______________________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________________________________________________________________________________________ 
FORM 10-Q

þ                 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended December 31, 2020

OR

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 814-00794

Golub Capital BDC, Inc.
(Exact name of registrant as specified in its charter)
Delaware 27-2326940
(State or other jurisdiction of incorporation or organization)    (I.R.S. Employer Identification No.)
200 Park Avenue, 25th Floor
New York, NY 10166
(Address of principal executive offices)

(212) 750-6060
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, par value $0.001 per share GBDC  The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ   No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes o No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  þ
Accelerated filer o
Non-accelerated filer  o
Smaller reporting company o
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o  No þ

As of February 8, 2021, the Registrant had 167,259,511 shares of common stock, $0.001 par value, outstanding.



Part I. Financial Information   
Item 1. Financial Statements
3
Consolidated Statements of Financial Condition as of December 31, 2020 (unaudited) and September 30, 2020
3
Consolidated Statements of Operations for the three months ended December 31, 2020 (unaudited) and 2019 (unaudited)
4
Consolidated Statements of Changes in Net Assets for the three months ended December 31, 2020 (unaudited) and 2019 (unaudited)
4
Consolidated Statements of Cash Flows for the three months ended December 31, 2020 (unaudited) and 2019 (unaudited)
6
Consolidated Schedules of Investments as of December 31, 2020 (Unaudited) and September 30, 2020
10
Notes to Consolidated Financial Statements (unaudited)
89
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
127
Item 3. Quantitative and Qualitative Disclosures about Market Risk
153
Item 4. Controls and Procedures
154
Part II. Other Information
Item 1. Legal Proceedings
155
Item 1A. Risk Factors
155
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
155
Item 3. Defaults Upon Senior Securities
155
Item 4. Mine Safety Disclosures
155
Item 5. Other Information
155
Item 6. Exhibits
156

2
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(In thousands, except share and per share data)

December 31, 2020 September 30, 2020
(unaudited)
Assets      
Investments, at fair value      
Non-controlled/non-affiliate company investments $ 4,430,239  $ 4,177,474 
Non-controlled affiliate company investments 58,211  42,000 
Controlled affiliate company investments 18,768  18,736 
Total investments, at fair value (amortized cost of $4,604,818 and $4,398,900, respectively) 4,507,218  4,238,210 
Cash and cash equivalents 26,500  24,569 
Foreign currencies (cost of $527 and $567, respectively) 527  567 
Restricted cash and cash equivalents
242,783  157,566 
Restricted foreign currencies (cost of $1,340 and $1,727, respectively) 1,355  1,728 
Cash collateral held at broker for forward currency contracts 5,420  3,320 
Interest receivable 18,628  17,263 
Receivable from investments sold —  259 
Other assets 137  802 
Total Assets $ 4,802,568  $ 4,444,284 
Liabilities      
Debt $ 2,332,563  $ 2,023,698 
Less unamortized debt issuance costs 10,822  5,896 
Debt less unamortized debt issuance costs 2,321,741  2,017,802 
Unrealized depreciation on forward currency contracts 4,956  1,064 
Interest payable 12,551  7,875 
Management and incentive fees payable 17,330  17,347 
Accounts payable and other liabilities 3,863  4,003 
Total Liabilities 2,360,441  2,048,091 
Commitments and Contingencies (Note 8)      
Net Assets      
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of December 31, 2020 and September 30, 2020 —  — 
Common stock, par value $0.001 per share, 200,000,000 shares authorized, 167,259,511 and 167,259,511 shares issued and outstanding as of December 31, 2020 and September 30, 2020, respectively 167  167 
Paid in capital in excess of par 2,624,608  2,624,608 
Distributable earnings (losses)
(182,648) (228,582)
Total Net Assets 2,442,127  2,396,193 
Total Liabilities and Total Net Assets $ 4,802,568  $ 4,444,284 
Number of common shares outstanding 167,259,511  167,259,511 
Net asset value per common share $ 14.60  $ 14.33 

See Notes to Consolidated Financial Statements.
3
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In thousands, except share and per share data)

Three months ended December 31,
   2020 2019
Investment income      
From non-controlled/non-affiliate company investments:      
Interest income $ 71,522  $ 75,859 
Dividend income 160  34 
Fee income 907  215 
Total investment income from non-controlled/non-affiliate company investments 72,589  76,108 
From non-controlled affiliate company investments:      
Interest income 1,475  244 
Total investment income from non-controlled affiliate company investments 1,475  244 
From controlled affiliate company investments:      
Interest income (18) 350 
Dividend income —  1,905 
Total investment income from controlled affiliate company investments (18) 2,255 
Total investment income 74,046  78,607 
Expenses      
Interest and other debt financing expenses 15,081  22,278 
Base management fee 15,224  15,206 
Incentive fee 2,004  5,904 
Professional fees 837  939 
Administrative service fee 1,602  1,402 
General and administrative expenses 291  147 
Total expenses 35,039  45,876 
Net investment income 39,007  32,731 
Net gain (loss) on investment transactions      
Net realized gain (loss) from:      
Non-controlled/non-affiliate company investments 4,125  2,656 
Non-controlled affiliate company investments (5,739) — 
Foreign currency transactions (778) (155)
Net realized gain (loss) on investment transactions (2,392) 2,501 
Net change in unrealized appreciation (depreciation) from:      
Non-controlled/non-affiliate company investments 54,069  17,472 
Non-controlled affiliate company investments 9,071  (427)
Controlled affiliate company investments (50) (829)
Translation of assets and liabilities in foreign currencies (1,374) (3,150)
Forward currency contracts (3,892) (1,250)
Net change in unrealized appreciation (depreciation) on investment transactions 57,824  11,816 
Net gain on investment transactions 55,432  14,317 
Net increase in net assets resulting from operations $ 94,439  $ 47,048 
Per Common Share Data      
Basic and diluted earnings per common share (Note 10) $ 0.56  $ 0.34 
Dividends and distributions declared per common share $ 0.29  $ 0.46 
Basic and diluted weighted average common shares outstanding (Note 10) 167,259,511  136,989,243 




See Notes to Consolidated Financial Statements.
4
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Changes in Net Assets (unaudited)
(In thousands, except share data)



Common Stock Paid in Capital in Excess of Par Distributable Earnings (Losses) Total Net Assets
Shares Par Amount
Balance at September 30, 2019 132,658,200  $ 133  $ 2,310,610  $ (87,889) $ 2,222,854 
Net increase in net assets resulting from operations:
Net investment income —  —  —  32,731  32,731 
Net realized gain (loss) on investments and foreign currency transactions —  —  —  2,501  2,501 
Net change in unrealized appreciation (depreciation) on investments, foreign currency translation and forward currency contracts —  —  —  11,816  11,816 
Distributions to stockholders:
Stock issued in connection with dividend reinvestment plan 1,149,409  1  20,229  —  20,230 
Distributions from distributable earnings —  —  —  (61,023) (61,023)
Total increase (decrease) for the period ended December 31, 2019 1,149,409  1  20,229  (13,975) 6,255 
Balance at December 31, 2019 133,807,609  $ 134  $ 2,330,839  $ (101,864) $ 2,229,109 
Balance at September 30, 2020 167,259,511  $ 167  $ 2,624,608  $ (228,582) $ 2,396,193 
Net increase in net assets resulting from operations:
Net investment income —  —  —  39,007  39,007 
Net realized gain (loss) on investments and foreign currency transactions —  —  —  (2,392) (2,392)
Net change in unrealized appreciation (depreciation) on investments, foreign currency translation and forward currency contracts —  —  —  57,824  57,824 
Distributions to stockholders:
Distributions from distributable earnings —  —  —  (48,505) (48,505)
Total increase (decrease) for the period ended December 31, 2020 —  —  —  45,934  45,934 
Balance at December 31, 2020 167,259,511  $ 167  $ 2,624,608  $ (182,648) $ 2,442,127 

See Notes to Consolidated Financial Statements.
5
TABLE OF CONTENTS

Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(In thousands)

Three months ended December 31,
   2020 2019
Cash flows from operating activities      
Net increase (decrease) in net assets resulting from operations $ 94,439  $ 47,048 
Adjustments to reconcile net increase (decrease) in net assets resulting from operations
to net cash provided by (used in) operating activities:
Amortization of deferred debt issuance costs 1,204  571 
Accretion of discounts and amortization of premiums on investments 4,624  7,869 
Accretion of discounts on issued debt securities 471  295 
Net realized (gain) loss on investments 1,614  (2,656)
Net realized (gain) loss on foreign currency and other transactions 778  155 
Net change in unrealized (appreciation) depreciation on investments (63,090) (16,216)
Net change in unrealized (appreciation) depreciation on translation of assets and liabilities in foreign currencies 1,374  3,150 
Net change in unrealized (appreciation) depreciation on forward currency contracts 3,892  1,250 
Proceeds from (fundings of) revolving loans, net 3,911  (239)
Fundings of investments (490,007) (296,814)
Proceeds from principal payments and sales of portfolio investments 278,665  154,305 
PIK interest (4,725) (1,633)
Changes in operating assets and liabilities:
Interest receivable (1,365) 2,283 
Cash collateral held at broker for forward currency contracts (2,100) (600)
Receivable from investments sold 259  — 
Other assets 665  83 
Interest payable 4,676  3,944 
Management and incentive fees payable (17) 8,012 
Accounts payable and other liabilities (140) (22,409)
Accrued trustee fees —  (192)
Net cash provided by (used in) operating activities (164,872) (111,794)
Cash flows from financing activities      
Borrowings on debt 797,389  331,966 
Repayments of debt (491,339) (193,946)
Capitalized debt issuance costs (6,130) (1,062)
Proceeds from other short-term borrowings —  64,769 
Distributions paid (33,846) (40,793)
Purchases of common stock under reinvestment plan (14,659) — 
Net cash (used in) provided by financing activities 251,415  160,934 
Net change in cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies 86,543  49,140 
Effect of foreign currency exchange rates 192  (125)
Cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies, beginning of period 184,430  84,208 
Cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies, end of period $ 271,165  $ 133,223 
Supplemental disclosure of cash flow information:      
Cash paid during the period for interest $ 8,731  $ 17,763 
Distributions declared during the period 48,505  61,023 
Supplemental disclosure of non-cash operating and financing activities:
Stock issued in connection with dividend reinvestment plan $ —  $ 20,230 
Proceeds from issuance of Class A-2-R GCIC 2018 Notes 38,500  — 
Redemptions of Class A-2 GCIC 2018 Notes (38,500) — 
See Notes to Consolidated Financial Statements.
6

TABLE OF CONTENTS

Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Cash Flows - (continued)
(In thousands)

The following table provides a reconciliation of cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies reported within the Consolidated Statements of Financial Condition that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows:
As of December 31,
2020 2019
Cash and cash equivalents $ 26,500  $ 18,914 
Foreign currencies (cost of $527 and $512, respectively) 527  512 
Restricted cash and cash equivalents 242,783  112,353 
Restricted foreign currencies (cost of $1,340 and $1,444, respectively) 1,355  1,444 
Total cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies shown in the Consolidated Statements of Cash Flows
$ 271,165  $ 133,223 
See Note 2. Significant Accounting Policies and Recent Accounting Updates for a description of cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies.


See Notes to Consolidated Financial Statements.
7
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Investments                          
Non-controlled/non-affiliate company investments                       
Debt investments                          
Aerospace and Defense                          
NTS Technical Systems*#~^ Senior loan   L + 5.50% (c)   6.50%   06/2023   $ 40,477  $ 40,070  1.6 % $ 39,870
NTS Technical Systems~ Second lien   L + 9.75% (c)   10.75%   12/2023   4,589  4,502  0.2 4,497
NTS Technical Systems(5) Senior loan   L + 5.50%   N/A(6)   06/2023   —  (48) — (61)
NTS Technical Systems(5) Senior loan   L + 5.50%   N/A(6)   06/2023   —  (76) — (81)
Tronair Parent, Inc.+ Senior loan   L + 4.75% (e)   5.75%   09/2023   716  710  — 638
Tronair Parent, Inc. Senior loan   L + 4.50% (c)   4.71%   09/2021   160  159  — 154
Whitcraft LLC*#+~ One stop   L + 6.00% (c)   7.00%   04/2023   63,735  64,087  2.5 59,912
Whitcraft LLC(5) One stop   L + 6.00%   N/A(6)   04/2023   —  (2) — (18)
109,677  109,402  4.3 104,911
Airlines
Aurora Lux Finco S.A.R.L.(8)(13) One stop   L + 5.75% (c)   6.75%   12/2026   993  971  — 893
Auto Components                          
Polk Acquisition Corp.*# Senior loan   L + 6.50% (a)   3.50% cash/4.00% PIK   12/2023   18,167  18,011  0.7 17,077
Polk Acquisition Corp. Senior loan   L + 6.50% (a)   3.50% cash/4.00% PIK   12/2023   108  106  — 100
Polk Acquisition Corp. Senior loan   L + 6.50% (a)   3.50% cash/4.00% PIK   12/2023   18  16  — 4
Power Stop, LLC+~ Senior loan   L + 4.50% (a)   4.65%   10/2025   2,835  2,886  0.1 2,835
     21,128  21,019  0.8 20,016
Automobiles                          
JHCC Holdings LLC One stop   L + 5.50% (c)   6.50%   09/2025   15,591  15,347  0.6 15,591
JHCC Holdings LLC One stop   L + 5.50% (c)   6.50%   09/2025   78  76  — 78
JHCC Holdings LLC One stop   L + 5.50% (c)(f)   7.10%   09/2025   55  54  — 55
MOP GM Holding, LLC+~ One stop   L + 5.75% (c)   6.75%   11/2026   24,404  24,104  1.0 24,160
MOP GM Holding, LLC One stop   L + 5.75% (c)(f)   6.85%   11/2026   130  128  — 128
MOP GM Holding, LLC(5) One stop   L + 5.75%   N/A(6)   11/2026   —  (56) — (45)
Quick Quack Car Wash Holdings, LLC*# One stop   L + 6.50% (a)   7.50%   10/2024   13,050  13,069  0.5 12,919
Quick Quack Car Wash Holdings, LLC# One stop   L + 6.50% (a)   7.50%   04/2023   2,355  2,327  0.1 2,331
Quick Quack Car Wash Holdings, LLC One stop   L + 6.50% (a)   7.50%   10/2024   2,199  2,103  0.1 2,101
Quick Quack Car Wash Holdings, LLC*+ One stop   L + 6.50% (a)   7.50%   04/2023   2,057  2,103  0.1 2,036
Quick Quack Car Wash Holdings, LLC*+ One stop   L + 6.50% (a)   7.50%   04/2023   1,375  1,405  0.1 1,361
Quick Quack Car Wash Holdings, LLC* One stop   L + 6.50% (a)   7.50%   10/2024   1,120  1,163  — 1,108
Quick Quack Car Wash Holdings, LLC(5) One stop   L + 6.50%   N/A(6)   04/2023   —  —  — (2)
TWAS Holdings, LLC+ One stop   L + 6.75% (a)   7.75%   12/2026   31,111  30,722  1.3 30,800
TWAS Holdings, LLC(5) One stop   L + 6.75%   N/A(6)   12/2026   —  (4) — (4)
TWAS Holdings, LLC(5) One stop   L + 6.75%   N/A(6)   12/2026   —  (90) — (80)
93,525  92,451  3.8 92,537

See Notes to Consolidated Financial Statements.
8
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Beverages
Abita Brewing Co., L.L.C.(7) One stop   L + 7.25% (c)   8.25%   04/2021   $ 9,982  $ 9,969  0.4 % $ 8,485 
Abita Brewing Co., L.L.C.(7) One stop   L + 7.25% (c)   8.25%   04/2021   40  39  — 34 
Fintech Midco, LLC*# One stop   L + 5.00% (c)   6.00%   08/2024   24,349  24,671  1.0 24,349 
Fintech Midco, LLC# One stop   L + 5.00% (c)   6.00%   08/2024   1,128  1,163  — 1,128 
Fintech Midco, LLC(5) One stop   L + 5.00%   N/A(6)   08/2024   —  (1) — — 
35,499  35,841  1.4 33,996 
Biotechnology
BIO18 Borrower, LLC One stop   L + 4.75% (a)   5.75%   11/2024   11,047  11,081  0.4 11,047 
BIO18 Borrower, LLC*# One stop   L + 4.75% (a)   5.75%   11/2024   3,953  3,921  0.2 3,953 
BIO18 Borrower, LLC One stop   L + 4.75% (a)   5.75%   11/2024   210  210  — 210 
BIO18 Borrower, LLC(5) One stop   L + 4.75%   N/A(6)   11/2024   —  (1) — — 
15,210  15,211  0.6 15,210 
Building Products
Jensen Hughes, Inc.+ Senior loan   L + 4.50% (b)(c)(f)   5.50%   03/2024   4,181  4,181  0.2 4,097 
Jensen Hughes, Inc. Senior loan   L + 4.50% (a)(b)(c)(f)   5.50%   03/2024   1,252  1,283  0.1 1,223 
Jensen Hughes, Inc.+ Senior loan   L + 4.50% (b)(c)(d)(f)   5.50%   03/2024   911  924  — 893 
Jensen Hughes, Inc. Senior loan   L + 4.50% (c)(f)   5.50%   03/2024   438  450  — 429 
Jensen Hughes, Inc.+ Senior loan   L + 4.50% (b)(c)(f)   5.50%   03/2024   279  282  — 273 
Jensen Hughes, Inc. Senior loan   L + 4.50% (c)(f)   5.50%   03/2024   218  218  — 214 
Jensen Hughes, Inc.+ Senior loan   L + 4.50% (c)(f)   5.50%   03/2024   116  116  — 114 
7,395  7,454  0.3 7,243 
Chemicals
Inhance Technologies Holdings LLC# One stop   L + 6.00% (c)   7.00%   07/2024   12,671  12,782  0.5 12,207 
Inhance Technologies Holdings LLC One stop   L + 6.00% (c)   7.00%   07/2024   1,925  1,913  0.1 1,854 
Inhance Technologies Holdings LLC One stop   L + 6.00% (c)   7.00%   07/2024   80  80  — 72 
14,676  14,775  0.6 14,133 
Commercial Services & Supplies
EGD Security Systems, LLC*#^ One stop   L + 5.65% (c)   6.65%   06/2023   30,092  30,418  1.2 30,092 
EGD Security Systems, LLC* One stop   L + 5.65% (c)   6.65%   06/2023   1,258  1,257  0.1 1,258 
EGD Security Systems, LLC One stop   L + 5.65% (c)   6.65%   06/2023   767  760  — 767 
EGD Security Systems, LLC# One stop   L + 5.65% (c)   6.65%   06/2023   644  661  — 644 
EGD Security Systems, LLC# One stop   L + 5.65% (c)   6.65%   06/2023   575  572  — 575 
EGD Security Systems, LLC One stop   L + 5.65% (c)   6.65%   06/2023   40  39  — 40 
EGD Security Systems, LLC(5) One stop   L + 5.65%   N/A(6)   06/2023   —  (28) — — 
Bazaarvoice, Inc.*#+~^ One stop   L + 5.75% (c)   6.75%   02/2024   48,006  48,576  2.0 47,526 
Bazaarvoice, Inc.+ One stop   L + 5.75% (c)   6.75%   02/2024   21,094  20,886  0.9 20,883 
Bazaarvoice, Inc.(5) One stop   L + 5.75%   N/A(6)   02/2024   —  (3) — (4)
Hydraulic Authority III Limited~(8)(9)(10) One stop   L + 6.00% (h)   7.00%   11/2025   11,709  11,907  0.5 12,198 
See Notes to Consolidated Financial Statements.
9
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Commercial Services & Supplies - (continued)
Hydraulic Authority III Limited(8)(9)(10) One stop   N/A   11.00% PIK   11/2028   $ 222  $ 225  — % $ 239 
Hydraulic Authority III Limited(5)(8)(9)(10) One stop   L + 6.00%   N/A(6)   11/2025   —  —  — (6)
PT Intermediate Holdings III, LLC+~^ One stop   L + 5.50% (c)   6.50%   10/2025   29,700  29,331  1.2 28,512 
WRE Holding Corp.*# Senior loan   L + 5.25% (b)(c)   6.25%   01/2023   2,270  2,302  0.1 2,270 
WRE Holding Corp.^ Senior loan   L + 5.25% (b)(c)   6.25%   01/2023   938  962  — 938 
WRE Holding Corp. Senior loan   L + 5.25% (c)   6.25%   01/2023   688  687  — 688 
WRE Holding Corp. Senior loan   L + 5.25% (b)(c)   6.25%   01/2023   407  407  — 407 
WRE Holding Corp. Senior loan   L + 5.25% (b)(c)   6.25%   01/2023   23  23  — 23 
WRE Holding Corp. Senior loan   L + 5.25% (a)(c)   6.25%   01/2023   16  17  — 16 
WRE Holding Corp. Senior loan   L + 5.25%   N/A(6)   01/2023   —  8  — — 
148,449  149,007  6.0 147,066 

See Notes to Consolidated Financial Statements.
10
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Construction & Engineering
Reladyne, Inc.*#^ Senior loan   L + 5.00% (d)   6.00%   07/2022   $ 32,778  $ 32,967  1.4 % $ 32,778 
Reladyne, Inc.~ Senior loan   L + 5.00% (d)   6.00%   07/2022   3,473  3,524  0.1 3,473 
Reladyne, Inc.+ Senior loan   L + 5.00% (a)   6.00%   07/2022   3,386  3,354  0.1 3,386 
Reladyne, Inc. Senior loan   L + 5.00% (c)(d)   6.00%   07/2022   2,750  2,789  0.1 2,750 
Reladyne, Inc.*# Senior loan   L + 5.00% (d)   6.00%   07/2022   1,880  1,908  0.1 1,880 
Reladyne, Inc.#~ Senior loan   L + 5.00% (d)   6.00%   07/2022   1,621  1,645  0.1 1,621 
Reladyne, Inc.# Senior loan   L + 5.00% (d)   6.00%   07/2022   1,541  1,578  0.1 1,541 
Reladyne, Inc.#~ Senior loan   L + 5.00% (d)   6.00%   07/2022   738  749  — 738 
48,167  48,514  2.0 48,167 
Containers and Packaging
AmerCareRoyal LLC+ Senior loan   L + 5.00% (a)   6.00%   11/2025   820  813  — 820 
AmerCareRoyal LLC+(8) Senior loan   L + 5.00% (a)   6.00%   11/2025   152  151  — 152 
Fortis Solutions Group LLC+ Senior loan   L + 5.00% (a)   6.00%   12/2023   2,424  2,377  0.1 2,376 
Fortis Solutions Group LLC+ Senior loan   L + 5.00% (a)   6.00%   12/2023   1,582  1,570  0.1 1,550 
Fortis Solutions Group LLC+ Senior loan   L + 5.00% (a)   6.00%   12/2023   630  625  — 617 
Fortis Solutions Group LLC+ Senior loan   L + 5.00% (a)   6.00%   12/2023   605  600  — 594 
Fortis Solutions Group LLC(5) Senior loan   L + 5.00%   N/A(6)   12/2023   —  —  — (1)
Plano Molding Company, LLC+ One stop   L + 9.00% (c)   8.50% cash/1.50% PIK   05/2022   14,653  14,617  0.5 12,454 
Plano Molding Company, LLC One stop   L + 9.00% (c)   8.50% cash/1.50% PIK   05/2022   1,186  1,177  0.1 1,186 
  22,052  21,930  0.8 19,748 
Distributors
PetroChoice Holdings, Inc.#^ Senior loan   L + 5.00% (c)   6.00%   08/2022   3,267  3,273  0.1 3,104 
Diversified Consumer Services
EWC Growth Partners LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   03/2026   914  899  — 832 
EWC Growth Partners LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   03/2026   30  29  — 27 
EWC Growth Partners LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   03/2026   18  18  — 16 
Excelligence Learning Corporation# One stop   L + 7.00% (c)   8.00%   04/2023   10,466  10,233  0.3 8,373 
Learn-it Systems, LLC Senior loan   L + 5.00% (c)   5.00% cash/0.50% PIK   03/2025   2,542  2,588  0.1 2,542 
Learn-it Systems, LLC Senior loan   L + 5.00% (c)   5.50%   03/2025   608  607  — 608 
Learn-it Systems, LLC Senior loan   L + 4.50%   N/A(6)   03/2025   —  —  — — 
Liminex, Inc.~ One stop   L + 7.25% (a)   8.25%   11/2026   25,462  24,988  1.0 25,207 
Liminex, Inc.(5) One stop   L + 7.25%   N/A(6)   11/2026   —  (2) — (2)
Litera Bidco LLC+^ One stop   L + 5.25% (a)   6.25%   05/2026   3,740  3,760  0.2 3,568 
Litera Bidco LLC+ One stop   L + 6.00% (c)   7.00%   05/2026   1,307  1,291  0.1 1,291 
Litera Bidco LLC One stop   L + 5.25% (a)   5.40%   05/2026   701  725  — 669 
Litera Bidco LLC One stop   L + 5.25% (a)   6.25%   05/2026   701  725  — 669 
Litera Bidco LLC(5) One stop   L + 5.25%   N/A(6)   05/2025   —  —  — (2)
PADI Holdco, Inc.*# One stop   L + 8.75% (c)   8.25% cash/1.50% PIK   04/2024   21,686  21,859  0.8 18,429 
PADI Holdco, Inc.+~(8)(9) One stop   E + 5.75% (g)   4.25% cash/1.50% PIK   04/2024   20,634  20,892  0.8 18,343 
PADI Holdco, Inc.~ One stop   L + 7.25% (c)   6.75% cash/1.50% PIK   04/2024   803  797  — 682 
PADI Holdco, Inc. One stop   L + 7.25% (a)   6.75% cash/1.50% PIK   04/2023   180  179  — 146 
PADI Holdco, Inc. One stop   L + 8.75% (c)   8.25% cash/1.50% PIK   04/2024   166  165  — 141 
89,958  89,753  3.3 81,539 
See Notes to Consolidated Financial Statements.
11
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Diversified Financial Services
Higginbotham Insurance Agency, Inc.+ One stop   L + 5.75% (c)   6.50%   11/2026   $ 3,614  $ 3,561  0.1 % $ 3,560 
Higginbotham Insurance Agency, Inc.(5) One stop   L + 5.75%   N/A(6)   11/2026   —  (8) — (8)
Institutional Shareholder Services* Senior loan   L + 4.50% (c)   4.75%   03/2026   18,727  19,096  0.8 18,727 
Institutional Shareholder Services Senior loan   L + 4.50% (c)   4.74%   03/2024   190  187  — 190 
Sovos Compliance*+^ One stop   L + 4.75% (a)   5.75%   04/2024   19,614  20,117  0.8 19,614 
Sovos Compliance Second lien   N/A   12.00% PIK   04/2025   9,221  9,448  0.4 9,221 
Sovos Compliance+ One stop   L + 4.75% (a)   5.75%   04/2024   4,322  4,242  0.2 4,322 
Sovos Compliance*# One stop   L + 4.75% (a)   5.75%   04/2024   1,903  1,952  0.1 1,903 
Sovos Compliance Second lien   N/A   12.00% PIK   04/2025   1,260  1,296  — 1,260 
Sovos Compliance*# One stop   L + 4.75% (a)   5.75%   04/2024   768  789  — 768 
Sovos Compliance One stop   L + 4.75% (a)   5.75%   04/2024   96  95  — 96 
Sovos Compliance One stop   L + 4.75% (a)   5.75%   04/2024   85  84  — 85 
Sovos Compliance(5) One stop   L + 4.75%   N/A(6)   04/2024   —  (21) — — 
59,800  60,838  2.4 59,738 

See Notes to Consolidated Financial Statements.
12
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Electric Utilities
Arcos, LLC#^ One stop   L + 5.00% (c)   6.00%   02/2021   $ 11,368  $ 11,395  0.5 % $ 11,368 
Arcos, LLC One stop   L + 5.00%   N/A(6)   02/2021   —  —  — — 
11,368  11,395  0.5 11,368 
Electronic Equipment, Instruments & Components
CST Buyer Company+ One stop   L + 6.00% (d)   7.00%   10/2025   20,580  20,331  0.8 20,374 
CST Buyer Company+~ One stop   L + 6.00% (a)   7.00%   10/2025   10,189  10,084  0.4 10,087 
CST Buyer Company One stop   L + 6.00%   N/A(6)   10/2025   —  —  — — 
ES Acquisition LLC Senior loan   L + 5.00% (c)   6.00%   11/2025   660  649  — 659 
ES Acquisition LLC Senior loan   L + 5.00% (c)   6.00%   11/2025   140  138  — 139 
ES Acquisition, LLC Senior loan   L + 5.50% (c)   6.50%   11/2025   89  86  — 91 
ES Acquisition, LLC Senior loan   L + 5.00% (c)   6.00%   11/2025   46  46  — 46 
ES Acquisition LLC Senior loan   L + 5.00% (c)   6.00%   11/2025   45  44  — 45 
ES Acquisition LLC Second lien   L + 5.00% (c)   6.00%   11/2025   36  35  — 36 
Pasternack Enterprises, Inc. and Fairview Microwave, Inc+~ Senior loan   L + 4.00% (a)   4.15%   07/2025   23,578  23,790  1.0 23,342 
Pasternack Enterprises, Inc. and Fairview Microwave, Inc Senior loan   L + 4.00%   N/A(6)   07/2023   —  —  — — 
Inventus Power, Inc.*#+ One stop   L + 5.50% (a)   6.50%   04/2021   14,303  14,099  0.6 14,303 
Inventus Power, Inc.(5) One stop   L + 5.50%   N/A(6)   04/2021   —  (9) — — 
Watchfire Enterprises, Inc. Second lien   L + 8.00% (a)   9.00%   10/2021   9,435  9,410  0.4 9,435 
79,101  78,703  3.2 78,557 

See Notes to Consolidated Financial Statements.
13
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Food & Staples Retailing
Cafe Rio Holding, Inc.*# One stop   L + 5.50% (c)   6.50%   09/2023   $ 18,562  $ 18,743  0.8 % $ 18,562 
Cafe Rio Holding, Inc. One stop   L + 5.50% (c)   6.50%   09/2023   2,415  2,414  0.1 2,415 
Cafe Rio Holding, Inc.# One stop   L + 5.50% (c)   6.50%   09/2023   2,243  2,308  0.1 2,243 
Cafe Rio Holding, Inc.*# One stop   L + 5.50% (c)   6.50%   09/2023   1,423  1,465  0.1 1,423 
Cafe Rio Holding, Inc.# One stop   L + 5.50% (c)   6.50%   09/2023   1,257  1,293  — 1,257 
Cafe Rio Holding, Inc. One stop   L + 5.50% (c)   6.50%   09/2023   181  181  — 181 
Cafe Rio Holding, Inc. One stop   L + 5.50%   N/A(6)   09/2023   —  —  — — 
Captain D's, LLC# Senior loan   L + 4.50% (c)   5.50%   12/2023   13,688  13,729  0.6 13,688 
Captain D's, LLC Senior loan   L + 4.50% (c)   5.50%   12/2023   120  121  — 120 
Feeders Supply Company, LLC#+ One stop   L + 6.00% (a)   7.00%   04/2023   9,101  9,049  0.4 9,101 
Feeders Supply Company, LLC Subordinated debt   N/A   12.50% cash/7.00% PIK   04/2021   155  155  — 155 
Feeders Supply Company, LLC One stop   L + 6.00% (a)   7.00%   04/2021   10  10  — 10 
FWR Holding Corporation# One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   10,398  10,382  0.4 9,566 
FWR Holding Corporation# One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   1,819  1,871  0.1 1,673 
FWR Holding Corporation# One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   1,149  1,183  — 1,058 
FWR Holding Corporation# One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   364  373  — 335 
FWR Holding Corporation One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   274  273  — 252 
FWR Holding Corporation# One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   272  279  — 250 
FWR Holding Corporation One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   131  130  — 121 
FWR Holding Corporation(5) One stop   L + 7.00%   N/A(6)   08/2023   —  —  — (10)
FWR Holding Corporation One stop   L + 7.00%   N/A(6)   08/2023   —  —  — — 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   834  855  — 834 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   655  672  — 655 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   643  640  — 643 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   316  315  — 316 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   316  314  — 316 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   156  155  — 156 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   95  94  — 95 
Mendocino Farms, LLC(5) One stop   L + 8.50%   N/A(6)   06/2023   —  (2) — — 
NBC Intermediate, LLC+~ Senior loan   L + 6.00% (d)   7.00%   09/2023   18,536  18,356  0.8 18,350 
NBC Intermediate, LLC#+~ Senior loan   L + 6.00% (c)   7.00%   09/2023   9,657  9,624  0.4 9,561 
NBC Intermediate, LLC*#+~ Senior loan   L + 6.00% (c)   7.00%   09/2023   5,047  5,059  0.2 4,996 
NBC Intermediate, LLC#+~ Senior loan   L + 6.00% (a)(c)   7.00%   09/2023   4,301  4,341  0.2 4,257 
NBC Intermediate, LLC# Senior loan   L + 6.00% (a)   7.00%   09/2023   667  660  — 660 
NBC Intermediate, LLC(5) Senior loan   L + 6.00%   N/A(6)   09/2023   —  —  — (1)
Ruby Slipper Cafe LLC, The* One stop   L + 8.50% (c)   8.50% cash/1.00% PIK   01/2023   2,046  2,040  0.1 1,719 
Ruby Slipper Cafe LLC, The One stop   L + 8.50% (c)   8.50% cash/1.00% PIK   01/2023   414  426  — 348 
Ruby Slipper Cafe LLC, The One stop   L + 8.50% (c)   8.50% cash/1.00% PIK   01/2023   30  30  — 25 
Wetzel's Pretzels, LLC*# One stop   L + 7.25% (c)   7.75% cash/0.50% PIK   09/2021   16,929  17,030  0.7 16,082 
Wetzel's Pretzels, LLC One stop   L + 7.25% (c)   7.75% cash/0.50% PIK   09/2021   100  101  — 96 
Wood Fired Holding Corp.*# One stop   L + 7.75% (c)   6.75% cash/2.00% PIK   12/2023   14,163  14,354  0.6 13,739 
Wood Fired Holding Corp. One stop   L + 7.75% (c)   6.75% cash/2.00% PIK   12/2023   701  701  — 680 
Wood Fired Holding Corp. One stop   L + 7.75% (c)   6.75% cash/2.00% PIK   12/2023   202  201  — 196 
139,370  139,925  5.6 136,123 

See Notes to Consolidated Financial Statements.
14
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Food Products
FCID Merger Sub, Inc.+~ One stop   L + 6.00% (c)   7.00%   12/2026   $ 13,694  $ 13,490  0.5 % $ 13,556 
FCID Merger Sub, Inc.(5) One stop   L + 6.00%   N/A(6)   12/2026   —  (1) — (1)
FCID Merger Sub, Inc.(5) One stop   L + 6.00%   N/A(6)   12/2026   —  (42) — (43)
Flavor Producers, LLC#~ Senior loan   L + 5.75% (c)   5.75% cash/1.00% PIK   12/2023   5,006  4,907  0.2 4,605 
Flavor Producers, LLC(5) Senior loan   L + 4.75% (c)   N/A(6)   12/2022   —  (4) — (2)
MAPF Holdings, Inc.+~ One stop   L + 6.00% (c)   7.00%   12/2026   29,386  29,094  1.2 29,092 
MAPF Holdings, Inc.(5) One stop   L + 6.00%   N/A(6)   12/2026   —  (44) — (45)
MAPF Holdings, Inc.(5) One stop   L + 6.00%   N/A(6)   12/2026   —  (3) — (3)
Purfoods, LLC One stop   N/A   7.00% PIK   05/2026   76  80  — 76 
48,162  47,477  1.9 47,235 

See Notes to Consolidated Financial Statements.
15
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Equipment & Supplies
Aspen Medical Products, LLC+~ One stop   L + 5.00% (c)   6.00%   06/2025   $ 4,249  $ 4,314  0.2 % $ 4,249 
Aspen Medical Products, LLC+ One stop   L + 5.00% (c)   6.00%   06/2025   271  269  — 271 
Aspen Medical Products, LLC One stop   L + 5.00%   N/A(6)   06/2025   —  —  — — 
Belmont Instrument, LLC+^ Senior loan   L + 4.75% (c)   5.75%   12/2023   5,243  5,203  0.2 5,243 
Blades Buyer, Inc.+~^ Senior loan   L + 4.75% (c)   5.75%   08/2025   6,618  6,605  0.3 6,518 
Blades Buyer, Inc.(5) Senior loan   L + 4.75%   N/A(6)   08/2025   —  —  — (2)
Blades Buyer, Inc.(5) Senior loan   L + 4.75%   N/A(6)   08/2025   —  (20) — (21)
Blue River Pet Care, LLC One stop   L + 5.00% (a)   5.15%   07/2026   27,621  27,671  1.1 27,621 
Blue River Pet Care, LLC One stop   L + 5.00% (a)   5.15%   07/2026   2,756  2,669  0.1 2,756 
Blue River Pet Care, LLC One stop   L + 5.00% (c)   5.24%   08/2025   400  396  — 398 
CCSL Holdings, LLC+ One stop   L + 5.75% (c)   6.75%   12/2026   15,672  15,476  0.6 15,516 
CCSL Holdings, LLC(5) One stop   L + 5.75%   N/A(6)   12/2026   —  (2) — (2)
CCSL Holdings, LLC(5) One stop   L + 5.75%   N/A(6)   12/2026   —  (63) — (56)
CMI Parent Inc.#+^ Senior loan   L + 4.25% (c)   5.25%   08/2025   6,616  6,738  0.3 6,484 
CMI Parent Inc.(5) Senior loan   L + 4.25%   N/A(6)   08/2025   —  (2) — (6)
Flexan, LLC+^ One stop   L + 5.25% (c)   6.25%   02/2022   8,428  8,391  0.3 8,428 
Flexan, LLC*# One stop   L + 5.25% (c)   6.25%   02/2022   3,264  3,250  0.1 3,264 
Flexan, LLC+ One stop   L + 5.25% (c)   6.25%   02/2022   2,341  2,330  0.1 2,341 
Flexan, LLC# One stop   L + 5.25% (c)   6.25%   02/2022   1,536  1,529  0.1 1,536 
Flexan, LLC(5) One stop   L + 5.25%   N/A(6)   02/2022   —  (4) — — 
G & H Wire Company, Inc.#^ One stop   L + 7.75% (a)   8.00% cash/0.75% PIK   09/2023   11,153  11,107  0.5 10,930 
G & H Wire Company, Inc. One stop   L + 7.75% (a)   N/A(6)   09/2022   —  —  — — 
Joerns Healthcare, LLC* One stop   L + 6.00% (c)   7.00%   08/2024   1,873  1,829  0.1 1,833 
Joerns Healthcare, LLC One stop   L + 6.00% (c)   7.00%   08/2024   1,800  1,774  0.1 1,764 
Katena Holdings, Inc.# One stop   L + 6.50% (c)   7.50%   06/2021   12,696  12,740  0.5 12,441 
Katena Holdings, Inc.# One stop   L + 6.50% (c)   7.50%   06/2021   1,240  1,245  0.1 1,215 
Katena Holdings, Inc.+ One stop   L + 6.50% (c)   7.50%   06/2021   927  924  — 909 
Katena Holdings, Inc.# One stop   L + 6.50% (c)   7.50%   06/2021   849  852  — 832 
Katena Holdings, Inc. One stop   L + 6.50% (c)   7.50%   06/2021   200  200  — 196 
Lombart Brothers, Inc.*#~ One stop   L + 8.25% (c)   8.25% cash/1.00% PIK   04/2023   28,940  29,159  1.1 26,625 
Lombart Brothers, Inc.#(8) One stop   L + 8.25% (c)   8.25% cash/1.00% PIK   04/2023   3,116  3,141  0.1 2,867 
Lombart Brothers, Inc. One stop   L + 9.25% (a)(c)   9.25% cash/1.00% PIK   04/2023   280  280  — 258 
Lombart Brothers, Inc.(8) One stop   L + 9.25% (a)   9.25% cash/1.00% PIK   04/2023   50  49  — 46 
Orthotics Holdings, Inc.*# One stop   L + 6.00% (c)   7.00%   06/2021   7,728  7,728  0.3 7,574 
Orthotics Holdings, Inc.*# One stop   L + 16.00% (c)   7.00% cash/10.00% PIK   06/2021   3,994  3,994  0.2 3,675 
Orthotics Holdings, Inc.*#(8) One stop   L + 6.00% (c)   7.00%   06/2021   1,267  1,267  0.1 1,242 
Orthotics Holdings, Inc.*#(8) One stop   L + 16.00% (c)   7.00% cash/10.00% PIK   06/2021   655  655  — 603 
Orthotics Holdings, Inc. One stop   L + 6.00%   N/A(6)   06/2021   —  —  — — 
161,783  161,694  6.5 % 157,548 

See Notes to Consolidated Financial Statements.
16
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Providers & Services
Active Day, Inc.# One stop   L + 6.50% (c)   7.50%   12/2021   $ 24,504  $ 24,654  0.9 % $ 20,829 
Active Day, Inc.# One stop   L + 6.50% (c)   7.50%   12/2021   1,891  1,904  0.1 1,607 
Active Day, Inc.*# One stop   L + 6.50% (c)   7.50%   12/2021   1,219  1,227  0.1 1,036 
Active Day, Inc. One stop   L + 6.50% (c)   7.50%   12/2021   971  988  — 825 
Active Day, Inc. One stop   L + 6.50% (c)   7.50%   12/2021   856  853  — 728 
Active Day, Inc.*# One stop   L + 6.50% (c)   7.50%   12/2021   842  848  — 716 
Active Day, Inc. One stop   L + 6.50% (c)   7.50%   12/2021   102  102  — 86 
Active Day, Inc. One stop   L + 6.50% (c)   N/A(6)   12/2021   —  —  — — 
Acuity Eyecare Holdings, LLC One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   7,166  7,193  0.3 6,944 
Acuity Eyecare Holdings, LLC# One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   6,051  6,110  0.2 5,864 
Acuity Eyecare Holdings, LLC~ One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   5,630  5,730  0.2 5,456 
Acuity Eyecare Holdings, LLC~ One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   3,285  3,379  0.1 3,183 
Acuity Eyecare Holdings, LLC One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   795  814  — 769 
Acuity Eyecare Holdings, LLC One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   293  291  — 284 
Acuity Eyecare Holdings, LLC One stop   L + 13.00% (c)   7.25% cash/6.75% PIK   03/2024   248  246  — 273 
Acuity Eyecare Holdings, LLC One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   151  150  — 146 
Acuity Eyecare Holdings, LLC One stop   L + 13.00% (c)   7.25% cash/6.75% PIK   03/2024   151  150  — 166 
Acuity Eyecare Holdings, LLC(5) One stop   L + 6.25% (c)   7.25%   03/2024   1  (2) — 15 
ADCS Clinics Intermediate Holdings, LLC*# One stop   L + 5.75% (d)   6.75%   05/2022   41,764  42,115  1.7 41,764 
ADCS Clinics Intermediate Holdings, LLC*# One stop   L + 5.75% (d)   6.75%   05/2022   210  211  — 210 
ADCS Clinics Intermediate Holdings, LLC One stop   L + 5.75% (d)   6.75%   05/2022   190  189  — 190 
ADCS Clinics Intermediate Holdings, LLC* One stop   L + 5.75% (d)   6.75%   05/2022   162  164  — 162 
ADCS Clinics Intermediate Holdings, LLC*# One stop   L + 5.75% (d)   6.75%   05/2022   62  63  — 62 
Advanced Pain Management Holdings, Inc.(7) Senior loan   L + 5.00% (c)   6.25%   03/2021   11,433  6,860  — 259 
Advanced Pain Management Holdings, Inc.(7) Senior loan   L + 8.50% (c)   9.75%   03/2021   4,082  7  — — 
Advanced Pain Management Holdings, Inc.(7) Senior loan   L + 5.00% (c)   6.25%   03/2021   782  469  — 18 
Advanced Pain Management Holdings, Inc.(5)(7) Senior loan   L + 5.00% (c)   6.25%   03/2021   347  (21) — 8 
Agilitas USA, Inc.*# One stop   L + 5.50% (c)   6.50%   04/2022   9,227  9,257  0.4 9,042 
Agilitas USA, Inc. One stop   L + 5.50% (c)   6.50%   04/2022   100  100  — 98 
CRH Healthcare Purchaser, Inc.+~ Senior loan   L + 4.50% (c)   5.50%   12/2024   19,502  19,555  0.8 19,306 
CRH Healthcare Purchaser, Inc. Senior loan   L + 4.50% (c)   5.50%   12/2024   4,185  4,172  0.2 4,143 
CRH Healthcare Purchaser, Inc.(5) Senior loan   L + 4.50%   N/A(6)   12/2024   —  (1) — (4)
DCA Investment Holding, LLC*#+ One stop   L + 5.25% (c)   6.25%   07/2021   31,324  31,460  1.3 31,324 
DCA Investment Holding, LLC*#+~ One stop   L + 5.25% (c)   6.25%   07/2021   27,140  27,306  1.1 27,140 
DCA Investment Holding, LLC*# One stop   L + 5.25% (c)   6.25%   07/2021   8,297  8,368  0.3 8,297 
DCA Investment Holding, LLC~ One stop   L + 5.25% (c)   6.25%   07/2021   4,023  4,072  0.2 4,023 
DCA Investment Holding, LLC# One stop   L + 5.25% (c)   6.25%   07/2021   3,659  3,705  0.2 3,659 
DCA Investment Holding, LLC One stop   L + 5.25% (c)   6.25%   07/2021   2,737  2,735  0.1 2,737 
DCA Investment Holding, LLC*# One stop   L + 5.25% (c)   6.25%   07/2021   2,505  2,536  0.1 2,505 
DCA Investment Holding, LLC# One stop   L + 5.25% (c)   6.25%   07/2021   1,246  1,255  0.1 1,246 
See Notes to Consolidated Financial Statements.
17
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Providers & Services - (continued)
DCA Investment Holding, LLC*~ One stop   L + 5.25% (c)   6.25%   07/2021   $ 296  $ 298  — % $ 296 
DCA Investment Holding, LLC*~ One stop   L + 5.25% (c)   6.25%   07/2021   92  93  — 92 
Deca Dental Management LLC*# One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   11,311  11,413  0.5 11,311 
Deca Dental Management LLC#~ One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   1,377  1,391  0.1 1,377 
Deca Dental Management LLC+~ One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   994  1,003  — 994 
Deca Dental Management LLC One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   737  747  — 737 
Deca Dental Management LLC One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   100  100  — 100 
Deca Dental Management LLC(5) One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   2  (1) — 2 
Encorevet Group LLC One stop   L + 5.25% (c)   6.25%   11/2024   709  699  — 700 
Encorevet Group LLC Senior loan   L + 5.25% (c)   6.25%   11/2024   249  247  — 246 
Encorevet Group LLC Senior loan   L + 5.25% (c)   6.25%   11/2024   112  112  — 111 
Encorevet Group LLC Senior loan   L + 5.25% (c)   6.25%   11/2024   69  68  — 69 
Encorevet Group LLC Senior loan   L + 5.25% (c)   6.25%   11/2024   58  57  — 57 
Encorevet Group LLC Senior loan   L + 5.25% (c)   6.25%   11/2024   10  10  — 10 
Encorevet Group LLC(5) Senior loan   L + 5.25%   N/A(6)   11/2024   —  —  — (1)
ERG Buyer, LLC*# One stop   L + 5.50% (c)   6.50%   05/2024   19,084  19,039  0.7 15,649 
ERG Buyer, LLC One stop   P + 4.50% (f)   7.75%   05/2024   300  296  — 246 
Eyecare Services Partners Holdings LLC+ One stop   L + 6.25% (c)   7.25%   05/2023   18,183  18,266  0.7 17,274 
Eyecare Services Partners Holdings LLC* One stop   L + 6.25% (c)   7.25%   05/2023   7,976  8,090  0.3 7,577 
Eyecare Services Partners Holdings LLC*# One stop   L + 6.25% (c)   7.25%   05/2023   6,985  7,092  0.3 6,636 
Eyecare Services Partners Holdings LLC One stop   L + 6.25% (c)   7.25%   05/2023   5,140  5,159  0.2 4,884 
Eyecare Services Partners Holdings LLC*+ One stop   L + 6.25% (c)   7.25%   05/2023   2,385  2,420  0.1 2,266 
Eyecare Services Partners Holdings LLC* One stop   L + 6.25% (c)   7.25%   05/2023   1,530  1,554  0.1 1,454 
Eyecare Services Partners Holdings LLC*# One stop   L + 6.25% (c)   7.25%   05/2023   1,131  1,149  0.1 1,075 
Eyecare Services Partners Holdings LLC*# One stop   L + 6.25% (c)   7.25%   05/2023   997  1,012  — 947 
Eyecare Services Partners Holdings LLC*+ One stop   L + 6.25% (c)   7.25%   05/2023   644  651  — 612 
Eyecare Services Partners Holdings LLC One stop   L + 6.25% (c)   7.25%   05/2023   400  399  — 380 
FYI Optical Acquisitions, Inc. & FYI USA, Inc.~(8)(9)(12) One stop   L + 5.00% (k)   5.51%   03/2027   11,802  11,698  0.5 12,035 
FYI Optical Acquisitions, Inc. & FYI USA, Inc.(8)(9)(12) One stop   L + 5.00% (k)   5.51%   03/2027   96  93  — 99 
FYI Optical Acquisitions, Inc. & FYI USA, Inc.(8)(12) One stop   L + 5.00% (c)   6.00%   03/2027   20  19  — 20 
Krueger-Gilbert Health Physics, LLC~ Senior loan   L + 5.25% (c)   6.25%   05/2025   2,353  2,342  0.1 2,353 
Krueger-Gilbert Health Physics, LLC Senior loan   L + 5.25% (c)   6.25%   05/2025   1,111  1,147  0.1 1,111 
Krueger-Gilbert Health Physics, LLC Senior loan   L + 5.25% (c)   6.25%   05/2025   918  916  — 918 
Krueger-Gilbert Health Physics, LLC Senior loan   L + 5.25% (c)   6.25%   05/2025   50  50  — 50 
MD Now Holdings, Inc.+ One stop   L + 5.00% (c)   6.00%   08/2024   14,506  14,652  0.6 14,506 
MD Now Holdings, Inc. One stop   L + 5.00% (c)   6.00%   08/2024   622  622  — 622 
MD Now Holdings, Inc.(5) One stop   L + 5.00%   N/A(6)   08/2024   —  (1) — — 
Midwest Veterinary Partners, LLC One stop   L + 5.75% (c)   6.75%   07/2025   11,360  11,205  0.5 11,247 
Midwest Veterinary Partners, LLC One stop   L + 5.75% (c)   6.75%   07/2025   6,565  6,428  0.3 6,452 
Midwest Veterinary Partners, LLC^ One stop   L + 5.75% (c)   6.75%   07/2025   4,263  4,202  0.2 4,220 
Midwest Veterinary Partners, LLC One stop   L + 5.75% (c)   6.75%   07/2025   4,120  4,088  0.2 4,079 
Midwest Veterinary Partners, LLC# One stop   L + 5.75% (c)   6.75%   07/2025   1,022  1,014  — 1,012 
Midwest Veterinary Partners, LLC One stop   L + 5.75% (c)   6.75%   07/2025   78  78  — 75 
See Notes to Consolidated Financial Statements.
18
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Providers & Services - (continued)
MWD Management, LLC & MWD Services, Inc.#+ One stop   L + 5.75% (c)   6.75%   06/2023   $ 9,358  $ 9,311  0.4 % $ 9,358 
MWD Management, LLC & MWD Services, Inc.# One stop   L + 5.75% (c)   6.75%   06/2023   4,506  4,567  0.2 4,506 
MWD Management, LLC & MWD Services, Inc.(5) One stop   L + 5.75%   N/A(6)   06/2022   —  (1) — — 
NVA Holdings, Inc.~ Senior loan   L + 3.50% (a)   3.69%   02/2026   2,877  2,852  0.1 2,877 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   19,295  17,639  0.5 12,770 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   2,239  1,906  0.1 1,482 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   1.00%   05/2022   2,122  1,929  0.1 1,404 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   1,606  1,367  0.1 1,063 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   1,419  1,208  — 939 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   1,235  1,052  — 818 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   962  819  — 637 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   834  710  — 552 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   514  438  — 340 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)(f)   7.25%   05/2022   290  266  — 193 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   98  89  — 65 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   5/1/2022   89  81  — 59 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   5/1/2022   69  63  — 46 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   64  58  — 42 
Pinnacle Treatment Centers, Inc.# One stop   L + 6.25% (c)   7.25%   01/2023   19,080  19,170  0.8 19,080 
Pinnacle Treatment Centers, Inc.* One stop   L + 6.25% (c)   7.25%   01/2023   7,612  7,563  0.3 7,612 
Pinnacle Treatment Centers, Inc.# One stop   L + 6.25% (c)   7.25%   01/2023   1,566  1,570  0.1 1,566 
Pinnacle Treatment Centers, Inc.^ One stop   L + 6.25% (c)   7.25%   01/2023   707  713  — 707 
Pinnacle Treatment Centers, Inc. One stop   L + 6.25% (c)   7.25%   01/2023   186  188  — 186 
Pinnacle Treatment Centers, Inc.^ One stop   L + 6.25% (c)   7.25%   01/2023   106  107  — 106 
Pinnacle Treatment Centers, Inc. One stop   L + 6.25% (c)   7.25%   01/2023   38  37  — 38 
Pinnacle Treatment Centers, Inc. One stop   L + 6.25%   N/A(6)   01/2023   —  1  — — 
Pinnacle Treatment Centers, Inc. One stop   L + 6.25%   N/A(6)   01/2023   —  —  — — 
PPT Management Holdings, LLC+ One stop   L + 8.50% (c)   7.00% cash/2.50% PIK   12/2022   25,061  23,907  0.9 21,542 
PPT Management Holdings, LLC One stop   L + 8.50% (c)   7.00% cash/2.50% PIK   12/2022   304  292  — 262 
PPT Management Holdings, LLC One stop   L + 8.50% (c)   7.00% cash/2.50% PIK   12/2022   180  173  — 154 
PPT Management Holdings, LLC One stop   L + 8.50% (c)   7.00% cash/2.50% PIK   12/2022   88  71  — 76 
PPT Management Holdings, LLC(5) One stop   L + 8.50% (c)   7.00% cash/2.50% PIK   12/2022   18  (3) — (40)
Pyramid Healthcare, Inc.*+ One stop   L + 6.50% (c)   7.50%   08/2022   14,942  14,821  0.6 14,942 
Pyramid Healthcare, Inc. One stop   L + 6.50% (c)   7.50%   8/1/2022   461  457  — 461 
Pyramid Healthcare, Inc. One stop   L + 6.50% (c)   7.50%   08/2022   333  329  — 333 
Pyramid Healthcare, Inc. One stop   L + 6.50% (c)   7.50%   08/2022   290  288  — 290 
Pyramid Healthcare, Inc. One stop   L + 6.50% (c)   7.50%   08/2022   112  110  — 112 
Pyramid Healthcare, Inc. One stop   L + 6.50% (c)   7.50%   08/2022   45  44  — 45 
Pyramid Healthcare, Inc.(5) One stop   L + 6.50%   N/A(6)   08/2022   —  (6) — — 
Riverchase MSO, LLC*# Senior loan   L + 6.75% (c)   6.75% cash/1.00% PIK   10/2022   9,624  9,710  0.4 9,431 
Riverchase MSO, LLC Senior loan   L + 6.75% (c)   6.75% cash/1.00% PIK   10/2022   130  130  — 128 
RXH Buyer Corporation*# One stop   L + 5.75% (c)   6.75%   09/2022   27,452  27,521  1.1 27,452 
RXH Buyer Corporation*# One stop   L + 5.75% (c)   6.75%   09/2022   3,107  3,115  0.1 3,107 
See Notes to Consolidated Financial Statements.
19
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Providers & Services - (continued)
RXH Buyer Corporation One stop   L + 5.75%   N/A(6)   09/2022   $ —  $ —  — % $ — 
Summit Behavioral Healthcare, LLC*#+ Senior loan   L + 5.00% (c)   6.00%   10/2023   29,568  29,273  1.2 29,272 
Summit Behavioral Healthcare, LLC Senior loan   L + 5.00% (c)   6.00%   10/2023   100  96  — 98 
Summit Behavioral Healthcare, LLC(5) Senior loan   L + 5.00%   N/A(6)   10/2023   —  (30) — (31)
Veterinary Specialists of North America, LLC*# Senior loan   L + 4.25% (a)   4.40%   04/2025   41,546  42,882  1.7 41,546 
Veterinary Specialists of North America, LLC Senior loan   L + 4.25% (a)   4.40%   04/2025   11,809  11,805  0.5 11,809 
Veterinary Specialists of North America, LLC# Senior loan   L + 4.25% (a)   4.40%   04/2025   2,864  2,845  0.1 2,864 
Veterinary Specialists of North America, LLC* Senior loan   L + 4.25% (a)   4.40%   04/2025   1,441  1,490  0.1 1,441 
Veterinary Specialists of North America, LLC Senior loan   L + 4.25% (a)   4.40%   04/2025   835  832  — 835 
WHCG Management, LLC*# Senior loan   L + 4.50% (c)   5.50%   03/2023   16,026  16,110  0.7 16,026 
WHCG Management, LLC Senior loan   L + 4.50% (c)   5.50%   03/2023   5,613  5,579  0.2 5,613 
WHCG Management, LLC Senior loan   L + 4.50% (c)   5.50%   03/2023   1,978  1,973  0.1 1,978 
WHCG Management, LLC Senior loan   L + 4.50% (c)   5.50%   03/2023   338  336  — 338 
WHCG Management, LLC Senior loan   L + 4.50% (d)   5.50%   3/1/2023   116  118  — 116 
638,143  627,102  24.4 595,662 
See Notes to Consolidated Financial Statements.
20
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Technology
Connexin Software, Inc.~ One stop   L + 8.50% (a)   9.50%   02/2024   $ 7,550  $ 7,612  0.3 % $ 7,550 
Connexin Software, Inc. One stop   L + 8.50%   N/A(6)   02/2024   —  —  — — 
HealthcareSource HR, Inc.*# One stop   L + 6.25% (c)   7.25%   05/2023   33,652  33,679  1.4 33,652 
HealthcareSource HR, Inc.(5) One stop   L + 6.25%   N/A(6)   05/2023   —  (1) — — 
HealthEdge Software, Inc. One stop   L + 6.25% (a)   7.25%   04/2026   2,000  1,960  0.1 1,955 
HealthEdge Software, Inc. One stop   L + 6.25% (a)   7.25%   04/2026   1,008  1,008  — 985 
HealthEdge Software, Inc. One stop   L + 6.25% (a)   7.25%   04/2026   225  223  — 220 
HealthEdge Software, Inc.(5) One stop   L + 6.25%   N/A(6)   04/2026   —  (1) — (1)
HSI Halo Acquisition, Inc.+~ One stop   L + 5.75% (c)   6.75%   08/2026   6,297  6,260  0.3 6,234 
HSI Halo Acquisition, Inc.+ One stop   L + 5.75% (c)   6.75%   08/2026   1,977  1,957  0.1 1,957 
HSI Halo Acquisition, Inc. One stop   L + 5.75% (c)   6.75%   08/2026   647  641  — 640 
HSI Halo Acquisition, Inc. One stop   L + 5.75% (c)   6.75%   09/2025   18  17  — 17 
HSI Halo Acquisition, Inc.(5) One stop   L + 5.75%   N/A(6)   08/2026   —  (14) — (14)
Kareo, Inc. One stop   L + 9.00% (a)   10.00%   06/2022   10,273  10,371  0.4 10,371 
Kareo, Inc. One stop   L + 9.00% (a)   10.00%   06/2022   941  953  — 950 
Kareo, Inc. One stop   L + 9.00% (a)   10.00%   06/2022   753  763  — 760 
Kareo, Inc. One stop   P + 8.00% (f)   11.25%   06/2022   80  80  — 80 
Nextech Holdings, LLC^ One stop   L + 5.50% (c)   5.71%   06/2025   4,002  4,065  0.2 3,841 
Nextech Holdings, LLC One stop   L + 5.50% (c)   5.72%   06/2025   1,951  1,938  0.1 1,873 
Nextech Holdings, LLC(5) One stop   L + 5.50%   N/A(6)   06/2025   —  (3) — (24)
Nextech Holdings, LLC(5) One stop   L + 5.50%   N/A(6)   06/2025   —  (3) — (16)
Qgenda Intermediate Holdings, LLC^ One stop   L + 5.50% (c)   6.50%   06/2025   15,238  15,238  0.6 15,086 
Qgenda Intermediate Holdings, LLC+~ One stop   L + 5.50% (c)   6.50%   06/2025   12,412  12,290  0.5 12,288 
Qgenda Intermediate Holdings, LLC~ One stop   L + 5.50% (c)   6.50%   06/2025   990  990  — 980 
Qgenda Intermediate Holdings, LLC(5) One stop   L + 5.50%   N/A(6)   06/2025   —  —  — (2)
Transaction Data Systems, Inc.*#+~^ One stop   L + 5.38% (c)   6.38%   06/2021   83,264  83,778  3.4 83,264 
Transaction Data Systems, Inc. One stop   L + 5.38% (c)   6.38%   06/2021   240  241  — 240 
Verisys Corporation*# One stop   L + 8.25% (c)   8.75% cash/0.50% PIK   01/2023   8,483  8,577  0.4 8,313 
Verisys Corporation One stop   L + 8.25% (c)   8.75% cash/0.50% PIK   01/2023   40  40  — 40 
192,041  192,659  7.8 191,239 

