|
Maryland
(State of Incorporation) |
| |
46-2961489
(I.R.S. Employer Identification Number) |
|
|
200 Park Avenue, 7
th
Floor
New York, NY (Address of principal executive offices) |
| |
10166
(Zip Code) |
|
|
Title of Each Class
|
| |
Name of Each Exchange on Which Registered
|
|
|
Common Stock, par value $0.001 per share
|
| |
The NASDAQ Global Select Market
|
|
| Large accelerated filer ☐ | | | Accelerated filer ☒ | |
| Non-accelerated filer ☐ | | | Smaller reporting company ☐ | |
| (Do not check if a smaller reporting Company) | | | Emerging growth company ☒ | |
| | |
Page
|
||
PART I | | | | | |
| | | | 1 | |
| | | | 26 | |
| | | | 56 | |
| | | | 56 | |
| | | | 56 | |
| | | | 56 | |
PART II | | | | | |
| | | | 57 | |
| | | | 60 | |
| | | | 62 | |
| | | | 75 | |
| | | | 76 | |
| | | | 112 | |
| | | | 112 | |
| | | | 113 | |
PART III | | | | | |
| | | | 114 | |
| | | | 114 | |
| | | | 114 | |
| | | | 114 | |
| | | | 114 | |
PART IV | | | | | |
| | | | 115 | |
| | | | 120 |
| | |
Price Range
|
| |||||||||
Fiscal Year Ended
|
| |
High
|
| |
Low
|
| ||||||
December 31, 2017 | | | | | | | | | | | | | |
Fourth Quarter
|
| | | $ | 10.78 | | | | | $ | 7.20 | | |
Third Quarter
|
| | | $ | 13.63 | | | | | $ | 10.53 | | |
Second Quarter
|
| | | $ | 14.73 | | | | | $ | 13.25 | | |
First Quarter
|
| | | $ | 14.23 | | | | | $ | 12.02 | | |
December 31, 2016 | | | | | | | | | | | | | |
Fourth Quarter
|
| | | $ | 13.33 | | | | | $ | 11.17 | | |
Third Quarter
|
| | | $ | 13.47 | | | | | $ | 12.10 | | |
Second Quarter
|
| | | $ | 12.50 | | | | | $ | 11.00 | | |
First Quarter
|
| | | $ | 12.04 | | | | | $ | 8.87 | | |
December 31, 2015 | | | | | | | | | | | | | |
Fourth Quarter
|
| | | $ | 12.80 | | | | | $ | 11.01 | | |
Third Quarter
|
| | | $ | 13.48 | | | | | $ | 10.01 | | |
Second Quarter
|
| | | $ | 14.25 | | | | | $ | 12.42 | | |
First Quarter
|
| | | $ | 14.44 | | | | | $ | 12.36 | | |
December 31, 2014 | | | | | | | | | | | | | |
Fourth Quarter
|
| | | $ | 13.50 | | | | | $ | 11.20 | | |
Third Quarter
|
| | | $ | 15.04 | | | | | $ | 10.60 | | |
Second Quarter
(1)
|
| | | $ | 15.50 | | | | | $ | 14.00 | | |
Date Declared
|
| |
Record Date
|
| |
Payment Date
|
| |
Amount Per
Share |
| |||
Fiscal 2017 | | | | | | | | | | | | | |
November 2, 2017
|
| | December 29, 2017 | | | January 4, 2018 | | | | | 0.25 | | |
August 3, 2017
|
| | September 30, 2017 | | | October 5, 2017 | | | | | 0.34 | | |
May 4, 2017
|
| | June 30, 2017 | | | July 6, 2017 | | | | | 0.34 | | |
March 9, 2017
|
| | March 31, 2017 | | | April 6, 2017 | | | | | 0.34 | | |
March 9, 2017
|
| | March 31, 2017 | | | April 6, 2017 | | | | | 0.03 | | |
| | | | | | | | | | $ | 1.30 | | |
Fiscal 2016 | | | | | | | | | | | | | |
November 3, 2016
|
| | December 31, 2016 | | | January 5, 2017 | | | | | 0.34 | | |
August 4, 2016
|
| | September 30, 2016 | | | October 6, 2016 | | | | | 0.34 | | |
May 5, 2016
|
| | June 30, 2016 | | | July 7, 2016 | | | | | 0.34 | | |
March 7, 2016
|
| | March 31, 2016 | | | April 7, 2016 | | | | | 0.34 | | |
| | | | | | | | | | $ | 1.36 | | |
Fiscal 2015 | | | | | | | | | | | | | |
November 5, 2015
|
| | December 30, 2015 | | | January 7, 2016 | | | | | 0.34 | | |
August 10, 2015
|
| | September 30, 2015 | | | October 6, 2015 | | | | | 0.34 | | |
May 11, 2015
|
| | June 30, 2015 | | | July 6, 2015 | | | | | 0.34 | | |
March 10, 2015
|
| | March 31, 2015 | | | April 6, 2015 | | | | | 0.34 | | |
| | | | | | | | | | $ | 1.36 | | |
Fiscal 2014 | | | | | | | | | | | | | |
November 4, 2014
|
| | December 30, 2014 | | | January 6, 2015 | | | | | 0.34 | | |
August 12, 2014
|
| | September 30, 2014 | | | October 6, 2014 | | | | | 0.34 | | |
June 24, 2014
|
| | June 30, 2014 | | | July 7, 2014 | | | | | 0.178 | | |
Total:
|
| | | | | | | | |
$
|
0.858
|
| |
|
Period
|
| |
Total
Number of Shares Purchased (2) |
| |
Average
Price Paid Per Share |
| |
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
| |
Approximate
Dollar Value of Shares that May Yet Be Purchased Under the Share Repurchase Program (4) |
| ||||||||||||
October 1 through October 31, 2017
|
| | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | |
November 1 through November 30, 2017
|
| | | | 21,400 | | | | | | 7.74 – 8.00 | | | | | | 21,400 | | | | | | 4,830,258 | | |
December 1 through December 31, 2017
|
| | | | 875 | | | | | | 8.25 | | | | | | 875 | | | | | | 4,823,004 | | |
Total
|
| | | | 22,275 | | | | | | | | | | | | 22,275 (3) | | | | | | | | |
|
| | |
Alcentra Capital
Corporation from January 1, 2017 through December 31, 2017 |
| |
Alcentra Capital
Corporation from January 1, 2016 through December 31, 2016 |
| |
Alcentra Capital
Corporation from January 1, 2015 through December 31, 2015 |
| |
Alcentra Capital
Corporation from May 8,* 2014 through December 31, 2014 |
| |
Year ended
December 31, 2014 BNY Mellon-Alcentra Mezzanine III, L.P. from January 1, 2014 through May 7, 2014 |
| |
BNY Mellon-Alcentra
Mezzanine III, L.P. for the year ended December 31, 2013 |
| ||||||||||||||||||
Statement of operations data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total investment income
|
| | | $ | 33,351,509 | | | | | $ | 40,602,599 | | | | | $ | 33,916,249 | | | | | $ | 16,166,214 | | | | | $ | 7,761,894 | | | | | $ | 11,051,383 | | |
Total expenses, net of fee waiver
|
| | | | 15,027,370 | | | | | | 18,193,683 | | | | | | 14,618,080 | | | | | | 4,564,482 | | | | | | 834,336 | | | | | | 3,541,736 | | |
Net investment income
|
| | | $ | 18,324,139 | | | | | $ | 22,408,916 | | | | | $ | 19,298,169 | | | | | $ | 11,601,732 | | | | | | 6,927,558 | | | | | | 7,509,647 | | |
Net increase in net assets resulting from
operations |
| | | $ | (19,101,742 ) | | | | | $ | 8,789,516 | | | | | $ | 12,611,774 | | | | | $ | 14,735,021 | | | | | $ | 9,954,110 | | | | | $ | 9,652,411 | | |
Per share data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income
|
| | | $ | 1.32 | | | | | $ | 1.66 | | | | | $ | 1.43 | | | | | $ | 0.86 | | | | | $ | N.A. | | | | | $ | N.A. | | |
Net increase (decrease) in net assets resulting from operations
|
| | | $ | (1.33 ) | | | | | $ | 0.65 | | | | | $ | 0.92 | | | | | $ | 1.30 | | | | | $ | N.A. | | | | | $ | N.A. | | |
Dividends declared
|
| | | $ | 1.30 | | | | | $ | 1.36 | | | | | $ | 1.36 | | | | | $ | 0.858 | | | | | $ | N.A. | | | | | $ | N.A. | | |
Net asset value per share
|
| | | $ | 11.09 | | | | | $ | 13.72 | | | | | $ | 14.43 | | | | | $ | 14.87 | | | | | $ | N.A. | | | | | $ | N.A. | | |
Balance sheet data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets
|
| | | $ | 310,326,150 | | | | | $ | 292,928,229 | | | | | $ | 307,495,807 | | | | | $ | 272,219,375 | | | | | $ | 175,925,784 | | | | | $ | 126,788,126 | | |
Cash and cash equivalents
|
| | | | 13,882,956 | | | | | | 3,891,606 | | | | | | 4,866,972 | | | | | | 10,022,617 | | | | | | 10,703,472 | | | | | | 729,431 | | |
Total net assets
|
| | | $ | 157,714,175 | | | | | $ | 184,524,591 | | | | | $ | 195,032,211 | | | | | $ | 200,989,308 | | | | | $ | 175,567,210 | | | | | $ | 110,639,427 | | |
| | |
Fair Value
|
| |
Cost
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
December 31, 2017
|
| |
December 31, 2016
|
| |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||||||||||||||||||||||||||||||||
| | |
(dollars in thousands)
|
| |||||||||||||||||||||||||||||||||||||||||||||
Senior Secured – First Lien
|
| | | $ | 177,340 | | | | | | 61.7 % | | | | | $ | 95,684 | | | | | | 34.6 % | | | | | $ | 181,664 | | | | | | 54.5 % | | | | | $ | 97,516 | | | | | | 33.2 % | | |
Senior Secured – Second Lien
|
| | | | 14,204 | | | | | | 4.9 % | | | | | | 84,865 | | | | | | 30.7 % | | | | | | 24,331 | | | | | | 7.3 % | | | | | | 87,731 | | | | | | 29.9 % | | |
Senior Subordinated
|
| | | | 66,885 | | | | | | 23.3 % | | | | | | 74,050 | | | | | | 26.8 % | | | | | | 81,397 | | | | | | 24.4 % | | | | | | 77,960 | | | | | | 26.6 % | | |
Equity/Other
|
| | | | 29,126 | | | | | | 10.1 % | | | | | | 21,674 | | | | | | 7.9 % | | | | | | 45,824 | | | | | | 13.8 % | | | | | | 30,129 | | | | | | 10.3 % | | |
Total
|
| | | $ | 287,555 | | | | | | 100 % | | | | | $ | 276,273 | | | | | | 100 % | | | | | $ | 333,217 | | | | | | 100 % | | | | | $ | 293,336 | | | | | | 100 % | | |
|
| | |
Fair Value
|
| |
Cost
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
December 31, 2017
|
| |
December 31, 2016
|
| |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||||||||||||||||||||||||||||||||
| | |
(dollars in thousands)
|
| |||||||||||||||||||||||||||||||||||||||||||||
Southeast | | | | $ | 78,668 | | | | | | 27.4 % | | | | | $ | 31,187 | | | | | | 11.3 % | | | | | $ | 99,475 | | | | | | 29.9 % | | | | | $ | 35,200 | | | | | | 12.0 % | | |
Northeast
|
| | | | 54,446 | | | | | | 18.9 % | | | | | | 14,435 | | | | | | 5.3 % | | | | | | 57,108 | | | | | | 17.1 % | | | | | | 14,241 | | | | | | 5.0 % | | |
West | | | | | 49,593 | | | | | | 17.2 % | | | | | | 29,231 | | | | | | 10.6 % | | | | | | 57,328 | | | | | | 17.2 % | | | | | | 34,638 | | | | | | 11.8 % | | |
South | | | | | 48,087 | | | | | | 16.7 % | | | | | | 73,849 | | | | | | 26.7 % | | | | | | 56,444 | | | | | | 16.9 % | | | | | | 82,261 | | | | | | 28.0 % | | |
Midwest
|
| | | | 33,560 | | | | | | 11.7 % | | | | | | 49,578 | | | | | | 17.9 % | | | | | | 39,884 | | | | | | 12.0 % | | | | | | 48,786 | | | | | | 16.6 % | | |
Canada
|
| | | | 23,200 | | | | | | 8.1 % | | | | | | — | | | | | | 0.0 % | | | | | | 22,978 | | | | | | 6.9 % | | | | | | — | | | | | | 0.0 % | | |
Southwest
|
| | | | — | | | | | | 0.0 % | | | | | | 29,507 | | | | | | 10.7 % | | | | | | — | | | | | | 0.0 % | | | | | | 29,982 | | | | | | 10.2 % | | |
Eastern | | | | | — | | | | | | 0.0 % | | | | | | 48,486 | | | | | | 17.6 % | | | | | | — | | | | | | 0.0 % | | | | | | 48,229 | | | | | | 16.4 % | | |
Total
|
| | | $ | 287,555 | | | | | | 100.0 % | | | | | $ | 276,273 | | | | | | 100.0 % | | | | | $ | 333,217 | | | | | | 100.0 % | | | | | $ | 293,336 | | | | | | 100.0 % | | |
|
| | |
Fair Value
|
| |
Cost
|
| ||||||||||||||||||
| | |
December 31, 2017
|
| |
December 31, 2016
|
| |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||||||||
Healthcare Services
|
| | | | 19.23 % | | | | | | 15.84 % | | | | | | 16.55 % | | | | | | 14.83 % | | |
Business Services
|
| | | | 17.99 % | | | | | | — | | | | | | 15.41 % | | | | | | — | | |
Industrial Services
|
| | | | 10.32 % | | | | | | 7.04 % | | | | | | 8.93 % | | | | | | 6.94 % | | |
Technology & Telecom
|
| | | | 8.10 % | | | | | | 5.23 % | | | | | | 7.19 % | | | | | | 5.16 % | | |
Wholesale/Distribution
|
| | | | 6.85 % | | | | | | 1.77 % | | | | | | 5.79 % | | | | | | 1.67 % | | |
High Tech Industries
|
| | | | 6.51 % | | | | | | 7.43 % | | | | | | 5.61 % | | | | | | 6.95 % | | |
Telecommunications
|
| | | | 6.15 % | | | | | | 9.90 % | | | | | | 4.69 % | | | | | | 9.07 % | | |
Retail
|
| | | | 4.94 % | | | | | | 4.35 % | | | | | | 4.14 % | | | | | | 4.05 % | | |
Security
|
| | | | 4.92 % | | | | | | 8.29 % | | | | | | 4.61 % | | | | | | 7.64 % | | |
Oil & Gas Services
|
| | | | 3.88 % | | | | | | 3.65 % | | | | | | 4.86 % | | | | | | 5.03 % | | |
Industrial Manufacturing
|
| | | | 3.21 % | | | | | | 5.89 % | | | | | | 2.65 % | | | | | | 5.27 % | | |
Environmental/Recycling Services
|
| | | | 2.72 % | | | | | | 2.36 % | | | | | | 2.28 % | | | | | | 2.42 % | | |
Media: Advertising, Printing & Publishing
|
| | | | 2.32 % | | | | | | 3.93 % | | | | | | 3.80 % | | | | | | 4.01 % | | |
Transportation Logistics
|
| | | | 1.90 % | | | | | | 1.56 % | | | | | | 2.31 % | | | | | | 2.55 % | | |
Waste Services
|
| | | | 0.96 % | | | | | | 4.76 % | | | | | | 0.76 % | | | | | | 4.63 % | | |
Media & Entertainment
|
| | | | 0.00 % | | | | | | 1.64 % | | | | | | 3.11 % | | | | | | 3.50 % | | |
Education
|
| | | | 0.00 % | | | | | | 4.89 % | | | | | | 4.76 % | | | | | | 5.06 % | | |
Automotive Business Services
|
| | | | 0.00 % | | | | | | 7.31 % | | | | | | 2.55 % | | | | | | 6.85 % | | |
Aerospace
|
| | | | 0.00 % | | | | | | 1.40 % | | | | | | 0.00 % | | | | | | 1.36 % | | |
Technology & IT
|
| | | | 0.00 % | | | | | | 1.42 % | | | | | | 0.00 % | | | | | | 1.31 % | | |
Food & Beverage
|
| | | | — | | | | | | 1.34 % | | | | | | — | | | | | | 1.70 % | | |
Total
|
| | | | 100.00 % | | | | | | 100.00 % | | | | | | 100.00 % | | | | | | 100.00 % | | |
|
| | |
Alcentra Capital
Corporation |
| |
Alcentra Capital
Corporation |
| |
Alcentra Capital
Corporation |
| |
Alcentra Capital
Corporation |
| |
BNY Mellon-
Alcentra Mezzanine III, L.P. |
| |
BNY Mellon-
Alcentra Mezzanine III, L.P. |
| ||||||||||||||||||
| | |
Year Ended
December 31, 2017 |
| |
Year Ended
December 31, 2016 |
| |
Year Ended
December 31, 2015 |
| |
For the period
from Inception (May 8, 2014) through December 31, 2014 |
| |
Year Ended
December 31, 2013 |
| |
Year Ended
December 31, 2012 |
| ||||||||||||||||||
Interest Income
|
| | | $ | 26.9 | | | | | $ | 29.5 | | | | | $ | 25.7 | | | | | $ | 11.5 | | | | | $ | 9.1 | | | | | $ | 9.4 | | |
PIK Interest
|
| | | | 4.1 | | | | | | 6.2 | | | | | | 5.9 | | | | | | 3.6 | | | | | | 1.7 | | | | | | 2.0 | | |
Other Income/Fees
|
| | | | 2.4 | | | | | | 4.9 | | | | | | 2.3 | | | | | | 1.1 | | | | | | 0.2 | | | | | | 1.3 | | |
Total
|
| | | $ | 33.4 | | | | | $ | 40.6 | | | | | $ | 33.9 | | | | | $ | 16.1 | | | | | $ | 11.1 | | | | | $ | 12.6 | | |
|
| | |
Alcentra Capital
Corporation |
| |
Alcentra Capital
Corporation |
| |
Alcentra Capital
Corporation |
| |
Alcentra Capital
Corporation |
| |
BNY Mellon-
Alcentra Mezzanine III, L.P. |
| |
BNY Mellon-
Alcentra Mezzanine III, L.P. |
| ||||||||||||||||||
| | |
Year Ended
December 31, 2017 |
| |
Year Ended
December 31, 2016 |
| |
Year Ended
December 31, 2015 |
| |
For the period
from Inception (May 8, 2014) through December 31, 2014 |
| |
Year Ended
December 31, 2013 |
| |
Year Ended
December 31, 2012 |
| ||||||||||||||||||
Operating Expenses:
|
| | | | | | | ||||||||||||||||||||||||||||||
Management Fees
|
| | | $ | 5.0 | | | | | $ | 5.2 | | | | | $ | 4.9 | | | | | $ | 2.5 | | | | | $ | 2.8 | | | | | $ | 4.4 | | |
Incentive Fees
|
| | | | 0.6 | | | | | | 3.3 | | | | | | 3.3 | | | | | | 1.0 | | | | | | — | | | | | | — | | |
Professional Fees
|
| | | | 1.2 | | | | | | 1.2 | | | | | | 1.0 | | | | | | 0.8 | | | | | | 0.4 | | | | | | 0.5 | | |
Valuation services
|
| | | | 0.3 | | | | | | 0.2 | | | | | | 0.4 | | | | | | 0.4 | | | | | | — | | | | | | — | | |
Interest and credit facility expense
|
| | | | 6.4 | | | | | | 5.7 | | | | | | 4.1 | | | | | | 1.0 | | | | | | 0.1 | | | | | | 0.1 | | |
Amortization of
deferred financing costs |
| | | | 1.4 | | | | | | 1.3 | | | | | | 0.9 | | | | | | 0.3 | | | | | | — | | | | | | — | | |
Directors Fees
|
| | | | 0.3 | | | | | | 0.3 | | | | | | 0.2 | | | | | | 0.2 | | | | | | — | | | | | | — | | |
Insurance Expense
|
| | | | 0.2 | | | | | | 0.3 | | | | | | 0.3 | | | | | | 0.2 | | | | | | — | | | | | | — | | |
Other Expenses
|
| | | | 0.8 | | | | | | 0.7 | | | | | | 0.5 | | | | | | 0.2 | | | | | | 0.2 | | | | | | 0.1 | | |
Total Operating Expenses
|
| | | $ | 16.4 | | | | | $ | 18.2 | | | | | $ | 15.6 | | | | | $ | 6.6 | | | | | $ | 3.5 | | | | | $ | 5.1 | | |
Waiver of Incentive & Management Fees
|
| | | | (1.3 ) | | | | | | — | | | | | | (1.0 ) | | | | | | (2.0 ) | | | | | | — | | | | | | — | | |
Total Expenses, net of fee waivers
|
| | | $ | 15.0 | | | | | $ | 18.2 | | | | | $ | 14.6 | | | | | $ | 4.6 | | | | | $ | 3.5 | | | | | $ | 5.1 | | |
|
| | |
Total
|
| |
2017
|
| |
2018
|
| |
2019
|
| |
2020
|
| |
2021
|
| |
2022 and
thereafter |
| |||||||||||||||||||||
| | |
(dollars in thousands)
|
| |||||||||||||||||||||||||||||||||||||||
Credit facility payable
|
| | | $ | 39,133 | | | | | $ | — | | | | | $ | — | | | | | $ | 39,133 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Notes payable
|
| | | $ | 55,000 | | | | | | — | | | | | | — | | | | | | 0 | | | | | | 38,582 | | | | | | 15,000 | | | | | | 1,418 | | |
| | | | $ | 94,133 | | | | | $ | — | | | | | $ | — | | | | | $ | 39,133 | | | | | $ | 38,582 | | | | | $ | 15,000 | | | | | $ | 1,418 | | |
Risk Rating
|
| |
Cost
|
| |
% of Cost
|
| |
FMV
|
| |
% of FMV
|
| ||||||||||||
1
|
| | | | 171,487 | | | | | | 51.5 % | | | | | | 176,486 | | | | | | 61.4 % | | |
2
|
| | | | 81,226 | | | | | | 24.4 % | | | | | | 79,637 | | | | | | 27.7 % | | |
3
|
| | | | 33,110 | | | | | | 9.9 % | | | | | | 24,753 | | | | | | 8.6 % | | |
4
|
| | | | 12,678 | | | | | | 3.8 % | | | | | | 6,678 | | | | | | 2.3 % | | |
5
|
| | | | 34,715 | | | | | | 10.4 % | | | | | | 0 | | | | | | 0.0 % | | |
| | | | | 333,217 | | | | | | 100.0 % | | | | | | 287,555 | | | | | | 100.0 % | | |
| | |
As of
December 31, 2017 |
| |
As of
December 31, 2016 |
| ||||||
Assets | | | | ||||||||||
Portfolio investments, at fair value | | | | ||||||||||
Non-controlled, non-affiliated investments, at fair value (cost of $265,675,598 and $248,479,039, respectively)
|
| | | $ | 252,325,403 | | | | | $ | 239,722,117 | | |
Non-controlled, affiliated investments, at fair value (cost of $51,734,635 and $29,734,859, respectively)
|
| | | | 19,972,905 | | | | | | 22,094,203 | | |
Controlled, affiliated investments, at fair value (cost $15,806,301 and $15,122,171, respectively)
|
| | | | 15,256,237 | | | | | | 14,456,630 | | |
Cash
|
| | | | 13,882,956 | | | | | | 3,891,606 | | |
Dividends and interest receivable
|
| | | | 1,942,300 | | | | | | 3,240,640 | | |
Receivable for investments sold
|
| | | | 669,733 | | | | | | 2,139,463 | | |
Deferred financing costs
|
| | | | 514,241 | | | | | | 1,287,807 | | |
Deferred tax asset
|
| | | | 4,934,962 | | | | | | 1,264,811 | | |
Income tax asset
|
| | | | 748,408 | | | | | | — | | |
Prepaid expenses and other assets
|
| | | | 79,005 | | | | | | 100,770 | | |
Total Assets
|
| | | $ | 310,326,150 | | | | | $ | 288,198,047 | | |
Liabilities | | | | ||||||||||
Credit facility payable
|
