelated third parties or (ii) arising
from, in connection with or related to Standard Securitization Undertakings; or
(j)
transactions approved by a majority of the independent directors of the board of
directors of the Company;
(k)
any issuance, sale or grant of securities or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of employment arrangements, stock options,
restricted stock awards or units and stock ownership plans or other compensation, severance or
retention awards or plans approved by the board of directors of the Company or any Subsidiary;
(l)
(i) any collective bargaining, employment, retention or severance agreement or
compensatory arrangement entered into by the Company or any of its direct or indirect subsidiaries
with their respective current or former officers, directors, members of management, managers,
employees, consultants or independent contractors or those of the Company, (ii) any agreement
pertaining to the repurchase of Equity Interests pursuant to rights with current or former officers,
directors, members of management, managers, employees, consultants or independent contractors
and (iii) transactions pursuant to any employee compensation, benefit plan, stock option plan or
arrangement, any health, disability or similar insurance plan which covers current or former
officers, directors, members of management, managers, employees, consultants or independent
contractors or any employment contract or arrangement;
(m)
customary compensation to Affiliates in connection with financial advisory,
financing, underwriting or placement services or in respect of other investment banking activities
and other transaction fees, which payments are approved by the majority of the members of the
board of directors (or similar governing body) or a majority of the disinterested members of the
board of directors of the Company in good faith;
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(n)
transactions and payments required under the definitive agreement for any
acquisition or Investment permitted under this Agreement (to the extent any seller, employee,
officer or director of an acquired entity becomes an Affiliate in connection with such transaction);
(o)
the payment of customary fees and reasonable out-of-pocket costs to, and
indemnities provided on behalf of, members of the board of directors (or similar governing body),
officers, employees, members of management, managers, consultants and independent contractors
of the Company and/or any of its direct or indirect subsidiaries in the ordinary course of business;
(p)
transactions with customers, clients, suppliers, joint ventures, purchasers or sellers
of goods or services or providers of employees or other labor entered into in the ordinary course
of business, which are (i) fair to the Company and/or the applicable Subsidiary in the good faith
determination of the board of directors (or similar governing body) of the Company or the senior
management thereof or (ii) on terms at least as favorable as might reasonably be obtained from a
Person other than an Affiliate; and
(q)
the Company may issue and sell Equity Interests to its Affiliates; and
(r)
any transaction permitted by the Bank Credit Agreement.
Section 10.2. Merger, Consolidation, Fundamental Changes, Etc. The Company will
not, nor will it permit any other Obligor to, enter into any transaction of merger or consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution).
The Company will not, nor will it permit any other Obligor to, acquire any business or property
from, or capital stock of, or be a party to any acquisition of, any Person, except for purchases or
acquisitions of Portfolio Investments and other assets in the normal course of the day-to-day
business activities of the Company and its Subsidiaries and not in violation of the terms and
conditions of this Agreement. The Company will not, nor will it permit any other Obligor to,
convey, sell, lease, transfer or otherwise dispose of, in one (1) transaction or a series of
transactions, any part of its assets, whether now owned or hereafter acquired, but excluding (w)
any transaction permitted under Section 10.6, (x) assets sold or disposed of in the ordinary course
of business (including to make expenditures of cash in the normal course of the day-to-day
business activities of the Company and its Subsidiaries and the use of Cash and Cash Equivalents
in the ordinary course of business) (other than the transfer of Portfolio Investments to Excluded
Assets), (y) subject to the provisions of clause (e) below, the transfer or sale of Portfolio
Investments to Excluded Assets or Immaterial Subsidiaries and (z) subject to the provisions of
clauses (c) and (f) below, any Obligor’s ownership interest in any Excluded Asset or any
Immaterial Subsidiary. Notwithstanding the foregoing provisions of this Section 10.2:
(a)
any Subsidiary Guarantor of the Company may be merged or consolidated with or
into the Company or any other Subsidiary Guarantor; provided that if any such transaction shall
be between a Subsidiary Guarantor and a wholly owned Subsidiary Guarantor, the wholly owned
Subsidiary Guarantor shall be the continuing or surviving corporation or such other Person that is
the continuing or surviving entity in such transaction becomes a Subsidiary Guarantor and
expressly assumes, in writing, all the obligations of a Subsidiary Guarantor under it Subsidiary
Guaranty;
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(b)
any Subsidiary Guarantor may sell, lease, transfer or otherwise dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to the Company or any wholly owned
Subsidiary Guarantor of the Company;
(c)