See Notes to Consolidated Financial Statements.
21
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Hotels, Restaurants & Leisure
BJH Holdings III Corp.+~ One stop   L + 5.25% (c)   6.25%   08/2025   $ 45,068  $ 46,339  1.9 % $ 45,068 
BJH Holdings III Corp.(5) One stop   L + 5.25%   N/A(6)   08/2025   —  (6) — — 
CR Fitness Holdings, LLC+~ Senior loan   L + 4.25% (c)   5.25%   07/2025   1,993  2,005  0.1 1,854 
CR Fitness Holdings, LLC Senior loan   L + 4.25% (a)   5.25%   07/2025   268  262  — 208 
CR Fitness Holdings, LLC Senior loan   L + 4.25% (a)(c)   5.25%   07/2025   74  74  — 70 
Davidson Hotel Company, LLC+ One stop   L + 6.75% (a)(c)   6.25% cash/1.50% PIK   07/2024   7,007  6,954  0.2 4,905 
Davidson Hotel Company, LLC One stop   L + 6.75% (a)(c)   6.25% cash/1.50% PIK   07/2024   1,077  1,073  — 754 
Davidson Hotel Company, LLC(5) One stop   L + 6.75%   N/A(6)   07/2024   —  (2) — (30)
Davidson Hotel Company, LLC(5) One stop   L + 6.75%   N/A(6)   07/2024   —  (18) — — 
EOS Fitness Opco Holdings, LLC*# One stop   L + 5.25% (c)   6.25%   01/2025   8,653  8,760  0.3 7,788 
EOS Fitness Opco Holdings, LLC One stop   L + 5.25% (c)   6.25%   01/2025   911  922  — 820 
EOS Fitness Opco Holdings, LLC One stop   L + 5.25% (c)   6.25%   01/2025   120  120  — 108 
Planet Fit Indy 10 LLC+ One stop   L + 5.25% (c)   6.25%   07/2025   17,342  17,141  0.6 14,914 
Planet Fit Indy 10 LLC# One stop   L + 5.25% (c)   6.25%   07/2025   2,313  2,360  0.1 1,990 
Planet Fit Indy 10 LLC# One stop   L + 5.25% (c)   6.25%   07/2025   1,256  1,239  0.1 1,080 
Planet Fit Indy 10 LLC One stop   L + 5.25% (c)   6.25%   07/2025   200  199  — 172 
Self Esteem Brands, LLC*#^ Senior loan   L + 4.25% (a)   5.25%   02/2022   45,724  46,017  1.8 44,811 
Self Esteem Brands, LLC Senior loan   P + 3.25% (f)   6.50%   02/2022   2,338  2,335  0.1 2,292 
SSRG Holdings, LLC One stop   L + 5.25% (c)   6.25%   11/2025   916  901  — 897 
SSRG Holdings, LLC One stop   L + 5.25% (c)   6.25%   11/2025   55  54  — 54 
Sunshine Sub, LLC#~ One stop   L + 4.75% (c)   5.75%   05/2024   12,891  12,984  0.5 12,117 
Sunshine Sub, LLC# One stop   L + 4.75% (c)   5.75%   05/2024   5,640  5,811  0.2 5,302 
Sunshine Sub, LLC(5) One stop   L + 4.75%   N/A(6)   05/2024   —  (1) — (12)
Tropical Smoothie Cafe Holdings, LLC+ Senior loan   L + 5.50% (a)(b)(c)   6.50%   09/2026   16,978  16,817  0.7 16,978 
Tropical Smoothie Cafe Holdings, LLC Senior loan   L + 5.50% (a)   6.50%   09/2026   15  14  — 15 
Velvet Taco Holdings, Inc.~ One stop   L + 8.00% (b)(c)(e)   8.00% cash/1.00% PIK   03/2026   1,777  1,757  0.1 1,599 
Velvet Taco Holdings, Inc. One stop   L + 11.00% (c)   8.00% cash/4.00% PIK   03/2026   91  90  — 91 
Velvet Taco Holdings, Inc. One stop   L + 7.00%   N/A(6)   03/2026   —  —  — — 
172,707  174,201  6.7 163,845 
Household Durables
Groundworks LLC^ Senior loan   L + 6.25% (c)   7.25%   01/2026   4,697  4,637  0.2 4,627 
Groundworks LLC Senior loan   L + 6.25% (c)   7.25%   01/2026   325  309  — 309 
Groundworks LLC Senior loan   L + 6.25% (c)   7.25%   01/2026   84  83  — 83 
Groundworks LLC(5) Senior loan   L + 6.25%   N/A(6)   01/2026   —  —  — (1)
5,106  5,029  0.2 5,018 
See Notes to Consolidated Financial Statements.
22
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Household Products
WU Holdco, Inc. #^ One stop   L + 5.25% (c)   6.25%   03/2026   $ 3,419  $ 3,491  0.2 % $ 3,419 
WU Holdco, Inc. One stop   L + 5.25% (c)   6.25%   03/2026   391  391  — 391 
WU Holdco, Inc. One stop   L + 5.25% (c)   5.50%   03/2025   10  9  — 8 
3,820  3,891  0.2 3,818 
Industrial Conglomerates
Arch Global CCT Holdings Corp.#^ Senior loan   L + 4.75% (c)   5.00%   04/2026   4,183  4,216  0.2 4,099 
Arch Global CCT Holdings Corp.(5) Senior loan   L + 4.75%   N/A(6)   04/2025   —  —  — (2)
Arch Global CCT Holdings Corp.(5) Senior loan   L + 4.75%   N/A(6)   04/2026   —  —  — (1)
Madison Safety & Flow LLC^ Senior loan   L + 4.00% (a)   4.15%   03/2025   490  489  — 485 
Madison Safety & Flow LLC Senior loan   L + 4.00%   N/A(6)   03/2025   —  —  — — 
Specialty Measurement Bidco Limited(8)(9)(10) One stop   L + 6.25% (c)   7.25%   11/2027   7,969  7,753  0.3 7,946 
Specialty Measurement Bidco Limited(8)(10) One stop   L + 6.25% (c)   7.25%   11/2027   7,961  7,745  0.3 7,742 
Specialty Measurement Bidco Limited(5)(8)(9)(10) One stop   L + 6.25%   N/A(6)   11/2027   —  (53) — (109)
20,603  20,150  0.8 20,160 

See Notes to Consolidated Financial Statements.
23
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Insurance
Captive Resources Midco, LLC*#+~^ One stop   L + 5.75% (c)   6.75%   05/2025   $ 52,723  $ 52,884  2.2 % $ 52,723 
Captive Resources Midco, LLC# One stop   L + 5.75% (c)   6.75%   05/2025   1,436  1,424  0.1 1,436 
Captive Resources Midco, LLC(5) One stop   L + 5.75%   N/A(6)   05/2025   —  (16) — — 
High Street Insurance Partners, Inc.+ Senior loan   L + 6.25% (c)   7.25%   12/2025   870  850  — 870 
High Street Insurance Partners, Inc. Senior loan   L + 6.25% (d)   7.25%   12/2025   202  195  — 202 
Integrity Marketing Acquisition, LLC^ Senior loan   L + 5.50% (c)   6.50%   08/2025   2,464  2,465  0.1 2,464 
Integrity Marketing Acquisition, LLC Senior loan   L + 5.50% (c)(d)   6.50%   08/2025   788  784  — 788 
Integrity Marketing Acquisition, LLC Senior loan   L + 5.50% (c)(d)   6.50%   08/2025   476  474  — 476 
Integrity Marketing Acquisition, LLC Senior loan   L + 5.50% (c)   6.50%   08/2025   249  247  — 249 
Integrity Marketing Acquisition, LLC Senior loan   L + 5.50%   N/A(6)   08/2025   —  —  — — 
J.S. Held Holdings, LLC#^ One stop   L + 6.00% (c)   7.00%   07/2025   6,152  6,124  0.2 6,152 
J.S. Held Holdings, LLC One stop   P + 5.00% (f)   8.25%   07/2025   72  66  — 72 
J.S. Held Holdings, LLC(5) One stop   L + 6.00%   N/A(6)   07/2025   —  (4) — — 
Majesco+ One stop   L + 7.75% (c)   8.75%   09/2027   12,303  12,067  0.5 12,303 
Majesco(5) One stop   L + 7.75%   N/A(6)   09/2026   —  (3) — — 
Orchid Underwriters Agency, LLC^ Senior loan   L + 4.50% (c)   5.50%   12/2024   4,114  4,162  0.2 4,114 
Orchid Underwriters Agency, LLC Senior loan   L + 4.25% (d)   5.25%   12/2024   542  542  — 542 
Orchid Underwriters Agency, LLC Senior loan   L + 4.25%   N/A(6)   12/2024   —  —  — — 
RSC Acquisition, Inc.+~^ One stop   L + 5.50% (c)   6.50%   10/2026   26,097  25,623  1.1 26,097 
RSC Acquisition, Inc.+ One stop   L + 5.50% (c)   6.50%   10/2026   1,303  1,253  0.1 1,303 
RSC Acquisition, Inc. One stop   L + 5.50% (c)   6.50%   10/2026   312  107  — 312 
RSC Acquisition, Inc.(5) One stop   L + 5.50%   N/A(6)   10/2026   —  (1) — — 
Sunstar Insurance Group, LLC+ Senior loan   L + 5.50% (c)   6.50%   10/2026   629  617  — 616 
Sunstar Insurance Group, LLC Senior loan   L + 5.50%   N/A(6)   10/2026   —  —  — — 
Sunstar Insurance Group, LLC(5) Senior loan   L + 5.50%   N/A(6)   10/2026   —  (8) — (8)
110,732  109,852  4.5 110,711 
Internet & Catalog Retail
AutoQuotes, LLC One stop   L + 6.00% (c)   7.00%   11/2024   9,887  10,014  0.4 9,097 
AutoQuotes, LLC(5) One stop   L + 6.00%   N/A(6)   11/2024   —  —  — (8)
9,887  10,014  0.4 9,089 
See Notes to Consolidated Financial Statements.
24
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
IT Services
Acquia, Inc.~ One stop   L + 7.00% (c)   8.00%   10/2025   $ 7,118  $ 7,060  0.3 % $ 7,118 
Acquia, Inc. One stop   L + 7.00%   N/A(6)   10/2025   —  —  — — 
Appriss Holdings, Inc.+~^ One stop   L + 5.25% (c)   5.50%   05/2026   24,906  25,580  1.0 24,792 
Appriss Holdings, Inc.(5) One stop   L + 5.25%   N/A(6)   05/2025   —  (3) — (2)
Arctic Wolf Networks, Inc. and Arctic Wolf Networks Canada, Inc. One stop   L + 7.50% (b)   8.50% cash/1.00% PIK   08/2025   4,630  4,461  0.2 4,721 
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc. One stop   L + 7.50%   N/A(6)   08/2025   —  —  — — 
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc.(5) One stop   L + 7.50%   N/A(6)   08/2025   —  (3) — — 
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc.(5) One stop   L + 7.50%   N/A(6)   08/2025   —  (13) — — 
Centrify Corporation*# One stop   L + 8.25% (c)   9.25%   08/2024   23,179  23,218  1.0 23,179 
Centrify Corporation One stop   P + 7.25% (f)   10.50%   08/2024   200  202  — 200 
E2open, LLC*#+~^ One stop   L + 5.75% (c)   6.75%   11/2024   85,686  86,504  3.5 85,686 
E2open, LLC One stop   L + 5.75% (a)(d)   6.75%   11/2024   370  365  — 370 
Episerver, Inc.~(8)(9) One stop   L + 6.00% (c)(d)   6.00%   10/2024   20,489  20,779  0.9 21,951 
Episerver, Inc.#^ One stop   L + 5.75% (c)(d)   6.75%   10/2024   12,154  12,331  0.5 12,154 
Episerver, Inc.(5) One stop   L + 5.75%   N/A(6)   10/2024   —  (2) — — 
Gamma Technologies, LLC*#^ One stop   L + 5.00% (c)   6.00%   06/2024   47,092  47,390  1.9 47,092 
Gamma Technologies, LLC(5) One stop   L + 5.00%   N/A(6)   06/2024   —  (1) — — 
Infinisource, Inc.~^ One stop   L + 4.50% (c)   5.50%   10/2026   29,108  28,703  1.2 29,108 
Infinisource, Inc. One stop   L + 4.50% (c)   5.50%   10/2026   244  241  — 244 
Infinisource, Inc. One stop   L + 4.50% (c)   5.50%   10/2026   110  109  — 110 
Infinisource, Inc.(5) One stop   L + 4.50%   N/A(6)   10/2026   —  (1) — — 
Maverick Bidco Inc.*#+~ One stop   L + 6.25% (c)   7.25%   04/2023   48,427  48,539  2.0 47,942 
Maverick Bidco Inc.+ One stop   L + 6.25% (c)   7.25%   04/2023   3,638  3,553  0.2 3,602 
Maverick Bidco Inc.*# One stop   L + 6.25% (c)   7.25%   04/2023   3,174  3,224  0.1 3,143 
Maverick Bidco Inc.+ One stop   L + 6.25% (c)   7.25%   04/2023   2,814  2,751  0.1 2,786 
Maverick Bidco Inc.^ One stop   L + 6.25% (c)   7.25%   04/2023   1,689  1,631  0.1 1,672 
Maverick Bidco Inc.(5) One stop   L + 6.25%   N/A(6)   04/2023   —  (1) — (3)
Maverick Bidco Inc.(5) One stop   L + 6.25%   N/A(6)   04/2023   —  (107) — (94)
PCS Intermediate II Holdings, LLC~ One stop   L + 5.25% (c)   6.25%   01/2026   14,456  14,334  0.6 14,456 
PCS Intermediate II Holdings, LLC(5) One stop   L + 5.50%   N/A(6)   01/2026   —  (1) — — 
Recordxtechnologies, LLC+ One stop   L + 5.50% (c)   6.50%   12/2025   741  734  — 719 
Recordxtechnologies, LLC One stop   L + 5.50% (c)   6.50%   12/2025   116  114  — 111 
Recordxtechnologies, LLC One stop   L + 5.50% (c)   6.50%   12/2025   42  41  — 39 
Red Dawn SEI Buyer, Inc.^ Senior loan   L + 4.25% (c)   5.25%   11/2025   750  742  — 734 
Red Dawn SEI Buyer, Inc.(5) Senior loan   L + 4.25%   N/A(6)   11/2025   —  (1) — (2)
Red Dawn SEI Buyer, Inc.(5) Senior loan   L + 4.25%   N/A(6)   11/2025   —  (1) — (3)
Red Dawn SEI Buyer, Inc.(5)(8)(9) Senior loan   L + 4.50%   N/A(6)   11/2025   —  —  — (236)
Red Dawn SEI Buyer, Inc.(5) Senior loan   L + 4.50%   N/A(6)   11/2025   —  —  — (56)
331,133  332,472  13.6 331,533 

See Notes to Consolidated Financial Statements.
25
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Leisure Products
WBZ Investment LLC# One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   09/2024   $ 8,510  $ 8,565  0.3 % $ 7,659 
WBZ Investment LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   09/2024   1,219  1,212  0.1 1,097 
WBZ Investment LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   09/2024   848  874  — 763 
WBZ Investment LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   09/2024   433  448  — 390 
WBZ Investment LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   09/2024   80  80  — 70 
11,090  11,179  0.4 9,979 
Life Sciences Tools & Services
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   29,562  29,619  1.2 29,562 
Pace Analytical Services, LLC+ One stop   L + 5.75% (c)   6.75%   04/2024   7,028  6,933  0.3 7,028 
Pace Analytical Services, LLC One stop   L + 5.75% (c)   6.75%   04/2024   3,523  3,415  0.1 3,523 
Pace Analytical Services, LLC#^ One stop   L + 5.75% (c)   6.75%   04/2024   2,749  2,757  0.1 2,749 
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   1,647  1,675  0.1 1,647 
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   1,515  1,523  0.1 1,515 
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   1,261  1,260  0.1 1,261 
Pace Analytical Services, LLC#^ One stop   L + 5.75% (c)   6.75%   04/2024   1,220  1,240  0.1 1,220 
Pace Analytical Services, LLC One stop   L + 5.75% (c)   6.75%   04/2024   990  971  — 990 
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   676  677  — 676 
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   558  567  — 558 
Pace Analytical Services, LLC* One stop   L + 5.75% (c)   6.75%   04/2024   187  190  — 187 
Pace Analytical Services, LLC(5) One stop   L + 5.75%   N/A(6)   04/2024   —  (3) — — 
50,916  50,824  2.1 50,916 
Machinery
Blackbird Purchaser, Inc. *+~^ Senior loan   L + 4.50% (c)(f)   4.75%   04/2026   15,961  16,219  0.7 15,481 
Blackbird Purchaser, Inc. Senior loan   L + 4.50% (c)   4.74%   04/2024   28  28  — 24 
Chase Industries, Inc.+~ Senior loan   L + 7.00% (d)   6.50% cash/1.50% PIK   05/2025   12,059  12,173  0.4 9,787 
Chase Industries, Inc. Senior loan   L + 7.00% (d)   6.50% cash/1.50% PIK   05/2025   985  1,018  — 800 
Chase Industries, Inc. Senior loan   L + 7.00% (d)   6.50% cash/1.50% PIK   05/2023   174  177  — 130 
29,207  29,615  1.1 26,222 
Marine
Veson Nautical LLC+ One stop   L + 5.50% (a)   6.50%   11/2025   10,594  10,492  0.4 10,488 
Veson Nautical LLC(5) One stop   L + 5.50%   N/A(6)   11/2025   —  (1) — (1)
10,594  10,491  0.4 10,487 
See Notes to Consolidated Financial Statements.
26
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Multiline Retail
Mills Fleet Farm Group LLC*#~^ One stop   L + 6.00% (d)   7.00%   10/2024   $ 46,488  $ 46,378  1.9 % $ 46,488 
Oil, Gas & Consumable Fuels
3ES Innovation, Inc.+~(8)(12) One stop   L + 5.75% (c)   6.75%   05/2025   13,725  13,956  0.6 13,451 
3ES Innovation, Inc.(5)(8)(12) One stop   L + 5.75%   N/A(6)   05/2025   —  (1) — (4)
Drilling Info Holdings, Inc.*#+~ Senior loan   L + 4.25% (a)   4.40%   07/2025   36,705  37,162  1.5 36,090 
Drilling Info Holdings, Inc.~ Senior loan   L + 4.50% (a)   4.65%   07/2025   17,298  16,893  0.7 17,184 
Drilling Info Holdings, Inc. Senior loan   L + 4.25% (a)   4.40%   07/2023   80  78  — 76 
Drilling Info Holdings, Inc. Senior loan   L + 4.50% (a)   4.65%   07/2023   34  32  — 34 
Drilling Info Holdings, Inc.(5) Senior loan   L + 4.25%   N/A(6)   07/2025   —  (5) — (17)
Project Power Buyer, LLC#+^ One stop   L + 6.25% (c)   7.25%   05/2026   15,742  15,883  0.6 15,742 
Project Power Buyer, LLC(5) One stop   L + 6.25%   N/A(6)   05/2025   —  (1) — — 
83,584  83,997  3.4 82,556 
Paper & Forest Products
Messenger, LLC+~ One stop   L + 6.50% (c)(f)   7.50%   08/2023   8,990  9,056  0.4 8,630 
Messenger, LLC(5) One stop   L + 6.50%   N/A(6)   08/2023   —  —  — (2)
8,990  9,056  0.4 8,628 
See Notes to Consolidated Financial Statements.
27
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Personal Products
IMPLUS Footwear, LLC+~ One stop   L + 7.75% (c)   8.75%   04/2024   $ 30,897  $ 31,273  1.2 % $ 27,808 
IMPLUS Footwear, LLC+~ One stop   L + 7.75% (c)   8.75%   04/2024   5,277  5,341  0.2 4,749 
IMPLUS Footwear, LLC* One stop   L + 7.75% (c)   8.75%   04/2024   761  783  — 685 
36,935  37,397  1.4 33,242 
Pharmaceuticals
ACP Ulysses Buyer, Inc.+^ Senior loan   L + 5.00% (a)   6.00%   02/2026   13,177  13,064  0.6 13,177 
Apothecary Products, LLC+ Senior loan   L + 4.25% (a)   5.25%   07/2023   2,904  3,000  0.1 2,904 
Apothecary Products, LLC Senior loan   L + 4.25% (d)   5.25%   07/2023   78  78  — 78 
BIOVT, LLC*#^ One stop   L + 5.75% (a)   6.75%   07/2022   32,726  32,493  1.3 32,726 
BIOVT, LLC#^ One stop   L + 5.75% (a)   6.75%   07/2022   1,988  1,974  0.1 1,988 
BIOVT, LLC* One stop   L + 5.75% (a)   6.75%   07/2022   1,866  1,853  0.1 1,866 
BIOVT, LLC(5) One stop   L + 5.75%   N/A(6)   07/2022   —  (2) — — 
52,739  52,460  2.2 52,739 
Professional Services
Brandmuscle, Inc.# Senior loan   L + 4.75% (c)   5.75%   12/2021   7,665  7,680  0.3 7,663 
Brandmuscle, Inc.# Senior loan   L + 5.00% (c)   6.00%   12/2021   1,068  1,079  — 1,070 
Brandmuscle, Inc. Senior loan   L + 4.75%   N/A(6)   12/2021   —  —  — — 
DISA Holdings Acquisition Subsidiary Corp.+~ Senior loan   L + 4.25% (c)   5.25%   06/2022   9,345  9,411  0.4 8,785 
DISA Holdings Acquisition Subsidiary Corp.(5) Senior loan   L + 4.25%   N/A(6)   06/2022   —  —  — (87)
Net Health Acquisition Corp.*# One stop   L + 5.50% (c)   6.50%   12/2023   8,532  8,605  0.3 8,447 
Net Health Acquisition Corp.~^ One stop   L + 5.50% (c)   6.50%   12/2023   6,827  6,921  0.3 6,759 
Net Health Acquisition Corp.+ One stop   L + 5.50% (c)   6.50%   12/2023   4,313  4,271  0.2 4,270 
Net Health Acquisition Corp.*# One stop   L + 5.50% (c)   6.50%   12/2023   1,192  1,202  0.1 1,180 
Net Health Acquisition Corp.(5) One stop   L + 5.50%   N/A(6)   12/2023   —  (2) — (2)
Nexus Brands Group, Inc.*# One stop   L + 6.00% (c)   7.00%   11/2023   9,354  9,439  0.4 8,980 
Nexus Brands Group, Inc.+~(8)(9) One stop   L + 6.00% (h)   7.00%   11/2023   7,127  7,235  0.3 7,441 
Nexus Brands Group, Inc.# One stop   L + 6.00% (c)   7.00%   11/2023   1,981  2,040  0.1 1,902 
Nexus Brands Group, Inc.#~ One stop   L + 6.00% (c)   7.00%   11/2023   1,433  1,476  0.1 1,376 
Nexus Brands Group, Inc.(8)(9) One stop   L + 6.00% (c)   7.00%   11/2023   823  822  — 827 
Nexus Brands Group, Inc.~ One stop   L + 6.00% (c)   7.00%   11/2023   763  758  — 733 
Nexus Brands Group, Inc. One stop   L + 6.00% (c)   7.00%   11/2023   517  517  — 507 
Nexus Brands Group, Inc. One stop   L + 6.00% (c)   7.00%   11/2023   85  84  — 83 
Nexus Brands Group, Inc. One stop   L + 6.00% (c)   7.00%   11/2023   54  53  — 53 
Nexus Brands Group, Inc. One stop   L + 6.00% (c)   7.00%   11/2023   20  21  — 12 
Nexus Brands Group, Inc.(5)(8)(9) One stop   L + 6.00%   N/A(6)   11/2023   —  —  — (4)
Nexus Brands Group, Inc. One stop   L + 6.00%   N/A(6)   11/2023   —  —  — — 
PlanSource Holdings, Inc. ~ One stop   L + 6.25% (d)   7.25%   04/2025   11,416  11,535  0.5 11,416 
PlanSource Holdings, Inc. (5) One stop   L + 6.25%   N/A(6)   04/2025   —  (1) — — 
Teaching Company, The*# One stop   L + 4.75% (c)   5.75%   07/2023   17,788  17,949  0.7 17,788 
Teaching Company, The One stop   L + 4.75%   N/A(6)   07/2023   —  —  — — 
90,303  91,095  3.7 89,199 

See Notes to Consolidated Financial Statements.
28
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Real Estate Management & Development
Property Brands, Inc.# One stop   L + 5.75% (d)   6.75%   01/2024   $ 19,794  $ 19,971  0.8 % $ 19,794 
Property Brands, Inc.~^ One stop   L + 5.75% (d)   6.75%   01/2024   13,632  13,427  0.6 13,632 
Property Brands, Inc.*# One stop   L + 5.75% (d)   6.75%   01/2024   6,636  6,736  0.3 6,636 
Property Brands, Inc.~^ One stop   L + 5.75% (d)   6.75%   01/2024   3,234  3,332  0.1 3,234 
Property Brands, Inc. One stop   L + 5.75% (d)   6.75%   01/2024   1,421  1,462  0.1 1,421 
Property Brands, Inc.# One stop   L + 5.75% (d)   6.75%   01/2024   1,202  1,237  0.1 1,202 
Property Brands, Inc. One stop   L + 5.75% (d)   6.75%   01/2024   1,185  1,221  — 1,185 
Property Brands, Inc. One stop   L + 5.75% (d)   6.75%   01/2024   948  943  — 948 
Property Brands, Inc. One stop   L + 5.75% (d)   6.75%   01/2024   500  515  — 500 
Property Brands, Inc. One stop   L + 5.75% (d)   6.75%   01/2024   200  199  — 200 
Property Brands, Inc.(5) One stop   L + 5.75%   N/A(6)   01/2024   —  (2) — — 
MRI Software LLC~^ One stop   L + 5.50% (c)   6.50%   02/2026   14,562  14,441  0.6 14,562 
MRI Software LLC+ One stop   L + 5.50% (c)   6.50%   02/2026   1,744  1,703  0.1 1,744 
MRI Software LLC(5) One stop   L + 5.50%   N/A(6)   02/2026   —  (2) — — 
MRI Software LLC One stop   L + 5.50%   N/A(6)   02/2026   —  —  — — 
MRI Software LLC(5) One stop   L + 5.50%   N/A(6)   02/2026   —  (3) — — 
65,058  65,180  2.7  65,058 
Road & Rail
Internet Truckstop Group LLC*# One stop   L + 5.50% (c)   6.50%   04/2025   22,530  23,076  0.9 22,530 
Internet Truckstop Group LLC(5) One stop   L + 5.50%   N/A(6)   04/2025   —  (2) — — 
22,530  23,074  0.9 22,530 

See Notes to Consolidated Financial Statements.
29
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Software
Accela, Inc.*# One stop   L + 4.92% (a)   4.25% cash/1.67% PIK   09/2023   $ 4,498  $ 4,498  0.2 % $ 4,429 
Accela, Inc.(5) One stop   L + 7.00%   N/A(6)   09/2023   —  —  — (2)
Apptio, Inc. One stop   L + 7.25% (d)   8.25%   01/2025   57,009  57,680  2.3 57,009 
Apptio, Inc. (5) One stop   L + 7.25%   N/A(6)   01/2025   —  (1) — — 
Astute Holdings, Inc. One stop   L + 6.50% (c)   7.50%   04/2025   10,779  10,907  0.4 10,779 
Astute Holdings, Inc. One stop   L + 6.50% (c)   7.50%   04/2025   2,760  2,752  0.1 2,760 
Astute Holdings, Inc. (5) One stop   L + 6.50%   N/A(6)   04/2025   —  (1) — — 
Axiom Merger Sub Inc.~^ One stop   L + 5.25% (c)(d)   6.25%   04/2026   5,831  5,884  0.2 5,886 
Axiom Merger Sub Inc.+~(8)(9) One stop   E + 5.50% (g)   5.50%   04/2026   2,404  2,425  0.1 2,615 
Axiom Merger Sub Inc. One stop   L + 5.25% (d)   6.25%   04/2026   30  29  — 30 
Bearcat Buyer, Inc.+~ Senior loan   L + 4.25% (c)   5.25%   07/2026   2,921  2,942  0.1 2,828 
Bearcat Buyer, Inc. Senior loan   L + 4.25% (c)   5.25%   07/2026   522  521  — 505 
Bearcat Buyer, Inc.~ Senior loan   L + 4.25% (c)   5.25%   07/2026   308  306  — 299 
Bearcat Buyer, Inc. Senior loan   L + 4.25% (c)(f)   5.46%   07/2024   6  6  — 6 
Bullhorn, Inc.*#+~^ One stop   L + 5.75% (c)   6.75%   09/2026   67,133  66,027  2.8 67,677 
Bullhorn, Inc.(8)(9) One stop   L + 6.00% (h)   6.02%   09/2026   11,978  11,776  0.5 13,213 
Bullhorn, Inc.(8)(9) One stop   L + 5.75% (c)   5.75%   09/2026   4,810  4,728  0.2 5,273 
Bullhorn, Inc. One stop   L + 5.75% (c)   6.75%   09/2026   97  96  — 98 
Bullhorn, Inc. One stop   L + 5.75% (c)   6.75%   09/2026   78  76  — 78 
Bullhorn, Inc.(5) One stop   L + 5.75%   N/A(6)   09/2026   —  (4) — 2 
Bullhorn, Inc.(5) One stop   L + 5.75%   N/A(6)   09/2026   —  (4) — 2 
Calabrio, Inc. ~ One stop   L + 6.50% (c)   7.50%   06/2025   24,880  24,893  1.0 24,880 
Calabrio, Inc. One stop   L + 6.50%   N/A(6)   06/2025   —  1  — — 
Clearwater Analytics, LLC One stop   L + 6.25% (c)   7.25%   10/2025   17,398  17,230  0.7 17,224 
Clearwater Analytics, LLC*# One stop   L + 6.25% (c)   7.25%   10/2025   14,242  14,190  0.6 14,101 
Clearwater Analytics, LLC* One stop   L + 6.25% (c)   7.25%   10/2025   6,025  6,025  0.2 5,965 
Clearwater Analytics, LLC+ One stop   L + 6.25% (c)   7.25%   10/2025   988  971  — 978 
Clearwater Analytics, LLC(5) One stop   L + 6.25%   N/A(6)   10/2025   —  (4) — (3)
Cloudbees, Inc. One stop   L + 9.00% (c)   9.50% cash/0.50% PIK   05/2023   4,220  4,250  0.2 4,220 
Cloudbees, Inc. One stop   L + 9.00% (c)   9.50% cash/0.50% PIK   05/2023   2,778  2,703  0.1 2,778 
Cloudbees, Inc. One stop   L + 9.00% (c)   9.50% cash/0.50% PIK   05/2023   1,471  1,475  0.1 1,471 
Cloudbees, Inc. One stop   L + 9.00%   N/A(6)   05/2023   —  —  — — 
Confluence Technologies, Inc.+~^ One stop   L + 5.75% (a)   6.75%   03/2024   44,890  44,673  1.8 44,890 
Confluence Technologies, Inc. One stop   L + 5.75% (a)   6.75%   03/2024   28  27  — 28 
Convercent, Inc. One stop   L + 9.00% (c)   8.25% cash/2.75% PIK   12/2024   2,815  2,748  0.1 2,860 
Convercent, Inc. Subordinated debt   N/A   4.00%   02/2021   138  138  — 185 
Convercent, Inc. One stop   L + 9.00% (c)   N/A(6)   12/2024   —  —  — 1 
Convercent, Inc. One stop   L + 9.00%   N/A(6)   12/2024   —  —  — — 
Daxko Acquisition Corporation*#^ One stop   L + 6.00% (c)   7.00%   09/2023   25,614  25,686  1.1 25,614 
Daxko Acquisition Corporation One stop   L + 6.00%   N/A(6)   09/2023   —  —  — — 
See Notes to Consolidated Financial Statements.
30
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Software - (continued)
Digital Guardian, Inc. One stop   L + 9.50% (c)   7.50% cash/3.00% PIK   06/2023   8,798  9,054  0.4 % 9,329 
Digital Guardian, Inc. Subordinated debt   N/A   8.00% PIK   06/2023   9  7  — 9 
Digital Guardian, Inc. One stop   L + 8.00%   N/A(6)   06/2023   —  —  — 2 
Diligent Corporation*#+~^ One stop   L + 6.25% (c)   7.25%   08/2025   87,836  88,279  3.6 87,836 
Diligent Corporation One stop   L + 6.25%   N/A(6)   08/2025   —  —  — — 
GS Acquisitionco, Inc.*#+~^ One stop   L + 5.75% (c)   6.75%   05/2024   53,909  54,275  2.2 53,101 
GS Acquisitionco, Inc.*# One stop   L + 5.75% (c)   6.75%   05/2024   12,723  13,004  0.5 12,532 
GS Acquisitionco, Inc.# One stop   L + 5.75% (c)   6.75%   05/2024   3,278  3,351  0.1 3,229 
GS Acquisitionco, Inc.+~ One stop   L + 5.75% (c)   6.75%   05/2024   3,024  3,092  0.1 2,980 
GS Acquisitionco, Inc.# One stop   L + 5.75% (c)   6.75%   05/2024   1,895  1,937  0.1 1,866 
GS Acquisitionco, Inc. One stop   L + 5.75% (c)   6.75%   05/2024   75  75  — 74 
GS Acquisitionco, Inc. One stop   L + 5.75% (d)   6.75%   05/2024   37  37  — 36 
GS Acquisitionco, Inc.(5) One stop   L + 5.75%   N/A(6)   05/2024   —  (2) — (4)
ICIMS, Inc.~ One stop   L + 6.50% (c)   7.50%   09/2024   14,355  14,535  0.6 14,355 
ICIMS, Inc.~ One stop   L + 6.50% (c)   7.50%   09/2024   4,501  4,571  0.2 4,501 
ICIMS, Inc.~ One stop   L + 6.50% (c)   7.50%   09/2024   2,706  2,680  0.1 2,706 
ICIMS, Inc. One stop   L + 6.50% (c)   7.50%   09/2024   88  88  — 88 
Impartner, Inc. One stop   L + 9.50% (c)   9.30% cash/2.00% PIK   08/2025   2,931  2,897  0.1 3,037 
Impartner, Inc.(5) One stop   L + 9.50%   N/A(6)   08/2025   —  (3) — 17 
Impartner, Inc. One stop   L + 9.50%   N/A(6)   08/2025   —  —  — — 
Infogix, Inc.*# One stop   L + 6.00% (c)   7.00%   04/2024   7,160  7,282  0.3 7,160 
Infogix, Inc.*^ One stop   L + 6.00% (c)   7.00%   04/2024   1,105  1,120  0.1 1,105 
Infogix, Inc. One stop   L + 6.00% (c)   7.00%   04/2024   90  90  — 90 
Instructure, Inc.~ Senior loan   L + 7.00% (c)   8.00%   03/2026   17,285  16,683  0.7 17,285 
Integral Ad Science, Inc.~ One stop   L + 7.25% (c)   7.00% cash/1.25% PIK   07/2024   15,899  16,073  0.7 15,899 
Integral Ad Science, Inc.(5) One stop   L + 6.00%   N/A(6)   07/2023   —  (2) — (2)
Integration Appliance, Inc.*~ One stop   L + 7.25% (c)   8.25%   08/2023   68,335  69,047  2.8 68,335 
Integration Appliance, Inc. One stop   L + 7.25% (d)   8.25%   08/2023   487  483  — 487 
Invoice Cloud, Inc. One stop   L + 6.50% (c)   4.25% cash/3.25% PIK   02/2024   6,575  6,611  0.3 6,575 
Invoice Cloud, Inc. One stop   L + 6.50% (c)   4.25% cash/3.25% PIK   02/2024   2,204  2,203  0.1 2,204 
Invoice Cloud, Inc.(5) One stop   L + 6.00%   N/A(6)   02/2024   —  —  — (2)
Juvare, LLC+ One stop   L + 6.25% (c)   7.25%   10/2026   7,526  7,435  0.3 7,432 
Juvare, LLC One stop   P + 5.25% (f)   8.50%   10/2026   954  932  — 932 
Juvare, LLC(5) One stop   L + 6.25%   N/A(6)   04/2026   —  (1) — (1)
Kaseya Traverse Inc~ One stop   L + 7.00% (c)   5.00% cash/3.00% PIK   05/2025   37,203  38,061  1.5 37,203 
Kaseya Traverse Inc One stop   L + 7.00% (c)   5.00% cash/3.00% PIK   05/2025   3,852  3,863  0.2 3,852 
Kaseya Traverse Inc One stop   L + 6.50% (b)   7.50%   05/2025   89  88  — 87 
Kaseya Traverse Inc(5) One stop   L + 7.00%   N/A(6)   05/2025   —  (20) — — 
Mindbody, Inc.~ One stop   L + 8.50% (c)   8.00% cash/1.50% PIK   02/2025   48,777  49,519  2.0 47,802 
Mindbody, Inc.(5) One stop   L + 8.00%   N/A(6)   02/2025   —  (1) — (8)
Ministry Brands, LLC^ Senior loan   L + 4.00% (b)   5.00%   12/2022   1,442  1,457  0.1 1,413 
Ministry Brands, LLC^ Senior loan   L + 4.00% (b)   5.00%   12/2022   824  834  — 809 
Ministry Brands, LLC Senior loan   L + 4.00% (b)   5.00%   12/2022   376  386  — 368 
See Notes to Consolidated Financial Statements.
31
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Software - (continued)
mParticle, Inc. One stop   L + 9.75% (c)   7.50% cash/3.25% PIK   09/2025   $ 3,184  $ 3,130  0.1 % $ 3,184 
mParticle, Inc. One stop   L + 9.75%   N/A(6)   09/2025   —  —  — — 
Namely, Inc.~ One stop   L + 7.50% (c)   8.25% cash/1.25% PIK   06/2024   3,591  3,431  0.2 3,519 
Namely, Inc. One stop   L + 7.50% (c)   8.25% cash/1.25% PIK   06/2024   2,039  1,918  0.1 1,971 
Namely, Inc. One stop   L + 7.50% (a)   8.25% cash/1.25% PIK   06/2024   70  70  — 68 
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH One stop   L + 7.75% (c)   7.50% cash/1.75% PIK   10/2024   2,149  2,132  0.1 2,261 
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH One stop   L + 7.75%   N/A(6)   10/2024   —  —  — 1 
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH One stop   L + 7.75%   N/A(6)   10/2024   —  —  — 4 
PDI TA Holdings, Inc. One stop   L + 4.50% (a)   5.50%   10/2024   8,559  8,411  0.4 8,473 
PDI TA Holdings, Inc. Second lien   L + 8.50% (a)   9.50%   10/2025   3,424  3,347  0.1 3,372 
Personify, Inc.*+^ One stop   L + 5.75% (c)   6.75%   09/2024   15,216  15,459  0.6 15,064 
Personify, Inc.+ One stop   P + 4.75% (f)   8.00%   09/2024   9,032  8,943  0.4 8,942 
Personify, Inc. One stop   L + 5.75% (c)   6.75%   09/2024   60  61  — 58 
RegEd Aquireco, LLC^ Senior loan   L + 4.25% (a)   5.25%   12/2024   11,387  11,385  0.4 10,818 
RegEd Aquireco, LLC Senior loan   L + 4.25% (a)(f)   4.40%   12/2024   62  61  — 44 
Saturn Borrower Inc.+~ One stop   L + 6.50% (c)   7.50%   09/2026   16,284  15,816  0.7 16,284 
Saturn Borrower Inc.(5) One stop   L + 6.50%   N/A(6)   09/2026   —  (3) — — 
SnapLogic, Inc. One stop   L + 8.75% (c)   5.75% cash/5.50% PIK   09/2024   6,062  5,999  0.3 6,062 
SnapLogic, Inc. One stop   L + 8.75% (c)   5.75% cash/5.50% PIK   09/2024   62  61  — 62 
SnapLogic, Inc. One stop   L + 8.75%   N/A(6)   09/2024   —  —  — — 
Sontatype, Inc. One stop   L + 6.75% (c)   7.75%   12/2025   851  843  — 851 
Sontatype, Inc.(5) One stop   L + 6.75%   N/A(6)   12/2025   —  (2) — — 
Spartan Buyer Acquisition Co.+~ One stop   L + 6.50% (c)   7.50%   12/2026   31,916  31,522  1.3 31,556 
Spartan Buyer Acquisition Co.(5) One stop   L + 6.50%   N/A(6)   12/2026   —  (3) — (3)
Telesoft Holdings LLC^ One stop   L + 5.75% (b)   6.75%   12/2025   902  885  — 902 
Telesoft Holdings LLC(5) One stop   L + 5.75%   N/A(6)   12/2025   —  (2) — — 
TI Intermediate Holdings, LLC^ Senior loan   L + 4.50% (a)   4.65%   12/2024   3,508  3,563  0.1 3,333 
TI Intermediate Holdings, LLC+ Senior loan   L + 4.50% (a)   5.50%   12/2024   927  904  — 903 
TI Intermediate Holdings, LLC(5) Senior loan   L + 4.50%   N/A(6)   12/2024   —  —  — (3)
TI Intermediate Holdings, LLC(5) Senior loan   L + 4.50%   N/A(6)   12/2024   —  (11) — (11)
Togetherwork Holdings, LLC*# One stop   L + 5.75% (a)   6.75%   03/2025   15,524  15,658  0.6 15,524 
Togetherwork Holdings, LLC~^ One stop   L + 5.75% (a)   6.75%   03/2025   1,799  1,857  0.1 1,799 
Togetherwork Holdings, LLC One stop   L + 5.75% (a)   6.75%   03/2025   1,746  1,800  0.1 1,746 
Togetherwork Holdings, LLC*# One stop   L + 5.75% (a)   6.75%   03/2025   1,702  1,757  0.1 1,702 
Togetherwork Holdings, LLC~^ One stop   L + 5.75% (a)   6.75%   03/2025   1,644  1,674  0.1 1,644 
Togetherwork Holdings, LLC*^ One stop   L + 5.75% (a)   6.75%   03/2025   1,584  1,636  0.1 1,584 
Togetherwork Holdings, LLC One stop   L + 5.75% (a)   6.75%   03/2025   1,477  1,522  0.1 1,477 
Togetherwork Holdings, LLC*# One stop   L + 5.75% (a)   6.75%   03/2025   1,210  1,227  0.1 1,210 
Togetherwork Holdings, LLC One stop   L + 5.75% (a)   6.75%   03/2025   666  687  — 666 
Togetherwork Holdings, LLC+ One stop   L + 5.75% (a)   6.75%   03/2025   461  456  — 461 
Togetherwork Holdings, LLC^ One stop   L + 5.75% (a)   6.75%   03/2025   446  442  — 446 
Togetherwork Holdings, LLC One stop   L + 5.75% (a)   6.75%   03/2024   300  299  — 300 
Togetherwork Holdings, LLC One stop   L + 5.75% (a)   6.75%   03/2025   64  66  — 64 
See Notes to Consolidated Financial Statements.
32
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Software - (continued)
Togetherwork Holdings, LLC~ One stop   L + 5.75% (a)   6.75%   03/2025   $ 59  $ 61  — % $ 59 
Transact Holdings, Inc.+~ Senior loan   L + 4.75% (a)   4.90%   04/2026   3,071  3,111  0.1 3,002 
Trintech, Inc.*#^ One stop   L + 6.00% (c)   7.00%   12/2023   22,343  22,654  0.9 22,343 
Trintech, Inc.#^ One stop   L + 6.00% (c)   7.00%   12/2023   9,263  9,434  0.4 9,263 
Trintech, Inc. One stop   L + 6.00% (c)   7.00%   12/2023   300  301  — 300 
Vector CS Midco Limited & Cloudsense Ltd.~(8)(9)(10) One stop   N/A   4.50% cash/3.55% PIK   05/2024   7,929  8,049  0.4 8,515 
Vector CS Midco Limited & Cloudsense Ltd.(8)(9)(10) One stop   L + 8.05% (h)   4.50% cash/3.55% PIK   05/2024   134  133  — 140 
Vendavo, Inc.*~ One stop   L + 6.50% (c)   7.50%   10/2022   35,278  35,246  1.5 35,278 
Vendavo, Inc.(5) One stop   L + 6.50%   N/A(6)   10/2022   —  (2) — — 
Workforce Software, LLC~ One stop   L + 6.50% (c)   7.50%   07/2025   27,266  27,929  1.1 27,266 
Workforce Software, LLC(5) One stop   L + 6.50%   N/A(6)   07/2025   —  (2) — — 
986,550  989,584  40.4 985,902 