| | | $ | 89,703,273 | | | | | $ | 39,133,273 | | |
Notes payable (net of deferred note offering costs of $1,252,165 and $1,495,062, respectively)
|
| | | | 53,747,835 | | | | | | 53,504,938 | | |
Other accrued expenses and liabilities
|
| | | | 447,589 | | | | | | 282,165 | | |
Directors’ fees payable
|
| | | | 68,917 | | | | | | 95,000 | | |
Professional fees payable
|
| | | | 548,455 | | | | | | 331,867 | | |
Interest and credit facility expense payable
|
| | | | 1,248,791 | | | | | | 1,008,127 | | |
Management fee payable
|
| | | | 1,265,172 | | | | | | 1,301,591 | | |
Income-based incentive fees payable
|
| | | | 1,294,985 | | | | | | 2,071,661 | | |
Distributions payable
|
| | | | 3,561,305 | | | | | | 4,586,816 | | |
Unearned structuring fee revenue
|
| | | | 725,653 | | | | | | 1,175,319 | | |
Income tax liability
|
| | | | — | | | | | | 182,699 | | |
Total Liabilities
|
| | | $ | 152,611,975 | | | | | $ | 103,673,456 | | |
Commitments and Contingencies (Note 12) | | | | ||||||||||
Net Assets | | | | ||||||||||
Common stock, par value $0.001 per share (100,000,000 shares authorized,
14,222,945 and 13,451,633 shares outstanding, respectively) |
| | | | 14,223 | | | | | | 13,452 | | |
Additional paid-in capital
|
| | | | 206,570,701 | | | | | | 196,290,348 | | |
Accumulated net realized loss
|
| | | | (11,436,155 ) | | | | | | (776,548 ) | | |
Undistributed net investment income
|
| | | | 4,449,122 | | | | | | 4,890,065 | | |
Net unrealized appreciation (depreciation) on investments, net of benefit/(provision) for taxes of $3,778,273 and $1,170,393 as of December 31, 2017 and December 31, 2016, respectively
|
| | | | (41,883,716 ) | | | | | | (15,892,726 ) | | |
Total Net Assets
|
| | | | 157,714,175 | | | | | | 184,524,591 | | |
Total Liabilities and Net Assets
|
| | | $ | 310,326,150 | | | | | $ | 288,198,047 | | |
Net Asset Value Per Share
|
| | | $ | 11.09 | | | | | $ | 13.72 | | |
| | | |
| | |
For the year ended
December 31, 2017 |
| |
For the year ended
December 31, 2016 |
| |
For the year ended
December 31, 2015 |
| |||||||||
Investment Income: | | | | | |||||||||||||||
From non-controlled, non-affiliated investments: | | | | | |||||||||||||||
Interest income from portfolio investments
|
| | | $ | 23,917,956 | | | | | $ | 25,178,890 | | | | | $ | 19,225,065 | | |
Paid-in-kind interest income from portfolio investments
|
| | | | 1,156,486 | | | | | | 3,182,683 | | | | | | 3,128,501 | | |
Other income from portfolio investments
|
| | | | 2,228,104 | | | | | | 2,475,976 | | | | | | 1,819,533 | | |
Dividend income from portfolio investments
|
| | | | 171,083 | | | | | | 82,777 | | | | | | 302,874 | | |
From non-controlled, affiliated investments: | | | | | |||||||||||||||
Interest income from portfolio investments
|
| | | | 1,318,924 | | | | | | 2,742,054 | | | | | | 4,231,004 | | |
Paid in-kind income from portfolio investments
|
| | | | 2,209,418 | | | | | | 2,365,373 | | | | | | 2,632,281 | | |
Other income from portfolio investments
|
| | | | — | | | | | | 2,352,766 | | | | | | 72,320 | | |
From controlled, affiliated investments: | | | | | |||||||||||||||
Interest income from portfolio investments
|
| | | | 1,665,409 | | | | | | 1,566,173 | | | | | | 2,280,106 | | |
Paid in-kind income from portfolio investments
|
| | | | 684,129 | | | | | | 655,907 | | | | | | 159,722 | | |
Other income from portfolio investments
|
| | | | — | | | | | | — | | | | | | 64,843 | | |
Total investment income
|
| | | | 33,351,509 | | | | | | 40,602,599 | | | | | | 33,916,249 | | |
Expenses: | | | | | |||||||||||||||
Management fees
|
| | | | 4,975,349 | | | | | | 5,209,684 | | | | | | 4,943,886 | | |
Income-based incentive fees
|
| | | | 638,244 | | | | | | 3,255,167 | | | | | | 2,270,450 | | |
Capital gains incentive fees
|
| | | | — | | | | | | — | | | | | | 1,001,467 | | |
Professional fees
|
| | | | 1,248,715 | | | | | | 1,227,977 | | | | | | 966,671 | | |
Valuation services
|
| | | | 314,432 | | | | | | 236,904 | | | | | | 419,264 | | |
Interest and credit facility expense
|
| | | | 6,434,924 | | | | | | 5,657,154 | | | | | | 4,142,013 | | |
Amortization of deferred financing costs
|
| | | | 912,710 | | | | | | 1,154,343 | | | | | | 867,786 | | |
Directors’ fees
|
| | | | 341,680 | | | | | | 296,809 | | | | | | 243,726 | | |
Insurance expense
|
| | | | 239,048 | | | | | | 264,209 | | | | | | 272,331 | | |
Amortization of deferred note offering costs
|
| | | | 473,768 | | | | | | 193,357 | | | | | | — | | |
Other expenses
|
| | | | 778,920 | | | | | | 697,809 | | | | | | 491,953 | | |
Total expenses
|
| | | | 16,357,790 | | | | | | 18,193,413 | | | | | | 15,619,547 | | |
Waiver of management fees
|
| | | | (1,330,420 ) | | | | | | — | | | | | | — | | |
Waiver of capital gains incentive fees
|
| | | | — | | | | | | — | | | | | | (1,001,467 ) | | |
Net expenses
|
| | | | 15,027,370 | | | | | | 18,193,413 | | | | | | 14,618,080 | | |
Net investment income
|
| | | $ | 18,324,139 | | | | | $ | 22,409,186 | | | | | $ | 19,298,169 | | |
Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) From Portfolio Investments
|
| | | | |||||||||||||||
Net realized gain (loss) on: | | | | | |||||||||||||||
Non-controlled, non-affiliated investments
|
| | | | (11,434,891 ) | | | | | | (4,018,220 ) | | | | | | 2,722,992 | | |
Non-controlled, affiliated investments
|
| | | | — | | | | | | 11,019,205 | | | | | | — | | |
Controlled, affiliated investments
|
| | | | — | | | | | | (11,282,968 ) | | | | | | — | | |
Net realized gain (loss) from portfolio investments
|
| | | | (11,434,891 ) | | | | | | (4,281,983 ) | | | | | | 2,722,992 | | |
Net change in unrealized appreciation (depreciation) on: | | | | | |||||||||||||||
Non-controlled, non-affiliated investments
|
| | | | (4,593,273 ) | | | | | | (10,390,732 ) | | | | | | 230,245 | | |
Non-controlled, affiliated investments
|
| | | | (24,121,074 ) | | | | | | (10,458,180 ) | | | | | | 3,128,631 | | |
Controlled, affiliated investments
|
| | | | 115,477 | | | | | | 10,875,915 | | | | | | (15,000,080 ) | | |
Net change in unrealized appreciation (depreciation) from portfolio investments
|
| | | | (28,598,870 ) | | | | | | (9,972,997 ) | | | | | | (11,641,204 ) | | |
Benefit/(Provision) for taxes on unrealized gain (loss) on
investments |
| | | | 2,607,880 | | | | | | 635,580 | | | | | | 2,231,817 | | |
Net realized gain (loss) and net change in unrealized appreciation (depreciation) from portfolio investments
|
| | | | (37,425,881 ) | | | | | | (13,619,400 ) | | | | | | (6,686,395 ) | | |
Net Increase (Decrease) in Net Assets Resulting from Operations
|
| | | $ | (19,101,742 ) | | | | | $ | 8,789,786 | | | | | $ | 12,611,774 | | |
| | | | | |||||||||||||||
Basic and diluted: | | | | | |||||||||||||||
Net investment income per share
|
| | | $ | 1.32 | | | | | $ | 1.66 | | | | | $ | 1.43 | | |
Earnings per share
|
| | | $ | (1.37 ) | | | | | $ | 0.65 | | | | | $ | 0.93 | | |
Weighted Average Shares of Common Stock Outstanding
|
| | | | 13,928,869 | | | | | | 13,496,128 | | | | | | 13,516,766 | | |
| | | | |
| | |
For the year ended
December 31, 2017 |
| |
For the year ended
December 31, 2016 |
| |
For the year ended
December 31, 2015 |
| |||||||||
Increase (decrease) in net assets resulting from operations
|
| | | | |||||||||||||||
Net investment income
|
| | | $ | 18,324,139 | | | | | $ | 22,409,186 | | | | | $ | 19,298,169 | | |
Net realized gain (loss) on investments
|
| | | | (11,434,891 ) | | | | | | (4,281,983 ) | | | | | | 2,722,992 | | |
Net change in unrealized appreciation (depreciation) on investments
|
| | | | (28,598,870 ) | | | | | | (9,972,997 ) | | | | | | (11,641,204 ) | | |
Benefits/(Provision) for taxes on unrealized gain (loss)
on investments |
| | | | 2,607,880 | | | | | | 635,580 | | | | | | 2,231,817 | | |
Net increase (decrease) in net assets resulting from operations
|
| | | | (19,101,742 ) | | | | | | 8,789,786 | | | | | | 12,611,774 | | |
Capital transactions | | | | | |||||||||||||||
Offering costs
|
| | | | — | | | | | | (165,635 ) | | | | | | (186,069 ) | | |
Issuance of common stock (808,161, 0 shares and 0 shares, respectively)
|
| | | | 10,853,602 | | | | | | — | | | | | | — | | |
Repurchase of common stock (36,849, 65,133 and 0 shares, respectively)
|
| | | | (342,510 ) | | | | | | (775,622 ) | | | | | | — | | |
Net increase (decrease) in net assets resulting from capital transactions
|
| | | | 10,511,092 | | | | | | (941,257 ) | | | | | | (186,069 ) | | |
Distributions to shareholders from: | | | | | |||||||||||||||
Net investment income
|
| | | | (17,816,654 ) | | | | | | (18,351,553 ) | | | | | | (18,382,802 ) | | |
Realized gains
|
| | | | (403,112 ) | | | | | | (4,596 ) | | | | | | — | | |
Total distributions to shareholders
|
| | | | (18,219,766 ) | | | | | | (18,356,149 ) | | | | | | (18,382,802 ) | | |
Total increase (decrease) in net assets
|
| | | | (26,810,416 ) | | | | | | (10,507,620 ) | | | | | | (5,957,097 ) | | |
Net assets at beginning of year
|
| | | | 184,524,591 | | | | | | 195,032,211 | | | | | | 200,989,308 | | |
Net assets at end of year (including undistributed net investment income of $4,449,122, $4,890,065 and $1,130,327, respectively)
|
| | |
$
|
157,714,175
|
| | | |
$
|
184,524,591
|
| | | |
$
|
195,032,211
|
| |
Dividends declared per common share:
|
| | | $ | 1.300 | | | | | $ | 1.360 | | | | | $ | 1.360 | | |
| | | | |
| | |
For the year ended
December 31, 2017 |
| |
For the year ended
December 31, 2016 |
| |
For the year ended
December 31, 2015 |
| |||||||||
Cash Flows from Operating Activities | | | | | |||||||||||||||
Net increase/(decrease) in net assets resulting from
operations |
| | | $ | (19,101,742 ) | | | | | $ | 8,789,786 | | | | | $ | 12,611,774 | | |
Adjustments to reconcile net increase/(decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
|
| | | | |||||||||||||||
Net realized (gain) loss from portfolio investments
|
| | | | 11,434,891 | | | | | | 4,281,983 | | | | | | (2,722,992 ) | | |
Net change in unrealized (appreciation) depreciation of portfolio investments
|
| | | | 28,598,870 | | | | | | 9,972,997 | | | | | | 11,641,204 | | |
Deferred tax asset
|
| | | | (3,670,151 ) | | | | | | 117,597 | | | | | | (1,382,408 ) | | |
Deferred tax liability
|
| | | | — | | | | | | — | | | | | | (1,697,004 ) | | |
Paid in-kind interest income from portfolio investments
|
| | | | (4,050,033 ) | | | | | | (6,203,963 ) | | | | | | (5,920,504 ) | | |
Accretion of discount on debt securities
|
| | | | (1,905,751 ) | | | | | | (1,225,834 ) | | | | | | (444,557 ) | | |
Purchases of portfolio investments
|
| | | | (135,508,569 ) | | | | | | (145,561,983 ) | | | | | | (96,601,565 ) | | |
Net proceeds from sales/return of capital of portfolio investments
|
| | | | 90,148,997 | | | | | | 158,805,461 | | | | | | 56,340,657 | | |
Amortization of deferred financing costs
|
| | | | 912,710 | | | | | | 1,154,343 | | | | | | 867,786 | | |
Amortization of deferred note offering costs
|
| | | | 473,768 | | | | | | 193,357 | | | | | | — | | |
(Increase) decrease in operating assets: | | | | | |||||||||||||||
Dividends and interest receivable
|
| | | | 1,298,340 | | | | | | (633,435 ) | | | | | | (1,189,705 ) | | |
Receivable for investments sold
|
| | | | 1,469,730 | | | | | | (2,139,463 ) | | | | | | 4,753 | | |
Income tax asset
|
| | | | (748,408 ) | | | | | | — | | | | | | — | | |
Prepaid expenses and other assets
|
| | | | 21,765 | | | | | | 12,960 | | | | | | 14,658 | | |
Increase (decrease) in operating liabilities: | | | | | |||||||||||||||
Payable for investments purchased
|
| | | | — | | | | | | — | | | | | | (8,717 ) | | |
Other accrued expenses and liabilities
|
| | | | 165,424 | | | | | | 10,364 | | | | | | (267,616 ) | | |
Directors’ fees payable
|
| | | | (26,083 ) | | | | | | 57,975 | | | | | | (48,667 ) | | |
Professional fees payable
|
| | | | 216,588 | | | | | | (149,466 ) | | | | | | 71,705 | | |
Interest and credit facility expense payable
|
| | | | 240,664 | | | | | | 194,905 | | | | | | 596,746 | | |
Management fee payable
|
| | | | (36,419 ) | | | | | | (622 ) | | | | | | 686,545 | | |
Income-based incentive fees payable
|
| | | | (776,676 ) | | | | | | 989,864 | | | | | | 1,081,797 | | |
Unearned structuring fee revenue
|
| | | | (449,666 ) | | | | | | 485,742 | | | | | | 172,238 | | |
Income tax
|
| | | | (182,699 ) | | | | | | (660,113 ) | | | | | | 797,540 | | |
Net cash provided by (used in) operating activities
|
| | | | (31,474,450 ) | | | | | | 28,492,455 | | | | | | (25,396,332 ) | | |
Cash Flows from Financing Activities | | | | | |||||||||||||||
Issuance of common stock
|
| | | | 10,853,602 | | | | | | — | | | | | | — | | |
Financing costs paid
|
| | | | (139,144 ) | | | | | | (258,269 ) | | | | | | (1,065,147 ) | | |
Offering costs paid
|
| | | | (230,871 ) | | | | | | (697,432 ) | | | | | | (1,316,948 ) | | |
Proceeds from credit facility payable
|
| | | | 117,820,000 | | | | | | 116,375,000 | | | | | | 255,102,027 | | |
Repayments of credit facility payable
|
| | | | (67,250,000 ) | | | | | | (140,746,465 ) | | | | | | (254,096,443 ) | | |
Proceeds from notes payable
|
| | | | — | | | | | | 15,000,000 | | | | | | 40,000,000 | | |
Distributions paid to shareholders
|
| | | | (19,245,277 ) | | | | | | (18,365,033 ) | | | | | | (18,382,802 ) | | |
Repurchase of common stock
|
| | | | (342,510 ) | | | | | | (775,622 ) | | | | | | — | | |
Net cash provided by (used in) financing activities
|
| | | | 41,465,800 | | | | | | (29,467,821 ) | | | | | | 20,240,687 | | |
Increase (decrease) in cash and cash equivalents
|
| | | | 9,991,350 | | | | | | (975,366 ) | | | | | | (5,155,645 ) | | |
Cash at beginning of year
|
| | | | 3,891,606 | | | | | | 4,866,972 | | | | | | 10,022,617 | | |
Cash and Cash Equivalents at End of Year
|
| | | $ | 13,882,956 | | | | | $ | 3,891,606 | | | | | $ | 4,866,972 | | |
Supplemental and non-cash financing activities: | | | | | |||||||||||||||
Cash paid during the year for interest
|
| | | $ | 6,194,260 | | | | | $ | 5,462,249 | | | | | $ | 3,870,973 | | |
Accrued offering costs
|
| | | $ | 2,485 | | | | | $ | 2,485 | | | | | $ | 2,485 | | |
Accrued distributions payable
|
| | | $ | 3,561,305 | | | | | $ | 4,586,816 | | | | | $ | 4,595,700 | | |
Company
(+)(^)***
|
| |
Industry
|
| |
Spread
Above Index |
| |
Base Rate
Floor |
| |
Interest
Rate |
| |
Maturity
Date |
| |
No. Shares/
Principal Amount |
| |
Cost
(1)
|
| |
Fair Value
|
| |
% of Net
Assets |
| |||||||||||||||||||||
Investments in Non-Controlled, Non-Affiliated Portfolio Companies — 159.99% | | ||||||||||||||||||||||||||||||||||||||||||||||||
Senior Secured – First Lien — 103.57% | | ||||||||||||||||||||||||||||||||||||||||||||||||
Black Diamond Rentals
|
| | Oil & Gas Services | | |
12% Cash,
2% PIK (2) |
| | | | | | | | | | 14.00 % | | | | | | 7/9/2018 | | | | | | 5,937,501 | | | | | $ | 5,937,501 | | | | | $ | 4,875,828 | | | | | | 3.09 % | | |
| | | | | |
4% Cash,
10% PIK |
| | | | | | | | | | 14.00 % | | | | | | 7/9/2018 | | | | | | 2,288,381 | | | | | | 2,246,806 | | | | | | 2,288,400 | | | | | | 1.45 % | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,184,307 | | | | | | 7,164,228 | | | | | | 4.54 % | | |
CGGR Operations Holdings Corporation
(3)
|
| | Business Services | | |
11.5%
|
| | | | 1.00 % | | | | | | 12.50 % | | | | | | 10/2/2023 | | | | | | 13,431,579 | | | | | | 13,302,663 | | | | | | 13,431,578 | | | | | | 8.52 % | | |
| | | | | |
7.0%
|
| | | | 1.00 % | | | | | | 8.00 % | | | | | | 9/30/2022 | | | | | | 9,768,421 | | | | | | 9,675,645 | | | | | | 9,768,421 | | | | | | 6.19 % | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 22,978,308 | | | | | | 23,199,999 | | | | | | 14.71 % | | |
Champion ONE
(3)
|
| |
Technology &
Telecom |
| |
LIBOR +
10.5% |
| | | | 1.00 % | | | | | | 11.83 % | | | | | | 3/17/2022 | | | | | | 7,078,125 | | | | | | 7,020,027 | | | | | | 7,078,125 | | | | | | 4.49 % | | |
Cirrus Medical Staffing, Inc.
(3),(4)
|
| | Business Services | | |
LIBOR +
8.25% |
| | | | 1.00 % | | | | | | 9.61 % | | | | | | 10/19/2022 | | | | | | 18,600,000 | | | | | | 18,510,539 | | | | | | 18,600,000 | | | | | | 11.79 % | | |
Healthcare Associates of Texas, LLC
(3),(4)
|
| |
Healthcare Services
|
| |
LIBOR +
8.0% |
| | | | 1.00 % | | | | | | 9.39 % | | | | | | 11/8/2022 | | | | | | 23,334,250 | | | | | | 23,334,250 | | | | | | 23,334,250 | | | | | | 14.80 % | | |
IGT (3),(4) | | | Industrial Services | | |
LIBOR +
8.50% |
| | | | 1.00 % | | | | | | 9.86 % | | | | | | 12/10/2019 | | | | | | 7,783,012 | | | | | | 7,743,557 | | | | | | 7,783,012 | | | | | | 4.94 % | | |
Integrated Efficiency Solutions, Inc.
(3),(5)
|
| | Industrial Services | | |
LIBOR +
9.25% |
| | | | 1.00 % | | | | | | 10.59 % | | | | | | 6/30/2022 | | | | | | 19,500,000 | | | | | | 19,436,803 | | | | | | 19,500,000 | | | | | | 12.36 % | | |
Lugano Diamonds & Jewelry, Inc.
(3)
|
| | Retail | | |
LIBOR +
10.0% |
| | | | 0.75 % | | | | | | 11.34 % | | | | | | 10/24/2021 | | | | | | 8,000,000 | | | | | | 7,349,002 | | | | | | 7,483,890 | | | | | | 4.75 % | | |
NTI Holdings, LLC
(3),(4)
|
| | Telecommunications | | |
LIBOR +
8.0% |
| | | | 1.00 % | | | | | | 9.57 % | | | | | | 3/30/2021 | | | | | | 15,097,584 | | | | | | 14,869,193 | | | | | | 14,961,923 | | | | | | 9.49 % | | |
Palmetto Moon LLC
|
| | Retail | | |
11.5% Cash,
1.0% PIK |
| | | | | | | | | | 12.50 % | | | | | | 10/31/2021 | | | | | | 5,378,909 | | | | | | 5,357,837 | | | | | | 5,378,909 | | | | | | 3.41 % | | |
Pharmalogics Recruiting, LLC
(4)
|
| | Business Services | | |
10.25% Cash
|
| | | | | | | | | | 10.25 % | | | | | | 1/31/2022 | | | | | | 9,925,000 | | | | | | 9,845,384 | | | | | | 9,925,000 | | | | | | 6.29 % | | |
Stancor, Inc.
(3)
|
| |
Wholesale/
Distribution |
| |
LIBOR +
8.00% |
| | | | 0.75 % | | | | | | 9.37 % | | | | | | 8/19/2019 | | | | | | 4,105,932 | | | | | | 4,105,932 | | | | | | 4,105,932 | | | | | | 2.60 % | | |
Superior Controls, Inc.