the capital stock of any Subsidiary of any Obligor may be sold, transferred or
otherwise disposed of (including by way of consolidation or merger) (i) to the Company or any
wholly owned Subsidiary Guarantor of the Company or (ii) so long as such transaction results in
an Obligor receiving the proceeds of such disposition, to any other Person;
(d)
the Obligors may sell, transfer or otherwise dispose of Cash and Cash Equivalents
to an Excluded Asset or Immaterial Subsidiary;
(e)
the Obligors may sell, transfer or otherwise dispose of Portfolio Investments to an
Excluded Asset or Immaterial Subsidiary or to any Person to the extent not prohibited by the Bank
Credit Agreement;
(f)
the Obligors may sell, transfer or otherwise dispose of direct ownership interests in
any Excluded Asset to any Subsidiary that is not an Obligor, if immediately after giving effect to
such sale, transfer or other disposition, no more than 25% of the value of all Obligors’ direct
ownership interests in all Excluded Assets (calculated as of the date of the most recently delivered
financial statements on or prior to the date of such sale, transfer or other disposition) are subject
to Excluded Asset Liens or have been sold, transferred or otherwise disposed of to a Subsidiary
that is not an Obligor pursuant to this clause (f);
(g)  the Company or any other Obligor may merge or consolidate with, or acquire all or
substantially all of the assets of, any other Person so long as the successor formed by such
consolidation or acquisition or the survivor of such merger, as the case may be, shall be a solvent
corporation or limited liability company organized and existing under the laws of the United States
or any state thereof (including the District of Columbia), and, if the Company or any such other
Obligor is not such corporation or limited liability company, (i) such corporation or limited liability
company shall have executed and delivered to each holder of any Notes its assumption of the due
and punctual performance and observance of each covenant and condition of this Agreement and
the Notes and (ii) such corporation or limited liability company shall have caused to be delivered
to each holder of any Notes an opinion of nationally recognized independent counsel, or other
independent counsel reasonably satisfactory to the Required Holders, to the effect that all
agreements or instruments effecting such assumption are enforceable in accordance with their
terms and comply with the terms hereof; (iii) each Subsidiary Guarantor under any Subsidiary
Guaranty that is outstanding at the time such transaction or each transaction in such a series of
transactions occurs reaffirms its obligations under such Subsidiary Guaranty in writing at such
time; (iv) immediately before and immediately after giving effect to such transaction, no Event of
Default shall have occurred and be continuing; and (v) the surviving company shall have provided
the holders of the Notes evidence that the then current Rating of the Notes shall, after giving effect
to such merger, consolidation, conveyance, sale, lease, transfer or other disposition of all or
substantially all of the assets, have been reaffirmed;
(h)
the Company or the other Obligors may dissolve or liquidate (i) any Immaterial
Subsidiary or (ii) any other Subsidiary so long as, with respect to this clause (ii), (A) in connection
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with such dissolution or liquidation, any and all of the assets of such Subsidiary shall be distributed
or otherwise transferred to an Obligor (or, if such Subsidiary is an Excluded Asset, to another
Excluded Asset) and (B) such dissolution or liquidation is not materially adverse to the holders of
the Notes and the Company determines in good faith that such dissolution or liquidation is in its
best interests;
(i)
the Company and the other Obligors may sell, lease, transfer or otherwise dispose
of equipment or other property or assets that do not consist of Portfolio Investments so long as the
aggregate amount of all such sales, leases, transfer and dispositions does not exceed $10,000,000
in any fiscal year;
(j)
the Obligors may transfer assets that such Obligor would otherwise be permitted to
own to an Excluded Asset for the sole purpose of facilitating the transfer of assets from one (1)
Excluded Asset (or a Subsidiary that was an Excluded Asset immediately prior to such disposition)
to another Excluded Asset, directly or indirectly through such Obligor (such assets, the
“Transferred Assets”); provided that (i) no Event of Default exists and is continuing at such time
or would result from any such transfer to or by such Obligor, (ii) the Transferred Assets are
transferred to such Obligor by the transferor Excluded Asset on the same Business Day that such
assets are transferred by such Obligor to the transferee Excluded Asset, and (iii) following such
transfer such Obligor has no liability, actual or contingent, with respect to the Transferred Assets
other than Standard Securitization Undertakings;
(k)
the Company may deposit and use cash to purchase shares of common stock of the
Company in connection with tender offers in connection with ordinary course periodic share
repurchase programs; and
(l)
the Company may enter or permit any other Obligor to enter into any transaction
permitted by the Bank Credit Agreement;
provided that in no event shall the Company enter into any transaction of merger or consolidation
or amalgamation, or effect any internal reorganization, if the surviving entity would be organized
under any jurisdiction other than a jurisdiction of the United States or any state within the United
States.