See Notes to Consolidated Financial Statements.
33
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Specialty Retail
2nd Ave. LLC One stop   L + 6.50% (d)   7.50%   09/2025   $ 5,900  $ 5,819  0.2 % $ 5,782 
2nd Ave. LLC One stop   L + 6.50% (d)   7.50%   09/2025   50  50  — 49 
Batteries Plus Holding Corporation# One stop   L + 6.75% (a)   7.75%   07/2022   21,921  22,072  0.9 21,921 
Batteries Plus Holding Corporation(5) One stop   L + 6.75%   N/A(6)   07/2022   —  (1) — — 
Boot Barn, Inc.#+~ Senior loan   L + 4.50% (c)   5.50%   06/2023   16,778  16,893  0.7 16,778 
Cycle Gear, Inc.#+^ One stop   L + 5.00% (c)   6.00%   01/2024   21,416  21,727  0.9 21,416 
DTLR, Inc.*#+ One stop   L + 7.00% (c)   7.50% cash/0.50% PIK   08/2022   41,487  41,823  1.7 41,487 
Imperial Optical Midco Inc.~ One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   3,629  3,671  0.2 3,629 
Imperial Optical Midco Inc.* One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   2,830  2,812  0.1 2,830 
Imperial Optical Midco Inc.# One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   1,924  1,967  0.1 1,924 
Imperial Optical Midco Inc.# One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   1,252  1,280  0.1 1,252 
Imperial Optical Midco Inc.* One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   1,141  1,165  0.1 1,141 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   331  329  — 331 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   241  239  — 241 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   191  189  — 191 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   163  160  — 163 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   134  133  — 134 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   130  129  — 130 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   97  96  — 97 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   83  83  — 83 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   76  76  — 76 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   69  68  — 69 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   63  63  — 63 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   55  55  — 55 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   43  42  — 43 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   41  41  — 41 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   35  35  — 35 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   28  27  — 28 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   24  24  — 24 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   21  21  — 21 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   20  19  — 20 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   19  18  — 19 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   17  17  — 17 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   11  11  — 11 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   11  11  — 11 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   9  9  — 9 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   9  9  — 9 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   8  8  — 8 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   7  7  — 7 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   5  5  — 5 
See Notes to Consolidated Financial Statements.
34
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Specialty Retail -. (continued)
Imperial Optical Midco Inc. One stop   L + 6.25%   N/A(6)   08/2023   $ —  $ —  — % $ — 
Imperial Optical Midco Inc.(5) One stop   L + 6.25%   N/A(6)   08/2023   —  (15) — — 
Jet Equipment & Tools Ltd.+~(8)(9)(12) One stop   L + 5.25% (a)   6.25%   11/2024   17,942  18,203  0.8 18,534 
Jet Equipment & Tools Ltd.*#(8)(12) One stop   L + 5.25% (a)   6.25%   11/2024   12,333  12,557  0.5 12,319 
Jet Equipment & Tools Ltd.+(8)(9)(12) One stop   L + 5.50% (c)   6.50%   11/2024   5,246  5,197  0.2 5,474 
Jet Equipment & Tools Ltd.#(8)(12)^ One stop   L + 5.25% (a)   6.25%   11/2024   4,295  4,362  0.2 4,291 
Jet Equipment & Tools Ltd.(8)(12)^ One stop   L + 5.25% (a)   6.25%   11/2024   1,577  1,565  0.1 1,576 
Jet Equipment & Tools Ltd.(5)(8)(9)(12) One stop   L + 5.25%   N/A(6)   11/2024   —  (1) — — 
Pet Holdings ULC*#+(8)(12) One stop   L + 5.50% (c)   6.50%   07/2022   46,518  47,211  1.9 46,518 
Pet Holdings ULC*#+(8)(12) One stop   L + 5.50% (c)   6.50%   07/2022   240  241  — 240 
Pet Holdings ULC(5)(8)(12) One stop   L + 5.50%   N/A(6)   07/2022   —  (1) — — 
Pet Supplies Plus, LLC*+^ Senior loan   L + 4.25% (c)   5.25%   12/2024   14,144  14,365  0.6 14,144 
Pet Supplies Plus, LLC(5) Senior loan   L + 4.25%   N/A(6)   12/2023   —  (1) — — 
PetPeople Enterprises, LLC# One stop   L + 5.75% (c)   6.75%   09/2023   5,338  5,383  0.2 5,232 
PetPeople Enterprises, LLC# One stop   L + 5.75% (c)(d)   6.75%   09/2023   1,813  1,837  0.1 1,777 
PetPeople Enterprises, LLC One stop   L + 5.75% (d)   6.75%   09/2023   40  41  — 38 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (d)   7.50%   05/2023   4,908  4,908  0.2 4,908 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   1,164  1,106  0.1 1,164 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   1,073  1,059  0.1 1,073 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   1,034  1,021  — 1,034 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   1,007  1,007  — 1,007 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   931  919  — 931 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   776  766  — 776 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   737  728  — 737 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   602  602  — 602 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   530  523  — 530 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   434  418  — 434 
PPV Intermediate Holdings II, LLC One stop   L + 6.50% (a)   7.50%   05/2023   129  127  — 129 
PPV Intermediate Holdings II, LLC One stop   N/A   7.90% PIK   05/2023   24  24  — 24 
PPV Intermediate Holdings II, LLC One stop   L + 6.50%   N/A(6)   05/2023   —  —  — — 
Sola Franchise, LLC and Sola Salon Studios, LLC# One stop   L + 4.75% (c)   5.75%   10/2024   7,336  7,349  0.3 7,336 
Sola Franchise, LLC and Sola Salon Studios, LLC# One stop   L + 4.75% (c)   5.75%   10/2024   1,704  1,758  0.1 1,704 
Sola Franchise, LLC and Sola Salon Studios, LLC One stop   L + 4.75% (c)(f)   6.13%   10/2024   66  65  — 66 
Titan Fitness, LLC*#+ One stop   L + 4.75% (b)(c)   5.75%   02/2025   30,240  30,656  1.1 27,217 
Titan Fitness, LLC One stop   L + 4.75% (c)   5.75%   02/2025   1,889  1,876  0.1 1,700 
Titan Fitness, LLC One stop   L + 4.75% (c)   5.75%   02/2025   474  472  — 424 
Titan Fitness, LLC(5) One stop   L + 4.75%   N/A(6)   02/2025   —  (1) — — 
Vermont Aus Pty Ltd~(8)(9)(11) One stop   L + 4.75% (c)   4.81%   12/2024   2,199  2,218  0.1 2,452 
Vermont Aus Pty Ltd(8)(9)(11) One stop   L + 4.75% (c)   4.81%   12/2024   81  82  — 97 
287,093  289,829  11.7 284,638 

See Notes to Consolidated Financial Statements.
35
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Technology Hardware, Storage & Peripherals
Agility Recovery Solutions Inc.*#^ One stop   L + 6.00% (c)   7.00%   03/2023   $ 22,414  $ 22,524  0.9 % $ 21,966 
Agility Recovery Solutions Inc. One stop   L + 6.00% (c)   7.00%   03/2023   902  900  — 882 
23,316  23,424  0.9 22,848 
Textiles, Apparel & Luxury Goods
Elite Sportswear, L.P. Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   9,571  9,455  0.3 6,700 
Elite Sportswear, L.P. Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   3,848  3,803  0.1 2,693 
Elite Sportswear, L.P. Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   1,980  1,957  0.1 1,386 
Elite Sportswear, L.P. Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   1,192  1,178  — 828 
Elite Sportswear, L.P.* Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   657  650  — 459 
Elite Sportswear, L.P. Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   301  297  — 211 
Elite Sportswear, L.P.* Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   287  285  — 201 
Elite Sportswear, L.P. Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   42  41  — 30 
Georgica Pine Clothiers, LLC# One stop   L + 5.50% (c)(d)   6.50%   11/2023   10,350  10,440  0.4 9,543 
Georgica Pine Clothiers, LLC*# One stop   L + 5.50% (c)(d)   6.50%   11/2023   6,504  6,565  0.3 5,997 
Georgica Pine Clothiers, LLC+ One stop   L + 5.50% (c)(d)   6.50%   11/2023   1,006  999  — 928 
Georgica Pine Clothiers, LLC# One stop   L + 5.50% (c)(d)   6.50%   11/2023   906  915  — 835 
Georgica Pine Clothiers, LLC*# One stop   L + 5.50% (c)(d)   6.50%   11/2023   635  643  — 586 
Georgica Pine Clothiers, LLC One stop   L + 5.50% (c)(d)   6.50%   11/2023   236  236  — 218 
SHO Holding I Corporation~ Senior loan   L + 5.25% (c)   4.00% cash/2.25% PIK   04/2024   4,035  4,019  0.2 3,631 
SHO Holding I Corporation~ Senior loan   L + 5.23% (c)   4.00% cash/2.23% PIK   04/2024   44  44  — 39 
SHO Holding I Corporation Senior loan   L + 4.00% (a)(c)(d)   5.00%   04/2024   35  34  — 35 
SHO Holding I Corporation(5) Senior loan   L + 5.00%   N/A(6)   04/2024   —  (1) — (8)
SHO Holding I Corporation Senior loan   L + 5.00% (c)(d)   N/A(6)   04/2024   —  —  — — 
SHO Holding I Corporation Senior loan   L + 5.23% (c)(d)   N/A(6)   04/2024   —  —  — — 
41,629  41,560  1.4 34,312 
Total non-controlled/non-affiliate company debt investments $ 4,440,774  $ 4,440,146  177.7 $ 4,335,951 

See Notes to Consolidated Financial Statements.
36
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Equity Investments (14)(15)
NTS Technical Systems Common Stock   N/A   N/A   N/A   2  $ 1,506  0.1 % $ 776 
NTS Technical Systems Preferred stock   N/A   N/A   N/A   —  256  — 448 
NTS Technical Systems Preferred stock   N/A   N/A   N/A   —  128  — 256 
Whitcraft LLC Common Stock   N/A   N/A   N/A   11  2,285  0.1 2,766 
4,175  0.2 4,246 
Auto Components
Polk Acquisition Corp. LP interest   N/A   N/A   N/A   5  314  — 137 
Automobiles
MOP GM Holding, LLC LLC units   N/A   N/A   N/A   —  323  — 323 
Quick Quack Car Wash Holdings, LLC LLC units   N/A   N/A   N/A   —  508  — 480 
831  — 803 
Biotechnology
BIO18 Borrower, LLC(16) LLC units   N/A   N/A   N/A   591  1,190  0.1 1,814 
Building Products
Brooks Equipment Company, LLC Common Stock   N/A   N/A   N/A   10  $ 1,020  0.1 $ 2,180 
Chemicals
Inhance Technologies Holdings LLC LLC units   N/A   N/A   N/A   —  124  — 73 
Commercial Services & Supplies
Hydraulic Authority III Limited(8)(9)(10) Preferred stock   N/A   N/A   N/A   284  384  — 377 
Hydraulic Authority III Limited(8)(9)(10) Common Stock   N/A   N/A   N/A   6  43  — — 
427  — 377 
Construction & Engineering
Reladyne, Inc. LP units   N/A   N/A   N/A   1  931  0.1 1,001 
Diversified Consumer Services
EWC Growth Partners LLC LLC interest   N/A   N/A   N/A   —  12  — 4 
Liminex, Inc. Common Stock   N/A   N/A   N/A   14  496  — 496 
PADI Holdco, Inc. LLC units   N/A   N/A   N/A   1  969  — 138 
Spear Education, LLC LLC units   N/A   N/A   N/A   —  7  — 20 
Spear Education, LLC LLC units   N/A   N/A   N/A   1  1  — — 
1,485  — 658 
Electronic Equipment, Instruments & Components
ES Acquisition LLC LP interest   N/A   N/A   N/A   —  15  — 28 
Inventus Power, Inc. Preferred stock   N/A   N/A   N/A   1  372  — 131 
Inventus Power, Inc. LLC units   N/A   N/A   N/A   —  88  — 167 
Inventus Power, Inc. Preferred stock   N/A   N/A   N/A   —  20  — 42 
Inventus Power, Inc. Common Stock   N/A   N/A   N/A   1  —  — — 
495  — 368 

See Notes to Consolidated Financial Statements.
37
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Food & Staples Retailing
Benihana, Inc. LLC unit   N/A   N/A   N/A   43  $ 699  — % $ 39 
Cafe Rio Holding, Inc. Common Stock   N/A   N/A   N/A   5  603  — 838 
Captain D's, LLC LLC interest   N/A   N/A   N/A   158  156  — 422 
Feeders Supply Company, LLC Preferred stock   N/A   N/A   N/A   4  400  — 284 
Feeders Supply Company, LLC LLC units   N/A   N/A   N/A   —  —  — — 
Hopdoddy Holdings, LLC LLC units   N/A   N/A   N/A   44  217  — 44 
Hopdoddy Holdings, LLC LLC units   N/A   N/A   N/A   20  61  — 13 
Mendocino Farms, LLC Common Stock   N/A   N/A   N/A   169  770  0.1 946 
Ruby Slipper Cafe LLC, The LLC units   N/A   N/A   N/A   31  373  — 65 
Ruby Slipper Cafe LLC, The LP units   N/A   N/A   N/A   2  20  — 8 
Wetzel's Pretzels, LLC Common Stock   N/A   N/A   N/A   —  416  — 170 
Wood Fired Holding Corp. LLC units   N/A   N/A   N/A   437  444  — 356 
Wood Fired Holding Corp. LLC units   N/A   N/A   N/A   437  —  — — 
4,159  0.1 3,185 
Food Products
C. J. Foods, Inc. Preferred stock   N/A   N/A   N/A   —  75  0.1 558 
FCID Merger Sub, Inc. Common Stock   N/A   N/A   N/A   3  325  — 325 
Purfoods, LLC LLC interest   N/A   N/A   N/A   —  926  0.2 5,325 
1,326  0.3 6,208 
Health Care Equipment & Supplies
Aspen Medical Products, LLC Common Stock   N/A   N/A   N/A   —  77  — 103 
Blue River Pet Care, LLC LLC units   N/A   N/A   N/A   —  76  — 105 
CCSL Holdings, LLC LP units   N/A   N/A   N/A   —  312  — 312 
CMI Parent Inc. LLC units   N/A   N/A   N/A   —  240  — 234 
CMI Parent Inc. LLC units   N/A   N/A   N/A   2  3  — — 
Flexan, LLC LLC units   N/A   N/A   N/A   —  137  — 227 
Flexan, LLC LLC interest   N/A   N/A   N/A   1  —  — 30 
G & H Wire Company, Inc. LLC interest   N/A   N/A   N/A   336  269  — 77 
Joerns Healthcare, LLC* Common Stock   N/A   N/A   N/A   432  4,330  0.2 2,569 
Katena Holdings, Inc. LLC units   N/A   N/A   N/A   1  572  — 330 
Lombart Brothers, Inc. Common Stock   N/A   N/A   N/A   1  440  — — 
6,456  0.2 3,987 

See Notes to Consolidated Financial Statements.
38
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Providers & Services
Active Day, Inc. LLC interest   N/A   N/A   N/A   1  $ 1,099  — % $ 372 
Acuity Eyecare Holdings, LLC LLC interest   N/A   N/A   N/A   1,158  1,334  0.1 1,563 
ADCS Clinics Intermediate Holdings, LLC Preferred stock   N/A   N/A   N/A   1  1,119  0.1 944 
ADCS Clinics Intermediate Holdings, LLC Common Stock   N/A   N/A   N/A   —  6  — — 
CRH Healthcare Purchaser, Inc.(16) LP interest   N/A   N/A   N/A   429  326  0.1 926 
DCA Investment Holding, LLC LLC units   N/A   N/A   N/A   13,890  1,619  0.1 2,088 
DCA Investment Holding, LLC LLC units   N/A   N/A   N/A   140  218  — — 
Deca Dental Management LLC LLC units   N/A   N/A   N/A   1,008  1,278  — 858 
Encore GC Acquisition, LLC LLC units   N/A   N/A   N/A   26  272  — 305 
Encore GC Acquisition, LLC LLC units   N/A   N/A   N/A   26  52  — 61 
Encorevet Group LLC Preferred stock   N/A   N/A   N/A   —  15  — 19 
Encorevet Group LLC LLC units   N/A   N/A   N/A   —  6  — 7 
ERG Buyer, LLC LLC units   N/A   N/A   N/A   1  661  — 26 
ERG Buyer, LLC LLC units   N/A   N/A   N/A   8  4  — — 
Eyecare Services Partners Holdings LLC LLC units   N/A   N/A   N/A   —  262  — — 
Eyecare Services Partners Holdings LLC LLC units   N/A   N/A   N/A   —  1  — — 
Krueger-Gilbert Health Physics, LLC LLC interest   N/A   N/A   N/A   168  187  — 193 
MD Now Holdings, Inc. LLC units   N/A   N/A   N/A   15  153  — 189 
Midwest Veterinary Partners, LLC LLC units   N/A   N/A   N/A   —  29  — 33 
Midwest Veterinary Partners, LLC LLC units   N/A   N/A   N/A   6  —  — 62 
MWD Management, LLC & MWD Services, Inc. LLC interest   N/A   N/A   N/A   412  335  — 304 
Oliver Street Dermatology Holdings, LLC LLC units   N/A   N/A   N/A   452  234  — — 
Pentec Acquisition Sub, Inc. Preferred stock   N/A   N/A   N/A   1  116  — 185 
Pinnacle Treatment Centers, Inc. Preferred stock   N/A   N/A   N/A   —  528  — 643 
Pinnacle Treatment Centers, Inc. LLC units   N/A   N/A   N/A   5  74  — 577 
Radiology Partners, Inc. LLC units   N/A   N/A   N/A   11  68  — 63 
Radiology Partners, Inc. LLC units   N/A   N/A   N/A   43  55  — 250 
RXH Buyer Corporation LP interest   N/A   N/A   N/A   11  973  0.1 1,437 
Sage Dental Management, LLC LLC units   N/A   N/A   N/A   —  249  — — 
Sage Dental Management, LLC LLC units   N/A   N/A   N/A   3  3  — — 
SSH Corporation Common Stock   N/A   N/A   N/A   —  40  — 115 
Summit Behavioral Healthcare, LLC LLC interest   N/A   N/A   N/A   2  98  — 199 
Summit Behavioral Healthcare, LLC LLC interest   N/A   N/A   N/A   2  —  — — 
WHCG Management, LLC LLC interest   N/A   N/A   N/A   1  414  — 583 
11,828  0.5 12,002 

See Notes to Consolidated Financial Statements.
39
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Technology
Connexin Software, Inc. LLC interest   N/A   N/A   N/A   154  $ 192  — % 265 
HealthcareSource HR, Inc. LLC interest   N/A   N/A   N/A   —  621  — 724 
HSI Halo Acquisition, Inc. Preferred stock   N/A   N/A   N/A   —  288  — 256 
HSI Halo Acquisition, Inc. Common Stock   N/A   N/A   N/A   —  —  — — 
Kareo, Inc. Warrant   N/A   N/A   N/A   53  162  — 11 
Kareo, Inc. Preferred stock   N/A   N/A   N/A   1  8  — 13 
Kareo, Inc. Warrant   N/A   N/A   N/A   5  6  — 20 
Caliper Software, Inc. Preferred stock   N/A   N/A   N/A   3  2,734  0.2 3,211 
Caliper Software, Inc. Preferred stock   N/A   N/A   N/A   —  1,427  0.1 1,427 
Caliper Software, Inc. Common Stock   N/A   N/A   N/A   221  283  — 816 
Caliper Software, Inc. Preferred stock   N/A   N/A   N/A   —  64  — 64 
Caliper Software, Inc. Preferred stock   N/A   N/A   N/A   —  37  — 47 
Verisys Corporation LLC interest   N/A   N/A   N/A   579  712  — 354 
6,534  0.3 7,208 
Hotels, Restaurants & Leisure
LMP TR Holdings, LLC LLC units   N/A   N/A   N/A   712  712  — 328 
SSRG Holdings, LLC LLC units   N/A   N/A   N/A   6  61  — 41 
Tropical Smoothie Cafe Holdings, LLC(16) LP units   N/A   N/A   N/A   5  550  — 640 
1,323  — 1,009 
Household Durables
Groundworks LLC LLC units   N/A   N/A   N/A   —  155  — 311 
Insurance
Captive Resources Midco, LLC LLC units   N/A   N/A   N/A   425  —  — 445 
Majesco LP units   N/A   N/A   N/A   —  264  — 270 
Majesco LP units   N/A   N/A   N/A   59  —  — 113 
Orchid Underwriters Agency, LLC LP interest   N/A   N/A   N/A   92  103  — 79 
367  — 907 
See Notes to Consolidated Financial Statements.
40
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
IT Services
Appriss Holdings, Inc. Preferred stock   N/A   N/A   N/A   —  $ 174  — % 185 
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc. Preferred stock   N/A   N/A   N/A   587  462  0.1 1,481 
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc. Preferred stock   N/A   N/A   N/A   154  423  — 427 
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc. Warrant   N/A   N/A   N/A   202  159  — 434 
Centrify Corporation LP interest   N/A   N/A   N/A   1  691  — 458 
Centrify Corporation LP interest   N/A   N/A   N/A   263  —  — — 
Episerver, Inc. LLC units   N/A   N/A   N/A   76  807  — 565 
Maverick Bidco Inc. LLC units   N/A   N/A   N/A   2  723  0.1 966 
PCS Intermediate II Holdings, LLC LLC units   N/A   N/A   N/A   37  367  — 424 
Red Dawn SEI Buyer, Inc. LP interest   N/A   N/A   N/A   13  13  — 15 
3,819  0.2 4,955 
Leisure Products
Massage Envy, LLC LLC interest   N/A   N/A   N/A   749  210  — 941 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   68  117  — 59 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   46  80  — 41 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   38  65  — 33 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   33  58  — 29 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   14  24  — 13 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   1  2  — 2 
556  — 1,118 
Life Sciences Tools & Services
Pace Analytical Services, LLC LLC units   N/A   N/A   N/A   6  700  0.1 1,054 
Oil, Gas and Consumable Fuels
W3 Co. LLC units   N/A   N/A   N/A   3  1,632  0.1 2,394 
W3 Co. Preferred stock   N/A   N/A   N/A   —  224  — 266 
1,856  0.1 2,660 
Pharmaceuticals
BIOVT, LLC LLC units   N/A   N/A   N/A   —  1,223  0.1 2,191 

See Notes to Consolidated Financial Statements.
41
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)


Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Professional Services
Brandmuscle, Inc. LLC interest   N/A   N/A   N/A   —  $ 335  — % $ 251 
DISA Holdings Acquisition Subsidiary Corp. Common Stock   N/A   N/A   N/A   —  154  — 272 
Net Health Acquisition Corp. LP interest   N/A   N/A   N/A   13  1,440  0.1 1,473 
Nexus Brands Group, Inc. LP interest   N/A   N/A   N/A   —  547  — 686 
Vitalyst, LLC Preferred stock   N/A   N/A   N/A   —  61  — 53 
Vitalyst, LLC Common Stock   N/A   N/A   N/A   1  7  — — 
2,544  0.1 2,735 
Real Estate Management & Development
Property Brands, Inc. LLC units   N/A   N/A   N/A   63  434  — 593 
Road & Rail
Internet Truckstop Group LLC LP interest   N/A   N/A   N/A   408  447  — 325 
See Notes to Consolidated Financial Statements.
42
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Software
Accela, Inc. LLC units   N/A   N/A   N/A   670  $ 418  — % $ 81 
Astute Holdings, Inc. LP interest   N/A   N/A   N/A   —  294 — 570
Calabrio, Inc. Common Stock   N/A   N/A   N/A   26  205 — 404
Cloudbees, Inc. Preferred stock   N/A   N/A   N/A   71  466 — 353
Cloudbees, Inc. Warrant   N/A   N/A   N/A   131  247 — 323
Confluence Technologies, Inc. LLC interest   N/A   N/A   N/A   3  412 — 541
Convercent, Inc. Warrant   N/A   N/A   N/A   325  63 — 148
Digital Guardian, Inc. Preferred stock   N/A   N/A   N/A   356  434 — 375
Digital Guardian, Inc. Warrant   N/A   N/A   N/A   122  225 — 290
Digital Guardian, Inc. Preferred stock   N/A   N/A   N/A   74  142 — 177
Digital Guardian, Inc. Preferred stock   N/A   N/A   N/A   67  123 — 174
Digital Guardian, Inc. Warrant   N/A   N/A   N/A   124  33 — 70
Diligent Corporation Preferred stock   N/A   N/A   N/A   414  912 0.1 2,162 
GS Acquisitionco, Inc. LP interest   N/A   N/A   N/A   2  290 0.1 872
MetricStream, Inc. Warrant   N/A   N/A   N/A   168  263 — 188
mParticle, Inc. Warrant   N/A   N/A   N/A   26  10 — 113
Namely, Inc. Warrants   N/A   N/A   N/A   47  314 — 303
Namely, Inc. Warrant   N/A   N/A   N/A   17  28 — 25
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH Warrant   N/A   N/A   N/A   4  9 — 25
Personify, Inc. LLC units   N/A   N/A   N/A   716  942 0.1 1,043 
Pride Midco, Inc.(16) Preferred stock   N/A   N/A   N/A   2  2,594  0.1 3,009 
Project Alpha Intermediate Holding, Inc. Common Stock   N/A   N/A   N/A   1  964 0.1 1,190 
Project Alpha Intermediate Holding, Inc. Common Stock   N/A   N/A   N/A   202  329 0.1 1,012 
Project Silverback Holdings Corp. Preferred stock   N/A   N/A   N/A   3  6 — 665
RegEd Aquireco, LLC LP interest   N/A   N/A   N/A   —  316 — 175
RegEd Aquireco, LLC LP interest   N/A   N/A   N/A   3  21 — 0
Saturn Borrower Inc. LP units   N/A   N/A   N/A   328  328 — 328
SnapLogic, Inc. Preferred stock   N/A   N/A   N/A   278  695 0.1 1,090 
SnapLogic, Inc. Warrant   N/A   N/A   N/A   69  27 — 191
Spartan Buyer Acquisition Co. Common Stock   N/A   N/A   N/A   —  535 — 535
Telesoft Holdings LLC LP interest   N/A   N/A   N/A   6  6 — 6
Vendavo, Inc. Preferred stock   N/A   N/A   N/A   1,017  1,017  0.1 1,833 
Workforce Software, LLC Common Stock   N/A   N/A   N/A   —  973 — 558
Xmatters, Inc. and Alarmpoint, Inc. Preferred stock   N/A   N/A   N/A   474  494 — 673
Xmatters, Inc. and Alarmpoint, Inc. Warrant   N/A   N/A   N/A   84  64 — 31
Xmatters, Inc. and Alarmpoint, Inc. Preferred stock   N/A   N/A   N/A   20  26 — 27
14,225  0.8 19,560 

See Notes to Consolidated Financial Statements.
43
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Specialty Retail
2nd Ave. LLC LP interest N/A N/A N/A 653  $ 653  — % $ 606 
Batteries Plus Holding Corporation LP interest N/A N/A N/A 10  1,287  0.1 1,231 
Cycle Gear, Inc. LLC units N/A N/A N/A 27  462  0.1 1,176 
DTLR, Inc. LLC interest N/A N/A N/A 4  411  0.1 969 
Imperial Optical Midco Inc. Preferred stock N/A N/A N/A —  122  — 131 
Imperial Optical Midco Inc. Preferred stock N/A N/A N/A —  46  — 47 
Jet Equipment & Tools Ltd.(8)(9)(12) LLC units N/A N/A N/A 1  948  0.1 3,048 
Paper Source, Inc. Common Stock N/A N/A N/A 8  1,387  — — 
Pet Holdings ULC(8)(12) LP interest N/A N/A N/A 677  483  — 309 
Pet Supplies Plus, LLC LLC units N/A N/A N/A 144  181  — 482 
PPV Intermediate Holdings II, LLC LLC interest N/A N/A N/A 281  271  — 473 
Sola Franchise, LLC and Sola Salon Studios, LLC LLC units N/A N/A N/A 6  682  — 645 
Sola Franchise, LLC and Sola Salon Studios, LLC LLC units N/A N/A N/A 1  138  — 129 
Southern Veterinary Partners, LLC LLC units N/A N/A N/A 1  717  0.1 952 
Southern Veterinary Partners, LLC LLC units N/A N/A N/A 148  188  0.1 1,523 
7,976  0.6 11,721 
Technology Hardware, Storage & Peripherals
Agility Recovery Solutions Inc. LLC units N/A N/A N/A 97 604 — 688
Textiles, Apparel & Luxury Goods
Elite Sportswear, L.P. LLC interest N/A N/A N/A —  165  — — 
Georgica Pine Clothiers, LLC LLC interest N/A N/A N/A 20  239  — 80 
Georgica Pine Clothiers, LLC LLC units N/A N/A N/A —  —  — — 
R.G. Barry Corporation Preferred stock N/A N/A N/A —  161  — 134 
565  — 214 
Total non-controlled/non-affiliate company equity investments $ 78,089  3.9 % $ 94,288 
Total non-controlled/non-affiliate company investments $ 4,440,774  $ 4,518,235  181.6 $ 4,430,239 

See Notes to Consolidated Financial Statements.
44
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Non-controlled/affiliate company investments(17)
Debt investments
Beverages
Uinta Brewing Company(7) One stop   L + 4.00% (a)   5.00%   08/2021   $ 962  $ 923  — % $ 212 
Uinta Brewing Company(7) One stop   L + 4.00% (a)   5.00%   08/2021   508  503  — 361 
1,470  1,426  — 573 
Consumer Finance
Paradigm DKD Group, LLC(7) Senior loan   L + 6.25% (c)   7.50%   05/2022   3,220  2,099  0.1 2,491 
Paradigm DKD Group, LLC(5)(7) Senior loan   L + 6.25% (c)   N/A(6)   05/2022   —  (142) — 3 
3,220  1,957  0.1 2,494 
Electronic Equipment, Instruments and Components
Sloan Company, Inc., The(7) One stop   L + 8.50% (c)   9.50%   04/2023   4,708  4,074  0.2 3,567 
Sloan Company, Inc., The One stop   L + 8.50% (c)   9.50%   04/2023   667  667  — 667 
Sloan Company, Inc., The(7) One stop   L + 8.50% (c)   9.50%   04/2023   312  271  — 237 
5,687  5,012  0.2 4,471 
Energy, Equipment & Services
Benetech, Inc.+ One stop   L + 6.00% (a)   7.25%   08/2023   3,973  3,973  0.1 2,384 
Benetech, Inc. One stop   L + 6.00% (a)   7.25%   08/2023   574  574  — 90 
4,547  4,547  0.1 2,474 
Food and Staples Retailing
Rubio's Restaurants, Inc. Senior loan   L + 8.00% (a)   9.25%   12/2024   13,059  12,712  0.5 12,667 
Rubio's Restaurants, Inc.(5) Senior loan   L + 8.00%   N/A(6)   12/2024   —  (19) — (42)
13,059  12,693  0.5 12,625 
Healthcare Providers and Services
Dental Holdings Corporation*# One stop   L + 6.00% (c)   7.00%   03/2023   11,262  11,276  0.4 9,571 
Dental Holdings Corporation One stop   L + 6.00% (c)   7.00%   03/2023   116  116  — 116 
Elite Dental Partners LLC One stop   L + 5.25% (c)   6.25%   06/2023   11,309  11,373  0.4 10,970 
Elite Dental Partners LLC One stop   L + 5.25%   N/A(6)   06/2023   —  —  — — 
22,687  22,765  0.8 20,657 
Software
Switchfly LLC One stop   L + 5.00% (c)   6.00%   10/1/2023   5,896  5,743  0.2 4,953 
Switchfly LLC One stop   L + 5.00% (c)   6.00%   10/1/2023   492  481  — 413 
Switchfly LLC One stop   L + 5.00% (b)(c)   6.00%   10/1/2023   38  37  — 32 
Switchfly LLC(5) One stop   L + 8.50% (c)   9.50%   10/1/2023   2  2  — (12)
6,428  6,263  0.2 5,386 
Total non-controlled/affiliate debt investments $ 57,098  $ 54,663  1.9  % $ 48,680 
Equity investments(14)(15)
Beverages
Uinta Brewing Company Common Stock   N/A   N/A   N/A   153 $ 17  — % $ — 
Consumer Finance
Paradigm DKD Group, LLC+ LLC units   N/A   N/A   N/A   354  116  — 3 
Paradigm DKD Group, LLC+ LLC units   N/A   N/A   N/A   71  —  — — 
Paradigm DKD Group, LLC+ LLC units   N/A   N/A   N/A   2,004  —  — — 
116  —  3 
See Notes to Consolidated Financial Statements.
45
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Electronic Equipment, Instruments and Components
Sloan Company, Inc., The LLC units   N/A   N/A   N/A   —  $ 152  — % $ — 
Sloan Company, Inc., The LLC units   N/A   N/A   N/A   2  14  — — 
Sloan Company, Inc., The Common Stock   N/A   N/A   N/A   —  41  — — 
207  — — 
Energy, Equipment & Services
Benetech, Inc.(8)
LLC interest N/A
N/A(6)
N/A 59  —  — — 
Benetech, Inc.(8)
LLC interest N/A
N/A(6)
N/A 59  —  — — 
—  — — 
Food and Staples Retailing
Rubio's Restaurants, Inc. Preferred stock   N/A   N/A   N/A   —  2,276  0.1 2,276 
Rubio's Restaurants, Inc. Common Stock   N/A   N/A   N/A   —  182  — 182 
Rubio's Restaurants, Inc. Common Stock   N/A   N/A   N/A   —  111  — 111 
Rubio's Restaurants, Inc. Common Stock   N/A   N/A   N/A   —  5  — 5 
Rubio's Restaurants, Inc. Common Stock   N/A   N/A   N/A   —  3  — 3 
Rubio's Restaurants, Inc. Common Stock   N/A   N/A   N/A   —  —  — — 
Rubio's Restaurants, Inc. Common Stock   N/A   N/A   N/A   —  —  — — 
Rubio's Restaurants, Inc. Common Stock   N/A   N/A   N/A   —  —  — — 
Rubio's Restaurants, Inc. Common Stock   N/A   N/A   N/A   —  —  — — 
Rubio's Restaurants, Inc. Common Stock   N/A   N/A   N/A   —  —  — — 
Rubio's Restaurants, Inc. Common Stock   N/A   N/A   N/A   —  —  — — 
2,577  0.1 2,577 
Healthcare Providers and Services
Dental Holdings Corporation*# Common Stock   N/A   N/A   N/A   —  390  — 406 
Elite Dental Partners LLC LLC units   N/A   N/A   N/A   —  2,902  0.1 3,103 
Elite Dental Partners LLC LLC units   N/A   N/A   N/A   —  1,250  0.1 1,074 
Elite Dental Partners LLC LLC units   N/A   N/A   N/A   —  —  — 195 
4,542  0.2 4,778 
Software
Switchfly LLC LLC units N/A N/A N/A 3,418  2,320  0.1 2,173 
Total non-controlled/affiliate equity investments $ 9,779  0.4 % $ 9,531 
Total non-controlled/affiliate investments $ 57,098  $ 64,442  2.3 % $ 58,211 
See Notes to Consolidated Financial Statements.
46
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Controlled affiliate company investments(18)
Debt Investments
IT Services
MMan Acquisition Co.*(7) One stop   L + 10.00% (c)   10.00% PIK   08/2023   $ 22,528  $ 19,746  0.7 % $ 16,775 
MMan Acquisition Co. One stop   L + 8.00% (e)   8.00% PIK   08/2023   1,468  1,468  — 1,468 
23,996  21,214  0.7 18,243 
Total controlled affiliate debt investments $ 23,996  $ 21,214  0.7 % $ 18,243 
Equity Investments (14)(15)
IT Services
MMan Acquisition Co.*+ Common Stock   N/A   N/A   N/A   —  $ 927  — % $ 525 
927  — 525 
Total controlled affiliate equity investments $ 927  — % $ 525 
Total controlled affiliate investments $ 23,996  $ 22,141  0.7 % $ 18,768 
Total investments $ 4,521,868  $ 4,604,818  184.6 % $ 4,507,218 
Money market funds (included in cash and cash equivalents and restricted cash and cash equivalents)
BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)
0.01%(19)
42,776  1.8 % 42,776 
Total money market funds $ 42,776  1.8 % $ 42,776 
Total Investments and Money Market Funds $ 4,647,594  186.4 % $ 4,549,994 

See Notes to Consolidated Financial Statements.
47
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)

*
Denotes that all or a portion of the loan secures the notes offered in the 2018 Debt Securitization (as defined in Note 7).
#
Denotes that all or a portion of the loan secures the notes offered in the GCIC 2018 Debt Securitization (as defined in Note 7).
^
Denotes that all or a portion of the loan secures the notes offered in the 2020 Debt Securitization (as defined in Note 7).
+
Denotes that all or a portion of the loan collateralizes the WF Credit Facility (as defined in Note 7).
~
Denotes that all or a portion of the loan collateralizes the MS Credit Facility II (as defined in Note 7).
(1)The majority of the investments bear interest at a rate that is permitted to be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) denominated in U.S. dollars or U.K. pound sterling (“GBP”), Euro Interbank Offered Rate (“EURIBOR” or “E”) or Prime (“P”) and which reset daily, monthly, quarterly, semiannually, or annually. For each, the Company has provided the spread over LIBOR, EURIBOR or Prime and the weighted average current interest rate in effect as of December 31, 2020. Certain investments are subject to a LIBOR, EURIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable. Listed below are the index rates as of December 31, 2020, which was the last business day of the period on which LIBOR or EURIBOR was determined. The actual index rate for each loan listed may not be the applicable index rate outstanding as of December 31, 2020, as the loan may have priced or repriced based on an index rate prior to December 31, 2020.
(a) Denotes that all or a portion of the loan was indexed to the 30-day LIBOR, which was 0.14% as of December 31, 2020.
(b) Denotes that all or a portion of the loan was indexed to the 60-day LIBOR, which was 0.19% as of December 31, 2020.
(c) Denotes that all or a portion of the loan was indexed to the 90-day LIBOR, which was 0.24% as of December 31, 2020.
(d) Denotes that all or a portion of the loan was indexed to the 180-day LIBOR, which was 0.26% as of December 31, 2020.
(e) Denotes that all or a portion of the loan was indexed to the 360-day LIBOR, which was 0.34% as of December 31, 2020.
(f) Denotes that all or a portion of the loan was indexed to the Prime rate, which was 3.25% as of December 31, 2020.
(g) Denotes that all or a portion of the loan was indexed to the 90-day EURIBOR, which was -0.55% as of December 31, 2020.
(h) Denotes that all or a portion of the loan was indexed to the 90-day GBP LIBOR, which was 0.03% as of December 31, 2020.
(i) Denotes that all or a portion of the loan was indexed to the 180-day GBP LIBOR, which was 0.03% as of December 31, 2020.
(j) Denotes that all or a portion of the loan was indexed to the Australia Three Month Interbank Rate, which was 0.06%, as of December 31, 2020.
(k) Denotes that all or a portion of the loan was indexed to the 90-day Canadian Bankers Acceptances Rate, which was 0.48%, as of December 31, 2020.
(2)For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect as of December 31, 2020.
(3)The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(4)The fair value of the investment was valued using significant unobservable inputs. See Note 6. Fair Value Measurements.
(5)The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(6)The entire commitment was unfunded as of December 31, 2020. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.
(7)Loan was on non-accrual status as of December 31, 2020, meaning that the Company has ceased recognizing interest income on the loan.
(8)The investment is treated as a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Under the 1940 Act, the Company can not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of December 31, 2020, total non-qualifying assets at fair value represented 4.9% of the Company's total assets calculated in accordance with the 1940 Act.
(9)Investment is denominated in foreign currency and is translated into U.S. dollars as of the valuation date or the date of the transaction. See Note 2. Significant Accounting Policies and Recent Accounting Updates - Foreign Currency Transactions.
(10)The headquarters of this portfolio company is located in the United Kingdom.
(11)The headquarters of this portfolio company is located in Australia.
(12)The headquarters of this portfolio company is located in Canada.
(13)The headquarters of this portfolio company is located in Luxembourg.
(14) Equity investments are non-income producing securities unless otherwise noted.
(15) Ownership of certain equity investments occurs through a holding company or partnership.
(16) The Company holds an equity investment that entitles it to receive preferential dividends.
See Notes to Consolidated Financial Statements.
48
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
December 31, 2020
(In thousands)
(17)As defined in the 1940 Act, the Company is deemed to be an “affiliated person"” of the portfolio company as the Company owns five percent or more of the portfolio company's voting securities (“non-controlled affiliate”). Transactions related to investments in non-controlled affiliates for the three months ended December 31, 2020 were as follows:
Portfolio Company
Fair value as of September 30, 2020
Gross Additions(l)
Gross Reductions(m)
Net change in unrealized gain (loss) Net realized gain (loss) Fair value as of December 31, 2020 Interest, dividend and fee income
Benetech, Inc.
$ 2,672  $ 53  $ (280) $ 29  $ —  $ 2,474  $ 90 
Dental Holdings Corporation
9,320  669  —  104  —  10,093  264 
Elite Dental Partners LLC 15,368  58  (60) (24) —  15,342  208 
Paradigm DKD Group, LLC 2,460  533  (538) 42  —  2,497  3 
Rubio's Restaurants, Inc(n)
—  25,455  (13,137) 8,623  (5,739) 15,202  781 
Sloan Company, Inc., The
4,365  155  (140) 91  —  4,471  16 
Switchfly LLC
7,229  113  —  217  —  7,559  114 
Uinta Brewing Company
586  18  (20) (11) —  573  (1)
Total Non-Controlled Affiliates
$ 42,000  $ 27,054  $ (14,175) $ 9,071  $ (5,739) $ 58,211  $ 1,475 

(l)
Gross additions may include increases in the cost basis of investments resulting from new investments, amounts related to payment-in-kind (“PIK”) interest capitalized and added to the principal balance of the respective loans, the accretion of discounts, the exchange of one or more existing investments for one or more new investments and the movement of an existing portfolio company into this affiliated category from a different category.
(m)
Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments and sales, the amortization of premiums and the exchange of one or more existing securities for one or more new securities.
(n)
During the three months ended December 31, 2020, the Company's ownership increased to over five percent of the portfolio company's voting securities.
(18)As defined in the 1940 Act, the Company is deemed to be both an “affiliated person” of and “control” this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement) (“controlled affiliate”). Transactions related to investments in controlled affiliates for the three months ended December 31, 2020 were as follows:
Portfolio Company
Fair value as of September 30, 2020
Gross Additions(o)
Gross Reductions(p)
Net change in unrealized gain (loss) Net realized gain (loss) Fair value as of December 31, 2020 Interest, dividend and fee income
MMan Acquisition Co. $ 18,736  $ 715  $ (633) $ (50) $ —  $ 18,768  $ (18)
Total Controlled Affiliates
$ 18,736  $ 715  $ (633) $ (50) $ —  $ 18,768  $ (18)

(o)
Gross additions may include increases in the cost basis of investments resulting from new investments, amounts related to PIK interest capitalized and added to the principal balance of the respective loans, the accretion of discounts, the exchange of one or more existing investments for one or more new investments and the movement of an existing portfolio company into this affiliated category from a different category.
(p)
Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the amortization of premiums and the exchange of one or more existing securities for one or more new securities.
(19)The rate shown is the annualized seven-day yield as of December 31, 2020.