(3),(4)
|
| |
Wholesale/
Distribution |
| |
LIBOR +
8.75% |
| | | | 1.00 % | | | | | | 10.09 % | | | | | | 3/22/2021 | | | | | | 14,825,000 | | | | | | 14,775,976 | | | | | | 14,825,000 | | | | | | 9.40 % | | |
Total Senior Secured – First Lien
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 163,511,115 | | | | | | 163,340,268 | | | | | | 103.57 % | | |
Senior Secured – Second Lien — 5.54% | | ||||||||||||||||||||||||||||||||||||||||||||||||
Medsurant Holdings, LLC
|
| |
High Tech Industries
|
| |
13.00% Cash
|
| | | | | | | | | | 13.00 % | | | | | | 6/30/2020 | | | | | | 8,729,396 | | | | | $ | 8,677,481 | | | | | $ | 8,729,396 | | | | | | 5.54 % | | |
Total Senior Secured – Second Lien
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,677,481 | | | | | | 8,729,396 | | | | | | 5.54 % | | |
Senior Subordinated — 40.88% | | ||||||||||||||||||||||||||||||||||||||||||||||||
Black Diamond Rentals
(2)
|
| | Oil & Gas Services | | |
4% Cash
|
| | | | | | | | | | 4.00 % | | | | | | 7/9/2018 | | | | | | 8,009,188 | | | | | $ | 8,009,188 | | | | | $ | 4,004,594 | | | | | | 2.54 % | | |
GST Autoleather
(2),(6)
|
| |
Automotive
Business Services |
| |
11% Cash,
2.0% PIK |
| | | | | | | | | | 13.00 % | | | | | | 1/11/2021 | | | | | | 8,496,238 | | | | | | 8,496,239 | | | | | | — | | | | | | — | | |
Media Storm, LLC
(2)
|
| |
Media &
Entertainment |
| |
10% PIK
|
| | | | | | | | | | 10.00 % | | | | | | 8/28/2019 | | | | | | 2,454,545 | | | | | $ | 2,454,545 | | | | | $ | 1 | | | | | | — | | |
Metal Powder Products LLC
(3)
|
| |
Industrial
Manufacturing |
| |
LIBOR +
11.25%, 1.0% PIK |
| | | | 0.75 % | | | | | | 13.59 % | | | | | | 11/5/2021 | | | | | | 8,333,733 | | | | | | 8,333,734 | | | | | | 8,500,408 | | | | | | 5.39 % | | |
NextCare Holdings, Inc.
|
| |
Healthcare Services
|
| |
10% Cash,
4% PIK |
| | | | | | | | | | 14.00 % | | | | | | 12/31/2018 | | | | | | 15,833,365 | | | | | | 15,731,616 | | | | | | 15,833,365 | | | | | | 10.04 % | | |
Pharmalogic Holdings Corp.
|
| |
Healthcare Services
|
| |
12% Cash
|
| | | | | | | | | | 12.00 % | | | | | | 9/1/2021 | | | | | | 16,122,103 | | | | | | 16,093,930 | | | | | | 16,122,103 | | | | | | 10.22 % | | |
QRC Holdings, LLC
|
| |
High Tech Industries
|
| |
12.25% Cash
|
| | | | | | | | | | 12.25 % | | | | | | 11/19/2021 | | | | | | 10,000,000 | | | | | | 10,000,000 | | | | | | 10,000,000 | | | | | | 6.34 % | | |
Security Alarm Financing Enterprises
L. P. (3),(7) |
| | Security | | |
LIBOR +
13.00%, 0.34% PIK |
| | | | 1.00 % | | | | | | 14.34 % | | | | | | 6/19/2020 | | | | | | 10,019,787 | | | | | | 9,873,536 | | | | | | 10,019,780 | | | | | | 6.35 % | | |
Total Senior Subordinated
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 78,992,788 | | | | | | 64,480,251 | | | | | | 40.88 % | | |
|
Company
(+)(^)***
|
| |
Industry
|
| |
Spread
Above Index |
| |
Base Rate
Floor |
| |
Interest
Rate |
| |
Maturity
Date |
| |
No. Shares/
Principal Amount |
| |
Cost
(1)
|
| |
Fair Value
|
| |
% of Net
Assets |
| |||||||||||||||||||||
Equity/Other — 10.00% | | ||||||||||||||||||||||||||||||||||||||||||||||||
Champion ONE, Common
Shares (2) |
| |
Technology &
Telecom |
| | | | | | | | | | | | | | | | | | | | | | | | | 11,250 | | | | | $ | 1,125,000 | | | | | $ | 984,332 | | | | | | 0.62 % | | |
IGT, Preferred Shares
(2)
|
| | Industrial Services | | |
11% PIK
|
| | | | | | | | | | 11.00 % | | | | | | 12/10/2019 | | | | | | 1,110,922 | | | | | | 1,110,923 | | | | | | — | | | | | | — | | |
Common Shares
(2)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 44,000 | | | | | | 44,000 | | | | | | — | | | | | | — | | |
Preferred AA Shares
|
| | | | |
15% PIK
|
| | | | | | | | | | 15.00 % | | | | | | 12/10/2019 | | | | | | 326,789 | | | | | | 326,789 | | | | | | 326,789 | | | | | | 0.21 % | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,481,712 | | | | | | 326,789 | | | | | | 0.21 % | | |
Integrated Efficiency Solutions, Inc. Preferred Shares
(2),(5)
|
| | Industrial Services | | | | | | | | | | | | | | | | | | | | | | | | | | 1,079,365 | | | | | | 1,100,000 | | | | | | 2,058,646 | | | | | | 1.31 % | | |
Lugano Diamonds & Jewelry, Inc, Warrants
(2)
|
| | Retail | | | | | | | | | | | | | | | | | | | | | | | | | | 666,615 | | | | | | 666,615 | | | | | | 1,000,000 | | | | | | 0.63 % | | |
Metal Powder Products, LLC, Common Shares
(2)
|
| |
Industrial
Manufacturing |
| | | | | | | | | | | | | | | | | | | | | | | | | 500,000 | | | | | | 500,000 | | | | | | 719,047 | | | | | | 0.46 % | | |
My Alarm Center, LLC, Common Shares
(2)
|
| | Security | | | | | | | | | | | | | | | | | | | | | | | | | | 129,582 | | | | | | 256,793 | | | | | | — | | | | | | — | | |
Junior Preferred Shares
(2)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,420 | | | | | | 2,366,549 | | | | | | 1,253,570 | | | | | | 0.79 % | | |
Senior Preferred Shares
(2)
|
| | | | |
8% PIK
|
| | | | | | | | | | 8.00 % | | | | | | 7/14/2022 | | | | | | 2,998,437 | | | | | | 2,862,059 | | | | | | 2,862,059 | | | | | | 1.81 % | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,485,401 | | | | | | 4,115,629 | | | | | | 2.60 % | | |
NTI Holdings, LLC, Preferred Shares
(2)
|
| | Telecommunications | | | | | | | | | | | | | | | | | | | | | | | | | | 424,621 | | | | | | 547,349 | | | | | | 1,679,748 | | | | | | 1.06 % | | |
Warrants (2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 417,823 | | | | | | 224,689 | | | | | | 1,035,867 | | | | | | 0.66 % | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 772,038 | | | | | | 2,715,615 | | | | | | 1.72 % | | |
Palmetto Moon LLC, Common Shares
(2)
|
| | Retail | | | | | | | | | | | | | | | | | | | | | | | | | | 434,145 | | | | | $ | 434,145 | | | | | $ | 329,633 | | | | | | 0.21 % | | |
Superior Controls, Inc., Preferred Shares
(2)
|
| |
Wholesale/
Distribution |
| | | | | | | | | | | | | | | | | | | | | | | | | 400,000 | | | | | | 400,000 | | | | | | 754,000 | | | | | | 0.48 % | | |
Tunnel Hill Class B Common Units
(2),(8)
|
| | Waste Services | | | | | | | | | | | | | | | | | | | | | | | | | | 98,418 | | | | | | 2,529,303 | | | | | | 2,771,797 | | | | | | 1.76 % | | |
Total Equity/Other
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 14,494,214 | | | | | | 15,775,488 | | | | | | 10.00 % | | |
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 265,675,598 | | | | | | 252,325,403 | | | | | | 159.99 % | | |
Investments in Non-Controlled, Affiliated Portfolio Companies — 12.67%* | | ||||||||||||||||||||||||||||||||||||||||||||||||
Senior Secured – First Lien — | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||
Show Media, Inc.
(2)
|
| |
Media &
Entertainment |
| |
8% Cash,
3% PIK |
| | | | | | | | | | 11.00 % | | | | | | 12/31/2018 | | | | | | 4,153,393 | | | | | $ | 4,153,393 | | | | | $ | 1 | | | | | | — | | |
Total Senior Secured – First Lien
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,153,393 | | | | | | 1 | | | | | | — | | |
Senior Secured – Second Lien — 3.47% | | ||||||||||||||||||||||||||||||||||||||||||||||||
Southern Technical Institute, Inc.
|
| | Education | | |
15% PIK
|
| | | | | | | | | | 15.00 % | | | | | | 12/2/2020 | | | | | | 8,451,041 | | | | | $ | 8,451,041 | | | | | $ | 1 | | | | | | — | | |
Xpress Global Systems, LLC
(3)
|
| |
Transportation
Logistics |
| |
15% PIK
|
| | | | | | | | | | 15.00 % | | | | | | 7/9/2020 | | | | | | 5,455,263 | | | | | | 5,222,687 | | | | | | 3,509,422 | | | | | | 2.22 % | | |
| | | | | |
LIBOR +
11.0% |
| | | | 1.00 % | | | | | | 12.33 % | | | | | | 7/9/2020 | | | | | | 1,964,872 | | | | | | 1,979,609 | | | | | | 1,964,872 | | | | | | 1.25 % | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,202,296 | | | | | | 5,474,294 | | | | | | 3.47 % | | |
Total Senior Secured – Second Lien
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,653,337 | | | | | | 5,474,295 | | | | | | 3.47 % | | |
Senior Subordinated — 1.53% | | ||||||||||||||||||||||||||||||||||||||||||||||||
Battery Solutions, Inc.
|
| |
Environmental/
Recycling Services |
| |
6% Cash,
8% PIK |
| | | | | | | | | | 14.00 % | | | | | | 11/6/2021 | | | | | | 2,404,598 | | | | | $ | 2,404,598 | | | | | $ | 2,404,598 | | | | | | 1.53 % | | |
Total Senior Subordinated
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,404,598 | | | | | | 2,404,598 | | | | | | 1.53 % | | |
|
Company
(+)(^)***
|
| |
Industry
|
| |
Spread
Above Index |
| |
Base Rate
Floor |
| |
Interest
Rate |
| |
Maturity
Date |
| |
No. Shares/
Principal Amount |
| |
Cost
(1)
|
| |
Fair Value
|
| |
% of Net
Assets |
| ||||||||||||||||||
Equity/Other — 7.67% | | |||||||||||||||||||||||||||||||||||||||||||||
Battery Solutions, Inc., Class A and F
Units (2) |
| |
Environmental/
Recycling Services |
| | | | | | | | | | | | | | | | | | | | | | 5,000,000 | | | | | $ | 1,058,000 | | | | | $ | 1,277,000 | | | | | | 0.81 % | | |
Class E Units
|
| | | | |
8% PIK
|
| | | | | | | 8.00 % | | | | | | 11/6/2021 | | | | | | 4,138,569 | | | | | | 4,138,569 | | | | | | 4,138,569 | | | | | | 2.62 % | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,196,569 | | | | | | 5,415,569 | | | | | | 3.43 % | | |
Conisus, LLC, Common Shares
(2)
|
| |
Media: Advertising,
Printing & Publishing |
| | | | | | | | | | | | | | | | | | | | | | 4,914,556 | | | | | | — | | | | | | — | | | | | | — | | |
Preferred Equity
|
| | | | |
12% PIK
|
| | | | | | | 12.00 % | | | | | | | | | | | | 12,677,834 | | | | | | 12,677,834 | | | | | | 6,678,442 | | | | | | 4.24 % | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,677,834 | | | | | | 6,678,442 | | | | | | 4.24 % | | |
Show Media, Inc., Units
(2)
|
| |
Media &
Entertainment |
| | | | | | | | | | | | | | | | | | | | | | 4,092,210 | | | | | | 3,747,428 | | | | | | — | | | | | | — | | |
Southern Technical Institute, Inc., Class A Units
(2)
|
| | Education | | | | | | | | | | | | | | | | | | | | | | | 3,164,063 | | | | | $ | 2,167,000 | | | | | $ | — | | | | | | — | | |
Preferred Shares
|
| | | | |
15.75% PIK
|
| | | | | | | 15.75 % | | | | | | 3/30/2026 | | | | | | 5,135,209 | | | | | | 5,024,209 | | | | | | — | | | | | | — | | |
Warrants (2) | | | | | | | | | | | | | | | | | | | | | | | | | | 221,267 | | | | | | 221,267 | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,412,476 | | | | | | — | | | | | | — | | |
Xpress Global Systems, LLC, Warrants
(2)
|
| |
Transportation
Logistics |
| | | | | | | | | | | | | | | | | | | | | | 489,000 | | | | | | 489,000 | | | | | | — | | | | | | — | | |
Total Equity/Other
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 29,523,307 | | | | | | 12,094,011 | | | | | | 7.67 % | | |
Total Investments in Non-Controlled, Affiliated Portfolio Companies
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 51,734,635 | | | | | | 19,972,905 | | | | | | 12.67 % | | |
Investments in Controlled, Affiliated Portfolio Companies — 9.67%** | | |||||||||||||||||||||||||||||||||||||||||||||
Senior Secured – First Lien — 8.87% | | |||||||||||||||||||||||||||||||||||||||||||||
FST Technical Services, LLC
|
| |
Technology &
Telecom |
| |
12% Cash,
5% PIK |
| | | | | | | 17.00 % | | | | | | 6/30/2019 | | | | | | 13,999,758 | | | | | $ | 13,999,758 | | | | | $ | 13,999,758 | | | | | | 8.87 % | | |
Total Senior Secured – First Lien
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 13,999,758 | | | | | | 13,999,758 | | | | | | 8.87 % | | |
Equity/Other — 0.80% | | |||||||||||||||||||||||||||||||||||||||||||||
FST Technical Services, LLC, Common Class B Shares
(2)
|
| |
Technology &
Telecom |
| |
9% PIK
|
| | | | | | | 9.00 % | | | | | | | | | | | | 1,750,000 | | | | | $ | 1,806,543 | | | | | $ | 1,256,479 | | | | | | 0.80 % | | |
Total Equity/Other
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,806,543 | | | | | | 1,256,479 | | | | | | 0.80 % | | |
Total Investments in Controlled, Affiliated Portfolio Companies
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,806,301 | | | | | | 15,256,237 | | | | | | 9.67 % | | |
Total Investments
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 333,216,534 | | | | | | 287,554,545 | | | | | | 182.33 % | | |
Liabilities In Excess Of Other
Assets |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (129,840,370 ) | | | | | | (82.33 )% | | |
Net Assets
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 157,714,175 | | | | | | 100.00 % | | |
|
Name of Issuers
|
| |
Fair Value at
December 31, 2016 |
| |
Gross
Addition |
| |
Gross
Reductions |
| |
Transfers
In/Out |
| |
Paid-in-kind/
Interest/ Dividend/ Other Income |
| |
Fair Value at
December 31, 2017 |
| ||||||||||||||||||
Battery Solutions, Inc.
|
| | | $ | 6,517,046 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 650,999 | | | | | $ | 7,820,167 | | |
Conisus, LLC
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,121,469 | | | | | | 6,678,442 | | |
Show Media, Inc.
|
| | | | 2,077,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 95,164 | | | | | | 1 | | |
Southern Technical Institute, Inc.
|
| | | | 13,500,157 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,205,438 | | | | | | 1 | | |
Xpress Global Systems, LLC
|
| | | | — | | | | | | — | | | | | | — | | | | | | 7,475,203 | | | | | | 455,272 | | | | | | 5,474,294 | | |
| | | | $ | 22,094,203 | | | | | $ | — | | | | | $ | — | | | | | $ | 7,475,203 | | | | | $ | 3,528,342 | | | | | $ | 19,972,905 | | |
|
Name of Issuers
|
| |
Fair value at
December 31, 2016 |
| |
Gross
Additions |
| |
Gross
Reductions |
| |
Transfers
In/Out |
| |
Interest/
Dividend/ Other Income |
| |
Fair Value at
December 31, 2017 |
| ||||||||||||||||||
FST Technical Services, LLC
|
| | | $ | 14,456,630 | | | | | $ | — | | | | | $ | — | | | | | | — | | | | | $ | 2,349,538 | | | | | $ | 15,256,237 | | |
| | | | $ | 14,456,630 | | | | | $ | — | | | | | $ | — | | | | | | — | | | | | $ | 2,349,538 | | | | | $ | 15,256,237 | | |
|
Company(+)***
|
| |
Industry
|
| |
Interest Rate
|
| |
Base
Rate Floor |
| |
Maturity
Date |
| |
No. Shares/
Principal Amount |
| |
Cost
(1)
|
| |
Fair Value
|
| |
% of Net
Assets |
| ||||||||||||||||||
Investments in Non-Controlled, Non-Affiliated Portfolio Companies — 129.91% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Senior Secured – First Lien — 43.51% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
A2Z Wireless Holdings, Inc.
(2)
|
| |
Telecommunications
|
| |
LIBOR + 9.0% Cash
|
| | | | 1.00 % | | | | | | 1/15/2021 | | | | | | 14,437,500 | | | | | $ | 14,293,125 | | | | | $ | 14,437,500 | | | | | | 7.82 % | | |
Black Diamond Rentals
|
| |
Oil & Gas Services
|
| |
10.00% Cash, 4% PIK
|
| | | | | | | | | | 7/9/2018 | | | | | | 6,741,084 | | | | | | 6,741,084 | | | | | | 6,368,583 | | | | | | 3.45 % | | |
IGT (2) , (3) | | |
Industrial Services
|
| |
LIBOR + 8.75% Cash,
1.50% PIK |
| | | | 1.00 % | | | | | | 12/10/2019 | | | | | | 8,063,911 | | | | | | 8,004,995 | | | | | | 8,063,911 | | | | | | 4.37 % | | |
LRI Holding, Inc.
(2)
|
| |
Industrial Services
|
| |
LIBOR + 9.75% Cash
|
| | | | 0.50 % | | | | | | 9/28/2021 | | | | | | 10,000,000 | | | | | | 9,906,795 | | | | | | 10,000,000 | | | | | | 5.42 % | | |
Lugano Diamonds & Jewelry, Inc
(2)
,
(3)
|
| |
Retail
|
| |
LIBOR + 10.0% Cash
|
| | | | 0.75 % | | | | | | 10/24/2021 | | | | | | 6,000,000 | | | | | | 5,235,101 | | | | | | 5,356,000 | | | | | | 2.90 % | | |
NTI Holdings, LLC
(2)
|
| |
Telecommunications
|
| |
LIBOR + 8.0% Cash
|
| | | | 1.00 % | | | | | | 3/30/2021 | | | | | | 11,876,288 | | | | | | 11,680,600 | | | | | | 11,680,566 | | | | | | 6.33 % | | |
NWN Corporation
(2)
|
| |
Technology & IT
|
| |
LIBOR + 10.0% Cash
|
| | | | 1.00 % | | | | | | 10/16/2020 | | | | | | 3,919,108 | | | | | | 3,840,726 | | | | | | 3,919,108 | | | | | | 2.12 % | | |
Palmetto Moon LLC
|
| |
Retail
|
| |
11.5% Cash
|
| | | | | | | | | | 10/31/2021 | | | | | | 5,565,855 | | | | | | 5,540,855 | | | | | | 5,565,855 | | | | | | 3.02 % | | |
Stancor, Inc.
(2)
|
| |
Wholesale/Distribution
|
| |
LIBOR + 9.0%
|
| | | | 0.75 % | | | | | | 8/19/2019 | | | | | | 4,900,000 | | | | | | 4,900,000 | | | | | | 4,900,000 | | | | | | 2.66 % | | |
Superior Controls, Inc.
(2)
,
(3)
|
| |
High Tech Industries
|
| |
LIBOR + 8.75%
|
| | | | 1.00 % | | | | | | 3/22/2021 | | | | | | 10,000,000 | | | | | | 10,000,000 | | | | | | 10,000,000 | | | | | | 5.42 % | | |
Total Senior Secured – First Lien | | | | | | | | | | | | | | | | | | | | | | | | | | 80,143,281 | | | | | | 80,291,523 | | | | | | 43.51 % | | | |||
Senior Secured – Second Lien — 41.57% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
Alpine Waste
(2)
|
| |
Waste Services
|
| |
LIBOR + 8.75%
|
| | | | 1.00 % | | | | | | 12/30/2020 | | | | | | 11,131,777 | | | | | $ | 11,131,777 | | | | | $ | 11,131,777 | | | | | | 6.03 % | | |
Conisus LLC
(2)
|
| |
Media: Advertising,
Printing & Publishing |
| |
LIBOR + 8.75% Cash
|
| | | | 1.00 % | | | | | | 6/23/2021 | | | | | | 11,750,000 | | | | | | 11,750,000 | | | | | | 10,870,000 | | | | | | 5.89 % | | |
Duke Finance, LLC
(2)
|
| |
Industrial Manufacturing
|
| |
LIBOR + 9.75% Cash
|
| | | | 1.00 % | | | | | | 10/28/2022 | | | | | | 7,500,000 | | | | | | 6,722,567 | | | | | | 7,350,000 | | | | | | 3.98 % | | |
Graco Supply Company
|
| |
Aerospace
|
| |
12% Cash
|
| | | | | | | | | | 3/17/2021 | | | | | | 4,000,000 | | | | | | 4,000,000 | | | | | | 3,877,000 | | | | | | 2.10 % | | |
Healthcare Associates of Texas, LLC
(3)
|
| |
Healthcare Services
|
| |
12.25% Cash
|
| | | | | | | | | | 4/30/2022 | | | | | | 8,500,000 | | | | | | 8,500,000 | | | | | | 8,500,000 | | | | | | 4.61 % | | |
Medsurant Holdings, LLC
|
| |
Healthcare Services
|
| |
12.25% Cash
|
| | | | | | | | | | 6/18/2021 | | | | | | 6,200,000 | | | | | | 6,138,000 | | | | | | 6,200,000 | | | | | | 3.36 % | | |
My Alarm Center, LLC
(2)
|
| |
Security
|
| |
LIBOR + 11.0% Cash
|
| | | | 1.00 % | | | | | | 7/9/2019 | | | | | | 12,625,000 | | | | | | 12,625,000 | | | | | | 12,625,000 | | | | | | 6.84 % | | |
Nation Safe Drivers (NSD)
(2)
|
| |
Automotive Business
Services |
| |
LIBOR + 8.0% Cash
|
| | | | 2.00 % | | | | | | 9/29/2020 | | | | | | 11,721,154 | | | | | | 11,721,154 | | | | | | 11,838,000 | | | | | | 6.42 % | | |
Xpress Global Systems, LLC
(2)
|
| |
Transportation Logistics
|
| |
|
| | | | | | | | | | 4/10/2020 | | | | | | 7,420,134 | | | | | | 6,986,203 | | | | | | 4,316,871 | | | | | | 2.34 % | | |
Total Senior Secured – Second Lien | | | | | | | | | | | | | | | | | | | | | | | | | | 79,574,701 | | | | | | 76,708,648 | | | | | | 41.57 % | | | |||
Senior Subordinated — 38.93% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
Black Diamond Rentals
|
| |
Oil & Gas Services
|
| |
4.0% Cash
|
| | | | | | | | | | 7/9/2018 | | | | | | 8,009,188 | | | | | $ | 8,009,188 | | | | | $ | 3,709,000 | | | | | | 2.01 % | | |
GST Autoleather
|
| |
Automotive Business
Services |
| |
11% Cash, 2.0% PIK
|
| | | | | | | | | | 1/11/2021 | | | | | | 8,368,939 | | | | | | 8,368,939 | | | | | | 8,368,939 | | | | | | 4.53 % | | |
Media Storm, LLC
|
| |
Media & Entertainment
|
| |
10% Cash
|
| | | | | | | | | | 8/28/2019 | | | | | | 2,454,545 | | | | | | 2,454,545 | | | | | | 2,454,545 | | | | | | 1.33 % | | |
Metal Powder Products LLC
(2)
|
| |
Industrial Manufacturing
|
| |
LIBOR + 12.25% Cash
|
| | | | 0.75 % | | | | | | 11/5/2021 | | | | | | 8,250,000 | | | | | | 8,250,000 | | | | | | 8,250,000 | | | | | | 4.47 % | | |
NextCare Holdings, Inc.
|
| |
Healthcare Services
|
| |
10% Cash, 4% PIK
|
| | | | | | | | | | 12/31/2018 | | | | | | 15,050,000 | | | | | | 14,859,566 | | | | | | 15,050,000 | | | | | | 8.16 % | | |
Pharmalogic Holdings Corp.
|
| |
Healthcare Services
|
| |
12% Cash
|
| | | | | | | | | | 9/1/2021 | | | | | | 14,000,000 | | | | | | 14,000,000 | | | | | | 14,000,000 | | | | | | 7.59 % | | |
QRC Holdings, LLC
|
| |
High Tech Industries
|
| |
12.25% Cash
|
| | | | | | | | | | 11/20/2021 | | | | | | 10,000,000 | | | | | | 10,000,000 | | | | | | 10,000,000 | | | | | | 5.42 % | | |
Security Alarm Financing Enterprises L. P.