No such conveyance, transfer or lease of substantially all of the assets of the Company or any
Subsidiary Guarantor shall have the effect of releasing the Company or such Subsidiary Guarantor,
as the case may be, or any successor corporation or limited liability company that shall theretofore
have become such in the manner prescribed in this Section 10.2, from its liability under (x) this
Agreement or the Notes (in the case of the Company) or (y) the Subsidiary Guaranty (in the case
of any Subsidiary Guarantor), unless, in the case of the conveyance, transfer or lease of
substantially all of the assets of a Subsidiary Guarantor, such Subsidiary Guarantor is released
from its Subsidiary Guaranty in accordance with Section 9.7(b) in connection with or immediately
following such conveyance, transfer or lease.
Section 10.3. Line of Business.
The Company will not and will not permit any
Subsidiary to engage in any business if, as a result, the general nature of the business in which the
Company and its subsidiaries, taken as a whole, would then be engaged would be substantially
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changed from the general nature of the business in which the Company and its subsidiaries, taken
as a whole, are engaged on the date of this Agreement as described in the Company’s most recent
Form 10-K, other than (i) ancillary or support businesses; (ii) any business in or related to private
credit or that other business development companies enter into or are engaged in; (iii) as is
otherwise in accordance with its Investment Policies; or (iv) as is otherwise permitted by the Bank
Credit Agreement.
Section 10.4. Economic Sanctions, Etc. The Company will not, and will not permit any
Controlled Entity to (a) become (including by virtue of being owned or controlled by a Blocked
Person), own or control a Blocked Person or (b) directly or indirectly have any investment in or
engage in any dealing or transaction (including any investment, dealing or transaction involving
the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would
cause any holder or any affiliate of such holder to be in violation of, or subject to sanctions under,
any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under
any Economic Sanctions Laws.
Section 10.5. Liens. The Company will not and will not permit any other Obligor to
directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency
or otherwise) any Lien on or with respect to any property or asset (including any document or
instrument in respect of goods or accounts receivable) of the Company or any such Obligor,
whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or
otherwise convey any right to receive income or profits (excluding, for the avoidance of doubt, the
payment of any fees under any Affiliate Agreement), except Permitted Liens or:
(a)
any Lien on any property or asset of the Company or another Obligor existing on
the Effective Date and set forth in Schedule 10.5, provided that (i) no such Lien shall extend to
any other property or asset of the Company or any Subsidiary Guarantors (other than proceeds
thereof or accessions thereto) and (ii) any such Lien shall secure only those obligations which it
secures on the Effective Date and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof, except to the extent not prohibited hereunder;
(b)
Liens created pursuant to the Collateral Documents (as defined in the Bank Credit
Agreement) and the security documents related to any other Material Credit Facility;
(c)
Liens on Special Equity Interests included in the Portfolio Investments;
(d)
Facility;
Liens securing Indebtedness or other obligations permitted by a Material Credit
(e)
Liens on an Obligor’s direct ownership interests in Excluded Assets (“Excluded
Asset Liens”) to secure obligations owed to a creditor of such Obligor but only to the extent that
at the time any such Lien is incurred, no more than 25% of the value of all Obligors’ direct
ownership interests in all Excluded Assets (calculated as of the most recently delivered financial
statements) have become subject to an Excluded Asset Lien or have been transferred pursuant to
Section 10.2(f);
(f)
Liens on the direct ownership interest of any Obligor in an Excluded Asset to secure
obligations owed to a creditor of such Excluded Asset;
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(g)
Liens created by posting of cash collateral in connection with Hedging Agreements