See Notes to Consolidated Financial Statements.
49
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Investments                          
Non-controlled/non-affiliate company investments                       
Debt investments                          
Aerospace and Defense                          
NTS Technical Systems*#~^ One stop   L + 6.00%
(c)
  7.00%   06/2021   $ 25,330  $ 25,312  1.0 % $ 25,330
NTS Technical Systems~^ One stop   L + 6.00%
(c)
  7.00%   06/2021   4,150  4,147  0.2 4,150
NTS Technical Systems(5) One stop   L + 6.00%  
N/A(6)
  06/2021   —  (17) — —
Tronair Parent, Inc.+ Senior loan   L + 4.75%
(c)
  5.75%   09/2023   718  711  — 638
Tronair Parent, Inc. Senior loan   L + 4.50%
(c)(f)
  4.73%   09/2021   160  159  — 152
Whitcraft LLC*#+~ One stop   L + 6.00%
(c)
  7.00%   04/2023   63,896  64,289  2.5 58,785
Whitcraft LLC One stop   L + 6.00%
(c)
  7.00%   04/2023   120  118  — 96
94,374  94,719  3.7 89,151
Airlines
Aurora Lux Finco S.A.R.L.!(8)(13)
One stop   L + 6.00%
(c)
  7.00%   12/2026   995  973  — 896
Auto Components                          
Polk Acquisition Corp.*# Senior loan   L + 6.50%
(a)
  3.50% cash/4.00% PIK   12/2023   18,042  17,859  0.7 16,599
Polk Acquisition Corp. Senior loan   L + 6.50%
(a)
  3.50% cash/4.00% PIK   12/2023   106  104  — 98
Polk Acquisition Corp. Senior loan   L + 6.50%
(a)
  3.50% cash/4.00% PIK   12/2023   22  21  — 10
Power Stop, LLC+~ Senior loan   L + 4.50%
(a)
  4.65%   10/2025   2,842  2,896  0.1 2,785
     21,012  20,880  0.8 19,492
Automobiles                          
Grease Monkey International, LLC*#+ Senior loan   L + 5.00%
(c)
  6.00%   11/2022   8,672  8,733  0.4 8,672
Grease Monkey International, LLC!~ Senior loan   L + 5.00%
(c)
  6.00%   11/2022   2,370  2,437  0.1 2,370
Grease Monkey International, LLC#~ Senior loan   L + 5.00%
(c)
  6.00%   11/2022   1,203  1,238  0.1 1,203
Grease Monkey International, LLC+~ Senior loan   L + 5.00%
(c)
  6.00%   11/2022   1,089  1,119  — 1,089
Grease Monkey International, LLC Senior loan   L + 5.00%
(c)
  6.00%   11/2022   995  997  — 995
Grease Monkey International, LLC Senior loan   L + 5.00%  
N/A(6)
  11/2022   —  1  — —
Grease Monkey International, LLC Senior loan   L + 5.00%  
N/A(6)
  11/2022   —  —  — —
JHCC Holdings LLC One stop   L + 5.50%
(c)
  6.50%   09/2025   15,630  15,373  0.7 15,630
JHCC Holdings LLC One stop   L + 5.50%
(c)
  6.50%   09/2025   79  76  — 79
JHCC Holdings LLC One stop   P + 4.50%
(c)(f)
  7.55%   09/2025   31  30  — 31
Quick Quack Car Wash Holdings, LLC*# One stop   L + 6.50%
(d)
  7.50%   04/2023   13,084  13,176  0.5 13,084
Quick Quack Car Wash Holdings, LLC# One stop   L + 6.50%
(c)(d)
  7.50%   04/2023   2,360  2,343  0.1 2,360
Quick Quack Car Wash Holdings, LLC*+ One stop   L + 6.50%
(d)
  7.50%   04/2023   2,062  2,124  0.1 2,062
Quick Quack Car Wash Holdings, LLC*+ One stop   L + 6.50%
(d)
  7.50%   04/2023   1,378  1,420  0.1 1,378
Quick Quack Car Wash Holdings, LLC* One stop   L + 6.50%
(d)
  7.50%   04/2023   1,122  1,176  — 1,122
Quick Quack Car Wash Holdings, LLC One stop   L + 6.50%  
N/A(6)
  04/2023   —  1  — —
50,075  50,244  2.1 50,075

See Notes to Consolidated Financial Statements.
50
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Beverages
Abita Brewing Co., L.L.C.+(7) One stop   L + 8.00% (c)   9.00%   04/2021   $ 9,983  $ 9,992  0.4 % $ 8,485 
Abita Brewing Co., L.L.C.(7) One stop   L + 8.00% (c)   9.00%   04/2021   40  40  — 34 
Fintech Midco, LLC*#! One stop   L + 5.00% (a)   6.00%   08/2024   24,411  24,756  1.0 23,679 
Fintech Midco, LLC# One stop   L + 5.00% (a)   6.00%   08/2024   1,131  1,168  — 1,096 
Fintech Midco, LLC(5) One stop   L + 5.00%   N/A(6)   08/2024   —  (1) — (6)
35,565  35,955  1.4 33,288 
Biotechnology
BIO18 Borrower, LLC! One stop   L + 5.25% (c)   6.25%   11/2024   11,075  11,111  0.4 11,075 
BIO18 Borrower, LLC*# One stop   L + 5.25% (c)   6.25%   11/2024   3,963  3,928  0.2 3,963 
BIO18 Borrower, LLC One stop   L + 5.25% (c)   6.25%   11/2024   210  210  — 210 
BIO18 Borrower, LLC(5) One stop   L + 5.25%   N/A(6)   11/2024   —  (1) — — 
15,248  15,248  0.6 15,248 
Building Products
Brooks Equipment Company, LLC*#^ One stop   L + 5.00% (c)   6.00%   05/2021   23,722  23,640  1.0 23,722 
Brooks Equipment Company, LLC(5) One stop   L + 5.00%   N/A(6)   05/2021   —  (9) — — 
Jensen Hughes, Inc.+ Senior loan   L + 4.50% (c)(f)   5.50%   03/2024   4,191  4,191  0.2 4,066 
Jensen Hughes, Inc. Senior loan   L + 4.50% (c)(f)   5.50%   03/2024   1,065  1,098  — 1,021 
Jensen Hughes, Inc.+ Senior loan   L + 4.50% (c)(f)   5.50%   03/2024   913  927  0.1 886 
Jensen Hughes, Inc. Senior loan   L + 4.50% (c)(f)   5.50%   03/2024   439  453  — 426 
Jensen Hughes, Inc.+ Senior loan   L + 4.50% (c)(f)   5.50%   03/2024   279  283  — 271 
Jensen Hughes, Inc. Senior loan   L + 4.50% (c)(f)   5.50%   03/2024   218  218  — 212 
Jensen Hughes, Inc.+ Senior loan   L + 4.50% (c)(f)   5.50%   03/2024   117  117  — 113 
30,944  30,918  1.3 30,717 
Chemicals
Inhance Technologies Holdings LLC# One stop   L + 6.00% (c)   7.00%   07/2024   12,703  12,822  0.5 12,005 
Inhance Technologies Holdings LLC One stop   L + 6.00% (c)   7.00%   07/2024   1,929  1,917  0.1 1,824 
Inhance Technologies Holdings LLC One stop   L + 6.00% (c)   7.00%   07/2024   80  80  — 68 
14,712  14,819  0.6 13,897 
Commercial Services & Supplies
Bazaarvoice, Inc.*#+~^ One stop L + 5.75% (a)(c) 6.75% 02/2024 48,127  48,873  2.0 48,127 
Bazaarvoice, Inc. One stop L + 5.75% (c) 6.75% 02/2024 300  297  — 300 
EGD Security Systems, LLC*#^ One stop   L + 5.65% (c)   6.65%   06/2023   30,092  30,453  1.3 30,092 
EGD Security Systems, LLC* One stop   L + 5.65% (c)   6.65%   06/2023   1,258  1,257  0.1 1,258 
EGD Security Systems, LLC# One stop   L + 5.65% (c)   6.65%   06/2023   644  663  — 644 
EGD Security Systems, LLC# One stop   L + 5.65% (c)   6.65%   06/2023   575  571  — 575 
EGD Security Systems, LLC One stop   L + 5.65% (c)   6.65%   06/2023   70  69  — 70 
EGD Security Systems, LLC(5) One stop   L + 5.65%   N/A(6)   06/2023   —  (38) — — 
Hydraulic Authority III Limited~(8)(9)(10) One stop   L + 6.00% (h)(i)   7.00%   11/2025   12,277  12,484  0.5 12,344 
Hydraulic Authority III Limited(8)(9)(10) One stop   N/A   11.00% PIK   11/2028   199  203  — 204 
Hydraulic Authority III Limited(8)(9)(10) One stop   L + 6.00% (d)   7.00%   11/2025   33  32  — 36 
See Notes to Consolidated Financial Statements.
51
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Commercial Services & Supplies - (continued)
MSHC, Inc.+ Senior loan   L + 4.25% (c)(f)   5.25%   12/2024   $ 343  $ 340  — % $ 343 
MSHC, Inc. Senior loan   L + 4.25% (a)(f)   5.25%   12/2024   9  9  — 9 
PT Intermediate Holdings III, LLC+~^ One stop   L + 5.50% (c)   6.50%   10/2025   29,776  29,385  1.2 27,988 
WRE Holding Corp.*# Senior loan   L + 5.25% (b)(c)   6.25%   01/2023   2,276  2,312  0.1 2,276 
WRE Holding Corp.^ Senior loan   L + 5.25% (b)(c)   6.25%   01/2023   940  967  0.1 940 
WRE Holding Corp. Senior loan   L + 5.25% (c)   6.25%   01/2023   688  687  — 688 
WRE Holding Corp. Senior loan   L + 5.25% (c)   6.25%   01/2023   408  408  — 408 
WRE Holding Corp. Senior loan   L + 5.25% (c)   6.25%   01/2023   23  23  — 23 
WRE Holding Corp. Senior loan   L + 5.25% (c)   6.25%   01/2023   14  13  — 14 
WRE Holding Corp. Senior loan   L + 5.25%   N/A(6)   01/2023   —  9  — — 
128,052  129,017  5.3 126,339 

See Notes to Consolidated Financial Statements.
52
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Construction & Engineering
Reladyne, Inc.*#^ Senior loan   L + 5.00% (c)   6.09%   07/2022   $ 32,863  $ 33,081  1.3 % $ 32,206 
Reladyne, Inc.~ Senior loan   L + 5.00% (c)   6.09%   07/2022   3,482  3,541  0.1 3,412 
Reladyne, Inc. Senior loan   L + 5.00% (c)   6.06%   07/2022   2,754  2,800  0.1 2,699 
Reladyne, Inc.# Senior loan   L + 5.00% (c)   6.09%   07/2022   1,885  1,916  0.1 1,847 
Reladyne, Inc.#~ Senior loan   L + 5.00% (c)   6.09%   07/2022   1,624  1,652  0.1 1,592 
Reladyne, Inc.# Senior loan   L + 5.00% (c)   6.09%   07/2022   1,545  1,587  0.1 1,514 
Reladyne, Inc.#~ Senior loan   L + 5.00% (c)   6.09%   07/2022   742  753  — 726 
44,895  45,330  1.8 43,996 
Containers & Packaging
AmerCareRoyal LLC+ Senior loan   L + 5.00% (a)   6.00%   11/2025   822  815  0.1 806 
AmerCareRoyal LLC+(8) Senior loan   L + 5.00% (a)   6.00%   11/2025   152  151  — 149 
Fortis Solutions Group LLC+ Senior loan   L + 5.00% (a)   6.00%   12/2023   1,586  1,573  0.1 1,586 
Fortis Solutions Group LLC+ Senior loan   L + 5.00% (a)   6.00%   12/2023   632  626  — 632 
Fortis Solutions Group LLC+ Senior loan   L + 5.00% (a)   6.00%   12/2023   607  602  — 607 
Fortis Solutions Group LLC Senior loan   L + 5.00%   N/A(6)   12/2023   —  —  — — 
Plano Molding Company, LLC+ One stop   L + 9.00% (c)   8.50% cash/1.50% PIK   05/2022   14,634  14,585  0.5 11,707 
Plano Molding Company, LLC One stop   L + 9.00% (c)   8.50% cash/1.50% PIK   05/2022   1,182  1,171  — 1,182 
19,615  19,523  0.7 16,669 
Distributors
PetroChoice Holdings, Inc.#^ Senior loan   L + 5.00% (c)   6.00%   08/2022   3,276  3,282  0.1 3,046 
Diversified Consumer Services
EWC Growth Partners LLC One stop   L + 5.50% (c)   6.50%   03/2026   914  897  0.1 795 
EWC Growth Partners LLC One stop   L + 5.50% (c)   6.50%   03/2026   30  29  — 26 
EWC Growth Partners LLC One stop   L + 5.50% (c)   6.50%   03/2026   18  18  — 15 
Excelligence Learning Corporation# One stop   L + 7.00% (c)   8.00%   04/2023   10,347  10,088  0.3 7,760 
Learn-it Systems, LLC! Senior loan   L + 5.00% (c)   5.00% cash/0.50% PIK   03/2025   2,545  2,594  0.1 2,494 
Learn-it Systems, LLC Senior loan   L + 5.00% (c)   5.00% cash/0.50% PIK   03/2025   345  344  — 338 
See Notes to Consolidated Financial Statements.
53
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Diversified Consumer Services - (continued)
Learn-it Systems, LLC Senior loan   L + 5.00% (c)   N/A(6)   03/2025   $ —  $ —  — % $ — 
Litera Bidco LLC+^ One stop   L + 5.25% (a)   6.25%   05/2026   3,749  3,771  0.2 3,749 
Litera Bidco LLC One stop   L + 5.25% (a)   6.25%   05/2026   702 728 — 702
Litera Bidco LLC One stop   L + 5.25% (a)   6.25%   05/2026   702  728  — 702 
Litera Bidco LLC One stop   L + 5.25% (a)   6.25%   05/2025   16  15  — 16 
PADI Holdco, Inc.*# One stop   L + 5.75% (c)   6.75%   04/2024   21,763  21,958  0.8 18,498 
PADI Holdco, Inc.+~(8)(9) One stop   E + 5.75% (g)   5.75%   04/2024   20,675  20,964  0.7 17,608 
PADI Holdco, Inc.~ One stop   L + 5.75% (c)   6.75%   04/2024   801  795  — 681 
PADI Holdco, Inc. One stop   L + 5.75% (c)   6.75%   04/2023   298  298  — 254 
PADI Holdco, Inc. One stop   L + 5.75% (c)   6.75%   04/2024   166  164  — 141 
63,071  63,391  2.2 53,779 
Diversified Financial Services
Institutional Shareholder Services*! Senior loan   L + 4.50% (c)   4.72%   03/2026   18,775  19,161  0.8 18,775 
Institutional Shareholder Services Senior loan   L + 4.50% (c)   4.72%   03/2024   150  147  — 150 
Sovos Compliance*+^ One stop   L + 4.75% (a)   5.75%   04/2024   19,614  20,156  0.8 19,221 
Sovos Compliance! Second lien   N/A   12.00% PIK   04/2025   8,947  9,187  0.4 8,947 
Sovos Compliance One stop   L + 4.75% (a)   5.75%   04/2024   4,322  4,236  0.2 4,235 
Sovos Compliance*# One stop   L + 4.75% (a)   5.75%   04/2024   1,903  1,956  0.1 1,864 
Sovos Compliance Second lien   N/A   12.00% PIK   04/2025   1,222  1,261  — 1,222 
Sovos Compliance*# One stop   L + 4.75% (a)   5.75%   04/2024   768  789  — 752 
Sovos Compliance One stop   L + 4.75% (a)   5.75%   04/2024   85  83  — 83 
Sovos Compliance(5) One stop   L + 4.75%   N/A(6)   04/2024   —  (1) — (4)
Sovos Compliance(5) One stop   L + 4.75%   N/A(6)   04/2024   —  (22) — (22)
55,786  56,953  2.3 55,223 

See Notes to Consolidated Financial Statements.
54
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Electric Utilities
Arcos, LLC#^ One stop   L + 5.00% (c)   6.00%   02/2021   $ 13,228  $ 13,311  0.6 % $ 13,228 
Arcos, LLC One stop   L + 5.00%   N/A(6)   02/2021   —  —  — — 
13,228  13,311  0.6 13,228 
Electronic Equipment, Instruments & Components
CST Buyer Company+~ One stop   L + 5.25% (a)   6.25%   10/2025   10,189  10,106  0.4 10,189 
CST Buyer Company One stop   L + 5.25%   N/A(6)   10/2025   —  —  — — 
ES Acquisition LLC Senior loan   L + 5.00% (c)   6.00%   11/2025   662  650  — 660 
ES Acquisition, LLC Senior loan   L + 5.50% (c)   6.50%   11/2025   89  87  — 91 
ES Acquisition, LLC Senior loan   L + 5.00% (d)   6.22%   11/2025   47  46  — 47 
ES Acquisition LLC Senior loan   L + 5.00% (c)   6.00%   11/2025   45  44  — 45 
ES Acquisition LLC Second lien   L + 5.00% (c)   6.00%   11/2025   36  36  — 36 
ES Acquisition LLC(5) Senior loan   L + 5.00%   N/A(6)   11/2025   —  (1) — — 
Inventus Power, Inc.*+ One stop   L + 5.50% (a)   6.50%   04/2021   14,352  13,988  0.6 14,352 
Inventus Power, Inc.(5) One stop   L + 5.50%   N/A(6)   04/2021   —  (16) — — 
Pasternack Enterprises, Inc. and Fairview Microwave, Inc+~ Senior loan   L + 4.00% (a)   4.15%   07/2025   23,638  23,862  1.0 23,165 
Pasternack Enterprises, Inc. and Fairview Microwave, Inc(5) Senior loan   L + 4.00%   N/A(6)   07/2023   —  —  — (2)
Watchfire Enterprises, Inc. Second lien   L + 8.00% (a)   9.00%   10/2021   9,435  9,402  0.4 9,435 
58,493  58,204  2.4 58,018 

See Notes to Consolidated Financial Statements.
55
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Food & Staples Retailing
Cafe Rio Holding, Inc.# One stop   L + 5.50% (c)   6.50%   09/2023   $ 18,610  $ 18,806  0.8 % $ 18,237 
Cafe Rio Holding, Inc. One stop   L + 5.50% (c)   6.50%   09/2023   2,420  2,419  0.1 2,354 
Cafe Rio Holding, Inc.# One stop   L + 5.50% (c)   6.50%   09/2023   2,248  2,320  0.1 2,203 
Cafe Rio Holding, Inc.*# One stop   L + 5.50% (c)   6.50%   09/2023   1,427  1,472  0.1 1,399 
Cafe Rio Holding, Inc.# One stop   L + 5.50% (c)   6.50%   09/2023   1,260  1,300  0.1 1,235 
Cafe Rio Holding, Inc. One stop   L + 5.50% (c)   6.50%   09/2023   181  181  — 178 
Cafe Rio Holding, Inc.(5) One stop   L + 5.50%   N/A(6)   09/2023   —  —  — (6)
Captain D's, LLC# Senior loan   L + 4.50% (c)   5.50%   12/2023   13,962  14,006  0.6 13,962 
Captain D's, LLC Senior loan   L + 4.50% (c)   5.50%   12/2023   120  121  — 120 
Feeders Supply Company, LLC# One stop   L + 5.75% (a)   6.75%   04/2021   8,564  8,619  0.4 8,564 
Feeders Supply Company, LLC Subordinated debt   N/A   12.50% cash/7.00% PIK   04/2021   153  154  — 153 
Feeders Supply Company, LLC One stop   L + 5.75%   N/A(6)   04/2021   —  —  — — 
FWR Holding Corporation# One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   10,385  10,368  0.4 9,867 
FWR Holding Corporation# One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   1,816  1,874  0.1 1,726 
FWR Holding Corporation# One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   1,148  1,185  0.1 1,091 
FWR Holding Corporation# One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   364  373  — 346 
FWR Holding Corporation One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   274  273  — 260 
FWR Holding Corporation# One stop   L + 7.00% (c)   6.50% cash/1.50% PIK   08/2023   272  279  — 259 
FWR Holding Corporation One stop   L + 7.00% (c)(d)   6.50% cash/1.50% PIK   08/2023   131  130  — 125 
FWR Holding Corporation(5) One stop   L + 5.50%   N/A(6)   08/2023   —  —  — (6)
FWR Holding Corporation One stop   L + 5.50%   N/A(6)   08/2023   —  —  — — 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   820  843  — 820 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   645  663  — 645 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   633  630  — 633 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   311  310  — 311 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   311  309  — 311 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   153  153  — 153 
Mendocino Farms, LLC One stop   L + 8.50% (a)   2.00% cash/7.50% PIK   06/2023   93  93  — 93 
Mendocino Farms, LLC(5) One stop   L + 8.50%   N/A(6)   06/2023   —  (2) — — 
NBC Intermediate, LLC Senior loan   L + 4.25% (c)   5.25%   09/2023   4,589  4,579  0.2 4,589 
NBC Intermediate, LLC*# Senior loan   L + 4.25% (c)   5.25%   09/2023   2,309  2,337  0.1 2,309 
NBC Intermediate, LLC# Senior loan   L + 4.25% (a)(c)   5.25%   09/2023   1,963  2,019  0.1 1,963 
NBC Intermediate, LLC# Senior loan   L + 4.25% (a)   5.25%   09/2023   667  662  — 667 
NBC Intermediate, LLC Senior loan   L + 4.25%   N/A(6)   09/2023   —  —  — — 
Rubio's Restaurants, Inc.(7) Senior loan   L + 11.50% (c)   8.75% cash/4.00% PIK   04/2021   17,898  17,678  0.4 10,004 
Rubio's Restaurants, Inc.(5)(7) Senior loan   L + 11.50% (a)(c)   8.75% cash/4.00% PIK   04/2021   71  68  — (5)
Ruby Slipper Cafe LLC, The* One stop   L + 8.50% (c)   8.50% cash/1.00% PIK   01/2023   2,046  2,039  0.1 1,801 
Ruby Slipper Cafe LLC, The One stop   L + 8.50% (c)   8.50% cash/1.00% PIK   01/2023   414  427  — 365 
Ruby Slipper Cafe LLC, The One stop   L + 8.50% (c)   8.50% cash/1.00% PIK   01/2023   30  30  — 27 
Wetzel's Pretzels, LLC*# One stop   L + 7.25% (c)   7.75% cash/0.50% PIK   09/2021   16,955  17,094  0.7 16,107 
Wetzel's Pretzels, LLC One stop   L + 7.25% (c)   7.75% cash/0.50% PIK   09/2021   100  101  — 96 
Wood Fired Holding Corp.*# One stop   L + 7.75% (c)   6.75% cash/2.00% PIK   12/2023   14,103  14,310  0.5 12,970 
Wood Fired Holding Corp. One stop   L + 7.75% (c)   6.75% cash/2.00% PIK   12/2023   698  698  — 642 
Wood Fired Holding Corp. One stop   L + 7.75% (c)   6.75% cash/2.00% PIK   12/2023   200  199  — 184 
128,344  129,120  4.9 116,752 

See Notes to Consolidated Financial Statements.
56
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)



Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Food Products
Flavor Producers, LLC#~ Senior loan   L + 5.75% (c)   5.75% cash/1.00% PIK   12/2023   $ 5,006  $ 4,898  0.2 % $ 4,605 
Flavor Producers, LLC(5) Senior loan   L + 5.75% (c)   5.75% cash/1.00% PIK   12/2022   4  (1) — — 
Global ID Corporation*#+^ One stop   L + 6.50% (c)   6.72%   11/2025   19,197  18,995  0.8 18,910 
Global ID Corporation(5) One stop   L + 6.50%   N/A(6)   11/2025   —  (2) — (1)
Global ID Corporation(5) One stop   L + 6.50%   N/A(6)   11/2025   —  (4) — (5)
Mid-America Pet Food, L.L.C.*#^ One stop   L + 5.50% (b)   6.50%   12/2021   22,120  22,385  0.9 22,120 
Mid-America Pet Food, L.L.C. One stop   L + 5.50%   N/A(6)   12/2021   —  —  — — 
Purfoods, LLC One stop   N/A   7.00% PIK   05/2026   76  80  — 76 
Teasdale Quality Foods, Inc. Senior loan   L + 5.25% (a)   6.25%   04/2021   3,798  3,769  0.2 3,722 
Teasdale Quality Foods, Inc. Senior loan   L + 5.25% (a)   6.25%   04/2021   3,071  3,048  0.1 3,010 
Teasdale Quality Foods, Inc. Senior loan   L + 5.25% (a)   6.25%   04/2021   494  491  — 485 
Teasdale Quality Foods, Inc. Senior loan   L + 5.25% (a)   6.25%   04/2021   370  366  — 362 
Teasdale Quality Foods, Inc.+ Senior loan   L + 5.25% (a)   6.25%   04/2021   251  251  — 246 
Teasdale Quality Foods, Inc. Senior loan   L + 5.25% (a)   6.25%   04/2021   184  182  — 180 
54,571  54,458  2.2 53,710 

See Notes to Consolidated Financial Statements.
57
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Technology
Caliper Software, Inc.#!~^ One stop L + 5.50% (c) 5.72% 11/2025 $ 27,934  $ 28,374  1.1 % $ 26,785 
Caliper Software, Inc. One stop L + 6.00% (c) 6.23% 11/2025 1,503  1,473  0.1 1,474 
Caliper Software, Inc.(5) One stop L + 5.50% N/A(6) 11/2023 —  1  — (10)
Connexin Software, Inc.!~ One stop   L + 8.50% (a)   9.50%   02/2024   7,550  7,617  0.3 7,550 
Connexin Software, Inc. One stop   L + 8.50%   N/A(6)   02/2024   —  —  — — 
HealthcareSource HR, Inc.*# One stop   L + 6.25% (c)   7.25%   05/2023   33,662  33,692  1.4 33,662 
HealthcareSource HR, Inc.(5) One stop   L + 6.25%   N/A(6)   05/2023   —  (1) — — 
HealthEdge Software, Inc. One stop   L + 6.25% (a)   7.25%   04/2026   2,000  1,959  0.1 2,000 
HealthEdge Software, Inc. One stop   L + 6.25% (a)   7.25%   04/2026   151  148  — 151 
HealthEdge Software, Inc.(5) One stop   L + 6.25%   N/A(6)   04/2026   —  (1) — — 
HSI Halo Acquisition, Inc.+~ One stop   L + 5.75% (c)   6.75%   08/2026   6,330  6,289  0.3 6,266 
HSI Halo Acquisition, Inc. One stop   L + 5.75% (c)   6.75%   08/2026   648  642  — 641 
HSI Halo Acquisition, Inc. One stop   P + 4.75% (f)   8.00%   09/2025   35  34  — 35 
Imprivata, Inc.*#^ Senior loan   L + 4.00% (c)   5.00%   10/2023   9,163  9,345  0.4 9,163 
Imprivata, Inc.(5) Senior loan   L + 4.00%   N/A(6)   10/2023   —  (1) — — 
Kareo, Inc. One stop   L + 9.00% (a)   10.00%   06/2022   10,273  10,387  0.4 10,360 
Kareo, Inc.! One stop   L + 9.00% (a)   10.00%   06/2022   941  955  — 949 
Kareo, Inc. One stop   L + 9.00% (a)   10.00%   06/2022   753  765  — 759 
Kareo, Inc. One stop   P + 8.00% (f)   11.25%   06/2022   80  80  — 80 
Netsmart Technologies, Inc.(5) Senior loan   L + 4.75%   N/A(6)   04/2021   —  (1) — (2)
Nextech Holdings, LLC^ One stop   L + 5.50% (c)   5.76%   06/2025   4,012  4,078  0.2 3,851 
Nextech Holdings, LLC One stop   L + 5.50% (c)   5.76%   06/2025   1,957  1,941  0.1 1,878 
Nextech Holdings, LLC One stop   L + 5.50% (c)   5.76%   06/2025   500  497  — 476 
Nextech Holdings, LLC(5) One stop   L + 5.50%   N/A(6)   06/2025   —  (3) — (16)
Qgenda Intermediate Holdings, LLC^ One stop   L + 4.75% (c)   5.75%   06/2025   15,277  15,296  0.6 15,277 
Qgenda Intermediate Holdings, LLC~ One stop   L + 4.75% (c)   5.75%   06/2025   993  984  — 993 
Qgenda Intermediate Holdings, LLC(5) One stop   L + 4.75%   N/A(6)   06/2025   —  (2) — — 
Transaction Data Systems, Inc.*#+!~^ One stop   L + 5.25% (c)   6.25%   06/2021   83,477  84,279  3.5 82,644 
Transaction Data Systems, Inc. One stop   L + 5.25% (c)   6.25%   06/2021   300  301  — 296 
Verisys Corporation*# One stop   L + 8.25% (c)   8.75% cash/0.50% PIK   01/2023   8,494  8,599  0.4 8,324 
Verisys Corporation One stop   L + 8.25% (c)   8.75% cash/0.50% PIK   01/2023   40  40  — 40 
216,073  217,767  8.9 213,626 

See Notes to Consolidated Financial Statements.
58
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Healthcare Equipment & Supplies
Aspen Medical Products, LLC+~ One stop   L + 5.25% (c)   6.45%   06/2025   $ 4,532  $ 4,600  0.2 % $ 4,487 
Aspen Medical Products, LLC One stop   L + 5.25%   N/A(6)   06/2025   —  —  — — 
Belmont Instrument, LLC+^ Senior loan   L + 4.75% (c)   4.97%   12/2023   5,257  5,212  0.2 5,257 
Blades Buyer, Inc.~^ Senior loan   L + 4.50% (c)   5.50%   08/2025   3,820  3,838  0.2 3,820 
Blades Buyer, Inc. Senior loan   L + 4.50% (d)   5.50%   08/2025   976  970  — 976 
Blades Buyer, Inc. Senior loan   L + 4.50%   N/A(6)   08/2025   —  —  — — 
Blue River Pet Care, LLC#+ One stop   L + 5.00% (a)   5.15%   07/2026   27,690  27,744  1.2 27,690 
Blue River Pet Care, LLC One stop   L + 5.00% (a)   5.15%   07/2026   2,756  2,666  0.1 2,756 
Blue River Pet Care, LLC(5) One stop   L + 5.00%   N/A(6)   08/2025   —  (4) — — 
CMI Parent Inc.#+^ Senior loan   L + 4.25% (c)   5.25%   08/2025   6,634  6,760  0.3 6,434 
CMI Parent Inc.(5) Senior loan   L + 4.25%   N/A(6)   08/2025   —  (2) — (10)
Flexan, LLC+^ One stop   L + 5.25% (c)   6.25%   02/2022   8,450  8,401  0.4 8,450 
Flexan, LLC*# One stop   L + 5.25% (c)   6.25%   02/2022   3,273  3,254  0.1 3,273 
Flexan, LLC+ One stop   L + 5.25% (c)   6.25%   02/2022   2,347  2,334  0.1 2,347 
Flexan, LLC# One stop   L + 5.25% (c)   6.25%   02/2022   1,540  1,531  0.1 1,540 
Flexan, LLC(5) One stop   L + 5.25%   N/A(6)   02/2022   —  (6) — — 
G & H Wire Company, Inc.# One stop   L + 5.75% (a)   6.75%   09/2023   11,149  11,149  0.4 10,481 
G & H Wire Company, Inc. One stop   L + 5.75% (a)   6.75%   09/2022   140  140  — 132 
Joerns Healthcare, LLC* One stop   L + 6.00% (c)   7.00%   08/2024   1,873  1,827  0.1 1,833 
Joerns Healthcare, LLC* One stop   L + 6.00% (c)   7.00%   08/2024   1,800  1,771  0.1 1,764 
Katena Holdings, Inc.# One stop   L + 6.50% (c)   7.50%   06/2021   12,728  12,797  0.5 12,474 
Katena Holdings, Inc.# One stop   L + 6.50% (c)   7.50%   06/2021   1,244  1,250  0.1 1,218 
Katena Holdings, Inc.+ One stop   L + 6.50% (c)   7.50%   06/2021   930  925  — 911 
Katena Holdings, Inc.# One stop   L + 6.50% (c)   7.50%   06/2021   851  855  — 834 
Katena Holdings, Inc. One stop   L + 6.50% (c)   7.50%   06/2021   200  201  — 196 
Lombart Brothers, Inc.*#~ One stop   L + 6.25% (c)   7.25%   04/2023   28,950  29,267  1.1 27,503 
Lombart Brothers, Inc.#(8) One stop   L + 6.25% (c)   7.25%   04/2023   3,117  3,153  0.1 2,961 
Lombart Brothers, Inc. One stop   L + 6.25% (a)   7.25%   04/2023   280  280  — 266 
Lombart Brothers, Inc.(8) One stop   L + 6.25% (a)   7.25%   04/2023   50  49  — 46 
ONsite Mammography, LLC~ One stop   L + 7.00% (c)   8.00%   11/2023   7,650  7,687  0.3 7,496 
ONsite Mammography, LLC One stop   L + 7.00% (c)   8.00%   11/2023   100  102  — 98 
ONsite Mammography, LLC One stop   L + 7.00% (c)   8.00%   11/2023   29  28  — 28 
Orthotics Holdings, Inc.*# One stop   L + 6.00% (e)   7.00%   06/2021   7,760  7,760  0.3 7,604 
Orthotics Holdings, Inc.*# One stop   L + 16.00% (c)   7.00% cash/10.00% PIK   06/2021   3,894  3,894  0.2 3,621 
Orthotics Holdings, Inc.*#(8) One stop   L + 6.00% (c)   7.00%   06/2021   1,272  1,272  0.1 1,246 
Orthotics Holdings, Inc.*#(8) One stop   L + 16.00% (c)   7.00% cash/10.00% PIK   06/2021   638  639  — 593 
Orthotics Holdings, Inc. One stop   L + 6.00%   N/A(6)   06/2021   —  —  — — 
SLMP, LLC#^ One stop   L + 6.00% (c)   7.00%   05/2023   11,764  11,841  0.5 11,764 
SLMP, LLC#^ One stop   L + 6.00% (c)   7.00%   05/2023   5,664  5,844  0.2 5,664 
SLMP, LLC One stop   L + 6.00% (c)   7.00%   05/2023   1,473  1,473  0.1 1,473 
SLMP, LLC Subordinated debt   N/A   7.50% PIK   05/2027   237  242  — 237 
SLMP, LLC(5) One stop   L + 6.00%   N/A(6)   05/2023   —  (1) — — 
171,068  171,743  7.0 167,463 

See Notes to Consolidated Financial Statements.
59
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Healthcare Providers & Services
Active Day, Inc.# One stop   L + 6.50% (c)   7.50%   12/2021   $ 24,567  $ 24,757  0.9 % $ 20,883 
Active Day, Inc.# One stop   L + 6.50% (c)   7.50%   12/2021   1,896  1,912  0.1 1,611 
Active Day, Inc.*# One stop   L + 6.50% (c)   7.50%   12/2021   1,222  1,233  0.1 1,038 
Active Day, Inc. One stop   L + 6.50% (c)   7.50%   12/2021   973  995  — 827 
Active Day, Inc. One stop   L + 6.50% (c)   7.50%   12/2021   859  854  — 730 
Active Day, Inc.*# One stop   L + 6.50% (c)   7.50%   12/2021   843  851  — 717 
Active Day, Inc. One stop   L + 6.50% (c)   7.50%   12/2021   102  102  — 86 
Active Day, Inc. One stop   L + 6.50% (c)   N/A(6)   12/2021   —  —  — — 
Acuity Eyecare Holdings, LLC One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   7,148  7,178  0.3 7,112 
Acuity Eyecare Holdings, LLC# One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   6,021  6,087  0.3 5,991 
Acuity Eyecare Holdings, LLC~ One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   5,616  5,722  0.2 5,588 
Acuity Eyecare Holdings, LLC~ One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   3,260  3,362  0.1 3,243 
Acuity Eyecare Holdings, LLC One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   793  814  — 789 
Acuity Eyecare Holdings, LLC One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   258  256  — 257 
Acuity Eyecare Holdings, LLC One stop   L + 8.25% (c)   7.25% cash/2.00% PIK   03/2024   150  149  — 150 
Acuity Eyecare Holdings, LLC One stop   L + 11.00% (c)   7.25% cash/4.75% PIK   03/2024   42  42  — 45 
Acuity Eyecare Holdings, LLC(5) One stop   L + 8.25% (c)   7.25%   03/2024   1  (5) — (3)
ADCS Clinics Intermediate Holdings, LLC*#! One stop   L + 5.75% (c)(d)(f)   6.75%   05/2022   41,873  42,287  1.7 40,618 
ADCS Clinics Intermediate Holdings, LLC*# One stop   L + 5.75% (c)(d)   6.75%   05/2022   210  212  — 204 
ADCS Clinics Intermediate Holdings, LLC One stop   L + 5.75% (d)   6.75%   05/2022   200  199  — 194 
ADCS Clinics Intermediate Holdings, LLC* One stop   L + 5.75% (c)(d)   6.75%   05/2022   162  165  — 158 
ADCS Clinics Intermediate Holdings, LLC*# One stop   L + 5.75% (c)(d)   6.75%   05/2022   61  62  — 59 
Advanced Pain Management Holdings, Inc.(7) Senior loan   L + 5.00% (b)   6.25%   11/2020   11,433  6,860  — 261 
Advanced Pain Management Holdings, Inc.(7) Senior loan   L + 8.50% (b)   9.75%   11/2020   4,082  7  — — 
Advanced Pain Management Holdings, Inc.(7) Senior loan   L + 5.00% (b)   6.25%   11/2020   782  469  — 18 
Advanced Pain Management Holdings, Inc.(5)(7) Senior loan   L + 5.00% (b)   6.25%   11/2020   355  (17) — 12 
Agilitas USA, Inc.*# One stop   L + 6.25% (c)   7.25%   04/2022   9,252  9,287  0.4 8,790 
Agilitas USA, Inc. One stop   L + 6.25% (c)   7.25%   04/2022   100  100  — 96 
CRH Healthcare Purchaser, Inc.+~ Senior loan   L + 4.50% (c)   4.72%   12/2024   13,046  13,206  0.6 13,046 
CRH Healthcare Purchaser, Inc.(5) Senior loan   L + 4.50%   N/A(6)   12/2024   —  (1) — — 
CRH Healthcare Purchaser, Inc.(5) Senior loan   L + 4.50%   N/A(6)   12/2024   —  (2) — — 
DCA Investment Holding, LLC*#+ One stop   L + 5.25% (c)   6.25%   07/2021   31,405  31,611  1.3 30,778 
DCA Investment Holding, LLC*#+!~ One stop   L + 5.25% (c)   6.25%   07/2021   27,210  27,463  1.1 26,668 
DCA Investment Holding, LLC*# One stop   L + 5.25% (c)   6.25%   07/2021   8,318  8,425  0.3 8,152 
DCA Investment Holding, LLC~ One stop   L + 5.25% (c)   6.25%   07/2021   4,034  4,106  0.2 3,953 
DCA Investment Holding, LLC# One stop   L + 5.25% (c)   6.25%   07/2021   3,669  3,736  0.2 3,595 
DCA Investment Holding, LLC One stop   L + 5.25% (c)   6.25%   07/2021   2,737  2,734  0.1 2,681 
DCA Investment Holding, LLC*# One stop   L + 5.25% (c)   6.25%   07/2021   2,512  2,558  0.1 2,462 
DCA Investment Holding, LLC# One stop   L + 5.25% (c)   6.25%   07/2021   1,249  1,262  0.1 1,225 
DCA Investment Holding, LLC*~ One stop   L + 5.25% (c)   6.25%   07/2021   296  299  — 290 
See Notes to Consolidated Financial Statements.
60
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Providers & Services - (continued)
DCA Investment Holding, LLC*~ One stop   L + 5.25% (c)   6.25%   07/2021   $ 92  $ 93  — % $ 90 
Deca Dental Management LLC*# One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   11,269  11,395  0.5 11,269 
Deca Dental Management LLC#~ One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   1,376  1,392  0.1 1,376 
Deca Dental Management LLC+~ One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   992  1,004  0.1 992 
Deca Dental Management LLC One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   736  749  — 736 
Deca Dental Management LLC One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   100  100  — 100 
Deca Dental Management LLC(5) One stop   L + 7.50% (c)   7.00% cash/1.50% PIK   12/2021   2  (2) — 2 
Encorevet Group LLC Senior loan   L + 5.00% (c)   6.00%   11/2024   249  247  — 249 
Encorevet Group LLC Senior loan   L + 5.00% (c)   6.00%   11/2024   112  112  — 112 
Encorevet Group LLC Senior loan   L + 5.00% (c)   6.00%   11/2024   58  57  — 58 
Encorevet Group LLC Senior loan   L + 5.00% (c)   6.00%   11/2024   10  10  — 10 
Encorevet Group LLC Senior loan   L + 5.00%   N/A(6)   11/2024   —  —  — — 
Encorevet Group LLC(5) Senior loan   L + 5.00%   N/A(6)   11/2024   —  (1) — — 
ERG Buyer, LLC*# One stop   L + 5.50% (c)   6.50%   05/2024   19,133  19,084  0.6 15,307 
ERG Buyer, LLC One stop   P + 4.50% (f)   7.75%   05/2024   300  296  — 240 
Eyecare Services Partners Holdings LLC+ One stop   L + 6.25% (c)   7.25%   05/2023   18,229  18,320  0.7 17,318 
Eyecare Services Partners Holdings LLC* One stop   L + 6.25% (c)   7.25%   05/2023   7,996  8,123  0.3 7,596 
Eyecare Services Partners Holdings LLC*# One stop   L + 6.25% (c)   7.25%   05/2023   7,003  7,120  0.3 6,653 
Eyecare Services Partners Holdings LLC One stop   L + 6.25% (c)   7.25%   05/2023   5,153  5,175  0.2 4,896 
Eyecare Services Partners Holdings LLC*+ One stop   L + 6.25% (c)   7.25%   05/2023   2,391  2,431  0.1 2,272 
Eyecare Services Partners Holdings LLC* One stop   L + 6.25% (c)   7.25%   05/2023   1,535  1,560  0.1 1,458 
Eyecare Services Partners Holdings LLC*# One stop   L + 6.25% (c)   7.25%   05/2023   1,134  1,154  0.1 1,077 
Eyecare Services Partners Holdings LLC*# One stop   L + 6.25% (c)   7.25%   05/2023   999  1,016  — 950 
Eyecare Services Partners Holdings LLC*+ One stop   L + 6.25% (c)   7.25%   05/2023   646  654  — 613 
Eyecare Services Partners Holdings LLC One stop   L + 6.25% (c)   7.25%   05/2023   400  398  — 380 
FYI Optical Acquisitions, Inc. & FYI USA, Inc.~(8)(9)(14) One stop   L + 5.50% (k)   6.06%   03/2027   11,832  11,723  0.5 11,296 
FYI Optical Acquisitions, Inc. & FYI USA, Inc.(8)(9)(14) One stop   L + 5.50% (k)   6.01%   03/2027   96  93  — 91 
FYI Optical Acquisitions, Inc. & FYI USA, Inc.(8)(14) One stop   L + 5.50% (c)   6.50%   03/2027   20  19  — 18 
Krueger-Gilbert Health Physics, LLC!~ Senior loan   L + 5.25% (a)   6.25%   05/2025   2,359  2,347  0.1 2,359 
Krueger-Gilbert Health Physics, LLC! Senior loan   L + 5.25% (a)   6.25%   05/2025   1,113  1,151  0.1 1,113 
Krueger-Gilbert Health Physics, LLC Senior loan   L + 5.25% (a)   6.25%   05/2025   920  918  — 920 
Krueger-Gilbert Health Physics, LLC Senior loan   L + 5.25% (a)   6.25%   05/2025   50  50  — 50 
MD Now Holdings, Inc.+! One stop   L + 5.25% (c)   6.25%   08/2024   14,544  14,699  0.6 14,252 
MD Now Holdings, Inc. One stop   L + 5.25% (c)   6.25%   08/2024   622  622  — 610 
MD Now Holdings, Inc.(5) One stop   L + 5.25%   N/A(6)   08/2024   —  (1) — (6)
Midwest Veterinary Partners, LLC^ One stop   L + 5.75% (c)   6.75%   07/2025   4,274  4,209  0.2 4,220 
Midwest Veterinary Partners, LLC One stop   L + 5.75% (c)(d)   6.75%   07/2025   4,120  4,086  0.2 4,069 
Midwest Veterinary Partners, LLC One stop   L + 6.50% (c)   7.50%   07/2025   2,510  2,347  0.1 2,369 
Midwest Veterinary Partners, LLC# One stop   L + 5.75% (c)   6.75%   07/2025   1,025  1,017  0.1 1,012 
See Notes to Consolidated Financial Statements.
61
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Providers & Services - (continued)
Midwest Veterinary Partners, LLC One stop   P + 4.75% (c)(f)   8.00%   07/2025   $ 200  $ 200  — % $ 198 
MWD Management, LLC & MWD Services, Inc.#+ One stop   L + 5.25% (c)   6.25%   06/2023   7,016  7,005  0.3 6,945 
MWD Management, LLC & MWD Services, Inc.# One stop   L + 5.25% (c)   6.25%   06/2023   4,517  4,596  0.2 4,472 
MWD Management, LLC & MWD Services, Inc.(5) One stop   L + 5.25%   N/A(6)   06/2022   —  (1) — (2)
NVA Holdings, Inc.~ Senior loan   L + 3.50% (a)   3.69%   02/2026   2,914  2,887  0.1 2,914 
Oliver Street Dermatology Holdings, LLC#(7) One stop   L + 6.25% (c)   7.25%   05/2022   19,296  17,670  0.4 10,448 
Oliver Street Dermatology Holdings, LLC*#(7) One stop   L + 6.25% (c)   7.25%   05/2022   2,239  1,913  0.1 1,213 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   2,122  1,933  0.1 1,149 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   1,606  1,372  — 869 
Oliver Street Dermatology Holdings, LLC*(7) One stop   L + 6.25% (c)   7.25%   05/2022   1,419  1,212  — 768 
Oliver Street Dermatology Holdings, LLC*(7) One stop   L + 6.25% (c)   7.25%   05/2022   1,235  1,055  — 669 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   962  822  — 521 
Oliver Street Dermatology Holdings, LLC*(7) One stop   L + 6.25% (c)   7.25%   05/2022   834  712  — 451 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)   7.25%   05/2022   514  439  — 278 
Oliver Street Dermatology Holdings, LLC(7) One stop   L + 6.25% (c)(f)   7.25%   05/2022   291  267  — 158 
Oliver Street Dermatology Holdings, LLC#(7) One stop   L + 6.25% (c)   7.25%   05/2022   98  89  — 52 
Oliver Street Dermatology Holdings, LLC*#(7) One stop   L + 6.25% (c)   7.25%   05/2022   88  81  — 48 
Oliver Street Dermatology Holdings, LLC#(7) One stop   L + 6.25% (c)   7.25%   05/2022   70  63  — 38 
Oliver Street Dermatology Holdings, LLC#(7) One stop   L + 6.25% (c)   7.25%   05/2022   64  59  — 34 
Pinnacle Treatment Centers, Inc.# One stop   L + 6.25% (c)   7.25%   1/1/2023   19,130  19,257  0.8 19,130 
Pinnacle Treatment Centers, Inc.* One stop   L + 6.25% (c)   7.25%   1/1/2023   7,793  7,735  0.3 7,793 
Pinnacle Treatment Centers, Inc.# One stop   L + 6.25% (c)   7.25%   01/2023   1,571  1,575  0.1 1,571 
Pinnacle Treatment Centers, Inc.^ One stop   L + 6.25% (c)   7.25%   01/2023   709  715  — 709 
Pinnacle Treatment Centers, Inc. One stop   L + 6.25% (c)   7.25%   01/2023   186  188  — 186 
Pinnacle Treatment Centers, Inc.^ One stop   L + 6.25% (c)   7.25%   01/2023   108  108  — 108 
Pinnacle Treatment Centers, Inc. One stop   L + 6.25% (c)   7.25%   01/2023   38  37  — 38 
Pinnacle Treatment Centers, Inc. One stop   L + 6.25%   N/A(6)   01/2023   —  —  — — 
Pinnacle Treatment Centers, Inc. One stop   L + 6.25%   N/A(6)   01/2023   —  —  — — 
PPT Management Holdings, LLC+ One stop   L + 8.50% (c)(d)   7.08% cash/2.50% PIK   12/2022   25,002  23,695  0.9 20,993 
PPT Management Holdings, LLC One stop   L + 8.50% (c)(d)   7.08% cash/2.50% PIK   12/2022   304  291  — 254 
PPT Management Holdings, LLC One stop   L + 8.50% (c)(d)   7.08% cash/2.50% PIK   12/2022   180  172  — 150 
PPT Management Holdings, LLC One stop   L + 8.50% (c)(d)   7.08% cash/2.50% PIK   12/2022   88  77  — 74 
PPT Management Holdings, LLC(5) One stop   L + 8.50% (b)   7.00% cash/2.50% PIK   12/2022   18  (6) — (48)
Pyramid Healthcare, Inc.*+ One stop   L + 6.50% (c)   7.50%   08/2022   14,982  14,840  0.6 14,982 
Pyramid Healthcare, Inc. One stop   L + 6.50% (c)   7.50%   08/2022   461  457  — 461 
Pyramid Healthcare, Inc. One stop   L + 6.50% (c)   7.50%   08/2022   333  330  — 333 
Pyramid Healthcare, Inc. One stop   L + 6.50% (c)   7.50%   08/2022   290  288  — 290 
Pyramid Healthcare, Inc. One stop   L + 6.50% (c)   7.50%   08/2022   112  111  — 112 
Pyramid Healthcare, Inc. One stop   L + 6.50% (c)   7.50%   08/2022   45  44  — 45 
Pyramid Healthcare, Inc.(5) One stop   L + 6.50%   N/A(6)   08/2022   —  (8) — — 
Riverchase MSO, LLC*# Senior loan   L + 6.75% (c)   6.75% cash/1.00% PIK   10/2022   9,624  9,722  0.4 9,432 
Riverchase MSO, LLC Senior loan   L + 6.75% (c)   6.75% cash/1.00% PIK   10/2022   130  130  — 128 
See Notes to Consolidated Financial Statements.
62
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Health Care Providers & Services - (continued)
RXH Buyer Corporation*#! One stop   L + 5.75% (c)   6.75%   09/2021   $ 27,525  $ 27,705  1.2 % $ 27,525 
RXH Buyer Corporation*# One stop   L + 5.75% (c)   6.75%   09/2021   3,116  3,136  0.1 3,116 
RXH Buyer Corporation One stop   L + 5.75%   N/A(6)   09/2021   —  1  — — 
Summit Behavioral Healthcare, LLC# Senior loan   L + 4.75% (c)   5.75%   10/2023   20,597  20,372  0.9 20,597 
Summit Behavioral Healthcare, LLC Senior loan   L + 4.75% (c)   5.75%   10/2023   430  431  — 430 
Summit Behavioral Healthcare, LLC Senior loan   L + 4.75% (c)   5.75%   10/2023   160  156  — 160 
Veterinary Specialists of North America, LLC*#! Senior loan   L + 4.50% (a)   4.65%   04/2025   41,653  43,066  1.7 41,653 
Veterinary Specialists of North America, LLC Senior loan   L + 4.50% (a)   4.65%   04/2025   10,262  10,258  0.4 10,262 
Veterinary Specialists of North America, LLC# Senior loan   L + 4.50% (a)   4.65%   04/2025   2,871  2,851  0.1 2,871 
Veterinary Specialists of North America, LLC* Senior loan   L + 4.50% (a)   4.65%   04/2025   1,445  1,496  0.1 1,445 
Veterinary Specialists of North America, LLC Senior loan   L + 4.50% (a)   4.65%   04/2025   835  832  — 835 
WHCG Management, LLC*# Senior loan   L + 4.50% (d)   5.50%   03/2023   16,067  16,161  0.7 16,067 
WHCG Management, LLC Senior loan   L + 4.50% (d)   5.50%   03/2023   5,627  5,590  0.2 5,627 
WHCG Management, LLC Senior loan   L + 4.50% (d)   5.50%   03/2023   1,983  1,978  0.1 1,983 
WHCG Management, LLC Senior loan   L + 4.50% (d)   5.50%   03/2023   338  336  — 338 
WHCG Management, LLC Senior loan   L + 4.50% (d)   5.50%   03/2023   116  118  — 116 
599,751  589,723  22.9 549,440 

See Notes to Consolidated Financial Statements.
63
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Hotels, Restaurants & Leisure
BJH Holdings III Corp.+~ One stop   L + 5.50% (c)   6.50%   08/2025   $ 45,936  $ 47,269  1.9 $ 45,936 
BJH Holdings III Corp.(5) One stop   L + 5.50%   N/A(6)   08/2025   —  (7) — 0
CR Fitness Holdings, LLC+~ Senior loan   L + 4.25% (a)   5.25%   07/2025   1,999  2,011  0.1 1,839 
CR Fitness Holdings, LLC Senior loan   L + 4.25% (a)   5.25%   07/2025   268  263  — 201 
CR Fitness Holdings, LLC Senior loan   L + 4.25% (a)(c)   5.25%   07/2025   74  74  — 68 
Davidson Hotel Company, LLC+ One stop   L + 6.75% (a)(c)   6.25% cash/1.50% PIK   07/2024   6,981  6,923  0.2 4,887 
Davidson Hotel Company, LLC One stop   L + 6.75% (a)(c)   6.25% cash/1.50% PIK   07/2024   1,073  1,068  — 751 
Davidson Hotel Company, LLC(5) One stop   L + 6.75%   N/A(6)   07/2024   —  (2) — (30)
Davidson Hotel Company, LLC(5) One stop   L + 6.75%   N/A(6)   07/2024   —  (19) — — 
EOS Fitness Opco Holdings, LLC*# One stop   L + 5.25% (c)   6.25%   01/2025   8,675  8,789  0.3 7,981 
EOS Fitness Opco Holdings, LLC One stop   L + 5.25% (c)   6.25%   01/2025   914  925  — 840 
EOS Fitness Opco Holdings, LLC One stop   L + 5.25% (c)   6.25%   01/2025   120  120  — 110 
Planet Fit Indy 10 LLC+ One stop   L + 5.25% (c)   6.25%   07/2025   17,386  17,173  0.7 15,647 
Planet Fit Indy 10 LLC# One stop   L + 5.25% (c)   6.25%   07/2025   2,319  2,369  0.1 2,088 
Planet Fit Indy 10 LLC# One stop   L + 5.25% (c)   6.25%   07/2025   1,259  1,242  0.1 1,133 
Planet Fit Indy 10 LLC One stop   L + 5.25% (c)   6.25%   07/2025   200  199  — 180 
Self Esteem Brands, LLC*# Senior loan   L + 4.25% (c)   5.25%   02/2022   45,841  46,193  1.8 44,007 
Self Esteem Brands, LLC Senior loan   P + 3.25% (f)   6.50%   02/2022   2,338  2,335  0.1 2,245 
SSRG Holdings, LLC One stop   L + 5.25% (a)   6.25%   11/2025   918  902  0.1 891 
SSRG Holdings, LLC One stop   L + 5.25% (a)(c)   6.25%   11/2025   75  74  — 73 
Sunshine Sub, LLC#~ One stop   L + 5.25% (a)   6.25%   05/2024   12,925  13,024  0.5 12,149 
Sunshine Sub, LLC# One stop   L + 5.25% (a)   6.25%   05/2024   5,654  5,838  0.2 5,315 
Sunshine Sub, LLC One stop   L + 5.25% (a)   6.25%   05/2024   20  19  — 8 
Tropical Smoothie Cafe Holdings, LLC Senior loan   L + 5.50% (a)(c)   6.50%   09/2026   17,374  17,202  0.7 17,200 
Tropical Smoothie Cafe Holdings, LLC(5) Senior loan   L + 5.50%   N/A(6)   09/2026   —  (1) — (1)
Velvet Taco Holdings, Inc.~ One stop   L + 7.00% (e)   8.00%   03/2026   1,769  1,753  0.1 1,522 
Velvet Taco Holdings, Inc. One stop   L + 7.00%   N/A(6)   03/2026   —  —  — — 
Velvet Taco Holdings, Inc.(5) One stop   L + 7.00%   N/A(6)   03/2026   —  (1) — — 
174,118  175,735  6.9 165,040 
Household Durables
Groundworks LLC^ Senior loan   L + 7.00% (a)   8.00%   01/2026   4,709  4,657  0.2 4,709 
Groundworks LLC Senior loan   L + 7.00% (a)   8.00%   01/2026   84  83  — 84 
Groundworks LLC Senior loan   L + 7.00%   N/A(6)   01/2026   —  —  — — 
4,793  4,740  0.2 4,793 
Household Products
WU Holdco, Inc. #^ One stop   L + 5.25% (c)   6.25%   03/2026   3,427  3,504  0.2 3,427 
WU Holdco, Inc. One stop   L + 5.25% (c)   6.25%   03/2026   392  392  — 392 
WU Holdco, Inc. (5) One stop   L + 5.25%   N/A(6)   03/2025   —  —  — (2)
3,819  3,896  0.2 3,817 