(2)
|
| |
Security
|
| |
LIBOR + 13.00% Cash
|
| | | | 1.00 % | | | | | | 6/19/2020 | | | | | | 10,000,000 | | | | | | 9,800,000 | | | | | | 10,000,000 | | | | | | 5.42 % | | |
Total Senior Subordinated | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 75,742,238 | | | | | | 71,832,484 | | | | | | 38.93 % | | |
Equity/Other — 5.90% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
IGT, Preferred Shares
(4)
|
| |
Industrial Services
|
| |
11% PIK
|
| | | | | | | | | | | | | | | | 1,110,922 | | | | | $ | 1,110,922 | | | | | $ | — | | | | | | — | | |
Common Shares
(4)
|
| | | | | | | | | | | | | | | | | | | | | | 44,000 | | | | | | 44,000 | | | | | | — | | | | | | — | | |
Preferred AA Shares
|
| | | | |
15% PIK
|
| | | | | | | | | | | | | | | | 292,115 | | | | | | 292,115 | | | | | | 292,115 | | | | | | 0.16 % | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,447,037 | | | | | | 292,115 | | | | | | 0.16 % | | |
LRI Holding, Inc.,
Preferred Shares (4) |
| |
Industrial Services
|
| | | | | | | | | | | | | | | | | | | 1,000,000 | | | | | | 1,000,000 | | | | | | 1,084,000 | | | | | | 0.59 % | | |
Lugano Diamonds & Jewelry, Inc, Warrants
|
| |
Retail
|
| | | | | | | | | | | | | | | | | | | 666,615 | | | | | | 666,615 | | | | | | 666,615 | | | | | | 0.36 % | | |
Metal Powder Products, LLC, Common Shares
(4)
|
| |
Industrial Manufacturing
|
| | | | | | | | | | | | | | | | | | | 500,000 | | | | | | 500,000 | | | | | | 659,000 | | | | | | 0.36 % | | |
Company(+)***
|
| |
Industry
|
| |
Interest Rate
|
| |
Base
Rate Floor |
| |
Maturity
Date |
| |
No. Shares/
Principal Amount |
| |
Cost
(1)
|
| |
Fair Value
|
| |
% of Net
Assets |
| | ||||||||||||||||||||
My Alarm Center, LL, Class A Preferred
(4)
|
| |
Security
|
| | | | | | | | | | | | | | | | | | | 284,589 | | | | | | — | | | | | | 284,589 | | | | | | 0.15 % | | | | ||
NTI Holdings, LLC,
Common Shares (4) |
| |
Telecommunications
|
| | | | | | | | | | | | | | | | | | | 376,515 | | | | | | 403,030 | | | | | | 779,000 | | | | | | 0.42 % | | | | ||
Warrants (4) | | | | | | | | | | | | | | | | | | | | | | | 417,823 | | | | | | 224,689 | | | | | | 444,998 | | | | | | 0.24 % | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 627,719 | | | | | | 1,223,998 | | | | | | 0.66 % | | | | ||
Palmetto Moon LLC, Common
Shares |
| |
Retail
|
| | | | | | | | | | | | | | | | | | | 434,145 | | | | | | 434,145 | | | | | | 434,145 | | | | | | 0.24 % | | | | ||
Superior Controls, Inc., Preferred Shares
(4)
|
| |
High Tech Industries
|
| | | | | | | | | | | | | | | | | | | 400,000 | | | | | | 400,000 | | | | | | 516,000 | | | | | | 0.28 % | | | | ||
Tunnel Hill Class B Common Units
(4)
,
(5)
|
| |
Waste Services
|
| | | | | | | | | | | | | | | | | | | 93,160 | | | | | | 2,454,303 | | | | | | 2,029,000 | | | | | | 1.10 % | | | | ||
Wholesome Sweeteners, Inc., Common Shares
(4)
|
| |
Food & Beverage
|
| | | | | | | | | | | | | | | | | | | 5,000 | | | | | | 5,000,000 | | | | | | 3,700,000 | | | | | | 2.00 % | | | | ||
Xpress Global Systems, LLC, Warrants
(4)
|
| |
Transportation Logistics
|
| | | | | | | | | | | | | | | | | | | 489,000 | | | | | | 489,000 | | | | | | — | | | | | | — | | | | ||
Total Equity/Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 13,018,819 | | | | | | 10,889,462 | | | | | | 5.90 % | | | | ||
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies | | | | | | | | | | | | | | | | | | | | | | | 248,479,039 | | | | | | 239,722,117 | | | | | | 129.91 % | | | | ||||||||
Investments in Non-Controlled, Affiliated Portfolio Companies — 11.97%* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
Senior Secured – First Lien — 1.12% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||
Show Media, Inc.
(4)
|
| |
Media & Entertainment
|
| |
5.5% Cash, 5.5% PIK
|
| | | | | | | | | | 8/10/2017 | | | | | | 4,153,393 | | | | | $ | 4,056,960 | | | | | $ | 2,077,000 | | | | | | 1.12 % | | | | ||
Total Senior Secured – First Lien
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,056,960 | | | | | | 2,077,000 | | | | | | 1.12 % | | | | ||
Senior Secured – Second Lien — 4.42% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
Southern Technical Institute, Inc.
(2)
|
| |
Education
|
| |
LIBOR + 8.0% Cash,
4% PIK |
| | | | 1.00 % | | | | | | 12/2/2020 | | | | | | 8,156,261 | | | | | $ | 8,156,261 | | | | | $ | 8,156,261 | | | | | | 4.42 % | | | | ||
Total Senior Secured – Second Lien
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,156,261 | | | | | | 8,156,261 | | | | | | 4.42 % | | | | ||
Senior Subordinated — 1.20% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Battery Solutions, Inc.
|
| |
Environmental/Recycling
Services |
| |
6% Cash, 8% PIK
|
| | | | | | | | | | 11/6/2021 | | | | | | 2,217,865 | | | | | $ | 2,217,865 | | | | | $ | 2,217,865 | | | | | | 1.20 % | | | | ||
Total Senior Subordinated | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,217,865 | | | | | | 2,217,865 | | | | | | 1.20 % | | | | ||
Equity/Other — 5.23% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Battery Solutions, Inc., Class A
and F Units (4) |
| |
Environmental/Recycling
Services |
| | | | | | | | | | | | | | | | | | | 5,000,000 | | | | | $ | 1,058,000 | | | | | $ | 482,000 | | | | | | 0.26 % | | | | ||
Class E Units
|
| | | | |
8% PIK
|
| | | | | | | | | | 11/6/2021 | | | | | | 3,817,181 | | | | | | 3,817,181 | | | | | | 3,817,181 | | | | | | 2.07 % | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,875,181 | | | | | | 4,299,181 | | | | | | 2.33 % | | | | ||
Show Media, Inc., Units
(4)
|
| |
Media & Entertainment
|
| | | | | | | | | | | | | | | | | | | 4,092,210 | | | | | | 3,747,428 | | | | | | — | | | | | | — | | | | ||
Southern Technical Institute, Inc., Class A Units
(4)
|
| |
Education
|
| | | | | | | | | | | | | | | | | | | 3,164,063 | | | | | | 2,167,000 | | | | | | 795,999 | | | | | | 0.43 % | | | | ||
Preferred Shares
|
| | | | |
15.75% PIK
|
| | | | | | | | | | | | | | | | 4,403,897 | | | | | | 4,292,897 | | | | | | 4,403,897 | | | | | | 2.39 % | | | | ||
Warrants (4) | | | | | | | | | | | | | | | | | 3/30/2026 | | | | | | 111,000 | | | | | | 111,000 | | | | | | 144,000 | | | | | | 0.08 % | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | 110,267 | | | | | | 110,267 | | | | | | — | | | | | | — | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 221,267 | | | | | | 144,000 | | | | | | 0.08 % | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,681,164 | | | | | | 5,343,896 | | | | | | 2.90 % | | | | ||
Total Equity/Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,303,773 | | | | | | 9,643,077 | | | | | | 5.23 % | | | | ||
Total Investments in Non-Controlled, Affiliated Portfolio Companies | | | | | | | | | | | | | | | | | | | | | | | 29,734,859 | | | | | | 22,094,203 | | | | | | 11.97 % | | | | ||||||||
Investments in Controlled, Affiliated Portfolio Companies — 7.84%** | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
Senior Secured – First Lien — 7.22% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
FST Technical Services, LLC
|
| |
Technology & Telecom
|
| |
12% Cash, 5% PIK
|
| | | | | | | | | | 11/18/2018 | | | | | | 13,315,630 | | | | | $ | 13,315,630 | | | | | $ | 13,315,630 | | | | | | 7.22 % | | | | ||
Total Senior Secured – First Lien
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 13,315,630 | | | | | | 13,315,630 | | | | | | 7.22 % | | | | ||
|
Company(+)***
|
| |
Industry
|
| |
Interest Rate
|
| |
Base
Rate Floor |
| |
Maturity
Date |
| |
No. Shares/
Principal Amount |
| |
Cost
(1)
|
| |
Fair Value
|
| |
% of Net
Assets |
| ||||||||||||
Equity/Other — 0.62% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
FST Technical Services, LLC, Common Class B Shares
|
| |
Technology & Telecom
|
| |
9% PIK
|
| | | | | | | | | | 1,750,000 | | | | | $ | 1,806,541 | | | | | $ | 1,141,000 | | | | | | 0.62 % | | |
Total Equity/Other | | | | | | | | | | | | | | | | | | | | | | | 1,806,541 | | | | | | 1,141,000 | | | | | | 0.62 % | | |
Total Investments in Controlled, Affiliated Portfolio Companies | | | | | | | | | | | | | | | | | 15,122,171 | | | | | | 14,456,630 | | | | | | 7.84 % | | | ||||||
Total Investments | | | | | | | | | | | | | | | | | | | | | | | 293,336,069 | | | | | | 276,272,950 | | | | | | 149.72 % | | |
Liabilities In Excess Of Other Assets | | | | | | | | | | | | | | | | | | | | | | | | | | (91,748,359 ) | | | | | | (49.72 )% | | | |||
Net Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 184,524,591 | | | | | | 100.00 % | | |
|
Name of Issuers
|
| |
Fair Value at
December 31, 2015 |
| |
Gross
Addition |
| |
Gross
Reductions |
| |
Interest/
Dividend/ Other Income |
| |
Fair Value at
December 31, 2016 |
| |||||||||||||||
ACT Lighting
|
| | | $ | 12,753,733 | | | | | $ | — | | | | | $ | (12,053,793 ) | | | | | $ | 2,097,103 | | | | | $ | — | | |
Battery Solutions, Inc.
|
| | | | 6,095,154 | | | | | | — | | | | | | — | | | | | | 598,729 | | | | | | 6,517,046 | | |
DBI Holding, LLC
|
| | | | 22,894,780 | | | | | | — | | | | | | (27,831,221 ) | | | | | | 2,244,921 | | | | | | — | | |
Net Access Corporation
|
| | | | — | | | | | | — | | | | | | (394,733 ) | | | | | | 235,641 | | | | | | — | | |
Show Media, Inc.
|
| | | | 3,610,000 | | | | | | — | | | | | | — | | | | | | 449,870 | | | | | | 2,077,000 | | |
Southern Technical Institute, Inc.
|
| | | | 13,890,332 | | | | | | 4,235,280 | | | | | | (4,235,280 ) | | | | | | 1,833,929 | | | | | | 13,500,157 | | |
| | | | $ | 59,243,999 | | | | | $ | 4,235,280 | | | | | $ | (44,515,027 ) | | | | | $ | 7,460,193 | | | | | $ | 22,094,203 | | |
|
Name of Issuers
|
| |
Fair value at
December 31, 2015 |
| |
Gross
Addition |
| |
Gross
Reductions |
| |
Interest/
Dividend/ Other income |
| |
Fair Value at
December 31, 2016 |
| |||||||||||||||
The DRC Group
|
| | | $ | 1,804,817 | | | | | $ | 133,333 | | | | | $ | (832,752 ) | | | | | $ | (4,526 ) | | | | | $ | — | | |
FST Technical Services, LLC
|
| | | | 13,943,722 | | | | | | — | | | | | | — | | | | | | 2,226,606 | | | | | | 14,456,630 | | |
| | | | $ | 15,748,539 | | | | | $ | 133,333 | | | | | $ | (832,752 ) | | | | | $ | 2,222,080 | | | | | $ | 14,456,630 | | |
|
| | |
As of
December 31, 2017 |
| |
As of
December 31, 2016 |
| |
As of
December 31, 2015 |
| |||||||||
Accumulated undistributed net investment income
|
| | | $ | (948,428 ) | | | | | $ | (293,029 ) | | | | | $ | 3,114 | | |
Accumulated net realized gains (losses)
|
| | | | 1,178,396 | | | | | | 713,845 | | | | | | (3,114 ) | | |
Additional paid-in capital
|
| | | | (229,968 ) | | | | | | (420,816 ) | | | | | | — | | |
| | |
As of
December 31, 2017 |
| |
As of
December 31, 2016 |
| |
As of
December 31, 2015 |
| |||||||||
Ordinary income
|
| | | $ | 18,219,766 | | | | | $ | 18,351,553 | | | | | $ | 18,382,802 | | |
Net long-term capital gains
|
| | | | — | | | | | | 4,596 | | | | | | — | | |
Total distributions paid
|
| | | $ | 18,219,766 | | | | | $ | 18,356,149 | | | | | $ | 18,382,802 | | |
|
| | |
As of
December 31, 2017 |
| |
As of
December 31, 2016 |
| |
As of
December 31, 2015 |
| |||||||||
Undistributed net investment income
|
| | | $ | 6,369,243 | | | | | $ | 6,262,940 | | | | | $ | 1,231,457 | | |
Accumulated net realized gains (losses)
|
| | | | 260,467 | | | | | | — | | | | | | 2,693,574 | | |
Unrealized appreciation (depreciation)
|
| | | | (36,742,515 ) | | | | | | (12,564,546 ) | | | | | | (6,558,423 ) | | |
Components of tax distributable earnings at
year end |
| | | $ | (30,112,805 ) | | | | | $ | (6,301,606 ) | | | | | $ | (2,633,392 ) | | |
|
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Senior Secured – First Lien
|
| | | $ | — | | | | | $ | — | | | | | $ | 177,340,027 | | | | | $ | 177,340,027 | | |
Senior Secured – Second Lien
|
| | | | — | | | | | | — | | | | | | 14,203,691 | | | | | | 14,203,691 | | |
Subordinated Debt
|
| | | | — | | | | | | — | | | | | | 66,884,849 | | | | | | 66,884,849 | | |
Equity/Other
|
| | | | — | | | | | | — | | | | | | 29,125,978 | | | | | | 29,125,978 | | |
Total Investments
|
| | | $ | — | | | | | $ | — | | | | | $ | 287,554,545 | | | | | $ | 287,554,545 | | |
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Senior Secured – First Lien
|
| | | $ | — | | | | | $ | — | | | | | $ | 95,684,153 | | | | | $ | 95,684,153 | | |
Senior Secured – Second Lien
|
| | | | — | | | | | | — | | | | | | 84,864,909 | | | | | | 84,864,909 | | |
Subordinated Debt
|
| | | | — | | | | | | — | | | | | | 74,050,349 | | | | | | 74,050,349 | | |
Equity/Other
|
| | | | — | | | | | | — | | | | | | 21,673,539 | | | | | | 21,673,539 | | |
Total Investments
|
| | | $ | — | | | | | $ | — | | | | | $ | 276,272,950 | | | | | $ | 276,272,950 | | |
| | |
Senior Secured —
First Lien |
| |
Senior Secured —
Second Lien |
| |
Senior
Subordinated |
| |
Equity/
Other |
| |
Total
|
| |||||||||||||||
Balance as of January 1, 2017
|
| | | $ | 95,684,153 | | | | | $ | 84,864,909 | | | | | $ | 74,050,349 | | | | | $ | 21,673,539 | | | | | $ | 276,272,950 | | |
Amortized discounts/premiums
|
| | | | 729,607 | | | | | | 1,016,258 | | | | | | 146,019 | | | | | | 13,867 | | | | | | 1,905,751 | | |
Paid in-kind interest
|
| | | | 958,229 | | | | | | 1,328,351 | | | | | | 981,139 | | | | | | 782,314 | | | | | | 4,050,033 | | |
Net realized gain (loss)
|
| | | | (10,000 ) | | | | | | (10,405,104 ) | | | | | | 73 | | | | | | (1,019,860 ) | | | | | | (11,434,891 ) | | |
Net change in unrealized appreciation
(depreciation) |
| | | | (2,492,521 ) | | | | | | (7,261,074 ) | | | | | | (10,602,783 ) | | | | | | (8,242,492 ) | | | | | | (28,598,870 ) | | |
Purchases
|
| | | | 118,756,622 | | | | | | 19,145,193 | | | | | | 2,310,319 | | | | | | 19,998,749 | | | | | | 160,210,883 | | |
Sales/Return of capital
|
| | | | (36,286,063 ) | | | | | | (74,484,842 ) | | | | | | (267 ) | | | | | | (4,080,139 ) | | | | | | (114,851,311 ) | | |
Transfers in
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Transfers out
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Balance as of December 31, 2017
|
| | | $ | 177,340,027 | | | | | $ | 14,203,691 | | | | | $ | 66,884,849 | | | | | $ | 29,125,978 | | | | | $ | 287,554,545 | | |
Net change in unrealized appreciation
(depreciation) from investments still held as of December 31, 2017 |
| | | $ | (2,266,477 ) | | | | | $ | (8,056,827 ) | | | | | $ | (10,602,708 ) | | | | | $ | (9,234,253 ) | | | | | $ | (30,160,265 ) | | |
|
| | |
Senior Secured —
First Lien |
| |
Senior Secured —
Second Lien |
| |
Senior
Subordinated |
| |
Equity/
Other |
| |
Total
|
| |||||||||||||||
Balance as of January 1, 2016
|
| | | $ | 88,453,325 | | | | | $ | 83,266,558 | | | | | $ | 80,458,554 | | | | | $ | 44,163,174 | | | | | $ | 296,341,611 | | |
Amortized discounts/premiums
|
| | | | 234,054 | | | | | | 298,817 | | | | | | 692,963 | | | | | | — | | | | | | 1,225,834 | | |
Paid in-kind interest
|
| | | | 1,729,143 | | | | | | 618,732 | | | | | | 1,660,971 | | | | | | 2,195,117 | | | | | | 6,203,963 | | |
Net realized gain (loss)
|
| | | | (5,334,131 ) | | | | | | 11,658 | | | | | | 411,308 | | | | | | 629,182 | | | | | | (4,281,983 ) | | |
Net change in unrealized appreciation
(depreciation) |
| | | | 2,522,071 | | | | | | (3,117,202 ) | | | | | | (4,009,434 ) | | | | | | (5,368,432 ) | | | | | | (9,972,997 ) | | |
Purchases
|
| | | | 60,425,816 | | | | | | 20,956,473 | | | | | | 67,125,299 | | | | | | 9,098,318 | | | | | | 157,605,906 | | |
Sales/Return of capital
|
| | | | (52,346,125 ) | | | | | | (17,170,127 ) | | | | | | (72,289,312 ) | | | | | | (29,043,820 ) | | | | | | (170,849,384 ) | | |
Balance as of December 31, 2016
|
| | | $ | 95,684,153 | | | | | $ | 84,864,909 | | | | | $ | 74,050,349 | | | | | $ | 21,673,539 | | | | | $ | 276,272,950 | | |
Net change in unrealized appreciation
(depreciation) from investments still held as of December 31, 2016 |
| | | $ | (1,902,020 ) | | | | | $ | (2,928,053 ) | | | | | $ | (3,909,754 ) | | | | | $ | (2,033,672 ) | | | | | $ | (10,773,499 ) | | |
|
Assets at Fair Value
|
| |
Fair Value at
December 31, 2017 |
| |
Valuation
Technique |
| |
Unobservable
Input |
| |
Range of
Inputs |
| |
Weighted
Average |
| ||||||
Senior Secured – First Lien
|
| | | $ | 177,340,027 | | | |
Yield to Maturity
|
| |
Comparable
Market Rate |
| |
8.0% – 17.0%
|
| | | | 10.9 % | | |
Senior Secured – Second Lien
|
| | | $ | 14,203,691 | | | |
Yield to Maturity
|
| |
Comparable
Market Rate |
| |
12.3% – 25.0%
|
| | | | 15.0 % | | |
Senior Subordinated
|
| | | $ | 66,884,849 | | | |
Yield to Maturity
|
| |
Comparable
Market Rate |
| |
4.0% – 14.7%
|
| | | | 12.7 % | | |
Preferred Ownership
|
| | | $ | 19,751,824 | | | |
Market Approach
|
| |
Enterprise Value/
LTM EBITDA Multiple |
| |
4.5x – 13.0x
|
| | | | 9.3x | | |
Common Ownership/Common Warrants
|
| | | $ | 9,374,154 | | | |
Market Approach
|
| |
Enterprise Value/
LTM EBITDA Multiple |
| |
4.5x – 13.0x
|
| | | | 8.3x | | |
Total
|
| | | $ | 287,554,545 | | | | | | | |||||||||||
|
Assets at Fair Value
|
| |
Fair Value at
December 31, 2016 |
| |
Valuation
Technique |
| |
Unobservable
Input |
| |
Range of
Inputs |
| |
Weighted
Average |
| ||||||
Senior Secured – First Lien
|
| | | $ | 95,684,153 | | | |
Yield to Maturity
|
| |
Comparable
Market Rate |
| |
9.0% – 17.0%
|
| | | | 11.44 % | | |
Senior Secured – Second Lien
|
| | | $ | 84,864,909 | | | |
Yield to Maturity
|
| |
Comparable
Market Rate |
| |
9.75% – 20.7%
|
| | | | 11.39 % | | |
Senior Subordinated
|
| | | $ | 74,050,349 | | | |
Yield to Maturity
|
| |
Comparable
Market Rate |
| |
10% – 14%
|
| | | | 12.33 % | | |
Preferred Ownership
|
| | | $ | 12,426,782 | | | |
Market Approach
|
| |
Enterprise Value/
LTM EBITDA Multiple |
| |
4.00x – 13.00x
|
| | | | 8.26x | | |
Common Ownership/Common Warrants
|
| | | $ | 9,246,757 | | | |
Market Approach
|
| |
Enterprise Value/
LTM EBITDA Multiple |
| |
4.00x – 13.00x
|
| | | | 10.13x | | |
Total
|
| | | $ | 276,272,950 | | | | | | | |||||||||||
|
Month Ended
|
| |
Shares Issued
|
| |
Issuance Price
Per Share |
| |
Aggregate
Consideration for Issued Shares |
| |||||||||
May 31, 2017
|
| | | | 808,161 | | | | | $ | 13.68 | | | | | $ | 10,853,602 | | |
Month Ended
|
| |
Shares Repurchased
|
| |
Repurchase Price
Per Share |
| |
Aggregate
Consideration for Repurchased Shares |
| ||||||
January 31, 2017
|
| | | | 14,574 | | | |
$12.13 – $12.49
|
| | | $ | 165,514 | | |
November 30, 2017
|
| | | | 21,400 | | | |
$7.74 – $8.00
|
| | | | 169,742 | | |
December 31, 2017
|
| | | | 875 | | | |
$8.25
|
| | | | 7,254 | | |
Total
|
| | | | 36,849 | | | | | | | | $ | 342,510 | | |
Month Ended
|
| |
Shares Repurchased
|
| |
Repurchase Price
Per Share |
| |
Aggregate
Consideration for Repurchased Shares |
| |||||||||
March 31, 2016
|
| | | | 10,509 | | | | | $ | 10.77 – $11.24 | | | | | $ | 115,828 | | |
May 31, 2016
|
| | | | 9,547 | | | | | $ | 11.56 – $12.33 | | | | | | 114,762 | | |
June 30, 2016
|
| | | | 6,074 | | | | | $ | 12.23 – $12.36 | | | | | | 74,860 | | |
November 30, 2016
|
| | | | 17,003 | | | | | $ | 11.50 – $12.30 | | | | | | 203,026 | | |
December 31, 2016
|
| | | | 22,000 | | | | | $ | 11.65 – $12.49 | | | | | | 267,146 | | |
| | | | | 65,133 | | | | | | | | | | | $ | 775,622 | | |
Date Declared
|
| |
Record Date
|
| |
Payment Date
|
| |
Amount Per Share
|
| |||
March 9, 2017
|
| | March 31, 2017 | | | April 6, 2017 | | | | $ | 0.340 | | |
March 9, 2017
|
| | March 31, 2017 | | | April 6, 2017 | | | | $ | 0.030 | | |
May 4, 2017
|
| | June 30, 2017 | | | July 6, 2017 | | | | $ | 0.340 | | |
August 3, 2017
|
| | September 30, 2017 | | | October 5, 2017 | | | | $ | 0.340 | | |
November 2, 2017
|
| | December 29, 2017 | | | January 4, 2018 | | | | $ | 0.250 | | |
Date Declared
|
| |
Record Date
|
| |
Payment Date
|
| |
Amount Per Share
|
| |||
March 7, 2016
|
| | March 31, 2016 | | | April 7, 2016 | | | | $ | 0.340 | | |
May 5, 2016
|
| | June 30, 2016 | | | July 7, 2016 | | | | $ | 0.340 | | |
August 4, 2016
|
| | September 30, 2016 | | | October 6, 2016 | | | | $ | 0.340 | | |
November 3, 2016
|
| | December 31, 2016 | | | January 7, 2017 | | | | $ | 0.340 | | |
Date Declared
|
| |
Record Date
|
| |
Payment Date
|
| |
Amount Per Share
|
| |||
March 10, 2015
|
| | March 31, 2015 | | | April 6, 2015 | | | | $ | 0.340 | | |
May 11, 2015
|
| | June 30, 2015 | | | July 6, 2015 | | | | $ | 0.340 | | |
August 10, 2015
|
| | September 30, 2015 | | | October 6, 2015 | | | | $ | 0.340 | | |
November 5, 2015
|
| | December 31, 2015 | | | January 7, 2016 | | | | $ | 0.340 | | |
| | |
For the year ended
December 31, 2017 |
| |
For the year ended
December 31, 2016 |
| |
For the year ended
December 31, 2015 |
| |||||||||
Investment purchases, at cost (including PIK interest and dividends)
|
| | | $ | 139,558,602 | | | | | $ | 151,765,946 | | | | | $ | 112,628,252 | | |
Investment sales, proceeds (including Principal payments/paydown proceeds)
|
| | | | 90,148,997 | | | | | | 158,805,461 | | | | | | 66,446,840 | | |
|
Tenor at
Origination (in years) |
| |
Principal
Amount (000’s omitted) |
| |
Interest
Rate Range |
| |
Weighted
Average Interest Rate |
| |
Maturity Date Range
|
| ||||||
|
5
|
| | | $ | 53,582 | | | |
6.25% – 6.50%
|
| | | | 6.38 % | | | |
February 15, 2020 – June 15, 2021
|
|
|
7
|
| | | | 1,418 | | | |
6.50% – 6.75%
|
| | | | 6.63 % | | | |
January 15, 2022 – April 15, 2022
|
|
| | | | | $ | 55,000 | | | | | | |||||||||
|
| | |
As of
|
| |||||||||
| | |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||
Cirrus Medical Staffing, Inc.