permitted under Section 10.7(d) and Credit Default Swaps and total return swaps permitted under
Section 10.7(i);
(h)
Liens existing on any property or asset prior to the acquisition thereof by the
Company or another Obligor; provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition and (ii) such Lien does not apply to any other property or assets
(other than proceeds thereof or accessions thereto) of the Company or such Obligor;
(i)
any Lien on Margin Stock (as defined in the Bank Credit Agreement);
(j)
any Lien imposed as a result of a taking under the exercise of the power of eminent
domain by any governmental body or by any Person acting under Governmental Authority;
(k)
Liens on assets securing Indebtedness so long as, after giving pro forma effect to
such Liens, the Company is in compliance with Section 10.8;
(l)
Liens on assets securing other obligations in an aggregate principal amount at any
time outstanding not to exceed $500,000; and
(m)
Liens permitted by the Bank Credit Agreement.
Section 10.6. Restricted Payments. The Company will not, nor will it permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except that any Obligor may declare and pay:
(a)
dividends with respect to the capital stock of the Company or such Obligor
(including, for the avoidance of doubt, pursuant to any distribution or dividend reinvestment plan
of the Company or such Obligor) to the extent payable in additional shares of the stock, units or
interests or the Company or such Obligor;
(b)
dividends and distributions in either case in cash or other property (excluding for
this purpose the Company’s common stock) in or with respect to any taxable year (or any calendar
year, as relevant) of the Company in amounts not to exceed 110% of the higher of (x) the net
investment income of the Company for the applicable year determined in accordance with GAAP
and as specified in the annual financial statements most recently delivered pursuant to Section
7.1(a) and (y) the amount that is estimated in good faith to allow the Company (i) to satisfy the
minimum distribution requirements imposed by Section 852(a) of the Code (or any successor
thereto) to maintain the Company’s eligibility to be taxed as a RIC for any such taxable year, (ii)
to reduce to zero (0) for any such taxable year its liability for federal income taxes imposed on (A)
its investment company taxable income pursuant to Section 852(b)(1) of the Code (or any
successor thereto), and (B) its net capital gain pursuant to Section 852(b)(3) of the Code (or any
successor thereto), and (iii) to avoid federal excise taxes for such taxable year (or for the previous
taxable year) imposed by Section 4982 of the Code (or any successor thereto);
(c)
any settlement in respect of a conversion feature in any convertible security that
may be issued by the Company to the extent made through the delivery of common stock (except
in the case of interest (which may be payable in cash));
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(d)  Restricted Payments to the Company or any Subsidiary or, other than the Company,
to each other owner of Equity Interests of such Subsidiary based on their relative ownership
interests;
(e)
Restricted Payments to pay general administrative costs and expenses (including
corporate overhead, legal or similar expenses and salary, bonus and other benefits payable to
directors, officers, employees, members of management, managers and/or consultants of any
Obligor or any of its subsidiaries) and franchise fees and franchise taxes and similar fees, taxes
and expenses required to enable the recipient of such Restricted Payment to maintain its
organizational existence or qualification to do business, in each case, which are reasonable and
customary and incurred in the ordinary course of business, plus any reasonable and customary
indemnification claims made by directors, officers, members of management, managers,
employees or consultants of any such recipient, in each case, to the extent attributable to the
ownership or operations of the Company and its subsidiaries;
(f)
Restricted Payments to finance or acquire any Investment permitted hereunder;
(g)
current or
Restricted Payments to pay salary, bonus, severance and other benefits payable to
former directors, officers, members of management, managers, employees or
consultants of any Obligor or any of its subsidiaries;
(h)
Restricted Payments for the repurchase, redemption, retirement or other acquisition
or retirement for value of Equity Interests