See Notes to Consolidated Financial Statements.
64
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Industrial Conglomerates
Arch Global CCT Holdings Corp.#^ Senior loan   L + 4.75% (c)   4.97%   04/2026   $ 4,162  $ 4,197  0.2 % $ 4,080 
Arch Global CCT Holdings Corp.(5) Senior loan   L + 4.75%   N/A(6)   04/2025   —  —  — (2)
Arch Global CCT Holdings Corp.(5) Senior loan   L + 4.75%   N/A(6)   04/2026   —  —  — (1)
Madison Safety & Flow LLC^ Senior loan   L + 4.50% (a)   4.66%   03/2025   495  494  — 490 
Madison Safety & Flow LLC Senior loan   L + 4.50%   N/A(6)   03/2025   —  —  — — 
4,657  4,691  0.2 4,567 
Insurance
Captive Resources Midco, LLC*#+~^ One stop   L + 6.00% (a)   7.00%   05/2025   55,016  55,162  2.3 55,016 
Captive Resources Midco, LLC# One stop   L + 6.00% (a)   7.00%   05/2025   1,440  1,427  0.1 1,440 
Captive Resources Midco, LLC(5) One stop   L + 6.00%   N/A(6)   05/2025   —  (18) — — 
High Street Insurance Partners, Inc.+ Senior loan   L + 6.25% (c)   7.25%   12/2025   873  851  — 851 
High Street Insurance Partners, Inc.(5) Senior loan   L + 6.25%   N/A(6)   12/2025   —  (7) — (7)
Integrity Marketing Acquisition, LLC^ Senior loan   L + 5.50% (c)   6.50%   08/2025   2,471  2,471  0.1 2,421 
Integrity Marketing Acquisition, LLC Senior loan   L + 5.50% (c)(d)   6.64%   08/2025   789  786  — 774 
Integrity Marketing Acquisition, LLC Senior loan   L + 5.50% (c)   6.50%   08/2025   478  475  — 468 
Integrity Marketing Acquisition, LLC Senior loan   L + 5.50% (c)(d)   6.50%   08/2025   243  242  — 238 
Integrity Marketing Acquisition, LLC Senior loan   L + 5.75%   N/A(6)   08/2025   —  —  — — 
J.S. Held Holdings, LLC#^ One stop   L + 6.00% (c)   7.00%   07/2025   4,780  4,768  0.2 4,780 
J.S. Held Holdings, LLC One stop   P + 5.00% (f)   8.25%   07/2025   52  46  — 52 
J.S. Held Holdings, LLC(5) One stop   L + 6.00%   N/A(6)   07/2025   —  (15) — — 
Majesco One stop   L + 7.75% (c)   8.75%   09/2027   12,334  12,089  0.5 12,149 
Majesco(5) Senior loan   L + 7.75%   N/A(6)   09/2026   —  (3) — (2)
Orchid Underwriters Agency, LLC^ Senior loan   L + 4.25% (c)   5.25%   12/2024   4,124  4,176  0.2 4,124 
Orchid Underwriters Agency, LLC Senior loan   L + 4.25%   N/A(6)   12/2024   —  —  — — 
Orchid Underwriters Agency, LLC(5) Senior loan   L + 4.25%   N/A(6)   12/2024   —  (1) — — 
RSC Acquisition, Inc.+~^ One stop   L + 5.50% (b)(c)   6.50%   10/2026   26,056  25,564  1.1 25,275 
RSC Acquisition, Inc. One stop   L + 5.50% (c)   6.50%   10/2026   998  958  — 968 
RSC Acquisition, Inc.(5) One stop   L + 5.50%   N/A(6)   10/2026   —  (1) — (2)
RSC Acquisition, Inc.(5) One stop   L + 5.50%   N/A(6)   10/2026   —  (2) — (3)
RSC Acquisition, Inc.(5) One stop   L + 5.50%   N/A(6)   10/2026   —  (226) — (170)
109,654  108,742  4.5 108,372 
Internet and Catalog Retail
AutoQuotes, LLC! One stop   L + 6.00% (c)   7.00%   11/2024   9,888  10,023  0.4 9,393 
AutoQuotes, LLC One stop   L + 6.00% (c)   7.00%   11/2024   100  100  — 96 
9,988  10,123  0.4 9,489 

See Notes to Consolidated Financial Statements.
65
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
IT Services
Acquia, Inc.!~ One stop   L + 7.00% (c)   8.00%   10/2025   $ 7,118  $ 7,057  0.3 % $ 7,118 
Acquia, Inc. One stop   L + 7.00%   N/A(6)   10/2025   —  —  — — 
Appriss Holdings, Inc.#+~^ One stop   L + 5.50% (a)(c)(d)   5.75%   06/2026   24,968  25,674  1.0 24,470 
Appriss Holdings, Inc. One stop   L + 5.50% (a)   5.65%   06/2025   202  198  — 194 
Arctic Wolf Networks, Inc. and Arctic Wolf Networks Canada, Inc. One stop   L + 7.50% (a)   8.50% cash/1.00% PIK   08/2025   4,622  4,444  0.2 4,529 
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc. One stop   L + 7.50%   N/A(6)   08/2025   —  —  — — 
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc.(5) One stop   L + 7.50%   N/A(6)   08/2025   —  (3) — (3)
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc.(5) One stop   L + 7.50%   N/A(6)   08/2025   —  (14) — (14)
Centrify Corporation*# One stop   L + 8.25% (c)   9.25%   08/2024   23,239  23,279  1.0 22,774 
Centrify Corporation One stop   P + 7.25% (f)   10.50%   08/2024   200  202  — 196 
E2open, LLC*#+!~^ One stop   L + 5.75% (c)   6.75%   11/2024   85,904  86,773  3.5 84,184 
E2open, LLC(5) One stop   L + 5.75%   N/A(6)   11/2024   —  (5) — (10)
Episerver, Inc.!~(8)(9) One stop   L + 6.00% (d)   6.00%   10/2024   20,541  20,852  0.9 20,471 
Episerver, Inc.#^ One stop   L + 5.75% (c)(d)   6.75%   10/2024   12,186  12,374  0.5 11,820 
Episerver, Inc.(5) One stop   L + 5.75%   N/A(6)   10/2024   —  (2) — (12)
Gamma Technologies, LLC*#!^ One stop   L + 5.00% (c)   6.00%   06/2024   47,091  47,412  1.9 46,620 
Gamma Technologies, LLC(5) One stop   L + 5.00%   N/A(6)   06/2024   —  (1) — (2)
Infinisource, Inc.~^ One stop   L + 4.50% (c)   5.50%   10/2026   29,180  28,757  1.2 29,180 
Infinisource, Inc. One stop   L + 4.50% (c)   5.50%   10/2026   154  151  — 154 
Infinisource, Inc. One stop   L + 4.50% (c)   5.50%   10/2026   111  110  — 111 
Infinisource, Inc.(5) One stop   L + 4.50%   N/A(6)   10/2026   —  (1) — — 
Maverick Bidco Inc.*#!~ One stop   L + 6.25% (c)   7.25%   04/2023   39,462  39,684  1.7 39,462 
Maverick Bidco Inc.*# One stop   L + 6.25% (c)   7.25%   04/2023   3,183  3,237  0.1 3,183 
Maverick Bidco Inc. One stop   L + 6.25% (c)   7.25%   04/2023   2,821  2,751  0.1 2,821 
Maverick Bidco Inc.^ One stop   L + 6.25% (c)   7.25%   04/2023   1,693  1,629  0.1 1,693 
Maverick Bidco Inc. One stop   L + 6.25% (c)   7.25%   04/2023   202  199  — 202 
PCS Intermediate II Holdings, LLC~ One stop   L + 5.25% (c)   6.25%   01/2026   14,493  14,364  0.6 14,493 
PCS Intermediate II Holdings, LLC(5) One stop   L + 5.50%   N/A(6)   01/2026   —  (1) — — 
Recordxtechnologies, LLC+ One stop   L + 5.50% (c)   6.50%   12/2025   743  735  — 714 
Recordxtechnologies, LLC One stop   L + 5.50% (c)   6.50%   12/2025   42  41  — 39 
Recordxtechnologies, LLC(5) One stop   L + 5.50%   N/A(6)   12/2025   —  (1) — (7)
Red Dawn SEI Buyer, Inc.^ Senior loan   L + 4.25% (c)   5.25%   11/2025   752  744  — 752 
Red Dawn SEI Buyer, Inc.(5) Senior loan   L + 4.25%   N/A(6)   11/2025   —  (1) — — 
Red Dawn SEI Buyer, Inc.(5) Senior loan   L + 4.25%   N/A(6)   11/2025   —  (1) — — 
Velocity Technology Solutions, Inc.*# One stop   L + 6.00% (c)   7.00%   12/2023   18,276  18,556  0.8 18,276 
Velocity Technology Solutions, Inc. One stop   L + 6.00% (c)   7.00%   12/2023   50  49  — 50 
337,233  339,242  13.9 333,458 
Leisure Products
WBZ Investment LLC# One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   09/2024   8,467  8,525  0.3 7,620 
WBZ Investment LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   09/2024   1,213  1,205  0.1 1,091 
WBZ Investment LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   09/2024   843  871  — 758 
WBZ Investment LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   09/2024   431  445  — 388 
WBZ Investment LLC One stop   L + 7.50% (c)   6.50% cash/2.00% PIK   09/2024   80  80  — 70 
11,034  11,126  0.4 9,927 

See Notes to Consolidated Financial Statements.
66
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Life Sciences Tools & Services
Pace Analytical Services, LLC*#! One stop   L + 5.75% (c)   6.75%   04/2024   $ 29,639  $ 29,717  1.2 $ 29,343 
Pace Analytical Services, LLC One stop   L + 5.75% (c)   6.75%   04/2024   7,046  6,943  0.3 6,975 
Pace Analytical Services, LLC#^ One stop   L + 5.75% (c)   6.75%   04/2024   2,756  2,768  0.1 2,729 
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   1,652  1,685  0.1 1,635 
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   1,518  1,529  0.1 1,504 
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   1,264  1,264  0.1 1,252 
Pace Analytical Services, LLC#^ One stop   L + 5.75% (c)   6.75%   04/2024   1,222  1,246  0.1 1,210 
Pace Analytical Services, LLC One stop   L + 5.75% (c)   6.75%   04/2024   993  971  — 983 
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   678  680  — 670 
Pace Analytical Services, LLC*# One stop   L + 5.75% (c)   6.75%   04/2024   559  570  — 554 
Pace Analytical Services, LLC* One stop   L + 5.75% (c)   6.75%   04/2024   188  191  — 186 
Pace Analytical Services, LLC(5) One stop   L + 5.75%   N/A(6)   04/2024   —  (3) — (4)
Pace Analytical Services, LLC(5) One stop   L + 5.75%   N/A(6)   04/2024   —  (116) — (80)
47,515  47,445  2.0 46,957 
Machinery
Blackbird Purchaser, Inc. *+~^ Senior loan   L + 4.25% (c)(f)   4.47%   04/2026   15,524  15,796  0.6 15,059 
Blackbird Purchaser, Inc. (5) Senior loan   L + 4.25%   N/A(6)   04/2024   —  (1) — (6)
Blackbird Purchaser, Inc. (5) Senior loan   L + 4.25%   N/A(6)   04/2026   —  20  — (14)
Chase Industries, Inc.+~ Senior loan   L + 5.50% (d)   6.50%   05/2025   12,059  12,180  0.4 9,620 
Chase Industries, Inc. Senior loan   L + 7.00% (d)   6.50% cash/1.50% PIK   05/2025   985  1,020  0.1 786 
Chase Industries, Inc. Senior loan   L + 7.00% (d)   6.50% cash/1.50% PIK   05/2023   354  358  — 282 
28,922  29,373  1.1 25,727 
Multiline Retail
Mills Fleet Farm Group LLC*#+!~^ One stop   L + 6.25% (d)   7.25%   10/2024   46,488  46,372  1.9 46,488 
Oil, Gas & Consumable Fuels
3ES Innovation, Inc.+~(8)(12) One stop   L + 5.75% (c)   6.75%   05/2025   13,761  14,004  0.5 13,072 
3ES Innovation, Inc.(5)(8)(12) One stop   L + 5.75%   N/A(6)   05/2025   —  (2) — (10)
Drilling Info Holdings, Inc.*#+~ Senior loan   L + 4.25% (a)   4.40%   07/2025   36,577  37,062  1.5 35,030 
Drilling Info Holdings, Inc.~ Senior loan   L + 4.50% (a)   4.65%   07/2025   17,342  16,915  0.7 16,790 
Drilling Info Holdings, Inc. Senior loan   L + 4.25% (a)   4.40%   07/2023   120  118  — 112 
Drilling Info Holdings, Inc. Senior loan   L + 4.50% (a)   4.65%   07/2023   52  49  — 49 
Drilling Info Holdings, Inc.(5) Senior loan   L + 4.25%   N/A(6)   07/2025   —  (6) — (43)
Project Power Buyer, LLC#+^ One stop   L + 6.25% (c)   7.25%   05/2026   15,782  15,929  0.7 15,625 
Project Power Buyer, LLC(5) One stop   L + 6.25%   N/A(6)   05/2025   —  (1) — (2)
83,634  84,068  3.4 80,623 
Paper & Forest Products
Messenger, LLC+~ One stop   L + 6.50% (c)(f)   7.50%   08/2023   9,053  9,126  0.4 8,601 
Messenger, LLC(5) One stop   L + 6.50%   N/A(6)   08/2023   —  —  — (4)
9,053  9,126  0.4 8,597 

See Notes to Consolidated Financial Statements.
67
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Personal Products
IMPLUS Footwear, LLC+~ One stop   L + 7.75% (c)   8.75%   04/2024   $ 30,973  $ 31,376  1.2 % $ 27,876 
IMPLUS Footwear, LLC+~ One stop   L + 7.75% (c)   8.75%   04/2024   5,290  5,358  0.2 4,761 
IMPLUS Footwear, LLC* One stop   L + 7.75% (c)   8.75%   04/2024   763  786  — 686 
37,026  37,520  1.4 33,323 
Pharmaceuticals
ACP Ulysses Buyer, Inc.+!^ Senior loan   L + 5.00% (c)   6.00%   02/2026   13,210  13,091  0.6 13,210 
Apothecary Products, LLC+ Senior loan   L + 4.50% (c)   5.50%   07/2023   2,904  3,009  0.1 2,846 
Apothecary Products, LLC(5) Senior loan   L + 4.50%   N/A(6)   07/2023   —  —  — (16)
BIOVT, LLC*#^ One stop   L + 5.75% (a)   6.75%   01/2021   34,128  34,262  1.4 34,128 
BIOVT, LLC#^ One stop   L + 5.75% (a)   6.75%   01/2021   2,073  2,091  0.1 2,073 
BIOVT, LLC* One stop   L + 5.75% (a)   6.75%   01/2021   1,946  1,963  0.1 1,946 
BIOVT, LLC One stop   L + 5.75%   N/A(6)   01/2021   —  —  — — 
BIOVT, LLC One stop   L + 5.75%   N/A(6)   01/2021   —  —  — — 
54,261  54,416  2.3 54,187 
Professional Services
Brandmuscle, Inc. Senior loan   L + 4.75% (c)   5.75%   12/2021   8,115  8,111  0.3 7,708 
Brandmuscle, Inc.# Senior loan   L + 5.00% (c)   6.00%   12/2021   1,126  1,140  — 1,073 
Brandmuscle, Inc.(5) Senior loan   L + 4.75%   N/A(6)   12/2021   —  —  — (4)
DISA Holdings Acquisition Subsidiary Corp.+~ Senior loan   L + 4.25% (c)   5.34%   06/2022   9,814  9,891  0.4 8,930 
DISA Holdings Acquisition Subsidiary Corp. Senior loan   L + 4.25% (a)   5.25%   06/2022   1,448  1,448  0.1 1,319 
DISA Holdings Acquisition Subsidiary Corp. Senior loan   L + 4.25%   N/A(6)   06/2022   —  3  — — 
Net Health Acquisition Corp.*# One stop   L + 5.50% (c)   6.50%   12/2023   8,554  8,656  0.3 8,554 
Net Health Acquisition Corp.~^ One stop   L + 5.50% (c)   6.50%   12/2023   6,845  6,964  0.3 6,845 
Net Health Acquisition Corp.*# One stop   L + 5.50% (c)   6.50%   12/2023   1,195  1,210  — 1,195 
Net Health Acquisition Corp.(5) One stop   L + 5.50%   N/A(6)   12/2023   —  (2) — — 
Nexus Brands Group, Inc.*# One stop   L + 6.00% (c)   7.00%   11/2023   9,378  9,471  0.4 8,909 
Nexus Brands Group, Inc.+~(8)(9) One stop   L + 6.00% (h)   7.00%   11/2023   7,145  7,263  0.3 6,980 
Nexus Brands Group, Inc.# One stop   L + 6.00% (c)   7.00%   11/2023   1,987  2,050  0.1 1,887 
Nexus Brands Group, Inc.#~ One stop   L + 6.00% (c)   7.00%   11/2023   1,437  1,483  0.1 1,365 
Nexus Brands Group, Inc.~ One stop   L + 6.00% (c)   7.00%   11/2023   765  759  — 727 
Nexus Brands Group, Inc. One stop   L + 6.00% (c)   7.00%   11/2023   20  21  — 10 
Nexus Brands Group, Inc.(5)(8)(9) One stop   L + 6.00%   N/A(6)   11/2023   —  —  — (4)
Nexus Brands Group, Inc.(5)(8)(9) One stop   L + 6.00%   N/A(6)   11/2023   —  (1) — — 
Nexus Brands Group, Inc.(5) One stop   L + 6.00%   N/A(6)   11/2023   —  (1) — — 
PlanSource Holdings, Inc. !~ One stop   L + 6.25% (b)   7.25%   04/2025   11,416  11,542  0.5 11,416 
PlanSource Holdings, Inc. (5) One stop   L + 6.25%   N/A(6)   04/2025   —  (1) — — 
Teaching Company, The*# One stop   L + 4.75% (c)(d)   5.75%   07/2023   17,832  18,009  0.7 17,832 
Teaching Company, The One stop   L + 4.75% (d)   5.75%   07/2023   30  30  — 30 
87,107  88,046  3.5 84,772 

See Notes to Consolidated Financial Statements.
68
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Real Estate Management & Development
Property Brands, Inc.# One stop   L + 5.75% (c)   6.75%   01/2024   $ 19,845  $ 20,037  0.8 % $ 18,852 
Property Brands, Inc.~^ One stop   L + 5.75% (c)   6.75%   01/2024   13,666  13,551  0.5 12,984 
Property Brands, Inc.*# One stop   L + 5.75% (c)   6.75%   01/2024   6,653  6,761  0.3 6,319 
Property Brands, Inc.~^ One stop   L + 5.75% (c)   6.75%   01/2024   3,243  3,348  0.1 3,081 
Property Brands, Inc. One stop   L + 5.75% (c)   6.75%   01/2024   1,424  1,469  0.1 1,353 
Property Brands, Inc.# One stop   L + 5.75% (c)   6.75%   01/2024   1,205  1,243  0.1 1,145 
Property Brands, Inc. One stop   L + 5.75% (c)   6.75%   01/2024   1,189  1,227  — 1,129 
Property Brands, Inc. One stop   L + 5.75% (c)   6.75%   01/2024   950  944  — 903 
Property Brands, Inc. One stop   L + 5.75% (c)   6.75%   01/2024   501  517  — 477 
Property Brands, Inc. One stop   L + 5.75% (c)   6.75%   01/2024   200 199 — 190
Property Brands, Inc.(5) One stop   L + 5.75%   N/A(6)   01/2024   —  (2) — (175)
MRI Software LLC~^ One stop   L + 5.50% (c)   6.50%   02/2026   14,579  14,450  0.6 14,215 
MRI Software LLC One stop   L + 5.50% (c)   6.50%   02/2026   1,710  1,667  0.1 1,667 
MRI Software LLC(5) One stop   L + 5.50%   N/A(6)   02/2026   —  (2) — (7)
MRI Software LLC(5) One stop   L + 5.50%   N/A(6)   02/2026   —  —  — (2)
MRI Software LLC(5) One stop   L + 5.50%   N/A(6)   02/2026   —  (3) — (9)
65,165  65,406  2.6 62,122 
Road & Rail
Internet Truckstop Group LLC*#! One stop   L + 5.50% (c)   6.50%   04/2025   22,587  23,165  0.9 22,587 
Internet Truckstop Group LLC(5) One stop   L + 5.50%   N/A(6)   04/2025   —  (2) — — 
22,587  23,163  0.9 22,587 

See Notes to Consolidated Financial Statements.
69
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Software
Accela, Inc.*# One stop   L + 4.91% (a)   4.25% cash/1.66% PIK   09/2023   $ 4,479  $ 4,479  0.2 % $ 4,411 
Accela, Inc.(5) One stop   L + 7.00%   N/A(6)   09/2023   —  —  — (2)
Apptio, Inc. !~ One stop   L + 7.25% (d)   8.25%   01/2025   57,009  57,722  2.4 57,009 
Apptio, Inc. (5) One stop   L + 7.25%   N/A(6)   01/2025   —  (1) — — 
Astute Holdings, Inc. ! One stop   L + 6.50% (c)   7.50%   04/2025   10,816  10,951  0.5 10,816 
Astute Holdings, Inc. One stop   L + 6.50% (c)   7.50%   04/2025   2,768  2,759  0.1 2,768 
Astute Holdings, Inc. (5) One stop   L + 6.50%   N/A(6)   04/2025   —  (1) — — 
Axiom Merger Sub Inc.!~^ One stop   L + 5.25% (c)   6.47%   04/2026   5,847  5,900  0.3 5,847 
Axiom Merger Sub Inc.+~(8)(9) One stop   E + 5.50% (g)   5.50%   04/2026   2,411  2,432  0.1 2,492 
Axiom Merger Sub Inc. One stop   L + 5.25% (d)   6.25%   04/2026   30  29  — 30 
Bearcat Buyer, Inc.+~ Senior loan   L + 4.25% (c)   5.25%   07/2026   2,928  2,950  0.1 2,928 
Bearcat Buyer, Inc.~ Senior loan   L + 4.25% (c)   5.25%   07/2026   309  307  — 309 
Bearcat Buyer, Inc. Senior loan   L + 4.25% (c)   5.25%   07/2026   165  166  — 165 
Bearcat Buyer, Inc. Senior loan   L + 4.25%   N/A(6)   07/2024   —  —  — — 
Bullhorn, Inc.*#+~^ One stop   L + 5.75% (c)   6.75%   09/2026   67,302  66,135  2.8 66,294 
Bullhorn, Inc.(8)(9) One stop   L + 6.00% (h)   6.06%   09/2026   12,008  11,796  0.5 12,230 
Bullhorn, Inc.(8)(9) One stop   L + 5.75% (c)   5.75%   09/2026   4,822  4,736  0.2 4,951 
Bullhorn, Inc. One stop   L + 5.75% (c)(f)   6.75%   09/2026   98  96  — 96 
Bullhorn, Inc. One stop   L + 5.75% (c)   6.75%   09/2026   78  77  — 77 
Bullhorn, Inc.(5) One stop   L + 5.75%   N/A(6)   09/2026   —  (4) — (4)
Bullhorn, Inc.(5) One stop   L + 5.75%   N/A(6)   09/2026   —  (4) — (3)
Calabrio, Inc. !~ One stop   L + 6.50% (c)   7.50%   06/2025   24,880  24,894  1.0 24,880 
Calabrio, Inc. One stop   L + 6.50% (a)   7.50%   06/2025   72  72  — 72 
Clearwater Analytics, LLC*# One stop   L + 5.50% (c)   6.50%   09/2022   14,242  14,256  0.6 14,242 
Clearwater Analytics, LLC* One stop   L + 5.50% (c)   6.50%   09/2022   6,040  6,071  0.3 6,040 
Clearwater Analytics, LLC+ One stop   L + 5.50% (c)   6.50%   09/2022   990  976  — 990 
Clearwater Analytics, LLC(5) One stop   L + 5.50%   N/A(6)   09/2022   —  (3) — — 
Cloudbees, Inc. One stop   L + 9.00% (a)   9.50% cash/0.50% PIK   05/2023   4,215  4,248  0.2 4,215 
Cloudbees, Inc. One stop   L + 9.00% (a)   9.50% cash/0.50% PIK   05/2023   2,774  2,692  0.1 2,774 
Cloudbees, Inc. One stop   L + 9.00% (a)   9.50% cash/0.50% PIK   05/2023   1,469  1,480  0.1 1,469 
Cloudbees, Inc. One stop   L + 8.50%   N/A(6)   05/2023   —  —  — — 
Confluence Technologies, Inc.+~^ One stop   L + 5.75% (a)   6.75%   03/2024   45,004  44,768  1.9 44,554 
Confluence Technologies, Inc. One stop   L + 5.75% (a)   6.75%   03/2024   28  27  — 25 
Convercent, Inc. One stop   L + 9.00% (c)   8.25% cash/2.75% PIK   12/2024   2,795  2,725  0.1 2,831 
Convercent, Inc. Subordinated debt   N/A   4.00%   11/2020   138  138  — 176 
Convercent, Inc. One stop   L + 9.00% (c)   N/A(6)   12/2024   —  —  — — 
Convercent, Inc. One stop   L + 9.00%   N/A(6)   12/2024   —  —  — — 
Daxko Acquisition Corporation*#^ One stop   L + 6.00% (c)   7.00%   09/2023   25,681  25,759  1.1 25,681 
Daxko Acquisition Corporation One stop   L + 6.00%   N/A(6)   09/2023   —  —  — — 
Digital Guardian, Inc.! One stop   L + 9.50% (c)   7.50% cash/3.00% PIK   06/2023   8,731  9,013  0.4 9,040 
See Notes to Consolidated Financial Statements.
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TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Software - (continued)
Digital Guardian, Inc. Subordinated debt   N/A   8.00% PIK   06/2023   $ 9  $ 7  — % $ 9 
Digital Guardian, Inc. One stop   L + 5.00%   N/A(6)   06/2023   —  —  — 2 
Diligent Corporation*#+!~^ One stop   L + 6.25% (c)   7.25%   08/2025   88,058  88,673  3.6 85,856 
Diligent Corporation(5) One stop   L + 6.25%   N/A(6)   08/2025   —  1  — (8)
GS Acquisitionco, Inc.*#+!~^ One stop   L + 5.75% (d)   6.75%   05/2024   54,048  54,440  2.3 54,048 
GS Acquisitionco, Inc.*# One stop   L + 5.75% (c)   6.75%   05/2024   12,756  13,056  0.5 12,756 
GS Acquisitionco, Inc.# One stop   L + 5.75% (d)   6.75%   05/2024   3,286  3,364  0.1 3,286 
GS Acquisitionco, Inc.+~ One stop   L + 5.75% (c)   6.75%   05/2024   3,033  3,104  0.1 3,033 
GS Acquisitionco, Inc.# One stop   L + 5.75% (c)   6.75%   05/2024   1,899  1,944  0.1 1,899 
GS Acquisitionco, Inc. One stop   L + 5.75% (c)(d)   6.75%   05/2024   186  183  — 186 
GS Acquisitionco, Inc. One stop   L + 5.75% (d)   6.75%   05/2024   75  75  — 75 
GS Acquisitionco, Inc. One stop   L + 5.75% (d)   6.75%   05/2024   37  37  — 37 
ICIMS, Inc.!~ One stop   L + 6.50% (c)   7.50%   09/2024   14,355  14,548  0.6 14,355 
ICIMS, Inc.!~ One stop   L + 6.50% (c)   7.50%   09/2024   4,501  4,576  0.2 4,501 
ICIMS, Inc.(5) One stop   L + 6.50%   N/A(6)   09/2024   —  (1) — — 
Impartner, Inc. Senior loan   L + 9.50% (c)   9.30% cash/2.00% PIK   08/2025   2,916  2,880  0.1 3,001 
Impartner, Inc.(5) Senior loan   L + 9.50%   N/A(6)   08/2025   —  (3) — 14 
Impartner, Inc. Senior loan   L + 9.50%   N/A(6)   08/2025   —  —  — — 
Infogix, Inc.*# One stop   L + 7.00% (c)   8.00%   04/2024   7,178  7,309  0.3 7,178 
Infogix, Inc.*^ One stop   L + 7.00% (c)   8.00%   04/2024   1,107  1,124  — 1,107 
Infogix, Inc. One stop   L + 7.00% (c)   8.00%   04/2024   90  90  — 90 
Integral Ad Science, Inc.!~ One stop   L + 7.25% (c)   7.00% cash/1.25% PIK   07/2024   15,882  16,069  0.7 15,882 
Integral Ad Science, Inc.(5) One stop   L + 6.00%   N/A(6)   07/2023   —  (3) — (4)
Integration Appliance, Inc.*!~ One stop   L + 7.25% (d)   8.25%   08/2023   68,335  69,117  2.9 68,335 
Integration Appliance, Inc. One stop   L + 7.25% (d)   8.25%   08/2023   487  483  — 487 
Invoice Cloud, Inc.! One stop   L + 6.50% (c)   4.25% cash/3.25% PIK   02/2024   6,520  6,559  0.3 6,390 
Invoice Cloud, Inc. One stop   L + 6.50% (c)   4.25% cash/3.25% PIK   02/2024   2,187  2,186  0.1 2,138 
Invoice Cloud, Inc.(5) One stop   L + 6.00%   N/A(6)   02/2024   —  —  — (2)
Kaseya Traverse Inc!~ One stop   L + 7.00% (c)   5.09% cash/3.00% PIK   05/2025   36,070  37,033  1.5 36,070 
Kaseya Traverse Inc One stop   L + 7.00% (c)(d)   5.06% cash/3.00% PIK   05/2025   738  755  — 738 
Kaseya Traverse Inc One stop   L + 6.50% (c)   7.50%   05/2025   89  88  — 86 
Kaseya Traverse Inc(5) One stop   L + 7.00%   N/A(6)   05/2025   —  (1) — — 
Mindbody, Inc.!~ One stop   L + 8.50% (c)   8.00% cash/1.50% PIK   02/2025   48,593  49,379  1.9 45,678 
Mindbody, Inc.(5) One stop   L + 8.00%   N/A(6)   02/2025   —  (1) — (18)
Ministry Brands, LLC^ Senior loan   L + 4.00% (b)   5.00%   12/2022   1,446  1,462  0.1 1,359 
Ministry Brands, LLC^ Senior loan   L + 4.00% (b)   5.00%   12/2022   827  837  — 777 
Ministry Brands, LLC Senior loan   L + 4.00% (b)   5.00%   12/2022   377  388  — 354 
mParticle, Inc. One stop   L + 9.75% (c)   7.50% cash/3.25% PIK   09/2025   3,157  3,101  0.1 3,115 
mParticle, Inc. One stop   L + 9.75%   N/A(6)   09/2025   —  —  — — 
Namely, Inc.!~ One stop   L + 7.50% (c)   8.25% cash/1.25% PIK   06/2024   3,580  3,614  0.1 3,507 
Namely, Inc. One stop   L + 7.50% (c)   8.25% cash/1.25% PIK   06/2024   2,033  2,019  0.1 1,992 
Namely, Inc. One stop   L + 7.50% (a)   8.25% cash/1.25% PIK   06/2024   70  70  — 68 
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH! One stop   P + 6.75% (f)   8.25% cash/1.75% PIK   10/2024   2,139  2,121  0.1 2,249 
See Notes to Consolidated Financial Statements.
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TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Software - (continued)
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH One stop   L + 7.75%   N/A(6)   10/2024   $ —  $ —  — % $ 1 
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH One stop   L + 7.75%   N/A(6)   10/2024   —  —  — 4 
Personify, Inc.*+^ One stop   L + 5.25% (c)   6.25%   09/2024   15,457  15,712  0.6 15,457 
Personify, Inc. One stop   L + 5.25% (c)   6.25%   09/2024   60  61  — 60 
RegEd Aquireco, LLC^ Senior loan   L + 4.25% (a)   5.25%   12/2024   11,416  11,413  0.4 10,731 
RegEd Aquireco, LLC Senior loan   L + 4.25% (a)(f)   5.08%   12/2024   132  131  — 112 
RegEd Aquireco, LLC(5) Senior loan   L + 4.25%   N/A(6)   12/2024   —  (4) — — 
Saturn Borrower Inc. Senior loan   L + 6.50% (c)   7.50%   09/2026   16,324  15,836  0.7 15,834 
Saturn Borrower Inc.(5) Senior loan   L + 6.50%   N/A(6)   09/2026   —  (3) — (3)
SnapLogic, Inc. One stop   L + 8.75% (c)   5.75% cash/5.50% PIK   09/2024   5,978  5,911  0.3 5,978 
SnapLogic, Inc. One stop   L + 8.75% (c)   5.75% cash/5.50% PIK   09/2024   61  61  — 61 
SnapLogic, Inc. One stop   L + 8.75%   N/A(6)   09/2024   —  —  — — 
Sontatype, Inc.! One stop   L + 6.75% (d)   7.75%   12/2025   851  843  — 851 
Sontatype, Inc.(5) One stop   L + 6.75%   N/A(6)   12/2025   —  (2) — — 
Telesoft Holdings LLC^ One stop   L + 5.75% (a)   6.75%   12/2025   905  887  — 905 
Telesoft Holdings LLC(5) One stop   L + 5.75%   N/A(6)   12/2025   —  (2) — — 
TI Intermediate Holdings, LLC^ Senior loan   L + 4.50% (a)   4.65%   12/2024   3,517  3,575  0.1 3,517 
TI Intermediate Holdings, LLC Senior loan   L + 4.50% (a)   4.65%   12/2024   42  42  — 42 
Togetherwork Holdings, LLC*# One stop   L + 5.75% (a)   6.75%   03/2025   15,564  15,706  0.6 15,408 
Togetherwork Holdings, LLC~^ One stop   L + 5.75% (a)   6.75%   03/2025   1,803  1,865  0.1 1,786 
Togetherwork Holdings, LLC One stop   L + 5.75% (a)   6.75%   03/2025   1,750  1,807  0.1 1,733 
Togetherwork Holdings, LLC*# One stop   L + 5.75% (a)   6.75%   03/2025   1,706  1,764  0.1 1,689 
Togetherwork Holdings, LLC~^ One stop   L + 5.75% (a)   6.75%   03/2025   1,648  1,680  0.1 1,631 
Togetherwork Holdings, LLC*^ One stop   L + 5.75% (a)   6.75%   03/2025   1,588  1,643  0.1 1,573 
Togetherwork Holdings, LLC One stop   L + 5.75% (a)   6.75%   03/2025   1,481  1,530  0.1 1,466 
Togetherwork Holdings, LLC*# One stop   L + 5.75% (a)   6.75%   03/2025   1,213  1,231  0.1 1,201 
Togetherwork Holdings, LLC One stop   L + 5.75% (a)   6.75%   03/2025   668  690  — 662 
Togetherwork Holdings, LLC^ One stop   L + 5.75% (a)   6.75%   03/2025   447  443  — 443 
Togetherwork Holdings, LLC One stop   L + 5.75% (a)   6.75%   03/2024   300  298  — 298 
Togetherwork Holdings, LLC One stop   L + 5.75% (a)   6.75%   03/2025   64  66  — 64 
Togetherwork Holdings, LLC~ One stop   L + 5.75% (a)   6.75%   03/2025   59  61  — 59 
Transact Holdings, Inc.+~ Senior loan   L + 4.75% (a)   4.90%   04/2026   3,079  3,121  0.1 2,912 
Trintech, Inc.*#^ One stop   L + 6.00% (c)   7.00%   12/2023   22,400  22,738  0.9 22,400 
Trintech, Inc.#!^ One stop   L + 6.00% (c)   7.00%   12/2023   9,287  9,473  0.4 9,287 
Trintech, Inc. One stop   L + 6.00% (c)   7.00%   12/2023   300  301  — 300 
True Commerce, Inc.*#^ One stop   L + 5.75% (c)   6.75%   11/2023   14,598  14,861  0.6 14,598 
True Commerce, Inc.+(8)(9) One stop   L + 5.75% (c)   6.75%   11/2023   2,575  2,665  0.1 2,677 
True Commerce, Inc.#(8) One stop   L + 5.75% (c)   6.75%   11/2023   909  941  — 909 
True Commerce, Inc. One stop   L + 5.75%   N/A(6)   11/2023   —  —  — — 
Upserve, Inc.!~ One stop   L + 8.00% (e)   9.00%   07/2023   6,141  6,193  0.3 6,018 
Upserve, Inc. One stop   L + 8.00% (e)   9.00%   07/2023   1,451  1,496  0.1 1,422 
Upserve, Inc.(5) One stop   L + 8.00%   N/A(6)   07/2023   —  —  — (2)
Vector CS Midco Limited & Cloudsense Ltd.!~(8)(9)(10) One stop   N/A   4.50% cash/3.55% PIK   05/2024   7,859  7,986  0.3 7,980 
See Notes to Consolidated Financial Statements.
72
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Software - (continued)
Vector CS Midco Limited & Cloudsense Ltd.(8)(9)(10) One stop   L + 7.25% (h)   5.30% cash/2.75% PIK   05/2024   $ 132  $ 132  — % $ 130 
Vendavo, Inc.*!~ One stop   L + 6.50% (c)   7.50%   10/2022   35,368  35,329  1.5 35,368 
Vendavo, Inc. One stop   P + 5.25% (f)   8.50%   10/2022   631  629  — 631 
Workforce Software, LLC!~ One stop   L + 6.50% (c)   7.50%   07/2025   27,195  27,895  1.1 27,195 
Workforce Software, LLC(5) One stop   L + 6.50%   N/A(6)   07/2025   —  (2) — — 
909,152  915,327  37.6 901,417 

See Notes to Consolidated Financial Statements.
73
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Specialty Retail
2nd Ave. LLC One stop   L + 5.50% (d)   6.50%   09/2025   $ 5,915  $ 5,829  0.2 % $ 5,560 
2nd Ave. LLC One stop   L + 5.50% (d)   6.56%   09/2025   50  50  — 47 
Batteries Plus Holding Corporation# One stop   L + 6.75% (a)   7.75%   07/2022   21,921  22,098  0.9 21,921 
Batteries Plus Holding Corporation(5) One stop   L + 6.75%   N/A(6)   07/2022   —  (1) — — 
Boot Barn, Inc.#+~ Senior loan   L + 4.50% (c)   5.50%   06/2023   16,777  16,904  0.7 16,777 
Cycle Gear, Inc.#+^ One stop   L + 5.00% (c)   6.00%   01/2024   23,834  24,042  1.0 23,834 
DTLR, Inc.*#+ One stop   L + 8.50% (b)(c)   7.50% cash/2.00% PIK   08/2022   41,457  41,896  1.7 41,457 
Imperial Optical Midco Inc.~ One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   3,620  3,666  0.2 3,620 
Imperial Optical Midco Inc.* One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   2,822  2,803  0.1 2,822 
Imperial Optical Midco Inc.# One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   1,918  1,965  0.1 1,918 
Imperial Optical Midco Inc.# One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   1,249  1,279  0.1 1,249 
Imperial Optical Midco Inc.* One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   1,137  1,165  0.1 1,137 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   330  328  — 330 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   240  238  — 240 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   190  189  — 190 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   134  133  — 134 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   130  129  — 130 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   96  96  — 96 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   83  82  — 83 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   42  42  — 42 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   41  41  — 41 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   24  23  — 24 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   21  21  — 21 
Imperial Optical Midco Inc. One stop   L + 8.25% (a)   7.25% cash/2.00% PIK   08/2023   11  11  — 11 
Imperial Optical Midco Inc. One stop   L + 6.25%   N/A(6)   08/2023   —  —  — — 
Imperial Optical Midco Inc.(5) One stop   L + 8.25%   N/A(6)   08/2023   —  (3) — — 
Jet Equipment & Tools Ltd.+~(8)(9)(12) One stop   L + 5.25% (a)   6.25%   11/2024   17,988  18,266  0.8 17,781 
Jet Equipment & Tools Ltd.*#(8)(12) One stop   L + 5.25% (a)   6.25%   11/2024   12,364  12,604  0.5 12,364 
Jet Equipment & Tools Ltd.#(8)(12)^ One stop   L + 5.25% (a)   6.25%   11/2024   4,306  4,377  0.2 4,306 
Jet Equipment & Tools Ltd.(8)(12)^ One stop   L + 5.25% (a)   6.25%   11/2024   1,581  1,569  0.1 1,581 
Jet Equipment & Tools Ltd.(5)(8)(9)(12) One stop   L + 5.25%   N/A(6)   11/2024   —  (1) — — 
Pet Holdings ULC*#+!(8)(12) One stop   L + 5.50% (c)   6.50%   07/2022   46,638  47,449  2.0 46,638 
Pet Holdings ULC*#+(8)(12) One stop   L + 5.50% (c)   6.50%   07/2022   240  242  — 240 
Pet Holdings ULC(5)(8)(12) One stop   L + 5.50%   N/A(6)   07/2022   —  (1) — — 
Pet Supplies Plus, LLC*+^ Senior loan   L + 4.50% (c)   5.50%   12/2024   14,181  14,415  0.6 14,181 
Pet Supplies Plus, LLC(5) Senior loan   L + 4.50%   N/A(6)   12/2023   —  (1) — — 
PetPeople Enterprises, LLC# One stop   L + 5.75% (c)   6.75%   09/2023   5,352  5,401  0.2 5,191 
PetPeople Enterprises, LLC# One stop   L + 5.75% (c)(d)   6.84%   09/2023   1,817  1,843  0.1 1,763 
PetPeople Enterprises, LLC One stop   L + 5.75% (c)(d)   6.92%   09/2023   40  41  — 38 
PPV Intermediate Holdings II, LLC One stop   L + 6.00% (a)(c)(d)   7.46%   05/2023   4,921  4,921  0.2 4,859 
See Notes to Consolidated Financial Statements.
74
TABLE OF CONTENTS
Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Specialty Retail - (continued)
PPV Intermediate Holdings II, LLC One stop   L + 6.00% (a)   7.00%   05/2023   $ 1,010  $ 1,010  — % $ 997 
PPV Intermediate Holdings II, LLC One stop   L + 6.00% (a)   7.00%   05/2023   603  603  — 596 
PPV Intermediate Holdings II, LLC One stop   L + 6.00% (a)   7.00%   05/2023   435  417  — 429 
PPV Intermediate Holdings II, LLC One stop   L + 6.00% (a)   7.00%   05/2023   129  127  — 128 
PPV Intermediate Holdings II, LLC One stop   L + 6.00% (d)(f)   7.69%   05/2023   94  94  — 92 
PPV Intermediate Holdings II, LLC One stop   N/A   7.90% PIK   05/2023   24  24  — 24 
PPV Intermediate Holdings II, LLC(5) One stop   L + 6.00%   N/A(6)   05/2023   —  (135) — (120)
Sola Franchise, LLC and Sola Salon Studios, LLC# One stop   L + 5.50% (c)   6.50%   10/2024   6,963  6,979  0.3 6,824 
Sola Franchise, LLC and Sola Salon Studios, LLC# One stop   L + 5.50% (c)   6.50%   10/2024   1,708  1,765  0.1 1,674 
Sola Franchise, LLC and Sola Salon Studios, LLC One stop   L + 5.50% (c)(f)   7.09%   10/2024   86  85  — 84 
Sola Franchise, LLC and Sola Salon Studios, LLC(5) One stop   L + 5.50%   N/A(6)   10/2024   —  (1) — — 
Southern Veterinary Partners, LLC*#^ One stop   L + 6.00% (a)   7.00%   05/2025   26,592  27,499  1.1 27,123 
Southern Veterinary Partners, LLC One stop   L + 6.00% (a)   7.00%   05/2025   210  208  — 214 
Southern Veterinary Partners, LLC One stop   L + 6.00% (a)   7.00%   05/2025   191  189  — 195 
Southern Veterinary Partners, LLC One stop   L + 6.00% (c)   7.00%   05/2025   181  179  — 184 
Southern Veterinary Partners, LLC One stop   L + 6.00% (c)(d)   7.00%   05/2023   170  169  — 170 
Southern Veterinary Partners, LLC One stop   L + 6.00% (c)   7.00%   05/2025   163  161  — 166 
Southern Veterinary Partners, LLC One stop   L + 6.00% (c)   7.00%   05/2025   142  140  — 144 
Southern Veterinary Partners, LLC One stop   L + 6.00% (d)   7.00%   05/2025   140  138  — 143 
Southern Veterinary Partners, LLC One stop   L + 6.00% (d)   7.00%   05/2025   128  127  — 131 
Southern Veterinary Partners, LLC One stop   L + 6.00% (a)   7.00%   05/2025   125  124  — 128 
Southern Veterinary Partners, LLC# One stop   L + 6.00% (a)   7.00%   05/2025   120  119  — 123 
Southern Veterinary Partners, LLC# One stop   L + 6.00% (a)   7.00%   05/2025   119  118  — 121 
Southern Veterinary Partners, LLC One stop   L + 6.00% (d)   7.00%   05/2025   118  117  — 120 
Southern Veterinary Partners, LLC# One stop   L + 6.00% (a)   7.00%   05/2025   113  112  — 115 
Southern Veterinary Partners, LLC# One stop   L + 6.00% (a)   7.00%   05/2025   111  110  — 113 
Southern Veterinary Partners, LLC One stop   L + 6.00% (d)   7.00%   05/2025   4  2  — 4 
Southern Veterinary Partners, LLC(5) One stop   L + 6.00%   N/A(6)   05/2025   —  (12) — 23 
Titan Fitness, LLC*#+ One stop   L + 4.75% (b)(c)   5.75%   02/2025   30,317  30,759  1.1 26,679 
Titan Fitness, LLC One stop   L + 4.75% (c)   5.75%   02/2025   1,894  1,881  0.1 1,667 
Titan Fitness, LLC One stop   L + 4.75% (c)   5.75%   02/2025   474  472  — 414 
Titan Fitness, LLC(5) One stop   L + 4.75%   N/A(6)   02/2025   —  (1) — — 
Vermont Aus Pty Ltd!~(8)(9)(11) One stop   L + 4.75% (j)   4.89%   12/2024   2,199  2,219  0.1 2,282 
Vermont Aus Pty Ltd(8)(9)(11) One stop   L + 4.75% (j)   4.89%   12/2024   81  82  — 91 
306,114  310,031  12.6 301,704 

See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Technology Hardware, Storage & Peripherals
Agility Recovery Solutions Inc.*#^ One stop   L + 6.00% (c)   7.00%   03/2023   $ 22,442  $ 22,566  0.9 % $ 21,994 
Agility Recovery Solutions Inc. One stop   L + 6.00% (c)   7.00%   03/2023   902  899  0.1 882 
23,344  23,465  1.0 22,876 
Textiles, Apparel & Luxury Goods
Elite Sportswear, L.P. Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   9,446  9,298  0.3 8,029 
Elite Sportswear, L.P. Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   3,798  3,740  0.1 3,228 
Elite Sportswear, L.P. Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   1,954  1,924  0.1 1,661 
Elite Sportswear, L.P. Senior loan   L + 6.25% (b)(c)   7.25%   12/2021   1,167  1,149  0.1 988 
Elite Sportswear, L.P.* Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   648  640  — 551 
Elite Sportswear, L.P. Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   297  292  — 252 
Elite Sportswear, L.P.* Senior loan   L + 6.25% (c)   2.00% cash/5.25% PIK   12/2021   283  279  — 241 
Elite Sportswear, L.P. Senior loan   L + 6.25% (b)(c)   2.00% cash/5.25% PIK   12/2021   40  40  — 34 
Georgica Pine Clothiers, LLC# One stop   L + 5.50% (c)(d)   6.50%   11/2023   10,324  10,427  0.4 9,497 
Georgica Pine Clothiers, LLC*# One stop   L + 5.50% (d)   6.50%   11/2023   6,504  6,574  0.3 5,983 
Georgica Pine Clothiers, LLC+ One stop   L + 5.50% (d)   6.50%   11/2023   1,006  998  — 926 
Georgica Pine Clothiers, LLC# One stop   L + 5.50% (d)   6.50%   11/2023   906  915  — 833 
Georgica Pine Clothiers, LLC*# One stop   L + 5.50% (d)   6.50%   11/2023   635  644  — 584 
Georgica Pine Clothiers, LLC One stop   L + 5.50% (c)(d)   6.50%   11/2023   236  235  — 216 
Protective Industrial Products, Inc.+ Senior loan   L + 4.50% (c)   5.50%   01/2024   993  984  0.1 993 
SHO Holding I Corporation!~ Senior loan   L + 5.25% (c)   4.00% cash/2.25% PIK   04/2024   4,035  4,015  0.2 3,631 
SHO Holding I Corporation Senior loan   L + 4.00% (a)(c)(d)   5.00%   04/2024   50  49  — 50 
SHO Holding I Corporation Senior loan   L + 5.23% (c)   4.00% cash/2.23% PIK   04/2024   20  20  — 19 
SHO Holding I Corporation(5) Senior loan   L + 5.00%   N/A(6)   04/2024   —  (1) — (10)
SHO Holding I Corporation Senior loan   L + 4.50% (c)(d)   N/A(6)   04/2024   —  —  — — 
SHO Holding I Corporation Senior loan   L + 5.23% (b)(c)   N/A(6)   04/2024   —  —  — — 
42,342  42,222  1.6 37,706 
Total non-controlled/non-affiliate company debt investments $ 4,237,154  $ 4,249,853  170.8  % $ 4,092,602 