|
| | | $ | 4,000,000 | | | | | $ | — | | |
Healthcare Associates of Texas, LLC
|
| | | | 6,900,000 | | | | | | 1,300,000 | | |
IGT
|
| | | | 500,000 | | | | | | 500,000 | | |
Lugano Diamonds & Jewelry, Inc
|
| | | | — | | | | | | 2,000,000 | | |
NTI Holdings, LLC
|
| | | | 1,258,540 | | | | | | — | | |
Pharmalogics Recruiting, LLC
|
| | | | 2,000,000 | | | | | | — | | |
Superior Controls, Inc.
|
| | | | 2,500,000 | | | | | | 2,500,000 | | |
Total
|
| | | $ | 17,158,540 | | | | | $ | 6,300,000 | | |
|
Industry
†
|
| |
Cost
|
| |
Fair Value
|
| |
% of
Net Assets* |
| |||||||||
Healthcare Services
|
| | | $ | 55,159,796 | | | | | $ | 55,289,718 | | | | | | 35.06 % | | |
Business Services
|
| | | | 51,334,231 | | | | | | 51,724,999 | | | | | | 32.80 % | | |
Industrial Services
|
| | | | 29,762,072 | | | | | | 29,668,447 | | | | | | 18.81 % | | |
Technology & Telecom
|
| | | | 23,951,328 | | | | | | 23,318,694 | | | | | | 14.79 % | | |
Wholesale/Distribution
|
| | | | 19,281,908 | | | | | | 19,684,932 | | | | | | 12.48 % | | |
High Tech Industries
|
| | | | 18,677,481 | | | | | | 18,729,396 | | | | | | 11.88 % | | |
Telecommunications
|
| | | | 15,641,231 | | | | | | 17,677,538 | | | | | | 11.21 % | | |
Retail
|
| | | | 13,807,599 | | | | | | 14,192,432 | | | | | | 9.00 % | | |
Security
|
| | | | 15,358,937 | | | | | | 14,135,409 | | | | | | 8.96 % | | |
Oil & Gas Services
|
| | | | 16,193,495 | | | | | | 11,168,822 | | | | | | 7.08 % | | |
Industrial Manufacturing
|
| | | | 8,833,734 | | | | | | 9,219,455 | | | | | | 5.85 % | | |
Environmental/Recycling Services
|
| | | | 7,601,167 | | | | | | 7,820,167 | | | | | | 4.96 % | | |
Media: Advertising, Printing & Publishing
|
| | | | 12,677,834 | | | | | | 6,678,442 | | | | | | 4.22 % | | |
Transportation Logistics
|
| | | | 7,691,296 | | | | | | 5,474,294 | | | | | | 3.47 % | | |
Waste Services
|
| | | | 2,529,303 | | | | | | 2,771,797 | | | | | | 1.76 % | | |
Media & Entertainment
|
| | | | 10,355,366 | | | | | | 2 | | | | | | 0.0 % | | |
Education
|
| | | | 15,863,517 | | | | | | 1 | | | | | | 0.0 % | | |
Automotive Business Services
|
| | | | 8,496,239 | | | | | | — | | | | | | 0.0 % | | |
Total
|
| | | $ | 333,216,534 | | | | | $ | 287,554,545 | | | | | | 182.33 % | | |
Geographic Region † | | | | | |||||||||||||||
Southeast
|
| | | $ | 99,474,605 | | | | | $ | 78,667,734 | | | | | | 49.88 % | | |
Northeast
|
| | | | 57,107,756 | | | | | | 54,446,210 | | | | | | 34.52 % | | |
West
|
| | | | 57,327,891 | | | | | | 49,593,273 | | | | | | 31.45 % | | |
South
|
| | | | 56,444,310 | | | | | | 48,087,167 | | | | | | 30.49 % | | |
Midwest
|
| | | | 39,883,664 | | | | | | 33,560,162 | | | | | | 21.28 % | | |
Canada
|
| | | | 22,978,308 | | | | | | 23,199,999 | | | | | | 14.71 % | | |
Total
|
| | | $ | 333,216,534 | | | | | $ | 287,554,545 | | | | | | 182.33 % | | |
Investment Type | | | | | | | | | | | | | | | | | | | |
Senior Secured – First Lien
|
| | | $ | 181,664,266 | | | | | $ | 177,340,027 | | | | | | 112.44 % | | |
Senior Subordinated
|
| | | | 81,397,386 | | | | | | 66,884,849 | | | | | | 42.41 % | | |
Equity/Other
|
| | | | 45,824,064 | | | | | | 29,125,978 | | | | | | 18.47 % | | |
Senior Secured – Second Lien
|
| | | | 24,330,818 | | | | | | 14,203,691 | | | | | | 9.01 % | | |
Total
|
| | | $ | 333,216,534 | | | | | $ | 287,554,545 | | | | | | 182.33 % | | |
|
Industry
|
| |
Cost
|
| |
Fair Value
|
| |
% of
Net Assets* |
| |||||||||
Healthcare Services
|
| | | $ | 43,497,566 | | | | | $ | 43,750,000 | | | | | | 23.71 % | | |
Telecommunications
|
| | | | 26,601,444 | | | | | | 27,342,064 | | | | | | 14.82 % | | |
Security
|
| | | | 22,425,000 | | | | | | 22,909,589 | | | | | | 12.41 % | | |
High Tech Industries
|
| | | | 20,400,000 | | | | | | 20,516,000 | | | | | | 11.12 % | | |
Automotive Business Services
|
| | | | 20,090,093 | | | | | | 20,206,939 | | | | | | 10.95 % | | |
Industrial Services
|
| | | | 20,358,827 | | | | | | 19,440,026 | | | | | | 10.53 % | | |
Industrial Manufacturing
|
| | | | 15,472,567 | | | | | | 16,259,000 | | | | | | 8.81 % | | |
Technology & Telecom
|
| | | | 15,122,171 | | | | | | 14,456,630 | | | | | | 7.83 % | | |
Education
|
| | | | 14,837,425 | | | | | | 13,500,157 | | | | | | 7.32 % | | |
Waste Services
|
| | | | 13,586,080 | | | | | | 13,160,777 | | | | | | 7.13 % | | |
Retail
|
| | | | 11,876,716 | | | | | | 12,022,615 | | | | | | 6.52 % | | |
Media: Advertising, Printing & Publishing
|
| | | | 11,750,000 | | | | | | 10,870,000 | | | | | | 5.89 % | | |
Oil & Gas Services
|
| | | | 14,750,272 | | | | | | 10,077,583 | | | | | | 5.46 % | | |
Environmental/Recycling Services
|
| | | | 7,093,046 | | | | | | 6,517,046 | | | | | | 3.53 % | | |
Wholesale/Distribution
|
| | | | 4,900,000 | | | | | | 4,900,000 | | | | | | 2.66 % | | |
Media & Entertainment
|
| | | | 10,258,933 | | | | | | 4,531,545 | | | | | | 2.46 % | | |
Transportation Logistics
|
| | | | 7,475,203 | | | | | | 4,316,871 | | | | | | 2.34 % | | |
Technology & IT
|
| | | | 3,840,726 | | | | | | 3,919,108 | | | | | | 2.12 % | | |
Aerospace
|
| | | | 4,000,000 | | | | | | 3,877,000 | | | | | | 2.10 % | | |
Food & Beverage
|
| | | | 5,000,000 | | | | | | 3,700,000 | | | | | | 2.01 % | | |
Total
|
| | | $ | 293,336,069 | | | | | $ | 276,272,950 | | | | | | 149.72 % | | |
Geographic Region
|
| | | | |||||||||||||||
South
|
| | | $ | 82,260,883 | | | | | $ | 73,848,766 | | | | | | 40.02 % | | |
Mid West
|
| | | | 48,785,996 | | | | | | 49,578,049 | | | | | | 26.87 % | | |
Eastern
|
| | | | 48,228,643 | | | | | | 48,486,134 | | | | | | 26.28 % | | |
South East
|
| | | | 35,200,203 | | | | | | 31,186,871 | | | | | | 16.90 % | | |
South West
|
| | | | 29,981,737 | | | | | | 29,506,630 | | | | | | 15.99 % | | |
West
|
| | | | 34,637,881 | | | | | | 29,231,392 | | | | | | 15.84 % | | |
North East
|
| | | | 14,240,726 | | | | | | 14,435,108 | | | | | | 7.82 % | | |
Total
|
| | | $ | 293,336,069 | | | | | $ | 276,272,950 | | | | | | 149.72 % | | |
Investment Type | | | | | |||||||||||||||
Senior Secured – First Lien
|
| | | $ | 97,515,871 | | | | | $ | 95,684,153 | | | | | | 51.85 % | | |
Senior Secured – Second Lien
|
| | | | 87,730,962 | | | | | | 84,864,909 | | | | | | 45.99 % | | |
Senior Subordinated
|
| | | | 77,960,103 | | | | | | 74,050,349 | | | | | | 40.13 % | | |
Equity/Other
|
| | | | 30,129,133 | | | | | | 21,673,539 | | | | | | 11.75 % | | |
Total
|
| | | $ | 293,336,069 | | | | | $ | 276,272,950 | | | | | | 149.72 % | | |
|
| | |
For the year ended
December 31, 2017 |
| |
For the year ended
December 31, 2016 |
| |
For the year ended
December 31, 2015 |
| |
For the period from
May 8, 2014* through December 31, 2014 |
| ||||||||||||
Per share data
(1)
|
| | | | | ||||||||||||||||||||
Net asset value, beginning of period
|
| | | $ | 13.72 | | | | | $ | 14.43 | | | | | $ | 14.87 | | | | | $ | 14.55 | | |
Net investment income (loss)
|
| | | | 1.32 | | | | | | 1.66 | | | | | | 1.43 | | | | | | 0.86 | | |
Net realized and unrealized gains (losses)
|
| | | | (2.84 ) | | | | | | (1.06 ) | | | | | | (0.68 ) | | | | | | 0.57 | | |
Benefit (Provision) for taxes on unrealized appreciation (depreciation) on investments
|
| | | | 0.19 | | | | | | 0.05 | | | | | | 0.17 | | | | | | (0.13 ) | | |
Net increase (decrease) in net assets resulting from operations
|
| | | | (1.33 ) | | | | | | 0.65 | | | | | | 0.92 | | | | | | 1.30 | | |
Distributions to shareholders:
(2)
|
| | | | | ||||||||||||||||||||
From net investment income
|
| | | | (1.27 ) | | | | | | (1.36 ) | | | | | | (1.36 ) | | | | | | (0.86 ) | | |
Net realized gains
|
| | | | (0.03 ) | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0.00 | | |
Total dividend distributions declared
|
| | | | (1.30 ) | | | | | | (1.36 ) | | | | | | (1.36 ) | | | | | | (0.86 ) | | |
Offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | (0.12 ) | | |
Net asset value, end of period
|
| | | $ | 11.09 | | | | | $ | 13.72 | | | | | $ | 14.43 | | | | | $ | 14.87 | | |
Market value per share, end of period
|
| | | $ | 8.39 | | | | | $ | 11.97 | | | | | $ | 11.60 | | | | | $ | 12.50 | | |
Total return based on net asset value
(3)
|
| | | | (9.7 )% | | | | | | 4.5 % | | | | | | 6.2 % | | | | | | 4.9 % (4)(5) | | |
Total return based on market value
(3)
|
| | | | (19.0 )% | | | | | | 14.9 % | | | | | | 3.7 % | | | | | | (10.9 )% (4)(5) | | |
Shares outstanding at end of period
|
| | | | 14,222,945 | | | | | | 13,451,633 | | | | | | 13,516,766 | | | | | | 13,516,766 | | |
| | | | | | ||||||||||||||||||||
Ratio/Supplemental Data: | | | | | | ||||||||||||||||||||
Net assets, at end of period
|
| | | $ | 157,714,175 | | | | | $ | 184,524,591 | | | | | $ | 195,032,211 | | | | | $ | 200,989,308 | | |
Ratio of total expenses before waiver
to average net assets |
| | | | 9.31 % | | | | | | 9.58 % | | | | | | 7.79 % | | | | | | 5.12 % (6) | | |
Ratio of interest expenses to average
net assets |
| | | | 4.18 % | | | | | | 3.59 % | | | | | | 2.50 % | | | | | | 1.04 % (6) | | |
Ratio of incentive fees to average net
assets |
| | | | 0.36 % | | | | | | 1.71 % | | | | | | 1.63 % | | | | | | 0.75 % (6) | | |
Ratio of waiver of management and
incentive fees to average net assets |
| | | | 0.76 % | | | | | | — % | | | | | | 0.50 % | | | | | | 1.57 % (6) | | |
Ratio of net expenses to average net assets
|
| | | | 8.55 % | | | | | | 9.58 % | | | | | | 7.29 % | | | | | | 3.55 % (6) | | |
Ratio of net investment income (loss)
before waiver to average net assets |
| | | | 9.67 % | | | | | | 11.80 % | | | | | | 9.13 % | | | | | | 7.45 % (6) | | |
Ratio of net investment income (loss)
after waiver to average net assets |
| | | | 10.43 % | | | | | | 11.80 % | | | | | | 9.63 % | | | | | | 9.02 % (6) | | |
Total Credit Facility payable outstanding
|
| | | $ | 89,703,273 | | | | | $ | 39,133,273 | | | | | $ | 63,504,738 | | | | | $ | 62,499,154 | | |
Total Notes payable outstanding
|
| | | $ | 55,000,000 | | | | | $ | 55,000,000 | | | | | $ | 40,000,000 | | | | | $ | — | | |
Asset coverage ratio
(7)
|
| | | | 2.1 | | | | | | 3.0 | | | | | | 2.9 | | | | | | 4.2 | | |
Portfolio turnover rate
|
| | | | 32 % | | | | | | 51 % | | | | | | 24 % | | | | | | 20 % (4)(8) | | |
| | |
January 1, 2014
to May 7, 2014 |
| |
December 31, 2013
|
| ||||||
Net investment income (loss) ratio before carried interest allocation
|
| | | | 15.06 % | | | | | | 7.50 % | | |
Expense ratio before carried interest allocation
|
| | | | 1.81 % | | | | | | 3.54 % | | |
Carried interest allocation
|
| | | | (4.51 )% | | | | | | 1.80 % | | |
Expense ratio after carried interest allocation
|
| | | | (2.70 )% | | | | | | 5.34 % | | |
Cumulative IRR after carried interest allocation
|
| | | | 13.69 % | | | | | | 10.03 % | | |
|
|
Tax Cost
|
| | | $ | 333,216,534 | | |
|
Gross unrealized appreciation
|
| | | | 5,655,729 | | |
|
Gross unrealized depreciation
|
| | | | (51,317,718 ) | | |
|
Net unrealized investment depreciation
|
| | | $ | (45,661,989 ) | | |
|
|
Tax Cost
|
| | | $ | 293,276,560 | | |
|
Gross unrealized appreciation
|
| | | | 3,101,358 | | |
|
Gross unrealized depreciation
|
| | | | (20,104,968 ) | | |
|
Net unrealized investment depreciation
|
| | | $ | (17,003,610 ) | | |
|
Balance Sheet
|
| |
As of
December 31, 2017 |
| |
Income Statement
|
| |
For the year ended
December 31, 2017 |
| ||||||
Current Assets
|
| | | | 6,276,379 | | | | Net Sales | | | | | 19,716,632 | | |
Noncurrent Assets
|
| | | | 18,281,690 | | | | Gross Profit | | | | | 6,534,303 | | |
Current Liabilities
|
| | | | 1,022,247 | | | | Net Income/EBITDA | | | | | 3,339,407 | | |
Noncurrent Liabilities
|
| | | | 14,003,599 | | | | |
Balance Sheet
|
| |
As of
December 31, 2016 |
| |
Income Statement
|
| |
For the year ended
December 31, 2016 |
| ||||||
Current Assets
|
| | | | 4,881,976 | | | | Net Sales | | | | | 15,174,299 | | |
Noncurrent Assets
|
| | | | 18,320,899 | | | | Gross Profit | | | | | 5,271,000 | | |
Current Liabilities
|
| | | | 811,164 | | | | Net Income (Loss) | | | | | 3,322,367 | | |
Noncurrent Liabilities
|
| | | | 13,315,630 | | | | |
| | |
2017
|
| |||||||||||||||||||||
| | |
For the
quarter ended December 31 |
| |
For the
quarter ended September 30 |
| |
For the
quarter ended June 30 |
| |
For the
quarter ended March 31 |
| ||||||||||||
Total investment income
|
| | | $ | 8,201,431 | | | | | $ | 7,610,521 | | | | | $ | 8,338,109 | | | | | $ | 9,201,448 | | |
Total investment income per common share
|
| | | | 0.58 | | | | | | 0.53 | | | | | | 0.61 | | | | | | 0.68 | | |
Net investment income
|
| | | | 4,044,773 | | | | | | 4,843,375 | | | | | | 4,843,375 | | | | | | 4,592,616 | | |
Net investment income per common share
|
| | | | 0.28 | | | | | | 0.34 | | | | | | 0.36 | | | | | | 0.34 | | |
Net realized and unrealized (loss) gain
|
| | | | (17,413,043 ) | | | | | | (6,454,859 ) | | | | | | (9,996,441 ) | | | | | | (3,561,538 ) | | |
Net realized and unrealized (loss) gain per common share
|
| | | | (1.25 ) | | | | | | (0.45 ) | | | | | | (0.73 ) | | | | | | (0.26 ) | | |
Net (decrease) increase in net assets resulting from operations
|
| | | | (13,368,270 ) | | | | | | (1,611,484 ) | | | | | | (5,153,066 ) | | | | | | 1,031,078 | | |
Basic and diluted earnings per common share
|
| | | | (0.96 ) | | | | | | (0.11 ) | | | | | | (0.38 ) | | | | | | 0.08 | | |
Net asset value per common share at the end of quarter
|
| | | | 11.09 | | | | | | 12.27 | | | | | | 12.73 | | | | | | 13.43 | | |
| | |
2016
|
| |||||||||||||||||||||
| | |
For the
quarter ended December 31 |
| |
For the
quarter ended September 30 |
| |
For the
quarter ended June 30 |
| |
For the
quarter ended March 31 |
| ||||||||||||
Total investment income
|
| | | $ | 10,899,771 | | | | | $ | 9,116,468 | | | | | $ | 10,639,969 | | | | | $ | 9,946,391 | | |
Total investment income per common share
|
| | | | 0.81 | | | | | | 0.68 | | | | | | 0.79 | | | | | | 0.74 | | |
Net investment income
|
| | | | 6,119,155 | | | | | | 4,786,793 | | | | | | 5,898,346 | | | | | | 5,604,892 | | |
Net investment income per common share
|
| | | | 0.45 | | | | | | 0.35 | | | | | | 0.44 | | | | | | 0.41 | | |
Net realized and unrealized (loss) gain
|
| | | | (1,195,769 ) | | | | | | (6,629,320 ) | | | | | | (4,503,177 ) | | | | | | (1,291,134 ) | | |
Net realized and unrealized (loss) gain per common share
|
| | | | (0.09 ) | | | | | | (0.49 ) | | | | | | (0.33 ) | | | | | | (0.10 ) | | |
Net (decrease) increase in net assets resulting from operations
|
| | | | 4,923,386 | | | | | | (1,842,527 ) | | | | | | 1,395,169 | | | | | | 4,313,758 | | |
Basic and diluted earnings per common share
|
| | | | 0.37 | | | | | | (0.14 ) | | | | | | 0.10 | | | | | | 0.32 | | |
Net asset value per common share at the end of quarter
|
| | | | 13.72 | | | | | | 13.69 | | | | | | 14.16 | | | | | | 14.41 | | |
| | |
2015
|
| |||||||||||||||||||||
| | |
For the
quarter ended December 31 |
| |
For the
quarter ended September 30 |
| |
For the
quarter ended June 30 |
| |
For the
quarter ended March 31 |
| ||||||||||||
Total investment income
|
| | | $ | 8,676,914 | | | | | $ | 8,507,142 | | | | | $ | 8,507,540 | | | | | $ | 8,224,653 | | |
Total investment income per common share
|
| | | | 0.64 | | | | | | 0.63 | | | | | | 0.63 | | | | | | 0.61 | | |
Net investment income
|
| | | | 4,529,602 | | | | | | 5,142,044 | | | | | | 4,649,349 | | | | | | 4,977,174 | | |
Net investment income per common share
|
| | | | 0.34 | | | | | | 0.38 | | | | | | 0.34 | | | | | | 0.37 | | |
Net realized and unrealized (loss) gain
|
| | | | (6,577,824 ) | | | | | | (1,887,595 ) | | | | | | 1,764,307 | | | | | | 14,717 | | |
Net realized and unrealized (loss) gain per common
share |
| | | | (0.49 ) | | | | | | (0.14 ) | | | | | | 0.13 | | | | | | 0.00 | | |
Net (decrease) increase in net assets resulting from operations
|
| | | | (2,048,222 ) | | | | | | 3,254,449 | | | | | | 6,413,656 | | | | | | 4,991,891 | | |
Basic and diluted earnings per common share
|
| | | | (0.15 ) | | | | | | 0.24 | | | | | | 0.47 | | | | | | 0.37 | | |
Net asset value per common share at the end of quarter
|
| | | | 14.43 | | | | | | 14.92 | | | | | | 15.03 | | | | | | 14.90 | | |
| | | | | 76 | | | |
| | | | | 77 | | | |
| | | | | 78 | | | |
| | | | | 79 | | | |
| | | | | 80 | | | |
| | | | | 83 | | | |
| | | | | 89 | | |
| | | | ALCENTRA CAPITAL CORPORATION | |
| Date: March 14, 2018 | | |
/s/ David Scopelliti
Name: David Scopelliti
Title: President and Chief Executive Officer |
|
| Date: March 14, 2018 | | |
/s/ David Scopelliti
David Scopelliti
President and Chief Executive Officer, (Principal Executive Officer) and Director |
|
| Date: March 14, 2018 | | |
/s/ Ellida McMillan
Ellida McMillan
Chief Financial Officer, Chief Operating Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) |
|
| Date: March 14, 2018 | | |
/s/ Paul Hatfield
Paul Hatfield
Director |
|
| Date: March 14, 2018 | | |
/s/ T. Ulrich Brechbuhl
T. Ulrich Brechbuhl
Director |
|
| Date: March 14, 2018 | | |
/s/ Douglas J. Greenlaw
Douglas J. Greenlaw
Director |
|
| Date: March 14, 2018 | | |
/s/ Edward Grebow
Edward Grebow
Director |
|
| Date: March 14, 2018 | | |
/s/ Steven H. Reiff
Steven H. Reiff
Director |
|
Exhibit 3.2
ALCENTRA CAPITAL CORPORATION
AMENDED AND RESTATED BYLAWS
March 8, 2018
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE . The principal office of Alcentra Capital Corporation (the “Corporation”) in the State of Maryland shall be located at such place as the board of directors (the “Board of Directors”) may designate.
Section 2. ADDITIONAL OFFICES . The Corporation may have additional offices, including a principal executive office, at such places as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. PLACE . All meetings of stockholders shall be held at the principal executive office of the Corporation or at such other place as shall be set in accordance with these Bylaws and stated in the notice of the meeting.
Section 2. ANNUAL MEETING . An annual meeting of the stockholders for the election of directors and the transaction of any business within the powers of the Corporation shall be held on a date and at the time and place set by the Board of Directors.
Section 3. SPECIAL MEETINGS .
(a) General . The Chairman of the Board of Directors, the chief executive officer, the president or the Board of Directors may call a special meeting of the stockholders. Except as provided in subsection (b)(4) of this Section 3, a special meeting of stockholders shall be held on the date and at the time and place set by the Chairman of the Board of Directors, the chief executive officer, the president or the Board of Directors, whoever has called the meeting. Subject to subsection (b) of this Section 3, a special meeting of stockholders shall also be called by the secretary of the Corporation to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast on such matter at such meeting.
(b) Stockholder Requested Special Meetings . (1) Any stockholder of record seeking to have stockholders request a special meeting shall, by sending written notice to the secretary (the “Record Date Request Notice”) by registered mail, return receipt requested, request the Board of Directors to fix a record date to determine the stockholders entitled to request a special meeting (the “Request Record Date”). The Record Date Request Notice shall set forth the purpose of the meeting and the matters proposed to be acted on at it, shall be signed by one or more stockholders of record as of the date of signature (or their agents duly authorized in a writing accompanying the Record Date Request Notice), shall bear the date of signature of each such stockholder (or such agent) and shall set forth all information relating to each such stockholder that must be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Upon receiving the Record Date Request Notice, the Board of Directors may fix a Request Record Date. The Request Record Date shall not precede and shall not be more than ten days after the close of business on the date on which the resolution fixing the Request Record Date is adopted by the Board of Directors. If the Board of Directors, within ten days after the date on which a valid Record Date Request Notice is received, fails to adopt a resolution fixing the Request Record Date, the Request Record Date shall be the close of business on the tenth day after the first date on which the Record Date Request Notice is received by the secretary.
(2) In order for any stockholder to request a special meeting to act on any matter that may properly be considered at a meeting of stockholders, one or more written requests for a special meeting signed by stockholders of record (or their agents duly authorized in a writing accompanying the request) as of the Request Record Date entitled to cast not less than a majority (the “Special Meeting Percentage”) of all of the votes entitled to be cast on such matter at such meeting (the “Special Meeting Request”) shall be delivered to the secretary. In addition, the Special Meeting Request (a) shall set forth the purpose of the meeting and the matters proposed to be acted on at it (which shall be limited to those lawful matters set forth in the Record Date Request Notice received by the secretary); (b) shall bear the date of signature of each such stockholder (or such agent) signing the Special Meeting Request; (c) shall set forth the name and address, as they appear in the Corporation’s books, of each stockholder signing such request (or on whose behalf the Special Meeting Request is signed) and the class, series and number of all shares of stock of the Corporation that are owned by each such stockholder, and the nominee holder for, and number of, shares owned by such stockholder beneficially but not of record; (d) shall be sent to the secretary by registered mail, return receipt requested; and (e) shall be received by the secretary within 60 days after the Request Record Date. Any requesting stockholder (or agent duly authorized in a writing accompanying the revocation or the Special Meeting Request) may revoke his, her or its request for a special meeting at any time by written revocation delivered to the secretary.
(3) The secretary shall inform the requesting stockholders of the reasonably estimated cost of preparing and mailing or delivering the notice of meeting (including the Corporation’s proxy materials). The secretary shall not be required to call a special meeting upon stockholder request and such meeting shall not be held unless, in addition to the documents required by paragraph (2) of this Section 3(b), the secretary receives payment of such reasonably estimated cost prior to the preparation and mailing or delivery of any notice of the meeting.
(4) In the case of any special meeting called by the secretary upon the request of stockholders (a “Stockholder Requested Meeting”), such meeting shall be held at such place, date and time as may be designated by the Board of Directors; provided, however, that the date of any Stockholder Requested Meeting shall be not more than 90 days after the record date for such meeting (the “Meeting Record Date”); and provided further that if the Board of Directors fails to designate, within ten days after the date that a valid Special Meeting Request is actually received by the secretary (the “Delivery Date”), a date and time for a Stockholder Requested Meeting, then such meeting shall be held at 2:00 p.m. local time on the 90th day after the Meeting Record Date or, if such 90th day is not a Business Day (as defined below), on the first preceding Business Day; and provided further that in the event that the Board of Directors fails to designate a place for a Stockholder Requested Meeting within ten days after the Delivery Date, then such meeting shall be held at the principal executive office of the Corporation. In fixing a date for a Stockholder Requested Meeting, the Board of Directors may consider such factors as it deems relevant, including, without limitation, the nature of the matters to be considered, the facts and circumstances surrounding any request for meeting and any plan of the Board of Directors to call an annual meeting or a special meeting. In the case of any Stockholder Requested Meeting, if the Board of Directors fails to fix a Meeting Record Date that is a date within 30 days after the Delivery Date, then the close of business on the 30th day after the Delivery Date shall be the Meeting Record Date. The Board of Directors may revoke the notice for any Stockholder Requested Meeting in the event that the requesting stockholders fail to comply with the provisions of paragraph (3) of this Section 3(b).
2 |
(5) If written revocations of the Special Meeting Request have been delivered to the secretary and the result is that stockholders of record (or their agents duly authorized in writing), as of the Request Record Date, entitled to cast less than the Special Meeting Percentage have delivered, and not revoked, requests for a special meeting to the secretary: (i) if the notice of meeting has not already been delivered, the secretary shall refrain from delivering the notice of the meeting and send to all requesting stockholders who have not revoked such requests written notice of any revocation of a request for the special meeting, or (ii) if the notice of meeting has been delivered and if the secretary first sends to all requesting stockholders who have not revoked requests for a special meeting written notice of any revocation of a request for the special meeting and written notice of the Corporation’s intention to revoke the notice of the meeting or for the chairman of the meeting to adjourn the meeting without action on the matter, (A) the secretary may revoke the notice of the meeting at any time before ten days before the commencement of the meeting or (B) the chairman of the meeting may call the meeting to order and adjourn the meeting without acting on the matter. Any request for a special meeting received after a revocation by the secretary of a notice of a meeting shall be considered a request for a new special meeting.
(6) The Board of Directors, the Chairman of the Board of Directors, the chief executive officer or the president may appoint independent inspectors of elections to act as the agent of the Corporation for the purpose of promptly performing a ministerial review of the validity of any purported Special Meeting Request received by the secretary. For the purpose of permitting the inspectors to perform such review, no such purported request shall be deemed to have been delivered to the secretary until the earlier of (i) five Business Days after receipt by the secretary of such purported request and (ii) such date as the independent inspectors certify to the Corporation that the valid requests received by the secretary represent, as of the Request Record Date, not less than the Special Meeting Percentage. Nothing contained in this paragraph (6) shall in any way be construed to suggest or imply that the Corporation or any stockholder shall not be entitled to contest the validity of any request, whether during or after such five Business Day period, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).
3 |
(7) For purposes of these Bylaws, “Business Day” shall mean any day other than a Saturday, a Sunday or other day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.
Section 4. NOTICE OF MEETINGS . Not less than ten nor more than 90 days before each meeting of stockholders, the secretary shall give to each stockholder entitled to vote at such meeting and to each stockholder not entitled to vote who is entitled to notice of the meeting notice in writing or by electronic transmission stating the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called, either by mail, by presenting it to such stockholder personally, by leaving it at the stockholder’s residence or usual place of business or by any other means permitted by Maryland law. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder at the stockholder’s address as it appears on the records of the Corporation, with postage thereon prepaid. If transmitted electronically, such notice shall be deemed to be given when transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions. The Corporation may give a single notice to all stockholders who share an address which single notice shall be effective as to any stockholder at such address, unless such stockholder objects to receiving such single notice or revokes a prior consent to receiving such single notice. Failure to give notice of any meeting to one or more stockholders, or any irregularity in such notice, shall not affect the validity of any meeting fixed in accordance with this Article II, or the validity of any proceedings at any such meeting.
Subject to Section 11(a) of this Article II, any business of the Corporation may be transacted at an annual meeting of stockholders without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of stockholders except as specifically designated in the notice. The Corporation may postpone or cancel a meeting of stockholders by making a “public announcement” (as defined in Section 11(c)(3)) of such postponement or cancellation prior to the meeting.
Section 5. ORGANIZATION AND CONDUCT . Every meeting of stockholders shall be conducted by an individual appointed by the Board of Directors to be chairman of the meeting or, in the absence of such appointment or appointed individual, by the Chairman of the Board of Directors, if any, or, in the case of a vacancy in the office or absence of the Chairman of the Board of Directors, by one of the following officers present at the meeting in the following order: the Vice Chairman of the Board of Directors, if any, the chief executive officer, the president, any vice president, the secretary, the treasurer or, in the absence of such officers, a chairman chosen by the stockholders by the vote of a majority of the votes cast by stockholders present in person or by proxy. The secretary or, in the secretary’s absence, an assistant secretary or, in the absence of both the secretary and assistant secretaries, an individual appointed by the Board of Directors or, in the absence of such appointment, an individual appointed by the chairman of the meeting shall act as secretary. In the event that the secretary presides at a meeting of the stockholders, an assistant secretary or, in the absence of assistant secretaries, an individual appointed by the Board of Directors or the chairman of the meeting shall record the minutes of the meeting. The order of business and all other matters of procedure at any meeting of stockholders shall be determined by the chairman of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of the chairman and without any action by the stockholders, are appropriate for the proper conduct of the meeting, including, without limitation, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance at the meeting to stockholders of record of the Corporation, their duly authorized proxies and other such individuals as the chairman of the meeting may determine; (c) limiting participation at the meeting on any matter to stockholders of record of the Corporation entitled to vote on such matter, their duly authorized proxies or other such individuals as the chairman of the meeting may determine; (d) limiting the time allotted to questions or comments by participants; (e) determining when and for how long the polls should be opened and when the polls should be closed; (f) maintaining order and security at the meeting; (g) removing any stockholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; (h) concluding a meeting or recessing or adjourning the meeting to a later date and time and at a place announced at the meeting; and (i) complying with any state and local laws and regulations concerning safety and security. Unless otherwise determined by the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.
4 |
Section 6. QUORUM . The presence in person or by proxy of the holders of shares of stock of the Corporation entitled to cast a majority of the votes entitled to be cast (without regard to class) shall constitute a quorum at any meeting of the stockholders, except with respect to any such matter that, under applicable statutes or regulatory requirements, requires approval by a separate vote of one or more classes of stock, in which case the presence in person or by proxy of the holders of shares entitled to cast a majority of the votes entitled to be cast by each such class on such a matter shall constitute a quorum. This section shall not affect any requirement under any statute or the charter of the Corporation (the “Charter”) for the vote necessary for the adoption of any measure.
If, however, such quorum shall not be present at any meeting of the stockholders, the chairman of the meeting shall have the power to (a) adjourn the meeting from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting or (b) conclude the meeting without adjournment to another date. If a meeting is adjourned and a quorum is present at such adjournment, any business may be transacted that might have been transacted at the meeting as originally notified.
The stockholders present either in person or by proxy, at a meeting that has been duly called and convened, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave fewer than would be required to establish a quorum.
Section 7. VOTING . A plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to elect a director. Each share may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted. A majority of the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to approve any other matter which may properly come before the meeting, unless more than a majority of the votes cast is required by statute or by the Charter. Unless otherwise provided in the Charter, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders.
5 |
Section 8. PROXIES . A holder of record of shares of stock of the Corporation may cast votes in person or by proxy executed by the stockholder or by the stockholder’s duly authorized agent in any manner permitted by law. Such proxy or evidence of authorization of such proxy shall be filed with the secretary of the Corporation before or at the meeting. No proxy shall be valid more than 11 months after its date unless otherwise provided in the proxy.
Section 9. VOTING OF STOCK BY CERTAIN HOLDERS . Stock of the Corporation registered in the name of a corporation, limited liability company, partnership, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, managing member, manager, general partner or trustee thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such stock pursuant to a bylaw or a resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such stock. Any trustee or other fiduciary, in such capacity, may vote stock registered in his or her name as trustee or fiduciary, either in person or by proxy.
Shares of stock of the Corporation directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.
The Board of Directors may adopt by resolution a procedure by which a stockholder may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date, the time after the record date within which the certification must be received by the Corporation; and any other provisions with respect to the procedure that the Board of Directors considers necessary or desirable. On receipt by the Corporation of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the stockholder of record of the specified stock in place of the stockholder who makes the certification.
Section 10. INSPECTORS . The Board of Directors or the chairman of the meeting may appoint , before or at the meeting, one or more inspectors for the meeting and any successor thereto . Except as otherwise provided by the chairman of the meeting, the inspectors, if any, shall (i) determine the number of shares of stock represented at the meeting, in person or by proxy and the validity and effect of proxies; (ii) receive and tabulate all votes, ballots or consents; (iii) report such tabulation to the chair of the meeting; (iv) hear and determine all challenges and questions arising in connection with the right to vote; and (v) do such acts as are proper to fairly conduct the election or vote. Each such report shall be in writing and signed by him or her or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.
6 |
Section 11. ADVANCE NOTICE OF STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER STOCKHOLDER PROPOSALS .
(a) Annual Meetings of Stockholders . (1) Nominations of individuals for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders (i) pursuant to the Corporation’s notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation who was a stockholder of record both at the time of giving of notice by the stockholder as provided for in this Section 11(a) and at the time of the annual meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with this Section 11(a).
(2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1) of this Section 11, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation and such other business must otherwise be a proper matter for action by the stockholders. To be timely, a stockholder’s notice shall set forth all information required under this Section 11 and shall be delivered to the secretary at the principal executive office of the Corporation not earlier than the 150th day prior to the first anniversary of the date of the proxy statement (as defined in Section 11(c)(3) of this Article II) for the preceding year’s annual meeting nor later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting (or if an annual meeting has not previously been held), notice by the stockholder to be timely must be so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120th day prior to the date of such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth (i) as to each individual whom the stockholder proposes to nominate for election or reelection as a director (each, a “Proposed Nominee”), (A) the name, age, business address and residence address of such individual, (B) the class, series and number of any shares of stock of the Corporation that are beneficially owned by such individual, (C) the date such shares were acquired and the investment intent of such acquisition, (D) whether such stockholder believes any such individual is, or is not, an “interested person” of the Corporation, as defined in the Investment Company Act of 1940, as amended, and the rules promulgated thereunder (the “Investment Company Act”) and information regarding such individual that is sufficient, in the discretion of the Board of Directors or any committee thereof or any authorized officer of the Corporation, to make such determination and (E) all other information relating to such individual that is required to be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act and the rules thereunder (including such individual’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (ii) as to any other business that the stockholder proposes to bring before the meeting, a description of such business, the reasons for proposing such business at the meeting and any material interest in such business of such stockholder and any Stockholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the stockholder or the Stockholder Associated Person therefrom; (iii) as to the stockholder giving the notice, any Proposed Nominee and any Stockholder Associated Person, (A) the class, series and number of all shares of stock of the Corporation which are owned by such stockholder and by such Proposed Nominee or Stockholder Associated Person, if any, (B) the nominee holder for, and number of, shares owned beneficially but not of record by such stockholder and by any such Proposed Nominee or Stockholder Associated Person, (C) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares) has been made, the effect or intent of which is to mitigate loss to or manage risk of share price changes for, or to increase the voting power of, such stockholder or any such Proposed Nominee or Stockholder Associated Person with respect to any shares of stock of the Corporation (collectively, “Hedging Activities”) and (D) a general description of whether and the extent to which such stockholder or such Proposed Nominee or Stockholder Associated Person has engaged in Hedging Activities with respect to shares of stock or other equity interests of any other company; (iv) as to the stockholder giving the notice and any Stockholder Associated Person covered by clauses (ii) or (iii) of this paragraph (2) of this Section 11(a) and any Proposed Nominee, (A) the name and address of such stockholder, as they appear on the Corporation’s stock ledger, and current name and address, if different, of such Stockholder Associated Person and any Proposed Nominee, and (B) the investment strategy or objective, if any, of such stockholder or Stockholder Associated Person and a copy of the prospectus, offering memorandum or similar document, if any provided to investors or potential investors in such stockholder or Stockholder Associated Person; and (v) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director or the proposal of other business on the date of such stockholder’s notice.
7 |
(3) Such stockholder’s notice shall, with respect to any Proposed Nominee, be accompanied by a certificate executed by the Proposed Nominee (i) certifying that such Proposed Nominee (a) is not, and will not become, a party to any agreement, arrangement or understanding with any person or entity other than the Corporation in connection with service or action as a director that has not been disclosed to the Corporation and (b) will serve as a director of the Corporation if elected; and (ii) attaching a completed Proposed Nominee questionnaire (which questionnaire shall be provided by the Corporation, upon request, to the stockholder providing the notice and shall include all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act and the rules thereunder, or would be required pursuant to the rules of any national securities exchange on which any securities of the Corporation are listed or over-the-counter market on which any securities of the Corporation are traded).
(4) Notwithstanding anything in this subsection (a) of this Section 11 to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there is no public announcement of such action at least 130 days prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting, a stockholder’s notice required by this Section 11(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the secretary at the principal executive office of the Corporation not later than 5:00 p.m., Eastern Time, on the tenth day following the day on which such public announcement is first made by the Corporation.
(5) For purposes of this Section 11, “Stockholder Associated Person” of any stockholder shall mean (i) any person acting in concert with such stockholder; (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder (other than a stockholder that is a depository); and (iii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such stockholder or such Stockholder Associated Person.
(b) Special Meetings of Stockholders . Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of individuals for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board of Directors or (ii) provided that the special meeting has been called in accordance with Section 3(a) of this Article II for the purpose of electing directors, by any stockholder of the Corporation who is a stockholder of record both at the time of giving of notice provided for in this Section 11 and at the time of the special meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the notice procedures set forth in this Section 11. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more individuals to the Board of Directors, any such stockholder may nominate an individual or individuals (as the case may be) for election as a director as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (a)(2) and (3) of this Section 11 shall be delivered to the secretary at the principal executive office of the Corporation not earlier than the 120th day prior to such special meeting and not later than 5:00 p.m., Eastern Time, on the later of the 90th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. The public announcement of a postponement or adjournment of a special meeting shall not commence a new time period for the giving of a stockholder’s notice as described above.
8 |
(c) General . (1) If information submitted pursuant to this Section 11 by any stockholder proposing a nominee for election as a director or any proposal for other business at a meeting of stockholders shall be inaccurate to a material extent, such information may be deemed not to have been provided in accordance with this Section 11. Any such stockholder shall notify the Corporation of any inaccuracy or change (within two Business Days of becoming aware of such inaccuracy or change) in any such information. Upon written request by the secretary or the Board of Directors, any stockholder proposing a nominee for election as a director or any proposal for other business at a meeting of stockholders shall provide, within five Business Days of delivery of such request (or such other period as may be specified in such request), (A) written verification, satisfactory, in the discretion of the Board of Directors or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by the stockholder pursuant to this Section 11 and (B) a written update of any information (including, if requested by the Corporation, written confirmation by such stockholder that it continues to intend to bring such nomination or other business proposal before the meeting) previously submitted by the stockholder pursuant to this Section 11 as of an earlier date. If a stockholder fails to provide such written verification or written update within such period, the information as to which written verification or a written update was requested may be deemed not to have been provided in accordance with this Section 11.
(2) Only such individuals who are nominated in accordance with this Section 11 shall be eligible for election by stockholders as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with this Section 11. The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with this Section 11.
(3) For purposes of this Section 11, “the date of the proxy statement” shall have the same meaning as “the date of the company’s proxy statement released to shareholders” as used in Rule 14a-8(e) promulgated under the Exchange Act, as interpreted by the Securities and Exchange Commission from time to time. “Public announcement” shall mean disclosure (i) in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, PR Newswire or other widely circulated news or wire service or (ii) in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to the Exchange Act or the Investment Company Act.
(4) Notwithstanding the foregoing provisions of this Section 11, a stockholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 11. Nothing in this Section 11 shall be deemed to affect any right of a stockholder to request inclusion of a proposal in, nor the right of the Corporation to omit a proposal from, the Corporation’s proxy statement pursuant to Rule 14a-8 (or any successor provision) under the Exchange Act. Nothing in this Section 11 shall require disclosure of revocable proxies received by the stockholder or Stockholder Associated Person pursuant to a solicitation of proxies after the filing of an effective Schedule 14A by such stockholder or Stockholder Associated Person under Section 14(a) of the Exchange Act.
9 |
Section 12. VOTING BY BALLOT . Voting on any question or in any election may be viva voce unless the chairman of the meeting shall order that voting be by ballot.
Section 13. CONTROL SHARE ACQUISITION ACT . Notwithstanding any other provision of the Charter or these Bylaws, Subtitle 7 of Title 3 of the Maryland General Corporation Law (the “MGCL”), or any successor statute, shall not apply to any acquisition by any person of shares of stock of the Corporation. This Section may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition.
ARTICLE III
DIRECTORS
Section 1. GENERAL POWERS . The business and affairs of the Corporation shall be managed under the direction of its Board of Directors.
Section 2. NUMBER, TENURE AND RESIGNATION . At any regular meeting or at any special meeting called for that purpose, a majority of the entire Board of Directors may establish, increase or decrease the number of directors, provided that the number thereof shall never be less than one, nor more than nine, and further provided that the tenure of office of a director shall not be affected by any decrease in the number of directors. Any director of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the Chairman of the Board of Directors or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.
Section 3. ANNUAL AND REGULAR MEETINGS . An annual meeting of the Board of Directors shall be held immediately after and at the same place as the annual meeting of stockholders, no notice other than those set forth in these Bylaws being necessary, at which, in addition to the transaction of any business properly before the Board of Directors, the Board of Directors shall appoint or re-appoint a Chairman of the Board of Directors and each of the Company’s executive officers to serve until the next annual meeting of the Board of Directors or until his or her successor is appointed. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. Regular meetings of the Board of Directors shall be held from time to time at such places and times as provided by the Board of Directors by resolution, without notice other than such resolution.
Section 4. SPECIAL MEETINGS . Special meetings of the Board of Directors may be called by or at the request of the Chairman of the Board of Directors, the chief executive officer, the president or a majority of the directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix any place as the place for holding any special meeting of the Board of Directors called by them. The Board of Directors may provide, by resolution, the time and place for the holding of special meetings of the Board of Directors without notice other than such resolution.
10 |
Section 5. NOTICE . Notice of any special meeting of the Board of Directors shall be delivered personally or by telephone, electronic mail, facsimile transmission, United States mail or courier to each director at his or her business or residence address. Notice by personal delivery, telephone, electronic mail or facsimile transmission shall be given at least 24 hours prior to the meeting. Notice by United States mail shall be given at least three days prior to the meeting. Notice by courier shall be given at least two days prior to the meeting. Telephone notice shall be deemed to be given when the director or his or her agent is personally given such notice in a telephone call to which the director or his or her agent is a party. Electronic mail notice shall be deemed to be given upon transmission of the message to the electronic mail address given to the Corporation by the director. Facsimile transmission notice shall be deemed to be given upon completion of the transmission of the message to the number given to the Corporation by the director and receipt of a completed answer-back indicating receipt. Notice by United States mail shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. Notice by courier shall be deemed to be given when deposited with or delivered to a courier properly addressed. Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Directors need be stated in the notice, unless specifically required by statute or these Bylaws.
Section 6. QUORUM . A majority of the directors shall constitute a quorum for transaction of business at any meeting of the Board of Directors, provided that, if less than a majority of such directors are present at such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to applicable law, the Charter or these Bylaws, the vote of a majority or other percentage of a particular group of directors is required for action, a quorum must also include a majority or such other percentage of such group.
The directors present at a meeting which has been duly called and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough directors to leave fewer than required to establish a quorum.
Section 7. VOTING . The action of a majority of the directors present at a meeting at which a quorum is present shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable statute, the Charter or these Bylaws. If enough directors have withdrawn from a meeting to leave less than a quorum but the meeting is not adjourned, the action of the majority of that number of directors necessary to constitute a quorum at such meeting shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable statute, the Charter or these Bylaws.
11 |
Section 8. ORGANIZATION . At each meeting of the Board of Directors, the Chairman of the Board of Directors or, in the absence of the Chairman of the Board of Directors, the Vice Chairman of the Board of Directors, if any, shall act as chairman. In the absence of both the Chairman and Vice Chairman of the Board of Directors, the chief executive officer or, in the absence of the chief executive officer, the president, or in the absence of the president, a director chosen by a majority of the directors present shall act as chairman. The secretary or, in his or her absence, an assistant secretary of the Corporation or, in the absence of the secretary and all assistant secretaries, an individual appointed by the chairman shall act as secretary of the meeting.