See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Equity Investments (15)(16)
Aerospace & Defense
NTS Technical Systems Common Stock   N/A   N/A   N/A   2  $ 1,506  0.1 % $ 637 
NTS Technical Systems Preferred stock   N/A   N/A   N/A   —  256  — 430 
NTS Technical Systems Preferred stock   N/A   N/A   N/A   —  128  — 245 
Whitcraft LLC Common Stock   N/A   N/A   N/A   11  2,285  0.1 2,598 
4,175  0.2 3,910 
Auto Components
Polk Acquisition Corp. LP interest   N/A   N/A   N/A   5  314  — 26 
Automobiles
Grease Monkey International, LLC LLC units   N/A   N/A   N/A   803  1,304  0.1 2,457 
Quick Quack Car Wash Holdings, LLC LLC units   N/A   N/A   N/A   —  508  — 440 
1,812  0.1 2,897 
Biotechnology
BIO18 Borrower, LLC(17) LLC units   N/A   N/A   N/A   591  1,190  0.1 1,654 
Building Products
Brooks Equipment Company, LLC Common Stock   N/A   N/A   N/A   10  1,021  0.1 2,107 
Chemicals
Inhance Technologies Holdings LLC LLC units   N/A   N/A   N/A   —  124  — 51 
Commercial Services & Supplies
Hydraulic Authority III Limited(8)(9)(10) Preferred stock   N/A   N/A   N/A   284  384  — 341 
Hydraulic Authority III Limited(8)(9)(10) Common Stock   N/A   N/A   N/A   6  43  — — 
427  — 341 
Construction & Engineering
Reladyne, Inc. LP units   N/A   N/A   N/A   1  931  — 896 
Diversified Consumer Services
EWC Growth Partners LLC LLC interest   N/A   N/A   N/A   —  12  — 1 
PADI Holdco, Inc.(17) LLC units   N/A   N/A   N/A   1  969  — 231 
Spear Education, LLC LLC units   N/A   N/A   N/A   —  7  — 30 
Spear Education, LLC LLC units   N/A   N/A   N/A   1  1  — 25 
989  — 287 
Electronic Equipment, Instruments & Components
ES Acquisition LLC LP interest   N/A   N/A   N/A   —  15  — 26 
Inventus Power, Inc. Preferred stock   N/A   N/A   N/A   1  372  — 119 
Inventus Power, Inc. LLC units   N/A   N/A   N/A   —  88  — 153 
Inventus Power, Inc. Preferred stock   N/A   N/A   N/A   —  20  — 42 
Inventus Power, Inc. Common Stock   N/A   N/A   N/A   1  —  — — 
495  — 340 

See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Food & Staples Retailing
Benihana, Inc. LLC unit   N/A   N/A   N/A   43  $ 699  — % $ 55 
Cafe Rio Holding, Inc. Common Stock   N/A   N/A   N/A   5  603  — 765 
Captain D's, LLC LLC interest   N/A   N/A   N/A   158  156  — 355 
Feeders Supply Company, LLC Preferred stock   N/A   N/A   N/A   4  400  — 349 
Feeders Supply Company, LLC LLC units   N/A   N/A   N/A   —  —  — — 
Hopdoddy Holdings, LLC LLC units   N/A   N/A   N/A   44  217  — 82 
Hopdoddy Holdings, LLC LLC units   N/A   N/A   N/A   20  61  — 23 
Mendocino Farms, LLC Common Stock   N/A   N/A   N/A   169  770  0.1 817 
Rubio's Restaurants, Inc. Preferred stock   N/A   N/A   N/A   2  945  — — 
Ruby Slipper Cafe LLC, The LLC units   N/A   N/A   N/A   31  373  — 72 
Ruby Slipper Cafe LLC, The LP units   N/A   N/A   N/A   2  20  — 12 
Wetzel's Pretzels, LLC Common Stock   N/A   N/A   N/A   —  416  — 185 
Wood Fired Holding Corp. LLC units   N/A   N/A   N/A   437  444  — 147 
Wood Fired Holding Corp. LLC units   N/A   N/A   N/A   437  —  — — 
5,104  0.1 2,862 
Food Products
C. J. Foods, Inc. Preferred stock   N/A   N/A   N/A   —  75  — 563 
Global ID Corporation LLC interest   N/A   N/A   N/A   5  603  0.1 801 
Purfoods, LLC LLC interest   N/A   N/A   N/A   379  926  0.2 5,346 
1,604  0.3 6,710 
Health Care Technology
Connexin Software, Inc. LLC interest   N/A   N/A   N/A   154  192  — 206 
Caliper Software, Inc. Preferred stock N/A N/A N/A 3  2,734  0.1 2,954 
Caliper Software, Inc. Common Stock N/A N/A N/A 221  283  — 594 
Caliper Software, Inc. Preferred stock N/A N/A N/A —  37  — 47 
HealthcareSource HR, Inc. LLC interest   N/A   N/A   N/A   —  621  0.1 680 
HSI Halo Acquisition, Inc. Preferred stock   N/A   N/A   N/A   —  288  — 253 
HSI Halo Acquisition, Inc. Common Stock   N/A   N/A   N/A   —  —  — — 
Kareo, Inc. Warrant   N/A   N/A   N/A   53  162  — 9 
Kareo, Inc. Preferred stock   N/A   N/A   N/A   1  8  — 12 
Kareo, Inc. Warrant   N/A   N/A   N/A   5  6  — 18 
Surgical Information Systems, LLC Common Stock   N/A   N/A   N/A   4  414  — 413 
Verisys Corporation LLC interest   N/A   N/A   N/A   579  712  — 354 
5,457  0.2 5,540 














See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Healthcare Equipment and Supplies
Aspen Medical Products, LLC Common Stock   N/A   N/A   N/A   —  $ 77  — % $ 68 
Blue River Pet Care, LLC LLC units   N/A   N/A   N/A   —  76  — 88 
CMI Parent Inc. LLC units   N/A   N/A   N/A   —  240  — 245 
CMI Parent Inc. LLC units   N/A   N/A   N/A   2  3  — — 
Flexan, LLC LLC units   N/A   N/A   N/A   —  137  — 198 
Flexan, LLC LLC interest   N/A   N/A   N/A   1  —  — — 
G & H Wire Company, Inc. LLC interest   N/A   N/A   N/A   336  269  — 91 
Joerns Healthcare, LLC* Common Stock   N/A   N/A   N/A   432  4,329  0.1 2,501 
Katena Holdings, Inc. LLC units   N/A   N/A   N/A   1  573  — 324 
Lombart Brothers, Inc. Common Stock   N/A   N/A   N/A   1  440  — — 
SLMP, LLC LLC interest   N/A   N/A   N/A   668  789  0.1 1,296 
6,933  0.2 4,811 

See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Healthcare Providers and Services
Active Day, Inc. LLC interest   N/A   N/A   N/A   1  $ 1,099  — % $ 372 
Acuity Eyecare Holdings, LLC LLC interest   N/A   N/A   N/A   1,158  1,334  0.1 1,358 
ADCS Clinics Intermediate Holdings, LLC Preferred stock   N/A   N/A   N/A   1  1,119  — 589 
ADCS Clinics Intermediate Holdings, LLC Common Stock   N/A   N/A   N/A   0 6  — — 
CRH Healthcare Purchaser, Inc. LP interest   N/A   N/A   N/A   429  469  — 715 
DCA Investment Holding, LLC LLC units   N/A   N/A   N/A   13,890  1,619  0.1 1,886 
DCA Investment Holding, LLC LLC units   N/A   N/A   N/A   140  218  — — 
Deca Dental Management LLC LLC units   N/A   N/A   N/A   1,008  1,278  — 393 
Encore GC Acquisition, LLC LLC units   N/A   N/A   N/A   26  272  — 300 
Encore GC Acquisition, LLC LLC units   N/A   N/A   N/A   26  52  — 77 
Encorevet Group LLC Preferred stock   N/A   N/A   N/A   —  15  — 13 
ERG Buyer, LLC LLC units   N/A   N/A   N/A   1  661  — 31 
ERG Buyer, LLC LLC units   N/A   N/A   N/A   8  4  — — 
Eyecare Services Partners Holdings LLC LLC units   N/A   N/A   N/A   —  262  — — 
Eyecare Services Partners Holdings LLC LLC units   N/A   N/A   N/A   —  1  — — 
IntegraMed America, Inc. LLC interest   N/A   N/A   N/A   —  417  — — 
Krueger-Gilbert Health Physics, LLC LLC interest   N/A   N/A   N/A   155  172  — 168 
MD Now Holdings, Inc. LLC units   N/A   N/A   N/A   15  153  — 169 
Midwest Veterinary Partners, LLC LLC units   N/A   N/A   N/A   —  29  — 32 
Midwest Veterinary Partners, LLC LLC units   N/A   N/A   N/A   6  —  — 17 
MWD Management, LLC & MWD Services, Inc. LLC interest   N/A   N/A   N/A   412  335  — 300 
Oliver Street Dermatology Holdings, LLC LLC units   N/A   N/A   N/A   452  234  — — 
Pentec Acquisition Sub, Inc. Preferred stock   N/A   N/A   N/A   1  116  — 159 
Pinnacle Treatment Centers, Inc. Preferred stock   N/A   N/A   N/A   —  528  0.1 631 
Pinnacle Treatment Centers, Inc. LLC units   N/A   N/A   N/A   5  74  — 390 
Radiology Partners, Inc. LLC units   N/A   N/A   N/A   11  68  — 59 
Radiology Partners, Inc. LLC units   N/A   N/A   N/A   43  55  — 233 
RXH Buyer Corporation LP interest   N/A   N/A   N/A   11  973  0.1 1,117 
Sage Dental Management, LLC LLC units   N/A   N/A   N/A   —  249  — — 
Sage Dental Management, LLC LLC units   N/A   N/A   N/A   3  3  — — 
SSH Corporation Common Stock   N/A   N/A   N/A   —  40  — 118 
Summit Behavioral Healthcare, LLC(17) LLC interest   N/A   N/A   N/A   2  98  — 156 
Summit Behavioral Healthcare, LLC(17) LLC interest   N/A   N/A   N/A   2  —  — — 
WHCG Management, LLC LLC interest   N/A   N/A   N/A   1  414  — 515 
12,367  0.4 9,798 
Hotels, Restaurants & Leisure
LMP TR Holdings, LLC LLC units   N/A   N/A   N/A   712  712  — 97 
SSRG Holdings, LLC LLC units   N/A   N/A   N/A   6  61  — 35 
Tropical Smoothie Cafe Holdings, LLC(17) LP units   N/A   N/A   N/A   5  550  — 550 
1,323  — 682 
See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Household Durables
Groundworks LLC LLC units   N/A   N/A   N/A   —  $ 155  — % $ 206 
Insurance
Captive Resources Midco, LLC(17) LLC units   N/A   N/A   N/A   425  —  — 432 
Majesco LP units   N/A   N/A   N/A   —  264  — 264 
Majesco LP units   N/A   N/A   N/A   59  —  — — 
Orchid Underwriters Agency, LLC LP interest   N/A   N/A   N/A   92  103  — 88 
367  — 784 
IT Services
Appriss Holdings, Inc. Preferred stock   N/A   N/A   N/A   —  174  — 179 
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc. Preferred stock   N/A   N/A   N/A   587  462  0.1 1,652 
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc. Warrant   N/A   N/A   N/A   202  159  — 410 
Centrify Corporation LP interest   N/A   N/A   N/A   1  691  — 372 
Centrify Corporation LP interest   N/A   N/A   N/A   263  —  — — 
Episerver, Inc. LLC units   N/A   N/A   N/A   76  807  — 488 
Maverick Bidco Inc. LLC units   N/A   N/A   N/A   2  723  0.1 804 
PCS Intermediate II Holdings, LLC LLC units   N/A   N/A   N/A   37  367  — 388 
Red Dawn SEI Buyer, Inc. LP interest   N/A   N/A   N/A   13  13  — 13 
3,396  0.2 4,306 
Leisure Products
Massage Envy, LLC LLC interest   N/A   N/A   N/A   749  210  0.1 1,236 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   68  117  — 76 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   46  80  — 52 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   38  65  — 43 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   33  58  — 37 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   14  24  — 16 
WBZ Investment LLC LLC interest   N/A   N/A   N/A   1  2  — 2 
556  0.1 1,462 
Life Sciences Tools & Services
Pace Analytical Services, LLC LLC units   N/A   N/A   N/A   6  700  — 914 
Oil, Gas and Consumable Fuels
W3 Co. LLC units   N/A   N/A   N/A   3  1,632  0.1 1,946 
W3 Co. Preferred stock   N/A   N/A   N/A   —  224  — 242 
1,856  0.1 2,188 
Pharmaceuticals
BIOVT, LLC LLC units   N/A   N/A   N/A   —  1,223  0.1 1,863 

See Notes to Consolidated Financial Statements.
81
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Professional Services
Brandmuscle, Inc. LLC interest   N/A   N/A   N/A   —  $ 335  — % $ 217 
DISA Holdings Acquisition Subsidiary Corp. Common Stock   N/A   N/A   N/A   —  154  — 290 
Net Health Acquisition Corp. LP interest   N/A   N/A   N/A   13  1,440  0.1 1,333 
Nexus Brands Group, Inc. LP interest   N/A   N/A   N/A   —  547  — 459 
Vitalyst, LLC Preferred stock   N/A   N/A   N/A   —  61  — 45 
Vitalyst, LLC Common Stock   N/A   N/A   N/A   1  7  — — 
2,544  0.1 2,344 
Real Estate Management & Development
Property Brands, Inc. LLC units   N/A   N/A   N/A   63  766  — 989 
Road & Rail
Internet Truckstop Group LLC LP interest   N/A   N/A   N/A   408  447  — 364 
Software
Accela, Inc. LLC units   N/A   N/A   N/A   670 418 — 73
Astute Holdings, Inc. LP interest   N/A   N/A   N/A   —  294 — 531
Calabrio, Inc. Common Stock   N/A   N/A   N/A   26 205 — 344
Cloudbees, Inc. Preferred stock   N/A   N/A   N/A   71 466 — 378
Cloudbees, Inc. Warrant   N/A   N/A   N/A   131 247 — 307
Confluence Technologies, Inc. LLC interest   N/A   N/A   N/A   3 412 — 561
Convercent, Inc. Warrant   N/A   N/A   N/A   325 63 — 140
Digital Guardian, Inc. Preferred stock   N/A   N/A   N/A   356  434  — 309
Digital Guardian, Inc. Warrant   N/A   N/A   N/A   122 225 — 211
Digital Guardian, Inc. Preferred stock   N/A   N/A   N/A   74 142 — 128
Digital Guardian, Inc. Preferred stock   N/A   N/A   N/A   67  123  — 139
Digital Guardian, Inc. Warrant   N/A   N/A   N/A   12 33 — 50
Diligent Corporation(17) Preferred stock   N/A   N/A   N/A   414  912  0.1 1,811 
GS Acquisitionco, Inc. LP interest   N/A   N/A   N/A   2 291 — 604
MetricStream, Inc. Warrant   N/A   N/A   N/A   168 263 — 179
mParticle, Inc. Warrant   N/A   N/A   N/A   26  10  92
Namely, Inc. Warrant   N/A   N/A   N/A   17 28 — 27
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH Warrant   N/A   N/A   N/A   4 9 — 24
Personify, Inc. LLC units   N/A   N/A   N/A   639 828 0.1 960
Pride Midco, Inc. Preferred stock   N/A   N/A   N/A   2  2,594  0.1 2,907 
Project Alpha Intermediate Holding, Inc. Common Stock   N/A   N/A   N/A   1  964  0.1 1,165 
Project Alpha Intermediate Holding, Inc. Common Stock   N/A   N/A   N/A   202  329  — 1,009 
Project Silverback Holdings Corp. Preferred stock   N/A   N/A   N/A   3  6  — — 
RegEd Aquireco, LLC LP interest   N/A   N/A   N/A   —  316 — 154
RegEd Aquireco, LLC LP interest   N/A   N/A   N/A   3  21  — — 
Saturn Borrower Inc. LP units   N/A   N/A   N/A   328  328  — 328
SnapLogic, Inc. Preferred stock   N/A   N/A   N/A   278  695  0.1 1,030 
SnapLogic, Inc. Warrant   N/A   N/A   N/A   69  27  — 180
Telesoft Holdings LLC LP interest   N/A   N/A   N/A   6  6  — 6
See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Software - (continued)
Vendavo, Inc. Preferred stock   N/A   N/A   N/A   1,017  $ 1,017  0.1 % $ 1,528 
Workforce Software, LLC Common Stock   N/A   N/A   N/A   —  973 — 306
Xmatters, Inc. and Alarmpoint, Inc. Preferred stock   N/A   N/A   N/A   474 494 0.1 643
Xmatters, Inc. and Alarmpoint, Inc. Warrant   N/A   N/A   N/A   84 64 — 29
Xmatters, Inc. and Alarmpoint, Inc. Preferred stock   N/A   N/A   N/A   20 26 — 26
13,263  0.7 16,179 

See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Specialty Retail
2nd Ave. LLC LP interest   N/A   N/A   N/A   653  $ 653  — % $ 561 
Batteries Plus Holding Corporation LP interest   N/A   N/A   N/A   10  1,287  0.1 1,245 
Cycle Gear, Inc. LLC units   N/A   N/A   N/A   27  462 — 775
DTLR, Inc. LLC interest   N/A   N/A   N/A   4 411 0.1 1,233 
Imperial Optical Midco Inc. Preferred stock   N/A   N/A   N/A   —  122  — 123 
Jet Equipment & Tools Ltd.(8)(9)(12) LLC units   N/A   N/A   N/A   1  947  0.1 1,919 
Paper Source, Inc. Common Stock   N/A   N/A   N/A   8  1,387  — — 
Pet Holdings ULC(8)(12) LP interest   N/A   N/A   N/A   677  483  — 221 
Pet Supplies Plus, LLC(17) LLC units   N/A   N/A   N/A   144 181 — 424
PPV Intermediate Holdings II, LLC LLC interest   N/A   N/A   N/A   241  231  — 332 
Sola Franchise, LLC and Sola Salon Studios, LLC LLC units   N/A   N/A   N/A   4 496 — 465
Sola Franchise, LLC and Sola Salon Studios, LLC LLC units   N/A   N/A   N/A   1 101 — 88
Southern Veterinary Partners, LLC LLC units   N/A   N/A   N/A   1 717 — 930
Southern Veterinary Partners, LLC LLC units   N/A   N/A   N/A   148 188 0.1 1,097 
7,666  0.4 9,413 
Technology Hardware, Storage & Peripherals
Agility Recovery Solutions Inc. LLC units   N/A   N/A   N/A   97 604 — 721
Textiles, Apparel & Luxury Goods
Elite Sportswear, L.P. LLC interest   N/A   N/A   N/A   —  165  — — 
Georgica Pine Clothiers, LLC(17) LLC interest   N/A   N/A   N/A   20 239 — 118
Georgica Pine Clothiers, LLC(17) LLC units   N/A   N/A   N/A   —  —  — — 
R.G. Barry Corporation Preferred stock   N/A   N/A   N/A   —  161 — 109
565  — 227 
Total non-controlled/non-affiliate company equity investments $ 78,374  3.4 % $ 84,872 
Total non-controlled/non-affiliate company investments $ 4,237,154  $ 4,328,227  174.2 % $ 4,177,474 


















See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Non-controlled/affiliate company investments(18)
Debt investments
Beverages
Uinta Brewing Company(7) One stop   L + 4.00% (a)   5.00%   08/2021   $ 962  $ 925  — % $ 210 
Uinta Brewing Company(7) One stop   L + 4.00% (a)   5.00%   08/2021   508  503  — 376 
1,470  1,428  — 586 
Consumer Finance
Paradigm DKD Group, LLC(7) Senior loan   L + 6.25% (c)   7.50%   05/2022   3,228  2,103  0.1 2,449 
Paradigm DKD Group, LLC(5)(7) Senior loan   L + 6.25% (c)   N/A(6)   05/2022   —  (142) — 3 
3,228  1,961  0.1 2,452 
Electronic Equipment, Instruments and Components
Sloan Company, Inc., The(7) One stop   L + 8.50% (c)   9.50%   04/2023   4,708  4,074  0.2 3,483 
Sloan Company, Inc., The One stop   L + 8.50% (c)   9.50%   04/2023   651  651  — 651 
Sloan Company, Inc., The(7) One stop   L + 8.50% (c)   9.50%   04/2023   312  272  — 231 
5,671  4,997  0.2 4,365 
Energy, Equipment & Services
Benetech, Inc.+ One stop   L + 6.00% (a)   7.25%   08/2023   4,044  4,044  0.1 2,426 
Benetech, Inc. One stop   L + 6.00% (a)(f)   7.36%   08/2023   730  730  — 246 
4,774  4,774  0.1 2,672 
Healthcare Providers and Services
Dental Holdings Corporation*#(7) One stop   L + 6.00% (c)   7.00%   03/2023   10,661  10,614  0.3 8,847 
Dental Holdings Corporation One stop   L + 6.00% (a)(c)   7.00%   03/2023   112  112  — 112 
Elite Dental Partners LLC One stop   L + 5.25% (c)   2.00% cash/4.25% PIK   06/2023   11,338  11,376  0.5 10,997 
Elite Dental Partners LLC One stop   L + 5.25%   N/A(6)   06/2023   —  —  — — 
22,111  22,102  0.8 19,956 
Software
Switchfly LLC One stop   L + 5.00% (c)   6.00%   10/1/2023   5,807  5,641  0.2 4,762 
Switchfly LLC One stop   L + 5.00% (c)   6.00%   10/1/2023   485  471  — 398 
Switchfly LLC One stop   L + 5.00% (b)(c)   6.00%   10/1/2023   36 36 — 30
Switchfly LLC(5) One stop   L + 8.50% (c)   9.50%   10/1/2023   2  2  — (21)
6,330  6,150  0.2 5,169 
Total non-controlled/affiliate debt investments $ 43,584  $ 41,412  1.4 % $ 35,200 
Equity Investments(15)(16)
Beverages
Uinta Brewing Company Common Stock   N/A   N/A   N/A   153 $ 17  — % $ — 
Consumer Finance
Paradigm DKD Group, LLC+ LLC units   N/A   N/A   N/A   354  115  — 8 
Paradigm DKD Group, LLC+ LLC units   N/A   N/A   N/A   71  —  — — 
Paradigm DKD Group, LLC+ LLC units   N/A   N/A   N/A   2,004  —  — — 
115 — 8
See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
Investment Type
Spread
Above
Index(1)
Interest
Rate(2)
Maturity
Date
Principal ($) /
Shares(3)
Amortized Cost Percentage
of Net
Assets
Fair
Value (4)
Electronic Equipment, Instruments and Components
Sloan Company, Inc., The LLC units   N/A   N/A   N/A   —  $ 152  — % $ — 
Sloan Company, Inc., The LLC units   N/A   N/A   N/A   2  14  — — 
Sloan Company, Inc., The LLC units   N/A   N/A   N/A   —  40  — — 
206  — — 
Energy, Equipment & Services
Benetech, Inc. LLC interest   N/A   N/A   N/A   59  —  — — 
Benetech, Inc. LLC interest   N/A   N/A   N/A   59  —  — — 
—  — — 
Healthcare Providers and Services
Dental Holdings Corporation*# Common Stock   N/A   N/A   N/A   —  390  — 361 
Elite Dental Partners LLC Preferred stock   N/A   N/A   N/A   —  2,902  0.1 2,902 
Elite Dental Partners LLC LLC units   N/A   N/A   N/A   —  1,250  0.1 1,250 
Elite Dental Partners LLC LLC units   N/A   N/A   N/A   —  —  — 219 
4,542  0.2 4,732 
Software
Switchfly LLC LLC units   N/A   N/A   N/A   3,418  2,320  0.1 2,060 
Total non-controlled/affiliate equity investments $ 7,200  0.3 % $ 6,800 
Total non-controlled/affiliate investments $ 43,584  $ 48,612  1.7 % $ 42,000 
Controlled affiliate company investments(19)
Debt Investments
IT Services
MMan Acquisition Co.*(7) One stop   N/A   10.00% PIK   08/2023   $ 22,527  $ 19,774  0.7 % $ 16,853 
MMan Acquisition Co.(7) One stop   L + 8.00%   8.00% PIK   08/2023   1,358  1,358  0.1 1,358 
23,885  21,132  0.8 18,211 
Total controlled affiliate debt investments $ 23,885  $ 21,132  0.8 % $ 18,211 
Equity Investments(15)(16)
IT Services
MMan Acquisition Co.*+ Common stocks   N/A   N/A   N/A   —  $ 929  — % $ 525 
Total controlled affiliate investments $ 23,885  $ 22,061  0.8 % $ 18,736 
Total investments $ 4,304,623  $ 4,398,900  176.7 % $ 4,238,210 
Money market funds (included in cash and cash equivalents and restricted cash and cash equivalents)
BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)
0.03%(20)
37,205  1.6 % 37,205 
Total money market funds $ 37,205  1.6 % $ 37,205 
Total Investments and Money Market Funds $ 4,436,105  178.3 % $ 4,275,415 

See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)

*
Denotes that all or a portion of the loan secures the notes offered in the 2018 Debt Securitization (as defined in Note 7).
#
Denotes that all or a portion of the loan secures the notes offered in the GCIC 2018 Debt Securitization (as defined in Note 7).
^
Denotes that all or a portion of the loan secures the notes offered in the 2020 Debt Securitization (as defined in Note 7).
+
Denotes that all or a portion of the loan collateralizes the WF Credit Facility (as defined in Note 7).
!
Denotes that all or a portion of the loan collateralizes the DB Credit Facility (as defined in Note 7).
~
Denotes that all or a portion of the loan collateralizes the MS Credit Facility II (as defined in Note 7).
(1)The majority of the investments bear interest at a rate that is permitted to be determined by reference to LIBOR denominated in U.S. dollars or GBP, EURIBOR, or Prime which reset daily, monthly, quarterly, semiannually, or annually. For each, the Company has provided the spread over LIBOR, EURIBOR or Prime and the weighted average current interest rate in effect as of September 30, 2020. Certain investments are subject to a LIBOR, EURIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable. Listed below are the index rates as of September 30, 2020, which was the last business day of the period on which LIBOR or EURIBOR was determined. The actual index rate for each loan listed may not be the applicable index rate outstanding as of September 30, 2020 , as the loan may have priced or repriced based on an index rate prior to September 30, 2020.
(a) Denotes that all or a portion of the loan was indexed to the 30-day LIBOR, which was 0.15% as of September 30, 2020.
(b) Denotes that all or a portion of the loan was indexed to the 60-day LIBOR, which was 0.19% as of September 30, 2020.
(c) Denotes that all or a portion of the loan was indexed to the 90-day LIBOR, which was 0.23% as of September 30, 2020.
(d) Denotes that all or a portion of the loan was indexed to the 180-day LIBOR, which was 0.26% as of September 30, 2020.
(e) Denotes that all or a portion of the loan was indexed to the 360-day LIBOR, which was 0.36% as of September 30, 2020.
(f) Denotes that all or a portion of the loan was indexed to the Prime rate, which was 3.25% as of September 30, 2020.
(g) Denotes that all or a portion of the loan was indexed to the 90-day EURIBOR, which was -0.50% as of September 30, 2020.
(h) Denotes that all or a portion of the loan was indexed to the 90-day GBP LIBOR, which was 0.06% as of September 30, 2020.
(i) Denotes that all or a portion of the loan was indexed to the 180-day GBP LIBOR, which was 0.09% as of September 30, 2020.
(j) Denotes that all or a portion of the loan was indexed to the Australia Three Month Interbank Rate, which was 0.14%, as of September 30, 2020.
(k) Denotes that all or a portion of the loan was indexed to the 90-day Canadian Bankers Acceptances Rate, which was 0.51%, as of September 30, 2020.
(2)For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect as of September 30, 2020.
(3)The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(4)The fair value of the investment was valued using significant unobservable inputs. See Note 6. Fair Value Measurements.
(5)The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(6)The entire commitment was unfunded as of September 30, 2020. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.
(7)Loan was on non-accrual status as of September 30, 2020, meaning that the Company has ceased recognizing interest income on the loan.
(8)The investment is treated as a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Under the 1940 Act, the Company can not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2020, total non-qualifying assets at fair value represented 4.7% of the Company's total assets calculated in accordance with the 1940 Act.
(9)Investment is denominated in foreign currency and is translated into U.S. dollars as of the valuation date or the date of the transaction. See Note 2. Significant Accounting Policies and Recent Accounting Updates - Foreign Currency Transactions.
(10)The headquarters of this portfolio company is located in the United Kingdom.
(11)The headquarters of this portfolio company is located in Australia.
(12)The headquarters of this portfolio company is located in Canada.
(13)The headquarters of this portfolio company is located in Luxembourg.
(14)The headquarters of this portfolio company is located in Andorra.
(15) Equity investments are non-income producing securities unless otherwise noted.
(16) Ownership of certain equity investments occurs through a holding company or partnership.
(17) The Company holds an equity investment that entitles it to receive preferential dividends.
See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2020
(In thousands)
(18)As defined in the 1940 Act, the Company is deemed to be an “affiliated person"” of the portfolio company as the Company owns five percent or more of the portfolio company's voting securities (“non-controlled affiliate”). Transactions related to investments in non-controlled affiliates for the year ended September 30, 2020 were as follows:
Portfolio Company
Fair value as of September 30, 2019
Gross Additions(l)
Gross Reductions(m)
Net change in unrealized gain (loss) Net realized gain (loss) Fair value as of September 30, 2020 Interest, dividend and fee income
Benetech, Inc.
$ 3,747  $ 1,049  $ (1,066) $ (1,058) $ —  $ 2,672  $ 639 
Dental Holdings Corporation (n)
—  17,771  (4,257) (946) (3,248) 9,320  292 
Elite Dental Partners LLC (p)
—  51,406  (30,254) 770  (6,554) 15,368  1,307 
Paradigm DKD Group, LLC(o)
—  3,371  (1,323) 412  —  2,460  (40)
Sloan Company, Inc., The (n)
—  18,483  (11,395) 2,067  (4,790) 4,365  (11)
Switchfly LLC
7,783  639  (95) (1,098) —  7,229  387 
Uinta Brewing Company
1,045  2,072  (1,762) (769) —  586  2 
Total Non-Controlled Affiliates
$ 12,575  $ 94,791  $ (50,152) $ (622) $ (14,592) $ 42,000  $ 2,576 

(l)
Gross additions may include increases in the cost basis of investments resulting from new investments, amounts related to PIK interest capitalized and added to the principal balance of the respective loans, the accretion of discounts, the exchange of one or more existing investments for one or more new investments and the movement of an existing portfolio company into this affiliated category from a different category.
(m)
Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments and sales, the amortization of premiums and the exchange of one or more existing securities for one or more new securities.
(n)
During the three months ended March 31, 2020, the Company's ownership increased to over five percent of the portfolio company's voting securities.
(o)
During the three months ended June 30, 2020, the Company's ownership increased to over five percent of the portfolio company's voting securities.
(p)
During the three months ended September 30, 2020, the Company's ownership increased to over five percent of the portfolio company's voting securities.
(19)As defined in the 1940 Act, the Company is deemed to be both an “affiliated person” of and “control” this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement) (“controlled affiliate”). Transactions related to investments in controlled affiliates for the year ended September 30, 2020 were as follows:
Portfolio Company
Fair value as of September 30, 2019
Gross Additions(q)
Gross Reductions(r)
Net change in unrealized gain (loss) Net realized gain (loss) Fair value as of September 30, 2020 Interest, dividend and fee income
MMan Acquisition Co.(s)
$ —  $ 31,433  $ (11,842) $ (855) $ —  $ 18,736  $ (86)
Senior Loan Fund LLC(t)
74,386  —  (74,838) 496  (44) —  — 
GCIC Senior Loan Fund LLC(u)
49,258  —  (48,613) 3,347  (3,992) —  1,905 
Total Controlled Affiliates
$ 123,644  $ 31,433  $ (135,293) $ 2,988  $ (4,036) $ 18,736  $ 1,819 

(q)
Gross additions may include increases in the cost basis of investments resulting from new investments, amounts related to PIK interest capitalized and added to the principal balance of the respective loans, the accretion of discounts, the exchange of one or more existing investments for one or more new investments and the movement of an existing portfolio company into this affiliated category from a different category.
(r)
Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, reductions in cost basis due to the Purchase Agreement (defined in Note 1), the amortization of premiums and the exchange of one or more existing securities for one or more new.
(s)
During the three months ended December 31, 2019, the Company's ownership increased to over twenty-five percent of the portfolio company's voting securities.
(t)
Prior to the closing of the transactions contemplated by the Purchase Agreement (defined in Note 1) on January 1, 2020, together with RGA Reinsurance Company (“RGA”), the Company co-invested through Senior Loan Fund (“SLF”). SLF was capitalized as transactions were completed and all portfolio and investment decisions in respect to SLF were approved by the SLF investment committee consisting of two representatives of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). Therefore, although the Company owned more than 25% of the voting securities of SLF, the Company did not have sole control over significant actions of SLF for purposes of the 1940 Act or otherwise.
(u)
Prior to the closing of the transactions contemplated by the Purchase Agreement (defined in Note 1) on January 1, 2020, together with Aurora National Life Assurance Company (“Aurora”), the Company co-invested through GCIC Senior Loan Fund (“GCIC SLF”), following the acquisition of GCIC SLF in the merger with GCIC (described in Note 1). GCIC SLF was capitalized as transactions were completed and all portfolio and investment decisions in respect to GCIC SLF were approved by the GCIC SLF investment committee consisting of two representatives of the Company and Aurora (with unanimous approval required from (i) one representative of each of the Company and Aurora or (ii) both representatives of each of the Company and Aurora). Therefore, although the Company owned more than 25% of the voting securities of GCIC SLF, the Company did not have sole control over significant actions of GCIC SLF for purposes of the 1940 Act or otherwise.
(20)The rate shown is the annualized seven-day yield as of September 30, 2020.

See Notes to Consolidated Financial Statements.
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Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
Note 1. Organization

Golub Capital BDC, Inc. (“GBDC” and, collectively with its subsidiaries, the “Company”) is an externally managed, closed-end, non-diversified management investment company. GBDC has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, GBDC has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company’s investment strategy is to invest primarily in one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle-market lenders as unitranche loans) and other senior secured loans of U.S. middle-market companies. The Company also selectively invests in second lien and subordinated (a loan that ranks senior only to a borrower’s equity securities and ranks junior to all of such borrower’s other indebtedness in priority of payment) loans of, and warrants and minority equity securities in, U.S. middle-market companies. The Company has entered into the Investment Advisory Agreement (defined below) with GC Advisors LLC (the “Investment Adviser”), under which the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, the Company. Under an administration agreement (the “Administration Agreement”) the Company is provided with certain services by an administrator (the “Administrator”), which is currently Golub Capital LLC.

On September 16, 2019, the Company completed its acquisition of Golub Capital Investment Corporation (“GCIC”), a Maryland corporation, pursuant to that certain Agreement and Plan of Merger (as amended, the “Merger Agreement”), dated as of November 27, 2018, by and among the Company, GCIC, Fifth Ave Subsidiary Inc., a Maryland corporation and wholly owned subsidiary of the Company (“Merger Sub”), the Investment Adviser, and, for certain limited purposes, the Administrator. Pursuant to the Merger Agreement, Merger Sub was first merged with and into GCIC, with GCIC as the surviving company (the “Initial Merger”), and, immediately following the Initial Merger, GCIC was then merged with and into the Company, with the Company as the surviving company (the Initial Merger and the subsequent merger, collectively, the “Merger”). Upon consummation of the Merger, the Company entered into the Third Amended and Restated Investment Advisory Agreement dated as of September 16, 2019 with the Investment Adviser (the “Investment Advisory Agreement”). The Investment Advisory Agreement replaced the Second Amended and Restated Investment Advisory Agreement by and between the Company and the Investment Adviser dated as of August 4, 2014 (the “Prior Investment Advisory Agreement”). Refer to Note 3 for more information on the Investment Advisory Agreement and the Prior Investment Advisory Agreement.

On January 1, 2020 the Company entered into a purchase agreement (the “Purchase Agreement”) with RGA Reinsurance Company (“RGA”), Aurora National Life Assurance Company (“Aurora”), Senior Loan Fund (“SLF”), and GCIC Senior Loan Fund LLC (“GCIC SLF”). Pursuant to the Purchase Agreement, RGA and Aurora (together the “Transferors”) agreed to sell their limited liability company (“LLC”) equity interests in SLF and GCIC SLF, respectively, to the Company, effective as of January 1, 2020. As a result of the Purchase Agreement, on January 1, 2020, SLF and GCIC SLF became wholly-owned subsidiaries of the Company and the capital commitments of the Transferors to SLF and GCIC SLF were terminated.

Note 2. Significant Accounting Policies and Recent Accounting Updates

Basis of presentation:  The Company is an investment company as defined in the accounting and reporting guidance under Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies (“ASC Topic 946”).
The accompanying interim consolidated financial statements of the Company and related financial information have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for the interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. All intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. The unaudited interim consolidated financial statements and notes thereto should be read in conjunction with the
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Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
financial statements and notes thereto in the Company’s Form 10-K for the year ended September 30, 2020, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

Fair value of financial instruments:  The Company applies fair value to all of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial instruments classified as Level 3.

Any changes to the valuation methodology are reviewed by management and the Company’s board of directors (the “Board”) to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies. See further description of fair value methodology in Note 6. Fair Value Measurements.

Use of estimates:  The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Consolidation:  As provided under Regulation S-X and ASC Topic 946, the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiaries Golub Capital BDC CLO 2014 LLC (“2014 Issuer”), Golub Capital BDC CLO III Depositor LLC (“2018 CLO Depositor”), Golub Capital BDC CLO III LLC (“2018 Issuer”), Golub Capital BDC Funding LLC (“Funding”), Golub Capital BDC Funding II LLC (“Funding II”), Golub Capital BDC Holdings, LLC (“BDC Holdings”), GC SBIC IV, L.P. (“SBIC IV”), GC SBIC V, L.P. (“SBIC V”), GC SBIC VI, L.P. (“SBIC VI”), GCIC Holdings LLC (“GCIC Holdings”), GCIC Funding LLC (“GCIC Funding”), GCIC CLO II Depositor LLC (“GCIC 2018 CLO Depositor”), GCIC CLO II LLC (“GCIC 2018 Issuer”), Golub Capital BDC CLO 4 LLC (“2020 Issuer”), Golub Capital BDC CLO 4 Depositor LLC (“2020 CLO Depositor”), GCIC Funding II LLC (“GCIC Funding II”), SLF, Senior Loan Fund II LLC (“SLF II”), GCIC SLF and GCIC Senior Loan Fund II LLC (“GCIC SLF II”). Prior to January 1, 2020, the Company did not consolidate its non-controlling interests in SLF, SLF II, GCIC SLF and GCIC SLF II (collectively, the “Senior Loan Funds” or “SLFs”). See further description of the Company’s previous investments in the SLFs in Note 4. Investments.

Assets related to transactions that do not meet ASC Topic 860 requirements for accounting sale treatment are reflected in the Company’s Consolidated Statements of Financial Condition as investments. Those assets are owned by special purpose entities, including BDC Holdings, 2014 Issuer, 2018 Issuer, 2020 Issuer, Funding, Funding II, GCIC Funding, GCIC Holdings, GCIC 2018 Issuer and GCIC Funding II that are consolidated in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of GBDC (or any affiliate of GBDC).

Cash, cash equivalents and foreign currencies: Cash, cash equivalents and foreign currencies are highly liquid investments with an original maturity of three months or less at the date of acquisition. The Company deposits its cash in financial institutions and, at times, such balances exceed the Federal Deposit Insurance Corporation insurance limits.
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)

Restricted cash and cash equivalents and restricted foreign currencies:  Restricted cash and cash equivalents and restricted foreign currencies include amounts that are collected and are held by trustees who have been appointed as custodians of the assets securing certain of the Company’s financing transactions. Restricted cash and cash equivalents and restricted foreign currencies are held by the trustees for payment of interest expense and principal on the outstanding borrowings or reinvestment into new assets. In addition, restricted cash and cash equivalents and restricted foreign currencies include amounts held within the Company’s small business investment company (“SBIC”) subsidiaries. The amounts held within the SBICs are generally restricted to the originations of new loans by the SBICs and the payment of U.S. Small Business Administration (“SBA”) debentures and related interest expense.

Foreign currency translation: The Company’s books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

(1)cash and cash equivalents, restricted cash and cash equivalents, fair value of investments, interest receivable, and other assets and liabilities—at the spot exchange rate on the last business day of the period; and

(2)purchases and sales of investments, income and expenses—at the exchange rates prevailing on the respective dates of such transactions.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, the Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Fluctuations arising from the translation of assets other than investments and liabilities are included with the net change in unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies on the Consolidated Statements of Operations.

Foreign security and currency transactions involve certain considerations and risks not typically associated with investing in U.S. companies. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.

Forward currency contracts: A forward currency contract is an obligation between two parties to purchase or sell a specific currency for an agreed-upon price at a future date. The Company utilized forward currency contracts to economically hedge the currency exposure associated with certain foreign-denominated investments. The use of forward currency contracts does not eliminate fluctuations in the price of the underlying securities the Company owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the exchange rates on the contract date and reporting date and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized gains (losses) and unrealized appreciation (depreciation) on the contracts are included in the Consolidated Statements of Operations. Unrealized appreciation (depreciation) on forward currency contracts is recorded on the Consolidated Statements of Financial Condition by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable.

The primary risks associated with forward currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks can exceed the amounts reflected in the Consolidated Statements of Financial Condition.

Refer to Note 5 for more information regarding the forward currency contracts.

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
Revenue recognition:

Investments and related investment income:  Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments.

Loan origination fees, original issue discount and market discount or premium are capitalized, and the Company accretes or amortizes such amounts over the life of the loan as interest income. For the three months ended December 31, 2020 and 2019, interest income included $4,606 and $3,968, respectively, of accretion of discounts. For the three months ended December 31, 2020 and 2019, the Company received loan origination fees of $8,665 and $4,295, respectively.

For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, the Company will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. For the three months ended December 31, 2020 and 2019, the Company capitalized PIK interest of $4,725 and $1,633, respectively, into the principal balance of certain debt investments.

In addition, the Company generates revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans. The Company records these fees as fee income when earned. All other income is recorded into income when earned. For the three months ended December 31, 2020 and 2019, fee income included $721 and $63, respectively, of prepayment premiums, which fees are non-recurring.

For the three months ended December 31, 2020 and 2019, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, in the amounts of $73,973 and $85,623, respectively.

Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Each distribution received from LLC and limited partnership (“LP”) investments is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

For the three months ended December 31, 2020 and 2019, excluding the Company's investment in LLC equity interests in the SLFs, the Company recorded dividend income of $160 and $34, respectively, and return of capital distributions, excluding the Company's investment in LLC equity interests in the SLFs, of $0 and $0, respectively. For the three months ended December 31, 2020 and 2019, the Company recorded dividend income of $0 and $1,905, respectively, and return of capital distributions of $0 and $4,375, respectively, from the Company's investment in LLC equity interests in the SLFs.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments and foreign currency translation in the Consolidated Statements of Operations.

Non-accrual loans: A loan can be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid interest credited to income is reversed. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans are recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
and interest is paid and, in management’s judgment, payments are likely to remain current. The total fair value of non-accrual loans was $52,860 and $69,315 as of December 31, 2020 and September 30, 2020, respectively.

Purchase accounting: The Merger was accounted for under the asset acquisition method of accounting in accordance with ASC 805 — Business Combinations — Related Issues (“ASC Topic 805”), also referred to as “purchase accounting.” Under asset acquisition accounting, acquiring assets in groups not only requires ascertaining the cost of the asset (or net assets), but also allocating that cost to the individual assets (or individual assets and liabilities) that make up the group. Per ASC Topic 805, assets are recognized based on their cost to the acquiring entity, which generally includes transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets carrying amounts on the acquiring entity’s books.

The cost of the group of assets acquired in an asset acquisition is allocated to the individual assets acquired or liabilities assumed based on the relative fair values of net identifiable assets acquired other than “non-qualifying” assets (for example cash) and does not give rise to goodwill. To the extent that the consideration paid to GCIC’s stockholders exceeded the relative fair values of the net identifiable assets of GCIC acquired other than “non-qualifying” assets, any such premium paid by the Company was further allocated to the cost of the GCIC assets acquired by the Company pro-rata to their relative fair value, other than “non-qualifying” assets. As GCIC did not have any “qualifying” assets at the time of acquisition, the premium was allocated to “non-qualifying” assets, which are GCIC’s investments in loans and equity securities, including its investment in GCIC SLF. Immediately following the acquisition of GCIC, the Company recorded its assets at their respective fair values and, as a result, the purchase premium allocated to the cost basis of the GCIC assets acquired was immediately recognized as unrealized depreciation on the Company's Consolidated Statement of Operations. The purchase premium allocated to investments in loan securities will amortize over the life of the loans through interest income, with a corresponding reversal of the unrealized depreciation on the loans acquired from GCIC through their ultimate disposition. Amortization expense of purchase premium for the three months ended December 31, 2020 and 2019, was $9,230 and $11,837 respectively. The purchase premium allocated to investments in equity securities will not amortize over the life of the equity securities through interest income and, assuming no subsequent change to the fair value of the equity securities acquired from GCIC and disposition of such equity securities at fair value, the Company will recognize a realized loss with a corresponding reversal of the unrealized depreciation upon disposition of the equity securities acquired from GCIC.

The Company's purchase of the equity interests in the Senior Loan Funds was accounted for under the asset acquisition method of accounting in accordance with ASC Topic 805. As of January 1, 2020, the Company allocated the cost to acquire the net assets of the Senior Loans Funds to the assets acquired and liabilities assumed based on the relative fair values of identifiable assets and liabilities. The total consideration transferred by the Company to acquire the Senior Loans Funds was $140,124, which was comprised of $17,011 paid to RGA and Aurora for their minority interests in the Senior Loan Funds and the derecognition of the Company's existing carrying cost of the investments in the Senior Loans Funds, as of January 1, 2020, of $123,113. As of January 1, 2020, the fair value of the net assets of the Senior Loan Funds was $136,088, which resulted in a $4,036 purchase premium that the Company recognized as realized loss in the Consolidated Statements of Operations for the three months ended March 31, 2020.

Income taxes:  The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to qualify and be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends for U.S. federal income tax purposes to its stockholders of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. The Company has made, and intends to continue to make, the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal income taxes with respect to all income distributed to its stockholders.

Depending on the level of taxable income earned in a tax year, the Company can determine to retain taxable income in excess of current year dividend distributions and distribute such taxable income in the next tax year. The Company may then be required to incur a 4% excise tax on such income. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. No U.S. deferral excise tax was incurred for each of the three months ended December 31, 2020 and 2019.

The Company accounts for income taxes in conformity with ASC Topic 740 — Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense or tax benefit in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. There were no material unrecognized tax benefits or unrecognized tax liabilities related to uncertain income tax positions through December 31, 2020. The Company's tax returns for the 2017 through 2019 tax years remain subject to examination by U.S. federal and most state tax authorities.

Dividends and distributions:  Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend or distribution is determined by the Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually, although the Company can retain such capital gains for investment in its discretion.

The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Board authorizes and the Company declares a cash distribution, then stockholders who participate in the DRIP will have their cash distribution reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. The Company expects to use newly issued shares under the guidelines of the DRIP if the Company’s shares are trading at a premium to net asset value. The Company can purchase shares in the open market in connection with the obligations under the plan, and in particular, if the Company’s shares are trading at a significant discount to net asset value (“NAV”) and the Company is otherwise permitted under applicable law to purchase such shares, the Company intends to purchase shares in the open market in connection with any obligations under the DRIP.

In the event the market price per share of the Company’s common stock on the date of a distribution exceeds the most recently computed NAV per share of the common stock, the Company will issue shares of common stock to participants in the DRIP at the greater of the most recently computed NAV per share of common stock or 95% of the current market price per share of common stock (or such lesser discount to the current market price per share that still exceeds the most recently computed NAV per share of common stock).

Share repurchase plan: The Company has a share repurchase program (the “Program”) which allows the Company to repurchase the Company’s outstanding common stock on the open market at prices below the Company’s NAV as reported in its most recently published consolidated financial statements. The Board most recently reapproved the Program in August 2020 and the Program is implemented at the discretion of management. Shares can be purchased from time to time at prevailing market prices, through open market transactions, including block transactions. The Program permits repurchases up to $150,000 of the Company's common stock. Prior to August 6, 2019, the Program permitted up to $75,000 in repurchases. The Company did not make any repurchases of its common stock during each of the three months ended December 31, 2020 and 2019.

Deferred debt issuance costs: Deferred debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. As of December 31, 2020 and September 30, 2020, the Company had deferred debt issuance costs of $10,822 and $5,896, respectively. These amounts are amortized and included in interest expense in the Consolidated Statements of Operations over the estimated average life of the borrowings. Amortization expense for deferred debt issuance costs for the three months ended December 31, 2020 and 2019, was $1,204 and $571, respectively.


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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
Note 3. Related Party Transactions

Investment Advisory Agreement: Under the Investment Advisory Agreement, the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, GBDC. The Board approved the Investment Advisory Agreement on July 11, 2019. The Board noted that the terms of the Investment Advisory Agreement did not change the calculation of the Capital Gain Incentive Fee or the management or incentive fee rates and that the changes, as compared to the Prior Investment Advisory Agreement, consisted of revisions to (i) exclude the impact of purchase accounting resulting from a merger, including the Merger, from the calculation of income subject to the income incentive fee payable and the calculation of the cumulative incentive fee cap under the Investment Advisory Agreement and (ii) convert the cumulative incentive fee cap into a per share calculation. At a meeting of the Company's stockholders held on September 4, 2019, the Company's stockholders voted to the approve the Investment Advisory Agreement, which was entered into and effective as of September 16, 2019, the closing of the Merger, and will continue for an initial two-year term. The Investment Adviser is a registered investment adviser with the SEC. The Investment Adviser receives fees for providing services, consisting of two components, a base management fee and an Incentive Fee (as defined below).

The base management fee is calculated at an annual rate equal to 1.375% of average adjusted gross assets at the end of the two most recently completed calendar quarters (including assets purchased with borrowed funds and securitization-related assets, leverage, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian but adjusted to exclude cash and cash equivalents so that investors do not pay the base management fee on such assets) and is payable quarterly in arrears. Additionally, the Investment Adviser voluntarily excludes any assets funded with secured borrowing proceeds from the base management fee calculation. The base management fee is adjusted, based on the actual number of days elapsed relative to the total number of days in such calendar quarter, for any share issuances or repurchases during such calendar quarter. For purposes of the Investment Advisory Agreement, cash equivalents mean U.S. government securities and commercial paper instruments maturing within 270 days of purchase (which is different than the GAAP definition, which defines cash equivalents as U.S. government securities and commercial paper instruments maturing within 90 days of purchase). To the extent that the Investment Adviser or any of its affiliates provides investment advisory, collateral management or other similar services to a subsidiary of the Company, the base management fee will be reduced by an amount equal to the product of (1) the total fees paid to the Investment Adviser by such subsidiary for such services and (2) the percentage of such subsidiary’s total equity, including membership interests and any class of notes not exclusively held by one or more third parties, that is owned, directly or indirectly, by the Company.

The Company has structured the calculation of the Incentive Fee to include a fee limitation such that an Incentive Fee for any quarter can only be paid to the Investment Adviser if, after such payment, the cumulative Incentive Fees paid to the Investment Adviser, calculated on a per share basis, since April 13, 2010, the effective date of the Company’s election to become a BDC, would be less than or equal to 20.0% of the Company’s Cumulative Pre-Incentive Fee Net Income (as defined below).

The Company accomplishes this limitation by subjecting each quarterly Incentive Fee payable under the Income and Capital Gain Incentive Fee Calculation (as defined below) to a cap (the “Incentive Fee Cap”). The Investment Advisory Agreement, as compared to the Prior Investment Advisory Agreement, converts the cumulative incentive fee cap from an aggregate basis calculation to a per share calculation. Under the Prior Investment Advisory Agreement, the Incentive Fee would not be paid at any time if, after such payment, the cumulative incentive fees paid to date would be greater than 20.0% of the Company's Cumulative Pre-Incentive Fee Net Income since April 13, 2010. Under the Investment Advisory Agreement, the Incentive Fee Cap in any quarter is equal to the difference between (a) 20.0% of Cumulative Pre-Incentive Fee Net Income Per Share (as defined below) and (b) Cumulative Incentive Fees Paid Per Share (as defined below). To the extent the Incentive Fee Cap is zero or a negative value in any quarter, no Incentive Fee would be payable in that quarter. If, for any relevant period, the Incentive Fee Cap calculation results in the Company paying less than the amount of the Incentive Fee calculated above, then the difference between the Incentive Fee and the Incentive Fee Cap will not be paid by GBDC and will not be received by the Investment Adviser as an Incentive Fee either at the end of such relevant period or at the end of any future period. “Cumulative Pre-Incentive Fee Net Income Per Share” equals the sum of “Pre-Incentive Fee Net Income Per Share” (as defined below) for each quarterly period since April 13, 2010. “Pre-Incentive Fee Net Income Per Share” equals the sum of (i) Pre-Incentive Fee Net Investment Income (as defined below) and (ii) Adjusted Capital Returns for the applicable period, divided by (b) the weighted average number of shares of GBDC common stock
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
outstanding during such period. “Adjusted Capital Returns” for any period is the sum of the realized aggregate capital gains, realized aggregate capital losses, aggregate unrealized capital depreciation and aggregate unrealized capital appreciation for such period; provided that the calculation of realized aggregate capital gains, realized aggregate capital losses, aggregate unrealized capital depreciation and aggregate unrealized capital appreciation shall not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation resulting solely from the purchase accounting for any premium or discount paid for the acquisition of assets in a merger. “Cumulative Incentive Fees Paid Per Share” is equal to the sum of Incentive Fees Paid Per Share since April 13, 2010. “Incentive Fees Paid Per Share” for any period is equal to the Incentive Fees accrued and/or payable to the Company for such period, divided by the weighted average number of shares of common stock of GBDC during such period.

“Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the Investment Advisory Agreement and the Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that the Company has not yet received in cash.

Incentive Fees are calculated and payable quarterly in arrears (or, upon termination of the Investment Advisory Agreement, as of the termination date).

The income and capital gains incentive fee calculation (the “Income and Capital Gain Incentive Fee Calculation”) has two parts, the income component (the “Income Incentive Fee”) and the capital gains component (the “Capital Gain Incentive Fee” and, together with the Income Incentive Fee, the “Incentive Fee”). The Income Incentive Fee is calculated quarterly in arrears based on the Company’s Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter.

For the three months ended December 31, 2020 and 2019, the Income Incentive Fee incurred was $2,004 and $5,904, respectively.

The Investment Advisory Agreement, as compared to the Prior Investment Advisory Agreement, excludes the impact of purchase accounting resulting from a merger, including the Merger, from the calculation of income subject to the Income Incentive Fee and the calculation of the Incentive Fee Cap. As a result, under the Investment Advisory Agreement, Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation or any amortization or accretion of any purchase premium or discount to interest income solely from the purchase accounting for any premium or discount paid for the acquisition of assets in a merger, such as the premium to net asset value paid for the shares of GCIC common stock in the Merger. Because of the structure of the Income Incentive Fee, it is possible that an Incentive Fee is calculated under this formula with respect to a period in which the Company has incurred a loss. For example, if the Company receives Pre-Incentive Fee Net Investment Income in excess of the hurdle rate (as defined below) for a calendar quarter, the Income Incentive Fee will result in a positive value and an Incentive Fee will be paid even if the Company has incurred a loss in such period due to realized and/or unrealized capital losses unless the payment of such Incentive Fee would cause the Company to pay Incentive Fees on a cumulative basis that exceed the Incentive Fee Cap.
Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed “hurdle rate” of 2.0% quarterly. If market interest rates rise, it is possible that the Company will be able to invest funds in debt instruments that provide for a higher return, which would increase Pre-Incentive Fee Net Investment Income and make it easier for the Investment Adviser to surpass the fixed hurdle rate and receive an Incentive Fee based on such net investment income.
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
The Company’s Pre-Incentive Fee Net Investment Income used to calculate this part of the Incentive Fee is also included in the amount of its total assets (excluding cash and cash equivalents but including assets purchased with borrowed funds and securitization-related assets, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian) used to calculate the 1.375% base management fee annual rate.

The Company calculates the Income Incentive Fee with respect to its Pre-Incentive Fee Net Investment Income quarterly, in arrears, as follows:

•Zero in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate;
•100% of the Company’s Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.5% in any calendar quarter. This portion of the Company’s Pre-Incentive Fee Net Investment Income (which exceeds the hurdle rate but is less than 2.5%) is referred to as the “catch-up” provision. The catch-up is meant to provide the Investment Adviser with 20.0% of the Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply if the Company’s Pre-Incentive Fee Net Investment Income exceeds 2.5% in any calendar quarter; and
•20.0% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.5% in any calendar quarter.

The Capital Gain Incentive Fee equals (a) 20.0% of the Company’s Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), which commenced with the calendar year ending December 31, 2010, less (b) the aggregate amount of any previously paid Capital Gain Incentive Fees. The Capital Gain Incentive Fee is calculated in the same manner under the Investment Advisory Agreement as under the Prior Investment Advisory Agreement. The Company’s “Capital Gain Incentive Fee Base” equals (1) the sum of (i) realized capital gains, if any, on a cumulative positive basis from the date the Company elected to become a BDC through the end of each calendar year, (ii) all realized capital losses on a cumulative basis and (iii) all unrealized capital depreciation on a cumulative basis less (2) all unamortized deferred debt issuance costs, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis.

•The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the Company’s portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.
•The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company’s portfolio when sold and (b) the accreted or amortized cost basis of such investment.
•The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company’s portfolio as of the applicable Capital Gain Incentive Fee calculation date and (b) the accreted or amortized cost basis of such investment.

In accordance with GAAP, the Company also is required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee on a quarterly basis as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under either the Prior Investment Advisory Agreement or Investment Advisory Agreement, as applicable. If the Capital Gain Incentive Fee Base, adjusted as required by GAAP to include unrealized capital appreciation, is positive at the end of a period, then GAAP requires the Company to accrue a capital gain incentive fee equal to 20% of such amount, less the aggregate amount of the actual Capital Gain Incentive Fees paid and capital gain incentive fees accrued under GAAP in all prior periods. If such amount is negative, then there is no accrual for such period. The resulting accrual under GAAP in a given period results in additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. There can be no assurance that such unrealized capital appreciation will be realized in the future. For three months ended December 31, 2020 and 2019, the Company did not accrue a capital gain incentive fee. Changes in the accrual for the capital gain incentive fee are included in incentive fee in the Consolidated Statements of Operations. As of December 31, 2020 and September
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30, 2020, there was no cumulative accrual of capital gain incentive fees under GAAP included in management and incentive fees payable on the Consolidated Statements of Financial Condition.

As of December 31, 2020 and September 30, 2020, there was no Capital Gain Incentive Fee payable as calculated under the Investment Advisory Agreement as described above. Any payment due under the terms of the Investment Advisory Agreement or the Prior Investment Advisory Agreement, as applicable, is calculated in arrears at the end of each calendar year.

Administration Agreement:  Under the Administration Agreement, the Administrator furnishes the Company with office facilities and equipment, provides the Company with clerical, bookkeeping and record keeping services at such facilities and provides the Company with other administrative services as the Administrator, subject to review by the Board, determines necessary to conduct the Company’s day-to-day operations. The Company reimburses the Administrator the allocable portion of overhead and other expenses incurred by it in performing its obligations under the Administration Agreement, including rent, fees and expenses associated with performing compliance functions and the Company's allocable portion of the cost of its chief financial officer and chief compliance officer and their respective staffs. The Board reviews such expenses to determine that these expenses, including any allocation of expenses among the Company and other entities for which the Administrator provides similar services, are reasonable and comparable to administrative services charged by unaffiliated third party asset managers. Under the Administration Agreement, the Administrator also provides, on the Company’s behalf, managerial assistance to those portfolio companies to which the Company is required to provide such assistance and will be paid an additional amount based on the cost of the services provided, which amount shall not exceed the amount the Company receives from such portfolio companies.

Included in accounts payable and other liabilities is $1,602 and $1,576 as of December 31, 2020 and September 30, 2020, respectively, for accrued allocated shared services under the Administration Agreement.

Other related party transactions:  The Administrator pays for certain unaffiliated third-party expenses incurred by the Company. Such expenses include postage, printing, office supplies, rating agency fees and professional fees. These expenses are not marked-up and represent the same amount the Company would have paid had the Company paid the expenses directly. These expenses are subsequently reimbursed in cash.

Total expenses reimbursed to the Administrator during the three months ended December 31, 2020 and 2019, were $1,627 and $1,685, respectively.

As of December 31, 2020 and September 30, 2020, included in accounts payable and other liabilities were $1,475 and $1,627, respectively, for expenses paid on behalf of the Company by the Administrator.

The Company is party to an unsecured revolving credit facility with the Investment Adviser (as amended, the “Adviser Revolver”) which, as of December 31, 2020 and September 30, 2020 permits the Company to borrow a maximum of $100,000 and expires on June 21, 2022. Refer to Note 7. Borrowings for discussion of the Adviser Revolver.

As of December 31, 2020, an affiliate of the Investment Adviser held $25,000 of the Company's 2024 Unsecured Notes (discussed in Note 7).

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Note 4. Investments

Investments as of December 31, 2020 and September 30, 2020 consisted of the following:
As of December 31, 2020 As of September 30, 2020
   Principal Amortized
Cost 		Fair
Value 		Principal Amortized
Cost 		Fair
Value
Senior secured $ 741,761  $ 732,386  $ 706,935  $ 683,735  $ 676,285  $ 640,213 
One stop 3,751,840  3,755,299  3,667,769  3,600,711  3,615,685  3,485,585 
Second lien 27,965  28,038  27,821  19,640  19,886  19,640 
Subordinated debt 302  300  349  537  541  575 
Equity N/A 88,795  104,344  N/A 86,503  92,197 
Total $ 4,521,868  $ 4,604,818  $ 4,507,218  $ 4,304,623  $ 4,398,900  $ 4,238,210 


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(In thousands, except shares and per share data)
The following tables show the portfolio composition by geographic region at amortized cost and fair value as a percentage of total investments in portfolio companies. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which is not always indicative of the primary source of the portfolio company’s business.
As of December 31, 2020 As of September 30, 2020
Amortized Cost:            
United States            
Mid-Atlantic $ 915,626  19.9  % $ 887,138  20.2  %
Midwest 842,674  18.3  805,618  18.3 
West 787,046  17.1  709,961  16.1 
Southeast 1,065,375  23.1  1,052,544  23.9 
Southwest 514,942  11.2  478,702  10.9 
Northeast 323,168  7.0  328,627  7.5 
Canada 116,530  2.5  99,937  2.3 
United Kingdom 36,186  0.8  21,264  0.5 
Australia 2,300  0.1  2,301  0.0  *
Luxembourg 971  0.0  * 973  0.0  *
Andorra —  0.0  11,835  0.3 
Total $ 4,604,818  100.0  % $ 4,398,900  100.0  %
Fair Value:            
United States            
Mid-Atlantic $ 897,760  19.9  % $ 861,772  20.3  %
Midwest 822,697  18.3  779,271  18.4 
West 771,372  17.1  677,712  16.0 
Southeast 1,039,467  23.1  1,014,912  23.9 
Southwest 501,817  11.1  456,111  10.8 
Northeast 315,711  7.0  314,611  7.4 
Canada 117,910  2.6  98,112  2.3 
United Kingdom 37,042  0.8  21,035  0.5 
Australia 2,549  0.1  2,373  0.1 
Luxembourg 893  0.0  * 896  0.0  *
Andorra —  0.0  11,405  0.3 
Total $ 4,507,218  100.0  % $ 4,238,210  100.0  %
* Represents an amount less than 0.1%.

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
The industry compositions of the portfolio at amortized cost and fair value as of December 31, 2020 and September 30, 2020 were as follows:
As of December 31, 2020 As of September 30, 2020
Amortized Cost:            
Aerospace and Defense $ 113,577  2.5  % $ 98,894  2.2  %
Airlines 971  0.0  * 973  0.0  *
Auto Components 21,333  0.5  21,194  0.5 
Automobiles 93,282  2.0  52,056  1.2 
Beverages 37,284  0.8  37,400  0.9 
Biotechnology 16,401  0.4  16,438  0.4 
Building Products 8,474  0.2  31,939  0.7 
Chemicals 14,899  0.3  14,943  0.3 
Commercial Services and Supplies 149,434  3.2  129,444  2.9 
Construction & Engineering 49,445  1.1  46,261  1.1 
Consumer Finance 2,073  0.0  * 2,076  0.0  *
Containers and Packaging 21,930  0.5  19,523  0.4 
Distributors 3,273  0.1  3,282  0.1 
Diversified Consumer Services 91,238  2.0  64,380  1.5 
Diversified Financial Services 60,838  1.3  56,953  1.3 
Electric Utilities 11,395  0.2  13,311  0.3 
Electronic Equipment, Instruments and Components 84,417  1.8  63,902  1.5 
Energy Equipment and Services 4,547  0.1  4,774  0.1 
Food and Staples Retailing 159,354  3.5  134,224  3.1 
Food Products 48,803  1.1  56,062  1.3 
Health Care Technology 199,193  4.3  223,224  5.1 
Healthcare Equipment and Supplies 168,150  3.7  178,676  4.1 
Healthcare Providers and Services 666,237  14.5  628,734  14.3 
Hotels, Restaurants and Leisure 175,524  3.8  177,058  4.0 
Household Durables 5,184  0.1  4,895  0.1 
Household Products 3,891  0.1  3,896  0.1 
Industrial Conglomerates 20,150  0.4  4,691  0.1 
Insurance 110,219  2.4  109,109  2.5 
Internet and Catalog Retail 10,014  0.2  10,123  0.2 
IT Services 358,432  7.8  364,699  8.3 
Leisure Products 11,735  0.3  11,682  0.3 
Life Sciences Tools & Services 51,524  1.1  48,145  1.1 
Machinery 29,615  0.6  29,373  0.6 
Marine 10,491  0.2  —  0.0 
Multiline Retail 46,378  1.0  46,372  1.1 
Oil, Gas and Consumable Fuels 85,853  1.9  85,924  2.0 
Paper and Forest Products 9,056  0.2  9,126  0.2 
Personal Products 37,397  0.8  37,520  0.8 
Pharmaceuticals 53,683  1.2  55,639  1.3 
Professional Services 93,639  2.0  90,590  2.0 
Real Estate Management and Development 65,614  1.4  66,172  1.5 
Road and Rail 23,521  0.5  23,610  0.5 
Software 1,012,392  22.0  937,060  21.3 
Specialty Retail 297,805  6.5  317,697  7.2 
Technology Hardware, Storage and Peripherals 24,028  0.5  24,069  0.5 
Textiles, Apparel and Luxury Goods 42,125  0.9  42,787  1.0 
Total $ 4,604,818  100.0  % $ 4,398,900  100.0  %
* Represents an amount less than 0.1%.
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As of December 31, 2020 As of September 30, 2020
Fair Value:            
Aerospace and Defense $ 109,157  2.4  % $ 93,061  2.2  %
Airlines 893  0.0  * 896  0.0  *
Auto Components 20,153  0.4  19,518  0.5 
Automobiles 93,340  2.1  52,972  1.2 
Beverages 34,569  0.8  33,874  0.9 
Biotechnology 17,024  0.4  16,902  0.4 
Building Products 9,423  0.2  32,824  0.7 
Chemicals 14,206  0.3  13,948  0.3 
Commercial Services and Supplies 147,443  3.3  126,680  2.9 
Construction & Engineering 49,168  1.1  44,892  1.1 
Consumer Finance 2,497  0.1  2,460  0.0  *
Containers and Packaging 19,748  0.4  16,669  0.4 
Distributors 3,104  0.1  3,046  0.1 
Diversified Consumer Services 82,197  1.8  54,066  1.5 
Diversified Financial Services 59,738  1.3  55,223  1.3 
Electric Utilities 11,368  0.2  13,228  0.3 
Electronic Equipment, Instruments and Components 83,396  1.9  62,723  1.5 
Energy Equipment and Services 2,474  0.1  2,672  0.1 
Food and Staples Retailing 154,510  3.4  119,614  3.1 
Food Products 53,443  1.2  60,420  1.3 
Health Care Technology 198,447  4.4  219,166  5.1 
Healthcare Equipment and Supplies 161,535  3.6  172,274  4.1 
Healthcare Providers and Services 633,099  14.0  583,926  14.3 
Hotels, Restaurants and Leisure 164,854  3.7  165,722  4.0 
Household Durables 5,329  0.1  4,999  0.1 
Household Products 3,818  0.1  3,817  0.1 
Industrial Conglomerates 20,160  0.4  4,567  0.1 
Insurance 111,618  2.5  109,156  2.5 
Internet and Catalog Retail 9,089  0.2  9,489  0.2 
IT Services 355,256  7.9  356,500  8.3 
Leisure Products 11,097  0.2  11,389  0.3 
Life Sciences Tools & Services 51,970  1.2  47,871  1.1 
Machinery 26,222  0.6  25,727  0.6 
Marine 10,487  0.2  —  0.0 
Multiline Retail 46,488  1.0  46,488  1.1 
Oil, Gas and Consumable Fuels 85,216  1.9  82,811  2.0 
Paper and Forest Products 8,628  0.2  8,597  0.2 
Personal Products 33,242  0.7  33,323  0.8 
Pharmaceuticals 54,930  1.2  56,050  1.3 
Professional Services 91,934  2.0  87,116  2.0 
Real Estate Management and Development 65,651  1.5  63,111  1.5 
Road and Rail 22,855  0.5  22,951  0.5 
Software 1,013,021  22.5  924,825  21.3 
Specialty Retail 296,359  6.6  311,117  7.2 
Technology Hardware, Storage and Peripherals 23,536  0.5  23,597  0.5 
Textiles, Apparel and Luxury Goods 34,526  0.8  37,933  1.0 
Total $ 4,507,218  100.0  % $ 4,238,210  100.0  %
* Represents an amount less than 0.1%.



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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)

Senior Loan Fund LLC:

Effective January 1, 2020, the Company purchased the remaining equity interests in SLF from RGA and consolidated SLF's assets and liabilities into the Company's financial statements and notes. Prior to January 1, 2020, the Company co-invested with RGA in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF was capitalized as transactions were completed and all portfolio and investment decisions in respect of SLF were approved by the SLF investment committee consisting of two representatives of each of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). SLF could have ceased making new investments upon notification of either member but operations would have continued until all investments were sold or paid-off in the normal course of business. Investments held by SLF were measured at fair value using the same valuation methodologies as described in Note 6.

For the three months ended December 31, 2019, the Company did not receive dividend income from the LLC equity interests in SLF.
See below for certain summarized financial information for SLF for the three months ended December 31, 2019:
Selected Statement of Operations Information:   
Interest income $ 2,800 
Total investment income 2,800 
Interest and other debt financing expense 634 
Administrative service fee 61 
Other expenses (15)
Total expenses 680 
Net investment income 2,120 
Net change in unrealized appreciation (depreciation) on investments (1,603)
Net increase in members' equity $ 517 

GCIC Senior Loan Fund LLC:

Effective January 1, 2020, the Company purchased the remaining equity interests in GCIC SLF from Aurora and consolidated GCIC SLF's assets and liabilities into the Company's financial statements and notes. Following the acquisition of GCIC SLF in the Merger, the Company co-invested with Aurora, a wholly-owned subsidiary of RGA Reinsurance Company, in senior secured loans through GCIC SLF, an unconsolidated Delaware LLC. The Company acquired the investment in GCIC SLF through its acquisition of GCIC on September 16, 2019. GCIC SLF was capitalized as transactions were completed and all portfolio and investment decisions in respect of GCIC SLF were approved by the GCIC SLF investment committee consisting of two representatives of each of the Company and Aurora (with unanimous approval required from (i) one representative of each of the Company and Aurora or (ii) both representatives of each of the Company and Aurora). GCIC SLF could have ceased making new investments upon notification of either member but operations would have continued until all investments were sold or paid-off in the normal course of business. Investments held by GCIC SLF were measured at fair value by GCIC SLF using the same valuation methodologies as described in Note 6.

For the three months ended December 31, 2019, the Company earned $1,905 of dividend income from the LLC equity interest in GCIC SLF.

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See below for certain summarized financial information for GCIC SLF for the three months ended December 31, 2019:
Selected Statement of Operations Information:
Interest income $ 2,081 
Total investment income 2,081 
Interest and other debt financing expenses 512 
Administrative service fee 45 
Other expenses (24)
Total expenses 533 
Net investment income 1,548 
Net change in unrealized appreciation (depreciation) on investments
(108)
Net increase in members' equity $ 1,440 




Note 5. Forward Currency Contracts

The Company enters into forward currency contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company's investments denominated in foreign currencies.

The outstanding forward currency contracts as of December 31, 2020 and September 30, 2020 were as follows:
As of December 31, 2020
Counterparty Currency to be sold Currency to be purchased Settlement date Unrealized appreciation ($) Unrealized depreciation ($)
Macquarie Bank Limited £ 8,925  GBP $ 11,219  USD 2/28/2023 $ —  $ (1,028)
Macquarie Bank Limited £ 3,780  GBP $ 4,804  USD 3/27/2023 —  (383)
Macquarie Bank Limited € 6,760  EUR $ 8,044  USD 4/28/2023 —  (625)
Macquarie Bank Limited € 9,300  EUR $ 10,861  USD 4/29/2022 —  (378)
Macquarie Bank Limited £ 10,058  GBP $ 12,706  USD 7/17/2023 —  (1,108)
Macquarie Bank Limited £ 2,228  GBP $ 2,903  USD 4/28/2023 —  (155)
Macquarie Bank Limited $ 18,425  CAD $ 13,783  USD 10/30/2023 —  (622)
Macquarie Bank Limited € 13,960  EUR $ 16,735  USD 4/28/2023 —  (657)
$ —  $ (4,956)

As of September 30, 2020
Counterparty Currency to be sold Currency to be purchased Settlement date Unrealized appreciation ($) Unrealized depreciation ($)
Macquarie Bank Limited £ 8,925  GBP $ 11,219  USD 2/28/2023 $ —  $ (361)
Macquarie Bank Limited £ 3,780  GBP $ 4,804  USD 3/27/2023 —  (101)
Macquarie Bank Limited € 6,760  EUR $ 8,044  USD 4/28/2023 —  (187)
Macquarie Bank Limited € 9,300  EUR $ 10,861  USD 4/29/2022 —  (60)
Macquarie Bank Limited £ 10,058  GBP $ 12,706  USD 7/17/2023 —  (355)
$ —  $ (1,064)

In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) with its derivative counterparty, Macquarie Bank Limited (“Macquarie”). The ISDA Master Agreement is a bilateral agreement between the Company and Macquarie that governs over the
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
counter (“OTC”) derivatives, including forward currency contracts, and contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Company and cash collateral received from Macquarie, if any, is included in the Consolidated Statements of Financial Condition as cash collateral held at broker for forward currency contracts or cash collateral received from broker for forward currency contracts. The Company minimizes counterparty credit risk by only entering into agreements with counterparties that it believes to be of good standing and by monitoring the financial stability of those counterparties.

The following table is intended to provide additional information about the effect of the forward currency contracts on the financial statements of the Company including: the fair value of derivatives by risk category, the location of those fair values on the Consolidated Statements of Financial Condition, and the Company’s gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Company as of December 31, 2020 and September 30, 2020.
As of December 31, 2020
Counterparty Risk exposure category Unrealized appreciation on forward currency contracts Unrealized depreciation on forward currency contracts Net amounts presented in the Consolidated Statement of Financial Condition
Collateral (Received) Pledged (1)
Net Amount (2)
Macquarie Bank Limited Foreign exchange $ —  $ (4,956) $ (4,956) $ 4,956  $ — 

As of September 30, 2020
Counterparty Risk exposure category Unrealized appreciation on forward currency contracts Unrealized depreciation on forward currency contracts Net amounts presented in the Consolidated Statement of Financial Condition
Collateral (Received) Pledged (1)
Net Amount (2)
Macquarie Bank Limited Foreign exchange $ —  $ (1,064) $ (1,064) $ 1,064  $ — 

(1) The actual collateral pledged may be more than the amount shown due to over collateralization.
(2)Represents the net amount due from/(to) counterparties in the event of default.
The impact of derivative transactions for the three months ended December 31, 2020 and 2019 on the Consolidated Statements of Operations, including realized and unrealized gains (losses) is summarized in the table below:
Realized gain (loss) on forward currency contracts recognized in income
Risk exposure category Three months ended December 31,
2020 2019
Foreign exchange $ —  $ — 
Change in unrealized appreciation (depreciation) on forward currency contracts recognized in income
Risk exposure category Three months ended December 31,
2020 2019
Foreign exchange $ (3,892) $ (1,250)

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The following table is a summary of the average outstanding daily volume for forward currency contracts for the three months ended December 31, 2020 and 2019:

Average U.S. Dollar notional outstanding Three months ended December 31,
2020 2019
Forward currency contracts $ 71,247  $ 29,997 

Exclusion of the Investment Adviser from Commodity Pool Operator Definition

Engaging in commodity interest transactions such as swap transactions or futures contracts for the Company may cause the Investment Adviser to fall within the definition of “commodity pool operator” under the Commodity Exchange Act (the “CEA”) and related Commodity Futures Trading Commission (the “CFTC”) regulations. On February 6, 2020, the Investment Adviser claimed an exclusion from the definition of the term “commodity pool operator” under the CEA and the CFTC regulations in connection with its management of the Company and, therefore, is not subject to CFTC registration or regulation under the CEA as a commodity pool operator with respect to its management of the Company.


Note 6. Fair Value Measurements

The Company follows ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1:     Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2:     Inputs include quoted prices for similar assets or liabilities in active markets and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the assets or liabilities.

Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company assesses the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three months ended December 31, 2020 and 2019. The following section describes the valuation techniques used by the Company to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

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(In thousands, except shares and per share data)
Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by the Board, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of the Board to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of the Company’s valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. All investments as of December 31, 2020 and September 30, 2020, with the exception of money market funds included in cash, cash equivalents and restricted cash and cash equivalents (Level 1 investments) and forward currency contracts (Level 2 investments), were valued using Level 3 inputs.

When determining fair value of Level 3 debt and equity investments, the Company takes into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that affect the price at which similar investments are made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s net income before net interest expense, income tax expense, depreciation and amortization (“EBITDA”). A portfolio company’s EBITDA can include pro forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, the Company will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, the Company uses a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, the Company bases its valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that the Company and others may be willing to pay. Ask prices represent the lowest price that the Company and others may be willing to accept. The Company generally uses the midpoint of the bid/ask range as its best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that are ultimately received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company could realize significantly less than the value at which such investment had previously been recorded. The Company’s investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
The following tables present fair value measurements of the Company’s investments and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of December 31, 2020 and September 30, 2020:
As of December 31, 2020 Fair Value Measurements Using
Description Level 1 Level 2 Level 3 Total
Assets, at fair value:            
Debt investments(1)
$ —  $ —  $ 4,402,874  $ 4,402,874 
Equity investments(1)
—  —  104,344  104,344 
Money market funds(1)(2)
42,776  —  —  42,776 
Total assets, at fair value: $ 42,776  $ —  $ 4,507,218  $ 4,549,994 
Liabilities at fair value:
Forward currency contracts $ —  $ (4,956) $ —  $ (4,956)
Total liabilities, at fair value: $ —  $ (4,956) $ —  $ (4,956)

As of September 30, 2020 Fair Value Measurements Using
Description Level 1 Level 2 Level 3 Total
Assets, at fair value:            
Debt investments(1)
$ —  $ —  $ 4,146,013  $ 4,146,013 
Equity investments(1)
—  —  92,197  92,197 
Money market funds(1)(2)
37,205  —  —  37,205 
Total assets, at fair value: $ 37,205  $ —  $ 4,238,210  $ 4,275,415 
Liabilities at fair value:
Forward currency contracts $ —  $ (1,064) $ —  $ (1,064)
Total liabilities, at fair value: $ —  $ (1,064) $ —  $ (1,064)

(1)Refer to the Consolidated Schedules of Investments for further details.
(2)Included in cash and cash equivalents, restricted cash and cash equivalents, foreign currencies and restricted foreign currencies on the Consolidated Statements of Financial Condition.

The net change in unrealized appreciation (depreciation) for the three months ended December 31, 2020 and 2019, reported within the net change in unrealized appreciation (depreciation) on investments in the Company's Consolidated Statements of Operations attributable to the Company's Level 3 assets held as of December 31, 2020 and 2019 was $46,683 and $10,027, respectively.

The following tables present the changes in investments measured at fair value using Level 3 inputs for the three months ended December 31, 2020 and 2019:
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)

For the three months ended December 31, 2020
   Debt
Investments 		Equity
Investments 		Total
Investments
Fair value, beginning of period $ 4,146,013  $ 92,197  $ 4,238,210 
Net change in unrealized appreciation (depreciation) on investments 53,236  9,854  63,090 
Realized gain (loss) on investments (5,412) 3,798  (1,614)
Funding of (proceeds from) revolving loans, net (3,911) —  (3,911)
Fundings of investments 481,021  8,986  490,007 
PIK interest 4,725  —  4,725 
Proceeds from principal payments and sales of portfolio investments (268,174) (10,491) (278,665)
Accretion of discounts and amortization of premiums (4,624) —  (4,624)
Fair value, end of period $ 4,402,874  $ 104,344  $ 4,507,218 

For the three months ended December 31, 2019
   Debt
Investments 		Equity
Investments 		Total
Investments
Fair value, beginning of period $ 4,083,298  $ 85,990  $ 4,169,288 
Net change in unrealized appreciation (depreciation) on investments 14,691  1,716  16,407 
Realized gain (loss) on investments 59  2,597  2,656 
Funding of (proceeds from) revolving loans, net 239  —  239 
Fundings of investments 294,799  2,015  296,814 
PIK interest 1,633  —  1,633 
Proceeds from principal payments and sales of portfolio investments (144,594) (5,356) (149,950)
Accretion of discounts and amortization of premiums (7,869) —  (7,869)
Fair value, end of period $ 4,242,256  $ 86,962  $ 4,329,218 


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Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of December 31, 2020 and September 30, 2020.
    
Quantitative information about Level 3 Fair Value Measurements
Fair value as of December 31, 2020 Valuation Techniques Unobservable Input
Range (Weighted Average) (1)
Assets:            
Senior secured loans(2)
$ 703,648  Market rate approach Market interest rate 3.7% - 14.0% (6.3%)
      Market comparable companies EBITDA multiples 6.0x - 20.0x (12.4x)
3,002  Market comparable Broker/dealer bids or quotes N/A
285  Collateral analysis Recovery rate 2.1%
One stop loans(3)(4)
$ 3,667,769  Market rate approach Market interest rate 4.8% - 29.5% (8.0%)
   Market comparable companies EBITDA multiples 4.5x - 27.0x (14.8x)
         Revenue multiples 1.5x - 13.9x (6.7x)
Subordinated debt and second lien loans(5)
$ 28,170  Market rate approach Market interest rate 6.0% - 19.5% (10.7%)
      Market comparable companies EBITDA multiples 8.0x - 21.0x (15.0x)
         Revenue multiples 4.0x -8.8x (8.5x)
Equity(6)
$ 104,344  Market comparable companies EBITDA multiples 4.5x - 30.1x (14.3x)
         Revenue multiples 1.5x - 13.9x (6.2x)

(1)Unobservable inputs were weighted by the relative fair value of the instruments.
(2)$14,999 of loans at fair value were valued using the market comparable companies approach only.
(3)$45,840 of loans at fair value were valued using the market comparable companies approach only.
(4)The Company valued $3,204,793 and $462,976 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.
(5)The Company valued $27,976 and $194 of subordinated debt and second lien loans using EBITDA and revenue multiples, respectively. All subordinated debt and second lien loans were also valued using the market rate approach.
(6)The Company valued $89,871 and $14,473 of equity investments using EBITDA and revenue multiples, respectively.

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
Quantitative information about Level 3 Fair Value Measurements
Fair value as of September 30, 2020 Valuation Techniques Unobservable Input
Range
(Weighted Average)(1)
Assets:            
Senior secured loans(2)
$ 637,012  Market rate approach Market interest rate 3.7% - 21.5% (6.9%)
      Market comparable companies EBITDA multiples 4.4x - 20.0x (12.4x)
2,910  Market comparable Broker/dealer bids or quotes N/A
291  Collateral analysis Recovery rate 2.2%
One stop loans(3)(4)
$ 3,485,585  Market rate approach Market interest rate 1.0% - 27.8% (8.2%)
   Market comparable companies EBITDA multiples 4.5x - 27.0x (13.7x)
         Revenue multiples 1.5x - 16.2x (5.8x)
Subordinated debt and second lien loans(5)
$ 20,215  Market rate approach Market interest rate 6.0% - 19.5% (10.6%)
      Market comparable companies EBITDA multiples 8.5x - 21.3x (15.3x)
Revenue multiples 4.0x -8.5x (8.3x)
Equity(6)
$ 92,197  Market comparable companies EBITDA multiples 4.5x - 24.5x (14.1x)
         Revenue multiples 1.5x - 16.2x (6.7x)

(1)Unobservable inputs were weighted by the relative fair value of the instruments.
(2)$12,488 of loans at fair value were valued using the market comparable companies approach only.
(3)$39,207 of loans at fair value were valued using the market comparable companies approach only.
(4)The Company valued $3,055,404 and $430,181 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.
(5)The Company valued $20,030 and $185 of second lien and subordinated debt loans using EBITDA and revenue multiples, respectively. All second lien and subordinated debt loans were also valued using the market rate approach.
(6)The Company valued $79,783 and $12,414 of equity investments using EBITDA and revenue multiples, respectively.

The above tables are not intended to be all-inclusive but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.

The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity investments are EBITDA multiples, revenue multiples and market interest rates. The Company uses EBITDA multiples and, to a lesser extent, revenue multiples on its debt and equity investments to determine any credit gains or losses. Increases or decreases in either of these inputs in isolation would have resulted in a significantly lower or higher fair value measurement. The Company uses market interest rates for loans to determine if the effective yield on a loan is commensurate with the market yields for that type of loan. If a loan’s effective yield was significantly less than the market yield for a similar loan with a similar credit profile, then the resulting fair value of the loan may have been lower.

Other Financial Assets and Liabilities

ASC Topic 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. As a result, with the exception of the line item titled “debt” which is reported at cost, all assets and liabilities approximate fair value on the Consolidated Statements of Financial Condition due to their short maturity. Fair value of the Company’s debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

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Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
The following are the carrying values and fair values of the Company’s debt as of December 31, 2020 and September 30, 2020.

As of December 31, 2020 As of September 30, 2020
   Carrying Value Fair Value Carrying Value Fair Value
Debt $ 2,332,563  $ 2,355,976  $ 2,023,698  $ 2,032,457 

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
Note 7. Borrowings

In accordance with the 1940 Act, with certain limited exceptions, prior to February 6, 2019, the Company was allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, was at least 200% after such borrowing. On February 5, 2019, the Company’s stockholders voted to approve the asset coverage requirement decrease to 150% from 200% in accordance with Section 61(a)(2) of the 1940 Act. Effective February 6, 2019, the reduced asset coverage requirement permits the Company to have a ratio of total consolidated assets to outstanding indebtedness of 2:1 as compared to a maximum of 1:1 under the 200% asset coverage requirement.  The Company currently intends to target a GAAP debt-to-equity ratio between 0.85 to 1.15x. On September 13, 2011, the Company received exemptive relief from the SEC allowing it to modify the asset coverage requirement to exclude the SBA debentures from its asset coverage calculation. As such, the Company’s ratio of total consolidated assets to outstanding indebtedness could be less than the applicable asset coverage requirement under the 1940 Act. This provides the Company with increased investment flexibility but also increases its risks related to leverage. As of December 31, 2020, the Company’s asset coverage for borrowed amounts was 216.0% (excluding the SBA debentures).

Debt Securitizations:

On June 5, 2014, the Company completed a $402,569 term debt securitization (“2014 Debt Securitization”). The notes (“2014 Notes”) offered in the 2014 Debt Securitization were issued by the 2014 Issuer and are secured by a diversified portfolio of senior secured and second lien loans held by the 2014 Issuer. The 2014 Debt Securitization initially consisted of $191,000 of Aaa/AAA Class A-1 2014 Notes, $20,000 of Aaa/AAA Class A-2 2014 Notes and $35,000 of Aa2/AA Class B 2014 Notes. In partial consideration for the loans transferred to the 2014 Issuer as part of the 2014 Debt Securitization, the Company received and retained $37,500 of Class C 2014 Notes and $119,069 of LLC equity interests in the 2014 Issuer. On March 23, 2018, the Company and the 2014 Issuer amended the 2014 Debt Securitization to, among other things, (a) refinance the issued Class A-1 2014 Notes by redeeming in full the $191,000 of Class A-1 2014 Notes and issuing new Class A-1-R 2014 Notes in an aggregate principal amount of $191,000 that bear interest at a rate of three-month LIBOR plus 0.95%, which is a decrease from the rate of three-month LIBOR plus 1.75% of the previously outstanding Class A-1 2014 Notes, (b) refinance the Class A-2 2014 Notes by redeeming in full the $20,000 of Class A-2 2014 Notes and issuing new Class A-2-R 2014 Notes in an aggregate principal amount of $20,000 that bear interest at a rate of three-month LIBOR plus 0.95%, which is a decrease from the rate of three-month LIBOR plus 1.95% of the previously outstanding Class A-2 2014 Notes, (c) refinance the Class B 2014 Notes by redeeming in full the $35,000 of Class B 2014 Notes and issuing new Class B-R 2014 Notes in an aggregate principal amount of $35,000 that bear interest at a rate of three-month LIBOR plus 1.40%, which is a decrease from the rate of three-month LIBOR plus 2.50% of the previously outstanding Class B 2014 Notes, (d) refinance the Class C 2014 Notes by redeeming in full the $37,500 of Class C 2014 Notes and issuing new Class C-R 2014 Notes in an aggregate principal amount of $37,500 that bear interest at a rate of three-month LIBOR plus 1.55%, which is a decrease from the rate of three-month LIBOR plus 3.50% of the previously outstanding Class C 2014 Notes. The Class C-R 2014 Notes were retained by the Company.

Through April 28, 2018, all principal collections received on the underlying collateral could have been used by the 2014 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the 2014 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the 2014 Debt Securitization.

On August 26, 2020, in connection with a new term debt securitization, the 2014 Issuer redeemed the outstanding 2014 Notes pursuant to the terms of the indenture governing such 2014 Notes. Following such redemption, the agreements governed the 2014 Debt Securitization were terminated. The 2014 Notes would have otherwise matured on April 25, 2026.

The pool of loans in the 2014 Debt Securitization were required to meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements. For the three months ended December 31, 2019, the Company had repayments on the 2014 Notes of $6,546.

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Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
The interest charged under the 2014 Debt Securitization was based on three-month LIBOR. For the three months ended December 31, 2020 and 2019, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the 2014 Debt Securitization were as follows:
Three months ended December 31,
   2020 2019
Stated interest expense $ —  $ 966 
Cash paid for interest expense $ —  $ 1,082 
Annualized average stated interest rate N/A 3.2  %
Average outstanding balance $ —  $ 121,496 

On November 16, 2018, the Company completed a $602.4 million term debt securitization (the “2018 Debt Securitization”). The notes offered in the 2018 Debt Securitization (the “2018 Notes”) were issued by the 2018 Issuer, a subsidiary of 2018 CLO Depositor, and are backed by a diversified portfolio of senior secured and second lien loans. The transaction was executed through a private placement of approximately $327.0 million of AAA/AAA Class A 2018 Notes, which bear interest at the three-month LIBOR plus 1.48%; $61.2 million of AA Class B 2018 Notes, which bear interest at the three-month LIBOR plus 2.10%; $20.0 million of A Class C-1 2018 Notes, which bear interest at the three-month LIBOR plus 2.80%; $38.8 million of A Class C-2 2018 Notes, which bear interest at the three-month LIBOR plus 2.65%; $42.0 million of BBB- Class D 2018 Notes, which bear interest at the three-month LIBOR plus 2.95%; and $113.4 million of Subordinated 2018 Notes which do not bear interest. The Company indirectly retained all of the Class C-2, Class D and Subordinated 2018 Notes. Through January 20, 2023, the 2018 Issuer is permitted to use all principal collections received on the underlying collateral to purchase new collateral under the direction of the Investment Adviser, in its capacity as collateral manager of the 2018 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the 2018 Debt Securitization. The 2018 Notes are scheduled to mature on January 20, 2031. The Class A, Class B and Class C-1 2018 Notes are included in the December 31, 2020 and September 30, 2020 Consolidated Statements of Financial Condition as debt of the Company. As of December 31, 2020 and September 30, 2020, the Class C-2, Class D and Subordinated 2018 Notes were eliminated in consolidation.

As of December 31, 2020 and September 30, 2020, there were 81 and 89 portfolio companies, respectively, with a total fair value of $556,939 and $557,484, respectively, securing the 2018 Notes. The pool of loans in the 2018 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

The interest charged under the 2018 Debt Securitization is based on three-month LIBOR. The three-month LIBOR in effect as of December 31, 2020 based on the last interest rate reset was 0.2%. For the three months ended December 31, 2020 and 2019, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the 2018 Debt Securitization were as follows:
Three months ended December 31,
   2020 2019
Stated interest expense $ 1,948  $ 3,830 
Amortization of debt issuance costs 106  106 
Total interest and other debt financing expenses $ 2,054  $ 3,936 
Cash paid for interest expense $ 1,992  $ 4,040 
Annualized average stated interest rate 1.9  % 3.7  %
Average outstanding balance $ 408,200  $ 408,200 

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
As of December 31, 2020, the classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A, B and C-1 2018 Notes are as follows:
Description Class A 2018 Notes Class B 2018 Notes Class C-1 2018 Notes
Type Senior Secured Floating Rate Senior Secured Floating Rate Senior Secured Floating Rate
Amount Outstanding $327,000 $61,200 $20,000
Fitch Rating "AAA" "NR" "NR"
S&P Rating "AAA" "AA" "A"
Interest Rate LIBOR + 1.48% LIBOR + 2.10% LIBOR + 2.80%

Effective September 16, 2019, the Company assumed, as a result of the Merger, a $908,195 term debt securitization (the “GCIC 2018 Debt Securitization”). The GCIC 2018 Debt Securitization was originally completed on December 13, 2018. The notes offered in the GCIC 2018 Debt Securitization (the “GCIC 2018 Notes”) were issued by the GCIC 2018 Issuer, a subsidiary of GCIC 2018 CLO Depositor, and are secured by a diversified portfolio of senior secured and second lien loans. The GCIC 2018 Debt Securitization consists of $490,000 of AAA/AAA Class A-1 GCIC 2018 Notes, $38,500 of AAA Class A-2 GCIC 2018 Notes, and $18,000 of AA Class B-1 GCIC 2018 Notes. In partial consideration for the loans transferred to the GCIC 2018 Issuer as part of the GCIC 2018 Debt Securitization, the GCIC 2018 CLO Depositor received and retained $27,000 of Class B-2 GCIC 2018 Notes, $95,000 of Class C GCIC 2018 Notes and $60,000 of Class D GCIC 2018 Notes and $179,695 of Subordinated GCIC 2018 Notes. On December 21, 2020, the Company and the GCIC 2018 Issuer amended the GCIC 2018 Debt Securitization to, among other things, (a) refinance the issued Class A-2 GCIC 2018 Notes issued by the GCIC 2018 Issuer by redeeming in full the $38,500 of Class A-2 GCIC 2018 Notes and issuing new Class A-2-R GCIC 2018 Notes in an aggregate principal amount of $38,500 that bear interest at a rate of 2.498%, which is a decrease from the rate of 4.665% of the Class A-2 GCIC 2018 Notes and (b) provide for a non-called period, during which the Class A-2-R GCIC 2018 Notes cannot be redeemed, from December 21, 2020 to but excluding June 21, 2021. The Class A-1, Class A-2-R and Class B-1 GCIC 2018 Notes are included in the December 31, 2020 and September 30, 2020 Consolidated Statements of Financial Condition as debt of the Company. As of December 31, 2020 and September 30, 2020, the Class B-2, Class C and Class D GCIC 2018 Notes and the Subordinated GCIC 2018 Notes were eliminated in consolidation.

Through January 20, 2023, the GCIC 2018 Issuer is permitted to use all principal collections received on the underlying collateral to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the GCIC 2018 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the GCIC 2018 Debt Securitization. The GCIC 2018 Notes are scheduled to mature on January 20, 2031, and the Subordinated GCIC 2018 Notes are scheduled to mature on December 13, 2118.

Two loan sale agreements govern the GCIC 2018 Debt Securitization. One of the loan sale agreements provided for the sale of assets upon the closing of the GCIC 2018 Debt Securitization to satisfy risk retention requirements. Under the terms of the other loan sale agreement governing the GCIC 2018 Debt Securitization, the Company agreed to directly or indirectly through the GCIC 2018 CLO Depositor sell or contribute certain senior secured and second lien loans (or participation interests therein) to the GCIC 2018 Issuer.

As of December 31, 2020 and September 30, 2020, there were 98 and 109 portfolio companies, respectively, with a total fair value of $807,328 and $859,600, respectively, securing the GCIC 2018 Notes. The pool of loans in the GCIC 2018 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
The interest charged under the GCIC 2018 Debt Securitization is based on three-month LIBOR. The three-month LIBOR in effect as of December 31, 2020 based on the last interest rate reset was 0.2%. For the three months ended December 31, 2020 and 2019, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the GCIC 2018 Debt Securitization were as follows:

Three months ended December 31,
   2020 2019
Stated interest expense $ 2,633  $ 4,883 
Accretion of discounts on notes issued 448  295 
Total interest and other debt financing expenses $ 3,081  $ 5,178 
Cash paid for interest expense 3,063  5,431 
Annualized average stated interest rate 1.9  % 3.5  %
Average outstanding balance $ 546,500  $ 546,500 

As of December 31, 2020, the classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR, as applicable) of the Class A-1 GCIC 2018 Notes, Class A-2 GCIC 2018 Notes, and Class B-1 GCIC 2018 Notes were as follows:
Description Class A-1 GCIC 2018 Notes Class A-2-R GCIC 2018 Notes Class B-1 GCIC 2018 Notes
Type Senior Secured Floating Rate Senior Secured Fixed Rate Senior Secured Floating Rate
Amount Outstanding $490,000 $38,500 $18,000
Fitch’s Rating "AAA" "NR" "NR"
S&P Rating "AAA" "AAA" "AA"
Interest Rate LIBOR + 1.48% 2.50% LIBOR + 2.25%

On August 26, 2020, the Company completed a $330,355 term debt securitization, of which $297,355 was funded at closing (the “2020 Debt Securitization”). The notes offered in the 2020 Debt Securitization (the “2020 Notes”) were issued by the 2020 Issuer, a subsidiary of 2020 CLO Depositor, and are backed by a diversified portfolio of senior secured and second lien loans. The 2020 Notes consist of approximately $137,500 of AAA Class A-1 2020 Notes, which bear interest at the three-month LIBOR plus 2.35%; $10,500 of AAA Class A-2 2020 Notes, which bear interest at the three-month LIBOR plus 2.75%; $21,000 of AA Class B 2020 Notes which bear interest at the three-month LIBOR plus 3.20%; up to $33,000 A Class C 2020 Notes, which remained unfunded upon closing of the transactions and, if funded, will bear interest at the three-month LIBOR plus a spread set in connection with the funding date but which in no event will be greater than 3.65%; and approximately $108,355 of Subordinated 2020 Notes, which do not bear interest. The Company is permitted, subject to certain conditions, to request a one-time funding of the Class C 2020 Notes, which will not be deemed an additional issuance of notes, but would cause the Class C 2020 Notes to be additional debt of the Company. As a part of the 2020 Debt Securitization, the Company also entered into a credit agreement (the “Credit Agreement”) upon closing of the transactions pursuant to which various financial institutions and other persons which are, or may become, parties thereto as lenders (the “Lenders”) committed to make $20,000 of AAA Class A-1-L loans to the Company (the “2020 Loans”). The 2020 Loans bear interest at the three-month LIBOR plus 2.35% and were fully drawn upon closing of the transactions. Any Lender may elect to convert all or a portion of the Class A-1-L Loans held by such Lender into Class A-1 2020 Notes upon written notice to the Company in accordance to the Credit Agreement. The Class A-1 2020 Notes, the Class A-2 2020 Notes and the Class B 2020 Notes were issued through a private placement. The Class C 2020 Notes and the Subordinated 2020 Notes were retained by the Company and the Company remains the sole owner of the equity of the 2020 Issuer. The Class A-1, Class A-2 and Class B 2020 Notes are included in the December 31, 2020 and September 30, 2020 Consolidated Statements of Financial Condition as debt of the Company. As of December 31, 2020 and September 30, 2020, the Subordinated 2020 Notes were eliminated in consolidation.

Through November 5, 2022, all principal collections received on the underlying collateral may be used by the 2020 Issuer to purchase new collateral under the direction of GC Advisors, in its capacity as collateral manager of the 2020 Issuer and in accordance with the Company's investment strategy, allowing the Company to maintain the initial
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
leverage in the 2020 Debt Securitization. The 2020 Notes, other than the Subordinated 2020 Notes, are due November 5, 2032. The 2020 Loans are scheduled to mature and, unless earlier repaid, the entire unpaid principal balance thereof is due and payable on November 5, 2032. The Subordinated 2020 Notes are due in 2120.

Two loan sale agreements govern the 2020 Debt Securitization. One of the loan sale agreements provided for the sale of assets upon the closing of the 2020 Debt Securitization to satisfy risk retention requirements. Under the terms of the other loan sale agreement governing the 2020 Debt Securitization, the Company agreed to directly or indirectly through the 2020 CLO Depositor sell or contribute certain senior secured and second lien loans (or participation interests therein) to the 2020 Issuer.