Section 9. TELEPHONE MEETINGS . Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting; provided however, this Section 9 does not apply to any action of the directors pursuant to the Investment Company Act that requires the vote of the directors to be cast in person at a meeting.
Section 10. WRITTEN CONSENT BY DIRECTORS . Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if a consent to such action is given in writing or by electronic transmission by each director and is filed with the minutes of proceedings of the Board of Directors; provided however, this Section 10 does not apply to any action of the directors pursuant to the Investment Company Act that requires the vote of the directors to be cast in person at a meeting.
Section 11. VACANCIES . If for any reason any or all the directors cease to be directors, such event shall not terminate the Corporation or affect these Bylaws or the powers of the remaining directors hereunder, if any. Pursuant to the Corporation’s election in Article IV of the Charter, subject to applicable requirements of the Investment Company Act, except as may be provided by the Board of Directors in setting the terms of any class or series of preferred stock, (a) any vacancy on the Board of Directors may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum, and (b) any director elected to fill a vacancy shall serve for the remainder of the full term of the class in which the vacancy occurred and until a successor is elected and qualifies.
Section 12. COMPENSATION . Directors shall not receive any stated salary for their services as directors but, by resolution of the Board of Directors, may receive compensation per year and/or per meeting and/or per visit to real property or other facilities owned or leased by the Corporation and for any service or activity they performed or engaged in as directors. Directors may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board of Directors or of any committee thereof and for their expenses, if any, in connection with each property visit and any other service or activity they performed or engaged in as directors; but nothing herein contained shall be construed to preclude any directors from serving the Corporation in any other capacity and receiving compensation therefor.
12 |
Section 13. RELIANCE . Each director and officer of the Corporation shall, in the performance of his or her duties with respect to the Corporation, be entitled to rely on any information, opinion, report or statement, including any financial statement or other financial data, prepared or presented by an officer or employee of the Corporation whom the director or officer reasonably believes to be reliable and competent in the matters presented, by a lawyer, certified public accountant or other person, as to a matter which the director or officer reasonably believes to be within the person’s professional or expert competence, or, with respect to a director, by a committee of the Board of Directors on which the director does not serve, as to a matter within its designated authority, if the director reasonably believes the committee to merit confidence.
Section 14. RATIFICATION . The Board of Directors or the stockholders may ratify and make binding on the Corporation any action or inaction by the Corporation or its officers to the extent that the Board of Directors or the stockholders could have originally authorized the matter. Moreover, any action or inaction questioned in any stockholders’ derivative proceeding or any other proceeding on the ground of lack of authority, defective or irregular execution, adverse interest of a director, officer or stockholder, non-disclosure, miscomputation, or the application of improper principles or practices of accounting, may be ratified, before or after judgment, by the Board of Directors or by the stockholders and such ratification shall be binding upon the Corporation and its stockholders and shall constitute a bar to any claim or execution of any judgment in respect of such questioned action or inaction.
Section 15. EMERGENCY PROVISIONS . Notwithstanding any other provision in the Charter or these Bylaws, this Section 15 shall apply during the existence of any catastrophe, or other similar emergency condition, as a result of which a quorum of the Board of Directors under Article III of these Bylaws cannot readily be obtained (an “Emergency”). During any Emergency, unless otherwise provided by the Board of Directors, (i) a meeting of the Board of Directors or a committee thereof may be called by any director or officer by any means feasible under the circumstances; (ii) notice of any meeting of the Board of Directors during such an Emergency may be given less than 24 hours prior to the meeting to as many directors and by such means as may be feasible at the time, including publication, television or radio, and (iii) the number of directors necessary to constitute a quorum shall be one-third of the entire Board of Directors.
13 |
ARTICLE IV
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATIONS . The Board of Directors may appoint from among its members an Executive Committee, an Audit Committee, a Nominating and Corporate Governance Committee, a Compensation Committee and other committees, composed of one or more directors, to serve at the pleasure of the Board of Directors.
Section 2. POWERS . The Board of Directors may delegate to committees appointed under Section 1 of this Article any of the powers of the Board of Directors, except as prohibited by law.
Section 3. MEETINGS . Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Directors. A majority of the members of the committee shall constitute a quorum for the transaction of business at any meeting of the committee. The act of a majority of the committee members present at a meeting shall be the act of such committee. The Board of Directors may designate a chairman of any committee, and such chairman or, in the absence of a chairman, any two members of any committee (if there are at least two members of the committee) may fix the time and place of its meeting unless the Board of Directors shall otherwise provide. In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another director to act in the place of such absent member. Each committee shall keep minutes of its proceedings.
Section 4. TELEPHONE MEETINGS . Members of a committee of the Board of Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.
Section 5. WRITTEN CONSENT BY COMMITTEES . Any action required or permitted to be taken at any meeting of a committee of the Board of Directors may be taken without a meeting, if a consent to such action is given in writing or by electronic transmission by each member of the committee and is filed with the minutes of proceedings of such committee.
Section 6. VACANCIES . Subject to the provisions hereof, the Board of Directors shall have the power at any time to change the membership of any committee, to fill any vacancy, to designate one or more alternate members to replace any absent or disqualified member or to dissolve any such committee. Subject to the power of the Board of Directors, the members of the committee shall have the power to fill any vacancies on the committee.
ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS . The officers of the Corporation shall include a president, a secretary and a treasurer and may include a chief executive officer, one or more vice presidents, a chief operating officer, a chief financial officer, a chief investment officer, a chief compliance officer, one or more assistant secretaries and one or more assistant treasurers. In addition, the Board of Directors may from time to time elect such other officers with such powers and duties as it shall deem necessary or desirable. The Board of Directors may designate a Chairman of the Board of Directors and a Vice Chairman of the Board of Directors, who shall not, solely by reason of such designation, be officers of the Corporation but shall have such powers and duties as determined by the Board of Directors from time to time. The officers of the Corporation shall be elected annually by the Board of Directors, except that the chief executive officer or president may from time to time appoint one or more vice presidents, assistant secretaries, assistant treasurers or other officers. Each officer shall serve until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal in the manner hereinafter provided. Any two or more offices except president and vice president may be held by the same person. Election of an officer or agent shall not of itself create contract rights between the Corporation and such officer or agent.
14 |
Section 2. REMOVAL AND RESIGNATION . Any officer or agent of the Corporation may be removed, with or without cause, by the Board of Directors if in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the Chairman of the Board of Directors, the chief executive officer, the president or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the notice of resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Corporation.
Section 3. VACANCIES . A vacancy in any office may be filled by the Board of Directors for the balance of the term.
Section 4. CHIEF EXECUTIVE OFFICER . The Board of Directors may designate a chief executive officer. In the absence of such designation, the president shall be the chief executive officer of the Corporation. The chief executive officer shall have general responsibility for implementation of the policies of the Corporation, as determined by the Board of Directors, and for the management of the business and affairs of the Corporation. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of chief executive officer and such other duties as may be prescribed by the Board of Directors from time to time.
Section 5. CHIEF OPERATING OFFICER . The Board of Directors may designate a chief operating officer. The chief operating officer shall have the responsibilities and duties as determined by the Board of Directors or the chief executive officer.
Section 6. CHIEF INVESTMENT OFFICER . The Board of Directors may designate a chief investment officer. The chief investment officer shall have the responsibilities and duties as determined by the Board of Directors or the chief executive officer.
Section 7. CHIEF FINANCIAL OFFICER . The Board of Directors may designate a chief financial officer. The chief financial officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.
15 |
Section 8. CHIEF COMPLIANCE OFFICER . The Chief Compliance Officer, subject to the direction of and reporting to the Board of Directors, shall be responsible for the oversight of the Corporation’s compliance with the federal securities laws. The designation, compensation and removal of the Chief Compliance Officer must be approved by the Board of Directors, including a majority of the directors who are not “interested persons” (as such term is defined in Section 2(a)(19) of the Investment Company Act) of the Corporation. The Chief Compliance Officer shall perform such executive, supervisory and management functions and duties as may be assigned to him or her by the Board of Directors or the chief executive officer from time to time.
Section 9. PRESIDENT . In the absence of a designation of a chief executive officer by the Board of Directors, the president shall be the chief executive officer. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Directors from time to time.
Section 10. VICE PRESIDENTS . In the absence of the president or in the event of a vacancy in such office, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the president and when so acting shall have all the powers of and be subject to all the restrictions upon the president; and shall perform such other duties as from time to time may be assigned to such vice president by the chief executive officer, the president or the Board of Directors. The Board of Directors may designate one or more vice presidents as executive vice president or as vice president for particular areas of responsibility.
Section 11. SECRETARY . The secretary shall: (a) keep the minutes of the proceedings of the stockholders, the Board of Directors and committees of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation; (d) keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder; (e) have general charge of the stock transfer books of the Corporation; and (f) in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, the president or the Board of Directors.
Section 12. TREASURER . The treasurer shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. In the absence of a designation of a chief financial officer by the Board of Directors, the treasurer shall be the chief financial officer of the Corporation.
16 |
The treasurer shall disburse the funds of the Corporation as may be directed by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the president and Board of Directors, at the regular meetings of the Board of Directors or whenever it may so require, an account of all his or her transactions as treasurer and of the financial condition of the Corporation.
Section 13. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS . The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or treasurer, respectively, or by the chief executive officer, the president or the Board of Directors.
ARTICLE VI
CONTRACTS, CHECKS AND DEPOSITS
Section 1. CONTRACTS . The Board of Directors may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document shall be valid and binding upon the Corporation when authorized or ratified by action of the Board of Directors and executed by an authorized person.
Section 2. CHECKS AND DRAFTS . All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or agent of the Corporation in such manner as shall from time to time be determined by the Board of Directors.
Section 3. DEPOSITS . All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors, the chief executive officer, the president, the chief financial officer or any other officer designated by the Board of Directors may determine.
ARTICLE VII
STOCK
Section 1. CERTIFICATES; REQUIRED INFORMATION . Except as may be otherwise provided by the Board of Directors, stockholders of the Corporation are not entitled to certificates representing the shares of stock held by them. In the event that the Corporation issues shares of stock represented by certificates, such certificates shall be in such form as prescribed by the Board of Directors or a duly authorized officer, shall contain the statements and information required by the MGCL and shall be signed by the officers of the Corporation in the manner permitted by the MGCL. In the event that the Corporation issues shares of stock without certificates, to the extent then required by the MGCL, the Corporation shall provide to the record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates. There shall be no differences in the rights and obligations of stockholders based on whether or not their shares are represented by certificates. If a class or series of stock is authorized by the Board of Directors to be issued without certificates, no stockholder shall be entitled to a certificate or certificates representing any shares of such class or series of stock held by such stockholder unless otherwise determined by the Board of Directors and then only upon written request by such stockholder to the secretary of the Corporation.
17 |
Section 2. TRANSFERS . All transfers of stock shall be made on the books of the Corporation, by the holder of the shares, in person or by his or her attorney, in such manner as the Board of Directors or any officer of the Corporation may prescribe and, if such shares are certificated, upon surrender of certificates duly endorsed. The issuance of a new certificate upon the transfer of certificated shares is subject to the determination of the Board of Directors that such shares shall no longer be represented by certificates. Upon the transfer of uncertificated shares, to the extent then required by the MGCL, the Corporation shall provide to record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates.
The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Maryland.
Notwithstanding the foregoing, transfers of shares of any class or series of stock will be subject in all respects to the Charter and all of the terms and conditions contained therein.
Section 3. REPLACEMENT CERTIFICATE . Any officer of the Corporation may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, stolen or mutilated, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, destroyed, stolen or mutilated; provided, however, if such shares have ceased to be certificated, no new certificate shall be issued unless requested in writing by such stockholder and the Board of Directors has determined such certificates may be issued. Unless otherwise determined by an officer of the Corporation, the owner of such lost, destroyed, stolen or mutilated certificate or certificates, or his or her legal representative, shall be required, as a condition precedent to the issuance of a new certificate or certificates, to give the Corporation a bond in such sums as it may direct as indemnity against any claim that may be made against the Corporation.
Section 4. FIXING OF RECORD DATE . The Board of Directors may set, in advance, a record date for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or determining stockholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of stockholders for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of stockholders, not less than ten days, before the date on which the meeting or particular action requiring such determination of stockholders of record is to be held or taken.
18 |
When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment or postponement thereof, except when the meeting is adjourned or postponed to a date more than 120 days after the record date fixed for the original meeting, in which case a new record date shall be determined as set forth herein.
Section 5. STOCK LEDGER . The Corporation shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate share ledger containing the name and address of each stockholder and the number of shares of each class held by such stockholder.
Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS . The Board of Directors may authorize the Corporation to issue fractional stock or authorize the issuance of scrip, all on such terms and under such conditions as it may determine. Notwithstanding any other provision of the Charter or these Bylaws, the Board of Directors may authorize the Corporation to issue units consisting of different securities of the Corporation. Any security issued in a unit shall have the same characteristics as any identical securities issued by the Corporation, except that the Board of Directors may provide that for a specified period securities of the Corporation issued in such unit may be transferred on the books of the Corporation only in such unit.
ARTICLE VIII
ACCOUNTING YEAR
The fiscal year of the Corporation shall end on December 31 of each fiscal year and may thereafter be changed by a duly adopted resolution of the Board of Directors.
ARTICLE IX
DISTRIBUTIONS
Section 1. AUTHORIZATION . Dividends and other distributions upon the stock of the Corporation may be authorized by the Board of Directors, subject to the provisions of law and the Charter. Dividends and other distributions may be paid in cash, property or stock of the Corporation, subject to the provisions of law and the Charter.
Section 2. CONTINGENCIES . Before payment of any dividends or other distributions, there may be set aside out of any assets of the Corporation available for dividends or other distributions such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends, for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall determine, and the Board of Directors may modify or abolish any such reserve.
19 |
ARTICLE X
SEAL
Section 1. SEAL . The Board of Directors may authorize the adoption of a seal by the Corporation. The seal shall contain the name of the Corporation and the year of its incorporation and the words “Incorporated Maryland.” The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof.
Section 2. AFFIXING SEAL . Whenever the Corporation is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word “(SEAL)” adjacent to the signature of the person authorized to execute the document on behalf of the Corporation.
ARTICLE XI
INDEMNIFICATION AND ADVANCE OF EXPENSES
To the maximum extent permitted by Maryland law and the Investment Company Act, in effect from time to time, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a) any individual who is a present or former director or officer of the Corporation and who is made, or threatened to be made, a party to the proceeding by reason of his or her service in that capacity or (b) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner, member, manager or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise and who is made, or threatened to be made, a party to the proceeding by reason of his or her service in that capacity. The rights to indemnification and advance of expenses provided by the Charter and these Bylaws shall vest immediately upon election of a director or officer. The Corporation may, with the approval of its Board of Directors or any duly authorized committee thereof, provide such indemnification and advance for expenses to a person who served a predecessor of the Corporation in any of the capacities described in (a) or (b) above and to any employee or agent of the Corporation or a predecessor of the Corporation. The indemnification and payment of expenses provided in these Bylaws shall not be deemed exclusive of or limit in any way other rights to which any person seeking indemnification or payment of expenses may be or may become entitled under any bylaw, regulation, insurance, agreement or otherwise.
Neither the amendment nor repeal of this Article, nor the adoption or amendment of any other provision of the Bylaws or Charter inconsistent with this Article, shall apply to or affect in any respect the applicability of the preceding paragraph with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.
20 |
No provision of this Article XI shall be effective to protect or purport to protect any director or officer of the Corporation against liability to the Corporation or its stockholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.
ARTICLE XII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the Charter or these Bylaws or pursuant to applicable law, a waiver thereof in writing or by electronic transmission, given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice, unless specifically required by statute. The attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
ARTICLE XIII
EXCLUSIVE FORUM FOR CERTAIN LITIGATION
Unless the Corporation consents in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of any duty owed by any director or other employee of the Corporation to the Corporation or to the stockholders of the Corporation, (c) any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation arising pursuant to any provision of the MGCL, the Charter or these Bylaws, or (d) any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation that is governed by the internal affairs doctrine.
ARTICLE XIV
INVESTMENT COMPANY ACT
If and to the extent that any provision of the MGCL, including, without limitation, Subtitle 6 and, if then applicable, Subtitle 7, of Title 3 of the MGCL, or any provision of the Charter or these Bylaws conflicts with any provision of the Investment Company Act, the applicable provision of the Investment Company Act shall control.
21 |
ARTICLE XV
AMENDMENT OF BYLAWS
The Board of Directors shall have the exclusive power, at any time, to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.
22 |
Exhibit 10.18
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into effective as of March __, 2018 (the “Effective Date”), by and between Alcentra Capital Corporation, a Maryland corporation (collectively, with its affiliates and subsidiaries, the “Company”), and ______________ (“Indemnitee”).
WHEREAS, at the request of the Company, Indemnitee currently serves as [a director][an officer] of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of [his][her] service as [a director][an officer] of the Company;
WHEREAS, as an inducement to Indemnitee [to continue] to serve as [a director][an officer] of the Company, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any claims, suits or proceedings, to the maximum extent permitted by law;
WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advancement of expenses; and
WHEREAS, Indemnitee is relying upon the rights afforded under this Agreement in continuing to serve as [a director][an officer] of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
1. | Definitions . For purposes of this Agreement: |
a. | “Adjudged” shall mean adjudged finally by a court or arbitral or other authority of competent jurisdiction. |
b. | “Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of all of the Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; (iii) at any time, a majority of the members of the Board of Directors are not comprised of (A) individuals who were directors as of the Effective Date and/or (B) individuals whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the Effective Date or whose election or nomination for election was previously so approved; or (iv) the Company retains or engages an external investment adviser to manage its assets and business. |
c. | “Corporate Status” means the status of a person as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company: (i) if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise (A) of which a majority of the voting power or equity interest is or was owned directly or indirectly by the Company, or (B) the management of which is controlled directly or indirectly by the Company; or (ii) if, as a result of Indemnitee’s service to the Company, Indemnitee is subject to duties by, or required to perform services for, an employee benefit plan or its participants or beneficiaries, including as a deemed fiduciary thereof. |
d. | “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advancement of Expenses is sought by Indemnitee. |
e. | “Effective Date” has the meaning set forth in the first paragraph of this Agreement. |
f. | “Enterprise” shall mean (i) the Company and (ii) any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise which is an affiliate or wholly or partially owned subsidiary of the Company and of which the Indemnitee is or was serving as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary; and (iii) any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company. |
2 |
g. | “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. |
h. | “Expenses” means any and all disbursements or expenses incurred by Indemnitee in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding, including, without limitation, reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, arbitration and mediation costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement and any ERISA excise taxes and penalties. Expenses shall also include (i) expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium for, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent, (ii) expenses incurred in connection with recovery under any directors’ and officers’ liability insurance policies maintained by the Company, and (iii) expenses incurred by Indemnitee in establishing or enforcing [his][her] right to indemnification or reimbursement under this Agreement. |
i. | “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advancement of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. |
j. | “Jointly Indemnifiable Claims” shall mean any Proceeding for which the Indemnitee shall be entitled to indemnification, advancement of expenses or insurance from (i) the Company and/or any Enterprise pursuant to this Agreement, the charter or Bylaws or other governing documents of the Company or any Enterprise, any agreement or a resolution of the stockholders of the Company entitled to vote generally in the election of directors or of the Board of Directors, or otherwise, on the one hand, and (ii) any Third-Party Indemnitor pursuant to any agreement between any Third-Party Indemnitor and the Indemnitee pursuant to which the Indemnitee is indemnified, the laws of the jurisdiction of incorporation or organization of any Third-Party Indemnitor and/or the certificate of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or other organizational or governing documents of any Third-Party Indemnitor, on the other hand. |
k. | “Proceeding” means any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing, claim, demand or discovery request or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding. The term “Proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, defense, settlement, arbitration or appeal of, and the giving of testimony in or related to, any threatened, pending or completed claim, action, suit or other proceeding, whether of a civil, criminal, administrative or investigative nature. |
l. | “Third-Party Indemnitor” means any person or entity that has or may in the future provide to the Indemnitee any indemnification, exoneration, hold harmless or Expense advancement rights and/or insurance benefits other than (i) the Company, (ii) any Enterprise and (iii) any entity or entities through which the Company maintains liability insurance applicable to the Indemnitee. |
2. | Services by Indemnitee . The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce the Indemnitee to [continue to] serve as [a director/an officer] of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in [continuing to serve/serving] in such capacity. However, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee. |
3. | Indemnification . The Company shall indemnify and hold harmless, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent not prohibited by (and not merely to the extent affirmatively permitted by) Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by the charter or bylaws of the Company or Section 2-418(b) of the Maryland General Corporation Law (the “MGCL”). |
3 |
4. | Standard for Indemnification . If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify and hold harmless Indemnitee against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding unless (and only to the extent) it is ultimately Adjudged that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (A) was committed in bad faith or (B) was the result of active and deliberate dishonesty; (ii) Indemnitee actually received an improper personal benefit in money, property or services; or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that [his][her] conduct was unlawful. |
5. | Certain Limitations . Indemnitee shall not be entitled to: |
a. | indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is Adjudged to be liable to the Company; |
b. | indemnification hereunder if Indemnitee is Adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging improper personal benefit to Indemnitee; or |
c. | indemnification or advancement of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to establish or enforce indemnification rights under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s charter or bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party, expressly provides otherwise. |
6. | Court-Ordered Indemnification . Notwithstanding any other provision of this Agreement (other than Section 16), a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances: |
a. | if such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or |
b. | if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses. |
4 |
7. | Partial Success . In addition to any other right to indemnification under any provision of this Agreement, and without limiting any such provision, if Indemnitee is not wholly successful in a Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7, and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. For the avoidance of doubt, in the event that Indemnitee is not wholly successful and is Adjudged liable, the Company shall indemnify Indemnitee to the maximum extent not prohibited by (and not merely to the extent affirmatively permitted by) Maryland law and as permitted by Sections 3, 4 5 and 6 of this Agreement. |
8. | Advancement of Expenses . If Indemnitee was, is, or is threatened to be, made a party to (or otherwise becomes a participant in) any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with such Proceeding. Such advance or advances shall be made within fifteen (15) days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding, and may be in the form of, in the reasonable discretion of Indemnitee (but without duplication): (i) payment of such Expenses directly to third parties on behalf of Indemnitee; (ii) advancement to Indemnitee of funds in an amount sufficient to pay such Expenses; or (iii) reimbursement to Indemnitee for Indemnitee’s payment of such Expenses. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation and undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion (if any) of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be Adjudged by clear and convincing evidence, that the standard of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 7 of this Agreement. For so long as the Company is subject to the Investment Company Act of 1940 (the “Investment Company Act”), any advancement of Expenses shall be subject to at least one of the following as a condition of the advancement: (a) Indemnitee shall provide appropriate security for [his][her] undertaking, (b) the Company shall be insured against losses arising by reason of any lawful advances or (c) a majority of a quorum of the Disinterested Directors, or Independent Counsel in a written report based on a review of readily available facts, shall determine that there is no reason to believe that Indemnitee ultimately will be found to not be entitled to indemnification. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor. |
5 |
9. | Indemnitee as Witness or Other Participant . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee was, is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall be advanced all reasonable Expenses and indemnified and held harmless against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within fifteen (15) days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee. In connection with any such advancement of Expenses, the Company may require Indemnitee to provide a written affirmation and undertaking substantially in the form attached hereto as Exhibit A . |
10. | Procedure for Determination of Entitlement to Indemnification . |
a. | To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary or appropriate to determine whether and to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors of the Company that Indemnitee has requested indemnification by the Company. |
b. | Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld or delayed, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by at least a majority of the members of the Board of Directors, the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within fifteen (15) days after such determination. Indemnitee shall cooperate with the Company (including Independent Counsel selected by the Company) in making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to the Company, upon reasonable advance written request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary or appropriate to such determination in the discretion of the Board of Directors or Independent Counsel, as applicable; provided, however Indemnitee shall not be required to waive any applicable privilege or work product protection. Any Expenses incurred by Indemnitee in so cooperating with the Company or Independent Counsel shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom. |
6 |
c. | The Company agrees to pay the reasonable fees and expenses of any Independent Counsel and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. In no event shall the Indemnitee be required or requested to pay any such fees or expenses or to provide any such indemnification. |
11. | Presumptions and Effect of Certain Proceedings . |
a. | In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden to overcome that presumption in connection with the making of any determination contrary to that presumption. |
b. | The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification. |
7 |
c. | The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any right to indemnification under this Agreement. |
d. | For purposes of any determination as to Indemnitee’s entitlement to indemnification, Indemnitee shall be presumed to have met the standard of conduct for indemnification if, among other things and without limitation, Indemnitee relied on any information, opinion, report or statement, including any financial statement or other financial data or the records or books of account of the Company or any Enterprise, prepared or presented by an officer or employee of the Company or any Enterprise whom Indemnitee reasonably believed to be reliable and competent in the matters presented, by a lawyer, certified public accountant, appraiser or other person, as to a matter which Indemnitee reasonably believed to be within the person’s professional or expert competence, or, if Indemnitee was serving on the Board of Directors of the Company or as a member of any similar body of any Enterprise, by a committee of the Board of Directors or such other body on which Indemnitee does not serve, as to a matter within its designated authority, if Indemnitee reasonably believes the committee to merit confidence. The provisions of this Section 11(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee met, or be presumed to have met, the applicable standard of conduct set forth in this Agreement. |
e. | For purposes of this Agreement, Indemnitee shall be considered to have been wholly successful with respect to any Proceeding if such Proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) it being Adjudged that Indemnitee was liable to the Company, (iii) a plea of guilty by Indemnitee, (iv) it being Adjudged that an act or omission of Indemnitee was material to the matter giving rise to the Proceeding and was (A) committed in bad faith or (B) the result of Indemnitee’s active and deliberate dishonesty, (v) it being Adjudged that Indemnitee actually received an improper personal benefit in money, property or services or (vi) with respect to any criminal proceeding, it being Adjudged that Indemnitee had reasonable cause to believe the act or omission was unlawful. |
12. | Remedies of Indemnitee . |
a. | If (i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement; (ii) advancement of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement; (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within sixty (60) days after receipt by the Company of the request for indemnification; (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within fifteen (15) days after receipt by the Company of a written request therefor; or (v) payment of indemnification pursuant to any other section of this Agreement or the charter or bylaws of the Company is not made within fifteen (15) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland or in any other court of competent jurisdiction, with regard to Indemnitee’s entitlement to indemnification or advancement of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within one hundred eighty (180) days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce [his][her] rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration. |
8 |
b. | In any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification or advancement of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement. |
c. | If a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification that was not disclosed in connection with the determination. |
d. | In the event that Indemnitee, pursuant to this Section 12, seeks a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to advancement from the Company, and shall be indemnified and held harmless by the Company for, any and all Expenses actually and reasonably incurred by [him][her] in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated. |
9 |
e. | Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the 10 th day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60th day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) ending on the date such payment is made to Indemnitee by the Company. |
13. | Defense of Underlying Proceeding . |
a. | Indemnitee shall notify the Company promptly in writing upon being served with or receiving any summons, citation, subpoena, complaint, indictment, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advancement of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advancement of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced. |
b. | Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder using a law firm of the Company’s choice, subject to the prior written approval of the Indemnitee, which shall not be unreasonably withheld; provided, however, that the Company shall notify Indemnitee in writing of any such decision to defend within fifteen (15) calendar days following receipt of notice of any such Proceeding under Section 13(a) above. Indemnitee shall have the right to retain a separate law firm in any such Proceeding at Indemnitee’s sole expense. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise of a claim against Indemnitee which (i) includes an admission of fault of Indemnitee; (ii) does not include, as an unconditional term thereof, (A) the full release with prejudice of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee and (B) the complete dismissal of all claims against the Indemnitee with prejudice; or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement, a Proceeding by or in the right of the Company or in the case of clause (ii) of Section 13(c). |
10 |
c. | Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party, (i) Indemnitee reasonably concludes, based upon advice of counsel approved by the Company, which approval shall not be unreasonably withheld or delayed, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon advice of counsel approved by the Company, which approval shall not be unreasonably withheld or delayed, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject, except in the case of (ii) or (iii) above, to the prior approval of the Company, which approval shall not be unreasonably withheld or delayed, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld or delayed, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter. |
14. | Jointly Indemnifiable Claims . Given that certain Jointly Indemnifiable Claims may arise, the Company acknowledges and agrees that the Company shall, and to the extent applicable shall cause any Enterprise to (i) be fully and primarily responsible for, and be the indemnitor of first resort with respect to, payment to or payment on behalf of the Indemnitee in respect of indemnification or advancement of Expenses in connection with any such Jointly Indemnifiable Claim, irrespective of any right of recovery the Indemnitee may have from the Third-Party Indemnitors, and (ii) be required to advance the full amount of Expenses incurred by the Indemnitee and shall be liable for the full amount of all Expenses, judgments, fines, penalties and amounts paid in settlement to the extent not prohibited by (and not merely to the extent affirmatively permitted by) applicable law and as required by the terms of this Agreement, without regard to any rights the Indemnitee may have against the Third-Party Indemnitors. Under no circumstance shall the Company or any Enterprise be entitled to, and the Company hereby irrevocably waives, relinquishes and releases, any claims against the Third-Party Indemnitors for subrogation, contribution or recovery of any kind and no right of advancement or recovery the Indemnitee may have from the Third-Party Indemnitors shall reduce or otherwise alter the rights of the Indemnitee or the obligations of the Company or any Enterprise. The Company further agrees that no advancement or payment by any Third-Party Indemnitor on behalf of Indemnitee with respect to any Proceeding for which Indemnitee has sought indemnification, exoneration or hold harmless rights from the Company shall affect the foregoing and the Third-Party Indemnitor(s) shall have a right to receive from the Company, contribution and/or be subrogated, to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company. The Company and the Indemnitee agree that each of the Third-Party Indemnitors shall be third-party beneficiaries with respect to this Agreement entitled to enforce this Section 14 as though each such Third-Party Indemnitor were a party to this Agreement. |
11 |
15. | Non-Exclusivity; Survival of Rights; Subrogation . |
a. | The rights of indemnification and advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under (i) applicable law (including, but not limited to, the MGCL), (ii) the charter or bylaws of the Company, (iii) any agreement or (iv) a resolution of (A) the stockholders entitled to vote generally in the election of directors or (B) the Board of Directors, or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in [his][her] Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy. |
b. | Except as set forth in Section 14, in the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. |
16. | Insurance . |
a. | The Company shall purchase and maintain a policy or policies of directors and officers insurance with reputable insurance companies. The Company shall continue to provide such insurance coverage to Indemnitee and such insurance policies shall have coverage terms and policy limits at least as favorable to Indemnitee as the insurance coverage provided to any other director or officer of the Company. If the Company has such insurance in effect at the time it receives from Indemnitee any notice of the commencement of an action, suit, proceeding or other claim, the Company shall give prompt notice of the commencement of such action, suit, proceeding or other claim to the insurers and take such other actions in accordance with the procedures set forth in the policy as required or appropriate to secure coverage of Indemnitee for such action, suit, proceeding or other claim. The Company shall thereafter take all reasonably necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such action, suit, proceeding or other claim in accordance with the terms of such policy. In the event of a Change in Control that would result in a loss or cancellation of the Company directors’ and officers’ insurance policy or policies, the Company shall purchase a directors and officers “Tail” insurance policy or policies to provide coverage to the Company’s directors and officers for a period of six (6) years after such Change in Control, but only with respect to coverage for claims arising from wrongful acts, errors or omissions occurring before such Change in Control. |
12 |
b. | Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee which would otherwise be indemnifiable hereunder arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in Section 16(a). The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. |
17. | Other Sources; Investment Company Act . Notwithstanding any other provision of this Agreement, the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that (i) Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise, except as otherwise provided in Section 14 to this Agreement, or (ii) for so long as the Company is subject to the Investment Company Act, indemnification or payment or reimbursement of Expenses would not be permissible under the Investment Company Act, whether pursuant to Section 17(h) of the Investment Company Act or otherwise. In addition, for so long as the Company is subject to the Investment Company Act of 1940, the presumptions, considerations and similar provisions set forth in Section 11(d) and (e) of this Agreement shall be of no force or effect to the extent inconsistent with the Investment Company Act and shall otherwise be construed in a manner to include any additional conditions, restrictions or references required to be contained therein by the Investment Company Act, including, without limitation, the disabling conduct set forth in Section 17(h) of the Investment Company Act. |
13 |
18. | Contribution . If the indemnification provided in this Agreement is unavailable in whole or in part and may not be paid to Indemnitee for any reason, other than for failure to satisfy the standard of conduct set forth in Section 4 or due to the provisions of Section 5, then, with respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), to the fullest extent permissible under applicable law, the Company, in lieu of indemnifying and holding harmless Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for Expenses, judgments, penalties, and/or amounts paid or to be paid in settlement, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee. |
19. | Miscellaneous . |
a. | This Agreement shall be effective as of the Effective Date and may apply to acts or omissions of Indemnitee taken in or in connection with Indemnitee’s Corporate Status which occurred prior to such date if Indemnitee was an officer, director, employee or agent of the Company or was a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any Enterprise at the time such act or omission occurred. |
b. | This Agreement shall continue until and terminate on the later of: (i) the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement). |
c. | The indemnification and advancement of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all, substantially all or a substantial part, of the business and/or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives. |
14 |
d. | If, by reason of Indemnitee’s Corporate Status, Indemnitee’s spouse is made a party to any Proceeding, the Company shall indemnify and hold harmless Indemnitee’s spouse against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee’s spouse in connection with any such Proceeding unless (and only to the extent) it is ultimately Adjudged that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty; (b) Indemnitee actually received an improper personal benefit in money, property or services; or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that [his][her] conduct was unlawful. Further, Indemnitee’s spouse shall not be entitled to (x) indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is Adjudged to be liable to the Company; (y) indemnification hereunder if Indemnitee is Adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging improper personal benefit to Indemnitee; or (z) indemnification or advancement of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to establish or enforce indemnification rights under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s charter or bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party, expressly provides otherwise. The foregoing right to indemnification shall include, without limitation, any Proceeding that seeks damages recoverable from marital community property, jointly-owned property or property purported to have been transferred from the Indemnitee to his or her spouse (or former spouse); provided that Indemnitee is indemnified and held harmless for the same pursuant to this Agreement. The Indemnitee’s spouse or former spouse also shall be entitled to advancement of Expenses to the same extent that Indemnitee is entitled to advancement of Expenses herein. The Company may maintain insurance to cover its obligation hereunder with respect to Indemnitee’s spouse (or former spouse) or set aside assets in a trust or escrow fund for that purpose. |
e. | The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. |
15 |
f. | The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult to prove, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such injunctive relief and/or specific performance, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking. |
g. | If any provision or provisions of this Agreement shall be held to be invalid, void, illegal or otherwise unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (ii) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (iii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. |
h. | No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor, unless otherwise expressly stated, shall such waiver constitute a continuing waiver. |
i. |
All notices, requests, demands and other communications hereunder shall be in writing and shall
be deemed to have been duly given if (i) delivered by hand or overnight courier service and receipted for by the party to whom
said notice, request, demand or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified
or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: (i) if to Indemnitee,
to the address set forth on the signature page hereto; or (ii) if to the Company, to Alcentra Capital Corporation, 200 Park Avenue,
7
th
Floor
New York, NY 10166, Attn: Corporate Secretary; or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be. |
16 |
j. | This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules. |
k. | This Agreement may be executed in one or more counterparts (delivery of which may be in electronic format), each of which shall for all purposes be deemed to be an original and all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement. |
17 |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written:
ALCENTRA CAPITAL CORPORATION | ||
By: | ||
Name: | ||
Title: | ||
[INDEMNITEE] | ||
Address: | ||
18 |
EXHIBIT A
AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED
To: The Board of Directors of Alcentra Capital Corporation
Re: Affirmation and Undertaking
Ladies and Gentlemen:
This Affirmation and Undertaking is being provided pursuant to the Indemnification Agreement, dated as of the [EFFECTIVE DATE], by and between Alcentra Capital Corporation, a Maryland corporation (the “Company”), and me as the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advancement of Expenses in connection with [ Description of Proceeding ] (the “Proceeding”).
Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.
I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as [a director][an officer] of the Company, in any of the facts or events giving rise to the Proceeding, I (i) did not act with willful misfeasance,* bad faith, gross negligence,* active and deliberate dishonesty or reckless disregard of duties,* (ii) did not receive any improper personal benefit in money, property or services and (iii) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.
In consideration of the advancement of Expenses by the Company for Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is Adjudged that (i) an act or omission by me was material to the matter giving rise to the Proceeding and (A) was committed in bad faith or (B) was the result of willful misfeasance,* gross negligence,* active and deliberate dishonesty or reckless disregard of duty,* (ii) I actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.
IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this _____ day of _______________, 20____.
Name: |
* These references can be deleted in any Affirmation and Undertaking if at the time of the submission thereof the Company is no longer subject to the Investment Company Act of 1940.
Exhibit 10.19
EXECUTION VERSION
AMENDMENT NO. 6 TO
SENIOR SECURED REVOLVING CREDIT AGREEMENT
This AMENDMENT NO. 6 TO SENIOR SECURED REVOLVING CREDIT AGREEMENT (this “ Amendment ), dated as of March 9, 2018, is made with respect to the Senior Secured Revolving Credit Agreement, dated as of May 8, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among ALCENTRA CAPITAL CORPORATION, a Maryland corporation (the “ Borrower ”), the several banks and other financial institutions or entities from time to time party to the Credit Agreement as lenders (the “ Lenders ”), and ING CAPITAL LLC, as administrative agent for the Lenders under the Credit Agreement (in such capacity, together with its successors in such capacity, the “ Administrative Agent ”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement (as amended hereby).
WITNESSETH :
WHEREAS, pursuant to the Credit Agreement, the Lenders have made certain loans and other extensions of credit to the Borrower; and
WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent amend certain provisions of the Credit Agreement and the Lenders signatory hereto and the Administrative Agent have agreed to do so on the terms and subject to the conditions contained in this Amendment.
NOW THEREFORE, in consideration of the promises and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION I AMENDMENTS TO CREDIT AGREEMENT
Effective as of December 31, 2017, and subject to the terms and conditions set forth below (including the occurrence of the Amendment No. 6 Closing Date), the Credit Agreement is hereby amended as follows:
(a) Section 6.07 of the Credit Agreement is hereby amended by deleting clause (a) in its entirety and replacing it with the following (solely for the sake of convenience in reviewing this Amendment, the language changed in this clause (a) of Section 6.07 of the Credit Agreement is set forth in bold italics):
“(a) Minimum Stockholders’ Equity . After the Initial Funding Date, (x) the Borrower will not permit Stockholders’ Equity as of the last day of any fiscal quarter of the Borrower (other than any such fiscal quarter ending on December 31, 2017, March 31, 2018 or June 30, 2018) to be less than the greater of (i) 55% of the total assets of the Borrower and its Subsidiaries as at the last day of such fiscal quarter (determined on a consolidated basis, without duplication, in accordance with GAAP) and (ii) the sum of (x) 75% of the Borrower’s Stockholders’ Equity as of the Initial Funding Date after giving effect to the consummation of the IPO, plus (y) 65% of the aggregate net proceeds of all sales of Equity Interests by the Borrower and its Subsidiaries after the Initial Funding Date (other than the proceeds of sales of Equity Interests by and among the Borrower and its Subsidiaries), and (y) the Borrower will not permit Stockholders’ Equity as of the last day of any fiscal quarter of the Borrower ending on December 31, 2017, March 31, 2018 or June 30, 2018 to be less than the greater of (i) 45% of the total assets of the Borrower and its Subsidiaries as at the last day of such fiscal quarter (determined on a consolidated basis, without duplication, in accordance with GAAP) and (ii) the sum of (x) $126,201,991 plus (y) 65% of the aggregate net proceeds of all sales of Equity Interests by the Borrower and its Subsidiaries after December 31, 2017 (other than the proceeds of sales of Equity Interests by and among the Borrower and its Subsidiaries). ”
(b) Section 6.07 of the Credit Agreement is hereby amended by deleting clause (b) in its entirety and replacing it with the following (solely for the sake of convenience in reviewing this Amendment, the language changed in this clause (b) of Section 6.07 of the Credit Agreement is set forth in bold italics):
“(b) Asset Coverage Ratio . After the Initial Funding Date, the Borrower will not permit the Asset Coverage Ratio to be less than (x) from December 31, 2017 through June 30, 2018, 2.00 to 1, and (y) at any other time , 2.25 to 1.”
(c) Section 6.07 of the Credit Agreement is hereby amended by deleting clause (e) in its entirety and replacing it with the following (solely for the sake of convenience in reviewing this Amendment, the language changed in this clause (e) of Section 6.07 of the Credit Agreement is set forth in bold italics):
“(e) Obligors’ Net Worth Test . After the Initial Funding Date, the Borrower will not permit the Obligors’ Net Worth, plus the Unsecured Longer Term Indebtedness Add-Back, to be less than (x) from December 31, 2017 through June 30, 2018, an amount equal to $126,201,991, and (y) at any other time , an amount equal to $149,559,368.”
SECTION II MISCELLANEOUS
2.1. Conditions to Effectiveness of Amendment . This Amendment shall become effective, with an effective date as of December 31, 2017, on the date (such date, the “ Amendment No. 6 Closing Date ”) on which the Borrower and the Subsidiary Guarantors shall have satisfied each of the following conditions precedent (unless a condition shall have been waived in accordance with Section 9.02 of the Credit Agreement):
(a) Executed Counterparts . The Administrative Agent shall have received from each party hereto either (1) a counterpart of this Amendment signed on behalf of such party or (2) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission or electronic mail of a signed signature page to this Amendment) that such party has signed a counterpart of this Amendment.
(b) Corporate Documents . The Administrative Agent shall have received (x) signature and incumbency certificates of the officers of such Person executing the Amendment and the other Loan Documents to which it is a party and (y) resolutions of the board of directors or similar governing body of each Obligor approving and authorizing the execution, delivery and performance of this Amendment and the other Loan Documents to which it is a party or by which it or its assets may be bound as of the date hereof, certified as of the date hereof by its secretary or an assistant secretary as being in full force and effect without modification or amendment.
2 |
(c) Consents . The Borrower shall have obtained and delivered to the Administrative Agent certified copies of all consents, approvals, authorizations, registrations, or filings (other than any filing required under the Exchange Act or the rules or regulations promulgated thereunder, including, without limitation, any filing required on Form 8-K) required to be made or obtained by the Borrower and all guarantors in connection with this Amendment, such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect and all applicable waiting periods shall have expired and no investigation or inquiry by any Governmental Authority regarding the Amendment or any transaction being financed with the proceeds of the Loans shall be ongoing.
(d) No Litigation . There shall not exist any action, suit, investigation, litigation or proceeding or other legal or regulatory developments pending or threatened in any court or before any arbitrator or Governmental Authority that relates to the Amendment or that could have a Material Adverse Effect.
(e) Fees and Expenses . The Borrower shall have paid in full to the Administrative Agent and the Lenders all fees and expenses related to this Amendment and the Credit Agreement owing as of the date hereof.
(f) Default . No Default or Event of Default shall have occurred and be continuing under the Credit Agreement, this Amendment or under any Material Indebtedness immediately before and after giving effect to this Amendment.
(g) Other Documents . The Administrative Agent shall have received such other documents as the Administrative Agent may reasonably request in form and substance satisfactory to the Administrative Agent.
2.2. Representations and Warranties . To induce the other parties hereto to enter into this Amendment, the Borrower represents and warrants to the Administrative Agent and each of the Lenders that, as of the date hereof and after giving effect to this Amendment:
(a) This Amendment has been duly authorized, executed and delivered by the Borrower and the Subsidiary Guarantor and constitutes a legal, valid and binding obligation of the Borrower and the Subsidiary Guarantor enforceable in accordance with its terms. The Credit Agreement, as amended by this Amendment, constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its respective terms.
(b) The representations and warranties set forth in Article III of the Credit Agreement and the representations and warranties in each other Loan Document are true and correct in all material respects (other than any representation or warranty already qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) on and as of the date hereof or as to any such representations and warranties that refer to a specific date, as of such specific date, with the same effect as though made on and as of the date hereof.
3 |
2.3. Counterparts . This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment constitutes the entire contract between and among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of this Amendment by telecopy or electronic mail shall be effective as delivery of a manually executed counterpart of this Amendment.
2.4. Payment of Expenses . The Borrower agrees to pay and reimburse the Administrative Agent for all of its reasonable and documented out-of-pocket costs and expenses incurred in connection with this Amendment, including, without limitation, the reasonable fees, charges and disbursements of legal counsel to the Administrative Agent.
2.5. GOVERNING LAW . THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
2.6. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
2.7. Incorporation of Certain Provisions . The provisions of Sections 9.01, 9.07, 9.09 and 9.12 of the Credit Agreement are hereby incorporated by reference mutatis mutandis as if fully set forth herein.
2.8. Effect of Amendment . Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders, the Administrative Agent, the Collateral Agent, the Borrower or the Subsidiary Guarantor under the Credit Agreement or any other Loan Document, and, except as expressly set forth herein, shall not alter, modify, amend or in any way affect any of the other terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle any Person to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances. This Amendment shall apply and be effective only with respect to the provisions amended herein of the Credit Agreement. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Credit Agreement as amended by this Amendment and each reference in any other Loan Document shall mean the Credit Agreement as amended hereby. This Amendment shall constitute a Loan Document.
4 |
2.9. Consent and Affirmation . Without limiting the generality of the foregoing, by its execution hereof, each of the Borrower and the Subsidiary Guarantor hereby, as of the date hereof, (i) consents to this Amendment and the transactions contemplated hereby, (ii) agrees that the Guarantee and Security Agreement and each of the other Security Documents is in full force and effect, (iii) confirms its guarantee (solely in the case of the Subsidiary Guarantor) and affirms its obligations under the Guarantee and Security Agreement and confirms its grant of a security interest in its assets as Collateral for the Secured Obligations (as defined in the Guarantee and Security Agreement), and (iv) acknowledges and affirms that such guarantee and/or grant is in full force and effect in respect of, and to secure, the Secured Obligations (as defined in the Guarantee and Security Agreement).
2.10. Release . Each of the Borrower and the Subsidiary Guarantor hereby acknowledges and agrees that: (a) neither it nor any of its Affiliates has any claim or cause of action against the Administrative Agent, the Collateral Agent or any Lender (or any of their respective Affiliates, officers, directors, employees, attorneys, consultants or agents) including, but not limited to, under the Credit Agreement and the other Loan Documents (and each other document entered into in connection therewith), and (b) the Administrative Agent, the Collateral Agent and each Lender has heretofore properly performed and satisfied in a timely manner all of its obligations to the Obligors and their Affiliates under the Credit Agreement and the other Loan Documents (and each other document entered into in connection therewith) that are required to have been performed on or prior to the date hereof. Accordingly, for and in consideration of the agreements contained in this Amendment and other good and valuable consideration, each of the Borrower and the Subsidiary Guarantor (for itself and its Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “ Releasors ”) does hereby fully, finally, unconditionally and irrevocably release and forever discharge the Administrative Agent, the Collateral Agent, each Lender and each of their respective Affiliates, officers, directors, employees, attorneys, consultants and agents (collectively, the “ Released Parties ”) from any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done on or prior to the date hereof directly arising out of, connected with or related to this Amendment, the Credit Agreement or any other Loan Document (or any other document entered into in connection therewith), or any act, event or transaction related or attendant thereto, or the agreements of the Administrative Agent, the Collateral Agent or any Lender contained therein, or the possession, use, operation or control of any of the assets of any of the Borrower or the Subsidiary Guarantor, or the making of any Loans or other advances, or the management of such Loans or advances or the Collateral.
[Signature pages follow]
5 |
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.
ALCENTRA CAPITAL CORPORATION, | ||
as Borrower | ||
By: | ||
Name: | ||
Title: | ||
ALCENTRA BDC EQUITY HOLDINGS, LLC, | ||
as Subsidiary Guarantor | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Amendment No. 6 to Senior Secured Revolving Credit Agreement]
ING CAPITAL LLC, as Administrative Agent and as a Lender | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Amendment No. 6 to Senior Secured Revolving Credit Agreement]
STATE STREET BANK AND TRUST COMPANY, as Lender | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Amendment No. 6 to Senior Secured Revolving Credit Agreement]
EVERBANK COMMERCIAL FINANCE, INC., as Lender | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Amendment No. 6 to Senior Secured Revolving Credit Agreement]
STATE BANK AND TRUST COMPANY, SUCCESSOR BY MERGER TO ALOSTAR BANK OF COMMERCE, as Lender | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Amendment No. 6 to Senior Secured Revolving Credit Agreement]
STIFEL BANK & TRUST, as Lender | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Amendment No. 6 to Senior Secured Revolving Credit Agreement]
RAYMOND JAMES BANK, N.A. , as Lender | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Amendment No. 6 to Senior Secured Revolving Credit Agreement]