As of December 31, 2020 and September 30, 2020, there were 64 and 70 portfolio companies with a total fair value of $264,821 and $286,744, respectively, securing the 2020 Notes. The pool of loans in the 2020 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

The interest charged under the 2020 Debt Securitization is based on three-month LIBOR. The three-month LIBOR in effect as of December 31, 2020 based on the last interest rate reset was 0.2%. For the three months ended December 31, 2020 and 2019, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the 2020 Debt Securitization were as follows:
Three months ended December 31,
2020 2019
Stated interest expense $ 1,296  $ — 
Amortization of debt issuance costs 190  — 
Total interest and other debt financing expenses $ 1,486  $ — 
Cash paid for interest expense —  — 
Annualized average stated interest rate 2.7  % N/A
Average outstanding balance $ 189,000  $ — 

As of December 31, 2020, the classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR, as applicable) of the Class A-1 2020 Notes, Class A-2 2020 Notes, Class B 2020 Notes and the Class A-1-L Loans were as follows:

Description Class A-1 2020 Notes Class A-2 2020 Notes Class B 2020 Notes Class A-1-L Loans
Type Senior Secured Floating Rate Senior Secured Floating Rate Senior Secured Floating Rate Senior Secured Floating Rate
Amount Outstanding $137,500 $10,500 $21,000 $20,000
Fitch’s Rating "AAA" "NR" "NR" "NR"
S&P Rating "AAA" "AAA" "AA" "AAA"
Interest Rate LIBOR + 2.35% LIBOR + 2.75% LIBOR + 3.20% LIBOR + 2.35%


The Investment Adviser served as collateral manager to the 2014 Issuer and serves as the collateral manager to the 2018 Issuer, GCIC 2018 Issuer and 2020 Issuer under separate collateral management agreements and receives a fee for providing these services. The total fees payable by the Company under the Investment Advisory Agreement and Prior Investment Advisory Agreement, as applicable, are reduced by an amount equal to the total aggregate fees paid to the Investment Adviser by the 2014 Issuer, the 2018 Issuer, the GCIC 2018 Issuer and the 2020 Issuer for rendering such collateral management services.

As part of each of the 2014 Debt Securitization, the 2018 Debt Securitization, GCIC 2018 Debt Securitization and the 2020 Debt Securitization, GBDC entered into, or assumed in the Merger, master loan sale agreements under which GBDC agreed to directly or indirectly sell or contribute certain senior secured and second lien loans (or participation
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
interests therein) to the 2014 Issuer, the 2018 Issuer, the GCIC 2018 Issuer or the 2020 Issuer, as applicable, and to purchase or otherwise acquire the Subordinated 2010 Notes, the LLC equity interests in the 2014 Issuer, the Subordinated 2018 Notes, the GCIC Subordinated 2018 Notes and the Subordinated 2020 Notes, as applicable. As of December 31, 2020, the 2018 Notes, the GCIC 2018 Notes and the 2020 Notes (other than the Subordinated 2018 Notes, the GCIC Subordinated 2018 Notes and the Subordinated 2020 Notes) were the secured obligations of the 2018 Issuer, GCIC 2018 Issuer and the 2020 Issuer, respectively, and indentures governing each of the 2018 Notes, GCIC 2018 Notes and the 2020 Notes include customary covenants and events of default.

SBA Debentures: On August 24, 2010, SBIC IV received approval for a license from the SBA to operate as an SBIC. On December 5, 2012, SBIC V received a license from the SBA to operate as an SBIC. On January 10, 2017, SBIC VI received a license from the SBA to operate as an SBIC. SBICs are subject to a variety of regulations and oversight by the SBA concerning the size and nature of the companies in which they invest as well as the structures of those investments.

The licenses allow the SBICs to obtain leverage by issuing SBA-guaranteed debentures, subject to issuance of a capital commitment by the SBA and customary procedures. These debentures are non-recourse to the Company, have interest payable semiannually and a ten-year maturity. The interest rate is fixed at the time of issuance at a market-driven spread over U.S. Treasury Notes with ten-year maturities.

Under present SBIC regulations, the maximum amount of SBA-guaranteed debentures issued by multiple licensees under common management is $350,000 and the maximum amount issued by a single SBIC licensee is $175,000. As of December 31, 2020, SBIC IV, SBIC V and SBIC VI had $0, $151,750 and $86,000, respectively, of outstanding SBA-guaranteed debentures that mature between March 2024 and March 2031. As of September 30, 2020, SBIC IV, SBIC V and SBIC VI had $0, $151,750 and $66,000, respectively, of outstanding SBA-guaranteed debentures that mature between March 2024 and March 2030. The original amount of debentures committed to SBIC IV and SBIC V by the SBA were $150,000 and $175,000, respectively. Through December 31, 2020, SBIC IV and SBIC V have repaid $150,000 and $23,250 of outstanding debentures, respectively, and these commitments have effectively been terminated. As of December 31, 2020 and September 30, 2020, SBIC VI had $55,450 and $29,000, respectively, of undrawn debenture commitments, of which $9,000 and $29,000, respectively, were available to be drawn, subject to SBA regulatory requirements.

The interest rate on the outstanding debentures as of December 31, 2020 is fixed at an average annualized interest rate of 2.9%. For the three months ended December 31, 2020 and 2019, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the SBA debentures were as follows:
Three months ended December 31,
   2020 2019
Stated interest expense $ 1,679  $ 2,443 
Amortization of debt issuance costs 331  281 
Total interest and other debt financing expenses $ 2,010  $ 2,724 
Cash paid for interest expense $ —  $ — 
Annualized average stated interest rate 3.0  % 3.2  %
Average outstanding balance $ 220,793  $ 301,870 

Revolving Credit Facilities:
On February 1, 2019, Funding II entered into a credit facility as amended, (the “MS Credit Facility II”) with Morgan Stanley, as the administrative agent, each of the lenders from time to time party thereto, each of the securitization subsidiaries from time to time party thereto, and Wells Fargo Bank, N.A., as collateral agent, account bank and collateral custodian. On September 6, 2019, the Company entered into an amendment to the MS Credit Facility II to increase borrowing capacity to $300,000. On October 11, 2019, the Company entered into an amendment to increase the borrowing capacity under the MS Credit Facility II from $300,000 to $500,000 until the earlier of (i) the closing date of a debt securitization transaction mutually agreed to by the Company and Morgan Stanley or (ii) March 31, 2020 after which the borrowing capacity under the MS Credit Facility II will revert to $200,000. On March 20, 2020, the Company entered into an amendment that changed the date under which the borrowing capacity reverts from
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
$500,000 to $200,000 to June 30, 2020 from March 31, 2020. On June 18, 2020, the Company entered into an amendment that increased the borrowing capacity through the full term of the MS Credit Facility II from $200,000 to $400,000. On October 23, 2020, the Company delivered a notice to the lenders under the MS Credit Facility II to permanently decrease the borrowing capacity under the MS Credit Facility II by $75,000, resulting in total borrowing capacity of $325,000. As of December 31, 2020, the MS Credit Facility II allows Funding II to borrow up to $325,000 at any one time outstanding, subject to leverage and borrowing base restrictions.
The period from February 1, 2019 until February 1, 2021 is referred to as the revolving period and during such revolving period, Funding II may request drawdowns under the MS Credit Facility II. Prior to June 18, 2020, borrowings under the MS Credit Facility II bore interest at the applicable base rate plus 2.05%. Effective June 18, 2020, during the Revolving Period, the MS Credit Facility II bears interest at the applicable base rate plus 2.45%. Following expiration of the revolving period, the interest rate on borrowings under the MS Credit Facility II will reset to the applicable base rate plus 2.95% for the remaining term of the MS Credit Facility II. The revolving period will continue through February 1, 2021 unless there is an earlier termination or event of default. The base rate under the MS Credit Facility II is (i) the one-month LIBOR with respect to any advances denominated in U.S. dollars or U.K. pound sterling, (ii) the one-month EURIBOR with respect to any advances denominated in euros, and (iii) the one-month Canadian Dollar Offered Rate with respect to any advances denominated in Canadian dollars. The scheduled maturity date of the MS Credit Facility II is February 1, 2024.
The MS Credit Facility II is secured by all of the assets held by Funding II. Both the Company and Funding II have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. The borrowings under the MS Credit Facility II will be subject to the leverage restrictions contained in the 1940 Act.
As of December 31, 2020 and September 30, 2020, the Company had outstanding debt under the MS Credit Facility II of $279,528 and $313,292, respectively. For the three months ended December 31, 2020 and 2019, the Company had borrowings on the MS Credit Facility II of $105,500 and $131,400, respectively, and repayments on the MS Credit Facility II of $140,827 and $7,200, respectively.

For the three months ended December 31, 2020 and 2019, the components of interest expense, cash paid for interest and facility fees, average interest rates and average outstanding balances for the MS Credit Facility II were as follows:
Three months ended December 31,
   2020 2019
Stated interest expense $ 1,543  $ 3,315 
Facility fees 144  172 
Amortization of debt issuance costs 197  185 
Total interest and other debt financing expenses $ 1,884  $ 3,672 
Cash paid for interest expense and facility fees $ 2,095  $ 2,161 
Annualized average stated interest rate 2.7  % 3.8  %
Average outstanding balance $ 230,165  $ 344,794 

Effective September 16, 2019, the Company assumed, as a result of the Merger, a senior secured revolving credit facility (as amended, the “WF Credit Facility”) with GCIC Funding as the borrower and with Wells Fargo Bank, N.A. as the swingline lender, collateral agent, account bank, collateral custodian and administrative agent which, as of December 31, 2020, allowed GCIC Funding to borrow up to $300,000 at any one time outstanding, subject to leverage and borrowing base restrictions.  The WF Credit Facility bears interest at one-month LIBOR plus 2.00%.  The reinvestment period of the WF Credit Facility expires on March 20, 2021 and the WF Credit Facility matures on March 21, 2024. The Company is required to pay a non-usage fee rate between 0.50% and 1.75% per annum depending on the size of the unused portion of the WF Credit Facility.

The WF Credit Facility is collateralized by all of the assets held by GCIC Funding, and GBDC has pledged its interests in GCIC Funding as collateral to Wells Fargo Bank, N.A., as the collateral agent, to secure the obligations of GBDC as the transferor and servicer under the WF Credit Facility. Both GBDC and GCIC Funding have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
customary requirements for similar credit facilities. Borrowing under the WF Credit Facility is subject to the asset coverage requirements contained in the 1940 Act.

The Company may transfer certain loans and debt securities it originated or acquired from time to time to GCIC Funding through a purchase and sale agreement and caused GCIC Funding to originate or acquire loans, consistent with the Company’s investment objectives.

As of December 31, 2020 and September 30, 2020, the Company had outstanding debt under the WF Credit Facility of $275,556 and $199,554, respectively. For the three months ended December 31, 2020 and 2019, the Company had borrowings on the WF Credit Facility of $272,209 and $107,331, respectively, and repayments on the WF Credit Facility of $196,876 and $87,700, respectively.

For the three months ended December 31, 2020 and 2019, the components of interest expense, cash paid for interest and facility fees, annualized average interest rates and average outstanding balances for the WF Credit Facility were as follows:
Three months ended December 31,
   2020 2019
Stated interest expense $ 460  $ 2,382 
Facility fees 278  66 
Total interest and other debt financing expenses $ 738  $ 2,448 
Cash paid for interest expense $ 740  $ 2,379 
Annualized average stated interest rate 2.2  % 3.8  %
Average outstanding balance $ 82,540  $ 248,653 

Effective September 16, 2019, the Company assumed as a result of the Merger a senior secured revolving credit facility (as amended, the “DB Credit Facility”) with GCIC Funding II as the borrower and with Deutsche Bank AG, New York branch, as facility agent, the other agents parties thereto, each of the entities from time to time party thereto as securitization subsidiaries and Wells Fargo Bank, National Association, as collateral agent and as collateral custodian. On October 9, 2020, all outstanding borrowings under the DB Credit Facility were repaid following which the DB Credit Facility was terminated. Prior to its termination, the DB Credit Facility allowed GCIC Funding II to borrow up to $250,000 at any one time outstanding, subject to leverage and borrowing base restrictions.

The DB Credit Facility bore interest at the applicable base rate plus 1.90% per annum. The base rate under the DB Credit Facility was (i) the three-month Canadian Dollar Offered Rate with respect to any advances denominated in Canadian dollars, (ii) the three-month EURIBOR Interbank Offered Rate with respect to any advances denominated in Euros, (iii) the three-month Bank Bill Swap Rate with respect to any advances denominated in Australian dollars and (iv) the three-month LIBOR with respect to any other advances. A non-usage fee of 0.25% per annum was payable on the undrawn amount under the DB Credit Facility, and an additional fee based on unfunded commitments of the lenders was payable if borrowings under the DB Credit Facility did not exceed a minimum utilization percentage threshold. In addition, a syndication/agent fee was payable to the facility agent each quarter and was calculated based on the aggregate commitments outstanding each day during the preceding collection period at a rate of 1/360 of 0.25% of the aggregate commitments on each day. The reinvestment period of the DB Credit Facility would have expired on December 31, 2021 and the DB Credit Facility would have matured on December 31, 2024.

The DB Credit Facility was secured by all of the assets held by GCIC Funding II. GCIC Funding II made customary representations and warranties and was required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. The borrowings of the Company, including under the DB Credit Facility, were subject to the leverage restrictions contained in the 1940 Act.

The Company transferred certain loans and debt securities it originated or acquired from time to time to GCIC Funding II through a purchase and sale agreement and caused GCIC Funding II to originate or acquire loans, consistent with the Company’s investment objectives.

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
As of September 30, 2020, the Company had outstanding debt under the DB Credit Facility of $153,524. For the three months ended December 31, 2020 and 2019, the Company had borrowings on the DB Credit Facility of $0 and $18,000 respectively, and repayments on the DB Credit Facility of $153,635 and $35,000 respectively.

For the three months ended December 31, 2020 and 2019, the components of interest expense, cash paid for interest and facility fees, annualized average interest rates and average outstanding balances for the DB Credit Facility were as follows:

Three months ended December 31,
   2020 2019
Stated interest expense $ 73  $ 2,528 
Facility fees 14  — 
Total interest and other debt financing expenses $ 87  $ 2,528 
Cash paid for interest expense $ 840  $ 2,652 
Annualized average stated interest rate 2.2  % 4.1  %
Average outstanding balance $ 13,248  $ 246,297 

2024 Unsecured Notes: On October 2, 2020, the Company issued $400,000 in aggregate principal amount of unsecured notes (the “2024 Unsecured Notes”). The 2024 Unsecured Notes bear interest at a rate of 3.375% per year payable semiannually in arrears on April 15 and October 15 of each year, commencing on April 15, 2021. The 2024 Unsecured Notes mature on April 15, 2024.

The 2024 Unsecured Notes are the Company’s general unsecured obligations that rank senior in right of payment to all of the Company’s future indebtedness or other obligations that are expressly subordinated, or junior, in right of payment to the 2024 Unsecured Notes; equal in right of payment to the Company’s existing and future indebtedness or other obligations that are not so subordinated or junior; effectively junior to any of the Company’s secured indebtedness or other obligations (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness and other obligations (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

At any time or from time to time, the Company may redeem some or all of the 2024 Unsecured Notes at a redemption price equal to the greater of (1) 100% of the principal amount of the 2024 Unsecured Notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest (exclusive of accrued and unpaid interest to the date of redemption) on the 2024 Unsecured Notes to be redeemed through March 15, 2024 (the date falling one month prior to the maturity date of the 2024 Unsecured Notes), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable Treasury Rate plus 50 basis points, plus, in each case, accrued and unpaid interest, if any, to, but excluding, the redemption date; provided, however, that if the Company redeems any 2024 Unsecured Notes on or after March 15, 2024 (the date falling one month prior to the maturity date of the 2024 Unsecured Notes), the redemption price for the Notes will be equal to 100% of the principal amount of the 2024 Unsecured Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the 2024 Unsecured Notes.

For the three months ended December 31, 2020 and 2019, the components of interest expense, cash paid for interest and facility fees, average interest rates and average outstanding balances for the 2024 Unsecured Notes were as follows:
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
Three months ended December 31,
   2020 2019
Stated interest expense $ 3,338  $ — 
Accretion of discounts on notes issued 23  — 
Amortization of debt issuance costs 381  — 
Total interest and other debt financing expenses $ 3,742  $ — 
Cash paid for interest expense —  — 
Annualized average stated interest rate 3.4  % N/A
Average outstanding balance $ 395,652  $ — 

Revolver:  On June 22, 2016, the Company entered into the Adviser Revolver with the Investment Adviser with a maximum credit limit of $20,000 and expiration date of June 22, 2019. On June 21, 2019, the Company and the Investment Adviser amended the Adviser Revolver to and among other things, (a) increase the maximum credit limit to $40,000, and (b) change the expiration date to June 21, 2022. On October 28, 2019, the Company entered into an amendment to the Adviser Revolver to increase the borrowing capacity under the Adviser Revolver from $40,000 to $100,000, and simultaneously terminated the Adviser Revolver II, which had been assumed by the Company as a result of the Merger on September 16, 2019. The Adviser Revolver bears an interest rate equal to the short-term Applicable Federal Rate, which was 0.2% as of December 31, 2020. As of December 31, 2020 and September 30, 2020, the Company had no outstanding debt under the Adviser Revolver. For the three months ended December 31, 2020 and 2019, the Company had $0 and $57,500 in borrowings and $0 and $57,500 in repayments, respectively, on the Adviser Revolver. For the three months ended December 31, 2020 and 2019, the Company incurred interest expense of $0 and $9, respectively, on the Adviser Revolver. For the three months ended December 31, 2020 and 2019, $0 and $18, respectively, was paid in cash for interest on the Adviser Revolver. For the three months ended December 31, 2019, the Company incurred no interest expense and paid no cash on the Adviser Revolver II.

Other Short-Term Borrowings:  Borrowings with original maturities of less than one year are classified as short-term.  The Company’s short-term borrowings are the result of investments that were sold under repurchase agreements.  Investments sold under repurchase agreements are accounted for as collateralized borrowings as the sale of the investment does not qualify for sale accounting under ASC Topic 860 and remains as an investment on the Consolidated Statements of Financial Condition.

As of December 31, 2020 and September 30, 2020, the Company had no short-term borrowings. For the three months ended December 31, 2019, the annualized effective interest rate on short-term borrowings was 5.0% and interest expense was $818. The net change in unrealized appreciation (depreciation) for the three months ended December 31, 2019, reported within the net change in unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies was $(1,064).

For the three months ended December 31, 2020, the average total debt outstanding (including the debt under the 2018 Debt Securitization, the GCIC 2018 Debt Securitization, the 2020 Debt Securitization, the SBA Debentures, the MS Credit Facility II, the WF Credit Facility, the DB Credit Facility, the 2024 Unsecured Notes and the Adviser Revolver) was $2,086,099. For the three months ended December 31, 2019, the average total debt outstanding (including the debt under the 2014 Debt Securitization, the 2018 Debt Securitization, the GCIC 2018 Debt Securitization, the SBA Debentures, the MS Credit Facility II, WF Credit Facility, DB Credit Facility, Adviser Revolver, Adviser
Revolver II and Other Short-Term Borrowings) was $2,284,590.

For the three months ended December 31, 2020 and 2019, the effective annualized average interest rate, which includes amortization of debt financing costs, amortization of discounts on notes issued and non-usage facility fees, on the Company's total debt was 2.9% and 3.9%, respectively.

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
A summary of the Company’s maturity requirements for borrowings as of December 31, 2020 is as follows:
Payments Due by Period
   Total Less Than
1 Year 		1 – 3 Years 3 – 5 Years More Than
5 Years
2018 Debt Securitization $ 408,200  $ —  $ —  $ —  $ 408,200 
2018 GCIC Debt Securitization(1)
542,826  —  —  —  542,826 
2020 Debt Securitization 189,000  —  —  —  189,000 
SBA Debentures 237,750  —  —  51,750  186,000 
WF Credit Facility 275,556  —  —  275,556  — 
MS Credit Facility II 279,528  —  —  279,528  — 
2024 Unsecured Notes(2)
399,703  —  —  399,703  — 
Total borrowings $ 2,332,563  $ —  $ —  $ 1,006,537  $ 1,326,026 

(1) Includes $3,674 of discount recognized on the assumption of the 2018 GCIC Debt Securitization in the Merger.
(2) Includes $297 of original issue discount as a result of the issuance of the 2024 Unsecured Notes.

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)

Note 8. Commitments and Contingencies

Commitments: As of December 31, 2020, the Company had outstanding commitments to fund investments totaling $169,706, including $43,465 of commitments on undrawn revolvers. As of September 30, 2020, the Company had outstanding commitments to fund investments totaling $141,795, including $41,644 of commitments on undrawn revolvers.

Indemnifications:  In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as these involve future claims against the Company that have not occurred. The Company expects the risk of any future obligations under these indemnifications to be remote.
Off-balance sheet risk: Off-balance sheet risk refers to an unrecorded potential liability that may result in a future obligation or loss, even though it does not appear on the Consolidated Statements of Financial Condition. The Company has entered and, in the future, may again enter into derivative instruments that contain elements of off-balance sheet market and credit risk. Refer to Note 5 for outstanding forward currency contracts as of December 31, 2020 and September 30, 2020. Derivative instruments can be affected by market conditions, such as interest rate volatility, which could impact the fair value of the derivative instruments. If market conditions move against the Company, it may not achieve the anticipated benefits of the derivative instruments and may realize a loss. The Company minimizes market risk through monitoring its investments and borrowings.

Concentration of credit and counterparty risk:  Credit risk arises primarily from the potential inability of counterparties to perform in accordance with the terms of the contract. The Company has engaged and, in the future, may engage again in derivative transactions with counterparties. In the event that the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparties or issuers of the instruments. The Company’s maximum loss that it could incur related to counterparty risk on its derivative instruments is the value of the collateral for that respective derivative instrument. It is the Company’s policy to review, as necessary, the credit standing of each counterparty.

Legal proceedings:  In the normal course of business, the Company is subject to legal and regulatory proceedings that are generally incidental to its ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings, the Company does not believe any disposition will have a material adverse effect on the Company’s consolidated financial statements.

Note 9. Financial Highlights

The financial highlights for the Company are as follows:
Three months ended December 31,
Per share data:(1)
2020 2019
Net asset value at beginning of period $ 14.33  $ 16.76 
Net increase in net assets as a result of issuance of DRIP shares(2)
—  0.01 
Distributions declared:
From net investment income (0.29) (0.38)
From capital gains —  (0.08)
Net investment income 0.23  0.24 
Net realized gain (loss) on investment transactions (0.01) 0.02 
Net change in unrealized appreciation (depreciation) on investment transactions(3)
0.34  0.09 
Net asset value at end of period $ 14.60  $ 16.66 
Per share market value at end of period $ 14.14  $ 18.45 
Total return based on market value(4)
9.00  % 0.49  %
Number of common shares outstanding 167,259,511  133,805,764 

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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)
Three months ended December 31,
Listed below are supplemental data and ratios to the financial highlights: 2020 2019
Ratio of net investment income to average net assets*
6.42  % 5.85  %
Ratio of total expenses to average net assets(5)*
5.51  % 7.41  %
Ratio of incentive fees to average net assets 0.08  % 0.27  %
Ratio of expenses (without incentive fees) to average net assets*
5.43  % 7.14  %
Total return based on average net asset value(6)*
15.53  % 8.41  %
Net assets at end of period $ 2,442,127  $ 2,229,109 
Average debt outstanding $ 2,086,099  $ 2,284,590 
Average debt outstanding per share $ 12.47  $ 17.07 
Portfolio turnover*
25.38  % 13.89  %
Asset coverage ratio(7)
216.01  % 208.67  %
Asset coverage ratio per unit(8)
$ 2,160  $ 2,087 
Average market value per unit:(9)
2024 Unsecured Notes $ 1,008  N/A
2014 Debt Securitization N/A N/A
2018 Debt Securitization N/A N/A
2018 GCIC Debt Securitization N/A N/A
2020 Debt Securitization N/A N/A
SBA Debentures N/A N/A
MS Credit Facility N/A N/A
MS Credit Facility II N/A N/A
WF Credit Facility N/A N/A
DB Credit Facility N/A N/A
Adviser Revolver N/A N/A
Adviser Revolver II N/A N/A

* Annualized for periods less than one year.    
(1)Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.
(2)Net increase in net assets as a result of issuance of shares related to shares issued through the DRIP.
(3)Includes the impact of different share amounts as a result of calculating certain per share data based on weighted average shares outstanding during the period and certain per share data based on the shares outstanding as of the dividend record date.
(4)Total return based on market value assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.
(5)Expenses, other than incentive fees, are annualized for a period less than one year.
(6)Total return based on average net asset value is calculated as (a) the net increase/(decrease) in net assets resulting from operations divided by (b) the daily average of total net assets. Total return does not include sales load.
(7)Effective February 6, 2019, in accordance with Section 61(a)(2) of the 1940 Act, with certain limited exceptions, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 ACT, is at least 150% after such borrowing (excluding the Company's SBA debentures pursuant to exemptive relief received by the Company from the SEC). Prior to February 6, 2019, in accordance with the 1940 Act, with certain limited exceptions, the Company was allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, was at least 200% after such borrowing (excluding the Company's SBA debentures pursuant to exemptive relief received by the Company from the SEC).
(8)Asset coverage ratio per unit is the ratio of the carrying value of our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage ratio per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. These amounts exclude the SBA debentures pursuant to exemptive relief the Company received from the SEC on September 13, 2011.
(9)Not applicable because such senior securities are not registered for public trading, with the exception of the 2024 Unsecured Notes. The average market value per unit calculated for the 2024 Unsecured Notes is based on the average monthly prices of such notes and is expressed per $1,000 of indebtedness.
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Notes to Consolidated Financial Statements (unaudited)
(In thousands, except shares and per share data)

Note 10. Earnings Per Share

The following information sets forth the computation of the net increase/(decrease) in net assets per share resulting from operations for the three months ended December 31, 2020 and 2019:
Three months ended December 31,
   2020 2019
Earnings available to stockholders $ 94,439  $ 47,048 
Basic and diluted weighted average shares outstanding(1)
167,259,511  136,989,243 
Basic and diluted earnings per share $ 0.56  $ 0.34 


(1)The weighted average shares of the Company's common stock outstanding used in computing basic and diluted earnings (loss) per share for the three months ended December 31, 2019 has been adjusted retroactively by a factor of approximately 1.03% to recognize the bonus element associated with rights to acquire shares of the Company's common stock that were issued to stockholders of record as of April 8, 2020.

Note 11. Dividends and Distributions

The Company’s dividends and distributions are recorded on the ex-dividend date. The following table summarizes the Company’s dividend declarations and distributions during the three months ended December 31, 2020 and 2019:

Date Declared Record Date Payment Date Amount
Per Share 		Cash
Distribution 		DRIP Shares
Issued 		DRIP Shares
Value
For the three months ended December 31, 2020
11/20/2020 12/11/2020 12/30/2020 $ 0.29  $ 33,846  —  $ 14,659 
(1)
For the three months ended December 31, 2019            
11/22/2019 12/12/2019 12/30/2019 $ 0.46 
(2)
$ 40,793  1,149,409  $ 20,230 

(1)In accordance with the Company's DRIP, 1,034,149 shares of the Company's stock were purchased in the open market at an average price of $14.18 and were issued to stockholders of the Company participating in DRIP.
(2)Includes a special distribution of $0.13 per share.


Note 12. Subsequent Events

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date of issuance. There are no subsequent events to disclose except for the following:

On January 29, 2021, the Company entered into an amendment to the MS Credit Facility II that extended the reinvestment period to May 3, 2021 from February 1, 2021, extended the maturity date to May 1, 2024 from February 1, 2024 and reduced borrowing capacity to $250,000 from $325,000.

On February 5, 2021, the Company's board of directors declared a quarterly distribution of $0.29 per share, which is payable on March 30, 2021 to holders of record as of March 5, 2021.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this section should be read in conjunction with our consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report, “we,” “us,” “our” and “Golub Capital BDC” refer to Golub Capital BDC, Inc. and its consolidated subsidiaries.

Forward-Looking Statements

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:

•our future operating results;
•our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our respective objectives as a result of the coronavirus (“COVID-19”) pandemic;
•the effect of investments that we expect to make and the competition for those investments;
•our contractual arrangements and relationships with third parties;
•actual and potential conflicts of interest with GC Advisors LLC, or GC Advisors, and other affiliates of Golub Capital LLC, or collectively, Golub Capital;
•the dependence of our future success on the general economy and its effect on the industries in which we invest;
•the ability of our portfolio companies to achieve their objectives;
•the use of borrowed money to finance a portion of our investments and the effect of the COVID-19 pandemic on the availability of equity and debt capital and our use of borrowed funds to finance a portion of our investments;
•the adequacy of our financing sources and working capital;
•the timing of cash flows, if any, from the operations of our portfolio companies;
•general economic and political trends and other external factors, including the COVID-19 pandemic;
•changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets that could result in changes to the value of our assets, including changes from the impact of the COVID-19 pandemic;
•the ability of GC Advisors to locate suitable investments for us and to monitor and administer our investments;
•the ability of GC Advisors or its affiliates to attract and retain highly talented professionals;
•the ability of GC Advisors to continue to effectively manage our business due to the disruptions caused by the COVID-19 pandemic;
•our ability to qualify and maintain our qualification as a regulated investment company, or RIC, and as a business development company;
•general price and volume fluctuations in the stock markets;
•the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank, and the rules and regulations issued thereunder and any actions toward repeal thereof; and
•the effect of changes to tax legislation and our tax position.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. The forward looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth as “Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2020.

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We have based the forward-looking statements included in this report on information available to us on the date of this report. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. You are advised to consult any additional disclosures that we make directly to you or through reports that we have filed or in the future file with the Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K. This quarterly report on Form 10-Q contains statistics and other data that have been obtained from or compiled from information made available by third-party service providers. We have not independently verified such statistics or data.

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Overview

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As a business development company and a RIC, we are also subject to certain constraints, including limitations imposed by the 1940 Act and the Code.

Our shares are currently listed on The Nasdaq Global Select Market under the symbol “GBDC”.

Our investment objective is to generate current income and capital appreciation by investing primarily in one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle-market lenders as unitranche loans) and other senior secured loans of U.S. middle-market companies. We also selectively invest in second lien and subordinated loans of, and warrants and minority equity securities in U.S. middle-market companies. We intend to achieve our investment objective by (1) accessing the established loan origination channels developed by Golub Capital, a leading lender to U.S. middle-market companies with over $35.0 billion in capital under management as of December 31, 2020, (2) selecting investments within our core middle-market company focus, (3) partnering with experienced private equity firms, or sponsors, in many cases with whom Golub Capital has invested alongside in the past, (4) implementing the disciplined underwriting standards of Golub Capital and (5) drawing upon the aggregate experience and resources of Golub Capital.

Our investment activities are managed by GC Advisors and supervised by our board of directors of which a majority of the members are independent of us, GC Advisors and its affiliates.

Under an investment advisory agreement, or the Investment Advisory Agreement, we have agreed to pay GC Advisors an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. The Investment Advisory Agreement was approved by our board of directors in July 2019 and by our stockholders in September 2019. The Investment Advisory Agreement was entered into effective as of September 16, 2019 and will continue for an initial two-year term. Under an administration agreement, or the Administration Agreement, we are provided with certain administrative services by an administrator, or the Administrator, which is currently Golub Capital LLC. Under the Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion (subject to the review and approval of our independent directors) of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement.

We seek to create a portfolio that includes primarily one stop and other senior secured loans by primarily investing approximately $10.0 million to $75.0 million of capital, on average, in the securities of U.S. middle-market companies. We also selectively invest more than $75.0 million in some of our portfolio companies and generally expect that the size of our individual investments will vary proportionately with the size of our capital base.

We generally invest in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. These securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. In addition, many of our debt investments have floating interest rates that reset on a periodic basis and typically do not fully pay down principal prior to maturity, which may increase our risk of losing part or all of our investment.

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As of December 31, 2020 and September 30, 2020, our portfolio at fair value was comprised of the following:
As of December 31, 2020 As of September 30, 2020
Investment Type Investments at
Fair Value
(In thousands) 		Percentage of
Total
Investments 		Investments at
Fair Value
(In thousands) 		Percentage of
Total
Investments
Senior secured $ 706,935  15.7  % $ 640,213  15.1  %
One stop 3,667,769  81.4  3,485,585  82.2 
Second lien 27,821  0.6  19,640  0.5 
Subordinated debt 349  0.0  * 575  0.0  *
Equity 104,344  2.3  92,197  2.2 
Total $ 4,507,218  100.0  % $ 4,238,210  100.0  %


* Represents an amount less than 0.1%.
One stop loans include loans to technology companies undergoing strong growth due to new services, increased adoption and/or entry into new markets. We refer to loans to these companies as late stage lending loans or recurring revenue loans. Other targeted characteristics of late stage lending businesses include strong customer revenue retention rates, a diversified customer base and backing from growth equity or venture capital firms. In some cases, the borrower’s high revenue growth is supported by a high level of discretionary spending. As part of the underwriting of such loans and consistent with industry practice, we adjust our characterization of the earnings of such borrowers for a reduction or elimination of such discretionary expenses, if appropriate. As of December 31, 2020 and September 30, 2020, one stop loans included $463.0 million and $430.2 million, respectively, of late stage lending loans at fair value.

As of December 31, 2020 and September 30, 2020, we had debt and equity investments in 253 and 254 portfolio companies, respectively.

The following table shows the weighted average income yield and weighted average investment income yield of our earning portfolio company investments, which represented nearly 100% of our debt investments, as well as the total return based on our average net asset value, and the total return based on the change in the quoted market price of our stock and assuming distributions were reinvested in accordance with our dividend reinvestment plan, or DRIP, in each case for the three months ended December 31, 2020 and 2019:
For the three months ended
   December 31, 2020 December 31, 2019
Weighted average income yield (1)*
7.4% 8.0%
Weighted average investment income yield (2)*
7.9% 8.4%
Total return based on average net asset value (3)*
15.5% 8.4%
Total return based on market value (4)
9.0% 0.5%


* Annualized for periods of less than one year.
(1)Represents income from interest and fees, excluding amortization of capitalized fees, discounts and purchase premium (as described in Note 2 of the consolidated financial statements), divided by the average fair value of earning portfolio company investments, and does not represent a return to any investor in us.
(2)Represents income from interest, fees and amortization of capitalized fees and discounts, excluding amortization of purchase premium (as described in Note 2 of the consolidated financial statements), divided by the average fair value of earning portfolio investments, and does not represent a return to any investor in us.
(3)Total return based on average net asset value is calculated as (a) the net increase/(decrease) in net assets resulting from operations divided by (b) the daily average of total net assets. Total return does not include sales load.
(4)Total return based on market value assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.
Revenues: We generate revenue in the form of interest and fee income on debt investments and capital gains and distributions, if any, on portfolio company investments that we originate or acquire. Our debt investments, whether
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in the form of senior secured, one stop, second lien or subordinated loans, typically have a term of three to seven years and bear interest at a fixed or floating rate. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. In some cases, our investments provide for deferred interest payments or payment-in-kind, or PIK, interest. The principal amount of loans and any accrued but unpaid interest generally become due at the maturity date. In addition, we generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. For additional details on revenues, see “Critical Accounting Policies—Revenue Recognition.”

We recognize realized gains or losses on investments based on the difference between the net proceeds from the disposition and the amortized cost basis of the investment or derivative instrument, without regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments and derivative instruments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investment transactions in the Consolidated Statements of Operations.

Expenses:  Our primary operating expenses include the payment of fees to GC Advisors under the Investment Advisory Agreement and interest expense on our outstanding debt. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:

•calculating our net asset value, or NAV (including the cost and expenses of any independent valuation firm);
•fees and expenses incurred by GC Advisors payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments, which fees and expenses include, among other items, due diligence reports, appraisal reports, any studies commissioned by GC Advisors and travel and lodging expenses;
•expenses related to unsuccessful portfolio acquisition efforts;
•offerings of our common stock and other securities;
•administration fees and expenses, if any, payable under the Administration Agreement (including payments based upon our allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our chief compliance officer, chief financial officer and their respective staffs);
•fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments in portfolio companies, including costs associated with meeting financial sponsors;
•transfer agent, dividend agent and custodial fees and expenses;
•U.S. federal and state registration and franchise fees;
•all costs of registration and listing our shares on any securities exchange;
•U.S. federal, state and local taxes;
•independent directors’ fees and expenses;
•costs of preparing and filing reports or other documents required by the SEC or other regulators;
•costs of any reports, proxy statements or other notices to stockholders, including printing costs;
•costs associated with individual or group stockholders;
•costs associated with compliance under the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act;
•our allocable portion of any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;
•direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;
•proxy voting expenses; and
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•all other expenses incurred by us or the Administrator in connection with administering our business.

We expect our general and administrative expenses to be relatively stable or decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

Prior to the redemption of the 2014 Notes (as defined in Note 7 of our consolidated financial statements) and termination of the documents governing the 2014 Debt Securitization (as defined in Note 7 of our consolidated financial statements) on August 26, 2020, GC Advisors, served as collateral manager for Golub Capital BDC 2014-LLC, or the 2014 Issuer, our wholly-owned subsidiary, under a collateral management agreement, or the 2014 Collateral Management Agreement, and was entitled to receive an annual fee in an amount equal to 0.25% of the principal balance of the portfolio loans held by the 2014 Issuer at the beginning of the collection period relating to each payment date, which was payable in arrears on each payment date. Under the 2014 Collateral Management Agreement, the term ‘‘collection period’’ referred to a quarterly period running from the day after the end of the prior collection period to the tenth business day prior to the payment date.

GC Advisors, as collateral manager for Golub Capital BDC CLO III LLC, or the 2018 Issuer, under a collateral management agreement, or the 2018 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.25% of the principal balance of the portfolio loans held by the 2018 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2018 Collateral Management Agreement, the term "collection period" refers to the period commencing on the third business day prior to the preceding payment date and ending on (but excluding) the third business day prior to such payment date.

GC Advisors, as collateral manager for Golub Capital Investment Corporation CLO II LLC, or the GCIC 2018 Issuer, under a collateral management agreement, or the GCIC 2018 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.35% of the principal balance of the portfolio loans held by the GCIC 2018 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2018 GCIC Collateral Management Agreement, the term “collection period” generally refers to a quarterly period commencing on the day after the end of the prior collection period to the tenth business day prior to the payment date.

GC Advisors, as collateral manager for Golub Capital BDC CLO 4 LLC, or the 2020 Issuer, under a collateral management agreement, or the 2020 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.35% of the principal balance of the portfolio loans held by the 2020 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2020 Collateral Management Agreement, the term “collection period” generally refers to a quarterly period commencing on the day after the end of the prior collection period to the tenth business day prior to the payment date.

Collateral management fees were paid directly by the 2014 Issuer and are paid directly by the 2018 Issuer, GCIC 2018 Issuer and 2020 Issuer to GC Advisors and are offset against the management fees payable under the Investment Advisory Agreement. In addition, the 2014 Issuer paid Wells Fargo Securities, LLC structuring and placement fees for its services in connection with the initial structuring and subsequent amendments to the initial structuring of the 2014 Debt Securitization. The 2018 Issuer paid Morgan Stanley & Co. LLC structuring and placement fees for its services in connection with the structuring of the 2018 Debt Securitization (as defined in Note 7 of our consolidated financial statements). Before we acquired the GCIC 2018 Issuer as part of our acquisition of GCIC, as defined in the “GCIC Acquisition” section below, the GCIC 2018 Issuer paid Wells Fargo Securities, LLC structuring and placement fees for its services in connection with the initial structuring of the GCIC 2018 Debt Securitization (as defined in Note 7 of our consolidated financial statements). The 2020 Issuer paid Wells Fargo Securities, LLC structuring and placement fees for its services in connection with the structuring of the 2020 Debt Securitization (as defined in Note 7 of our consolidated financial statements). Term debt securitizations are also known as collateralized loan obligations, or CLOs, and are a form of secured financing incurred by us, which are consolidated by us and subject to our overall asset coverage requirement. The 2018 Issuer, GCIC 2018 Issuer and 2020 Issuer also agreed to pay ongoing administrative expenses to the trustee, collateral manager, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2018 Debt Securitization, GCIC 2018 Debt Securitization and 2020 Debt Securitization, and collectively the Debt Securitizations, as applicable.

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We believe that these administrative expenses approximate the amount of ongoing fees and expenses that we would be required to pay in connection with a traditional secured credit facility. Our common stockholders indirectly bear all of these expenses.

GCIC Acquisition

On September 16, 2019, we completed our acquisition of Golub Capital Investment Corporation, or GCIC, pursuant to that certain Agreement and Plan of Merger, as amended, or the Merger Agreement, dated November 27, 2018, by and among us, GCIC, Fifth Ave Subsidiary Inc., our wholly owned subsidiary, or Merger Sub, GC Advisors, and, for certain limited purposes, the Administrator. Pursuant to the Merger Agreement, Merger Sub was first merged with and into GCIC, or the Initial Merger, with GCIC as the surviving company and immediately following the Initial Merger, GCIC was then merged with and into us, the Initial Merger and subsequent merger referred to as the Merger, with us as the surviving company.

In accordance with the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of GCIC’s common stock was converted into the right to receive 0.865 shares of our common stock (with GCIC’s stockholders receiving cash in lieu of fractional shares of our common stock). As a result of the Merger, we issued an aggregate of 71,779,964 shares of our common stock to former stockholders of GCIC.

SLF and GCIC SLF Purchase Agreement

On January 1, 2020, we entered into a purchase agreement, or the Purchase Agreement, with RGA Reinsurance Company, or RGA, Aurora National Life Assurance Company, a wholly-owned subsidiary of RGA, or Aurora and, together with RGA, the Transferors, Senior Loan Fund LLC, or SLF, and GCIC Senior Loan Fund LLC, or GCIC SLF. Prior to entering into the Purchase Agreement, the Transferors owned 12.5% of the LLC equity interests in each Senior Loan Fund, while we owned the remaining 87.5% of the LLC equity interests in each Senior Loan Fund. Pursuant to the Purchase Agreement, RGA and Aurora agreed to sell their LLC equity interests in each Senior Loan Fund to us, effective as of January 1, 2020. As consideration for the purchase of the LLC equity interests, we paid each Transferor an amount, in cash, equal to the net asset value of such Transferor's Senior Loan Fund LLC equity interests as of December 31, 2019, or the Net Asset Value, along with interest on such Net Asset Value accrued from the date of the Purchase Agreement through, but excluding, the payment date at a rate equal to the short-term applicable federal rate. In February 2020, we paid an aggregate of $17.0 million to the Transferors to acquire their respective LLC interests in the Senior Loan Funds.

As a result of the Purchase Agreement, on January 1, 2020, SLF and GCIC SLF became our wholly-owned subsidiaries. In addition, our capital commitments and those of the Transferors were terminated. As wholly-owned subsidiaries, the assets, liabilities, income and expenses of the Senior Loan Funds were consolidated into our financial statements and notes thereto for periods ending on or after January 1, 2020, and are included for purposes of determining our asset coverage ratio.

Rights Offering

On May 15, 2020, we completed a transferable rights offering. We issued to stockholders of record on April 8, 2020 one transferable right for each four shares of our common stock held on the record date. Each holder of rights was entitled to subscribe for one share of common stock for every right held at a subscription price of $9.17 per share. On May 15, 2020, we issued a total of 33,451,902 shares. Net proceeds after deducting the dealer manager fees and other offering expenses were approximately $300.4 million. 3,191,448 shares were purchased in the rights offering by affiliates of GC Advisors.

COVID-19 Pandemic

The rapid spread of COVID-19, which has been identified as a global pandemic by the World Health Organization, resulted in governmental authorities imposing restrictions on travel and the temporary closure of many corporate offices, retail stores, restaurants, healthcare facilities, fitness clubs and manufacturing facilities and factories in affected jurisdictions. The pandemic and the resulting economic dislocations have had adverse consequences for the business operations of some of our portfolio companies and has adversely affected, and threatens to continue to adversely affect, our operations and the operations of GC Advisors (including those relating to us). GC Advisors has been monitoring the COVID-19 pandemic and its impact on our business and the business of our portfolio
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companies and has been focused on proactively engaging with our portfolio companies in order to collaborate with the management teams of certain portfolio companies to assess and evaluate the steps each portfolio company can take in response to the impacts of COVID-19.

We cannot predict the full impact of the coronavirus, including the duration of the closures and restrictions described above. While several countries, as well as certain states in the United States, lifted or reduced certain travel restrictions, business closures and other quarantine measures, recurring COVID-19 outbreaks have led to the re-introduction of such restrictions in certain states in the United States and globally and could continue to lead to the re-introduction of such restrictions elsewhere. As a result, we are unable to predict the duration of business and supply-chain disruptions, the extent to which COVID-19 will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition. Depending on the duration and extent of the disruption to the business operations of our portfolio companies, we expect some portfolio companies, particularly those in vulnerable industries such as retail and travel, to experience financial distress and possibly to default on their financial obligations to us and their other capital providers. In addition, if such portfolio companies are subjected to prolonged and severe financial distress, we expect some of them to substantially curtail their operations, defer capital expenditures and lay off workers. These developments would be likely to permanently impair their businesses and result in a reduction in the value of our investments in them.

Business disruption and financial distress experienced by our portfolio companies is likely to reduce, over time, the amount of interest and dividend income that we receive from our investments and has in the past and may in the future require us to contribute additional capital to such companies in the form of follow on investments. Any restructuring of the capitalization of our portfolio companies required by any business disruption or financial distress could result in reduced interest payments or permanent impairments on our investments. Any such decrease in our net investment income would increase the percentage of our cash flows dedicated to debt service and distribution payments to stockholders. If these amounts become unsustainable, we may be required to reduce the amount of our future distributions to stockholders. In the first half of calendar year 2020 when the COVID-19 pandemic began to the impact the U.S. economy, we proactively and aggressively commenced on a number of actions to support and evaluate our portfolio companies, including gathering full information from a variety of sources including third-party experts, management teams of our borrowers, the private equity sponsor owners of our borrowers and other sources and immediate outreach to our private equity sponsor partners to establish candid, two-way, real-time communications. We believe these actions have led and will lead to increased and better solutions for our borrowers and believe our long-term relationships with these sponsors will create appropriate incentives for them to collaborate with us to address such portfolio company needs.

We have experienced a meaningful reversal of some of the unrealized depreciation recognized during the three months ended March 31, 2020 as the U.S. economy began reopening sooner than expected, portfolio companies generally performed better than expected, especially those in COVID-impacted sub-sectors, and private equity sponsors have generally stepped up to support their portfolio companies. Due to the resurgence of COVID-19 in some parts of the country, we remain cautious and concerned about the on-going impacts to the U.S. economy from COVID-19, but the positive trends identified above contributed to strong financial results for the three months ended December 31, 2020.

As of December 31, 2020, subject to certain limited exceptions, we were allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. Our revolving credit facilities, described in Note 7 in the notes to our consolidated financial statements, include customary covenants and events of default. Any failure on our part to make required payments under such facilities or to comply with such covenants could result in a default under the applicable credit facility or debt instrument. If we are unable to cure such default or obtain a waiver from the applicable lender or holder, we would experience an event of default, and the applicable lender or holder could accelerate the repayment of such indebtedness, which would negatively affect our business, financial condition, results of operations and cash flows.

We are also subject to financial risks, including changes in market interest rates. Many of the loans in our portfolio have floating interest rates, and we expect that our loans in the future will also have floating interest rates. The interest rates of such loans are based upon a floating interest rate index, typically LIBOR, together with a spread, or margin. They generally also feature interest rate reset provisions that adjust the interest rates under such loans to current market rates on a quarterly basis. As of December 31, 2020, over 90% of our floating rate loans at fair value were subject to a minimum base rate, or floor, that we charge on our loans if the applicable interest rate index falls below such floor. Certain of the notes issued in each of the 2018 Debt Securitization, the GCIC 2018 Debt Securitization and the 2020 Debt Securitization have floating rate interest provisions. In addition, our revolving credit facilities also have floating rate interest provisions. As a result of the COVID-19 pandemic and the related decision of the U.S. Federal Reserve to reduce certain interest rates, LIBOR decreased beginning in March 2020. A
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prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on such loans, a decrease in the income incentive fee as a result of our 8% hurdle rate or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR. See “Item 3. Quantitative and Qualitative Disclosures About Market Risk” for an analysis of the impact of hypothetical base rate changes in interest rates.

We and GC Advisors continue to monitor the rapidly evolving situation relating to the COVID-19 pandemic and guidance from U.S. and international authorities, including federal, state and local public health authorities and future recommendations from such authorities may further impact our business operations and financial results. In such circumstances, there may be developments outside our control requiring us to adjust our plan of operation. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of the COVID-19 pandemic on our financial condition, results of operations or cash flows in future periods.

Recent Developments

On January 29, 2021, we entered into an amendment to the MS Credit Facility II (as defined in Note 7 of our consolidated financial statements) that extended the reinvestment period to May 3, 2021 from February 1, 2021, extended the maturity date to May 1, 2024 from February 1, 2024 and reduced borrowing capacity to $250.0 million from $325.0 million.

On February 5, 2021, our board of directors declared a quarterly distribution of $0.29 per share, which is payable on March 30, 2021 to holders of record as of March 5, 2021.

Consolidated Results of Operations

Consolidated operating results for the three months ended December 31, 2020 and 2019 are as follows:

Three months ended December 31,
   2020 2019 Variances
   (In thousands)
Interest income $ 77,603  $ 84,322  $ (6,719)
Accretion of discounts and amortization of premiums 4,606  3,968  638 
GCIC acquisition purchase premium amortization (9,230) (11,837) 2,607 
Dividend income from LLC equity interests in SLF and GCIC SLF(1)
—  1,905  (1,905)
Dividend income 160  34  126 
Fee income 907  215  692 
Total investment income 74,046  78,607  (4,561)
Total expenses 35,039  45,876  (10,837)
Net investment income (loss) 39,007  32,731  6,276 
Net realized gain (loss) on investment transactions (2,313) 2,541  (4,854)
Net realized gain (loss) on investment transactions due to purchase premium (79) (40) (39)
Net change in unrealized appreciation (depreciation) on investment transactions excluding purchase premium 48,515  (61) 48,576 
Net change in unrealized depreciation on investment transactions due to purchase premium 9,309  11,877  (2,568)
Net gain (loss) on investment transactions 55,432  14,317  41,115 
Net increase (decrease) in net assets resulting from operations $ 94,439  $ 47,048  $ 47,391 
Average earning debt investments, at fair value(2)
$ 4,182,748  $ 4,190,808  $ (8,060)

(1)For periods ending on or after January 1, 2020, the assets and liabilities of SLF and GCIC SLF are consolidated into our financial statements and notes thereto.
(2)Does not include our investments in LLC equity interests in SLF and GCIC SLF.

Net income can vary substantially from period to period for various reasons, including the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, annual comparisons of net income may not be meaningful.

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On September 16, 2019, we completed our acquisition of GCIC. The acquisition was accounted for under the asset acquisition method of accounting in accordance with Accounting Standards Codification, or ASC, 805-50, Business Combinations — Related Issues. Under asset acquisition accounting, where the consideration paid to GCIC’s stockholders exceeded the relative fair values of the assets acquired and liabilities assumed, the premium paid by us was allocated to the cost of the GCIC assets acquired by us pro-rata based on their relative fair value. Immediately following the acquisition of GCIC, we recorded its assets at their respective fair values and, as a result, the purchase premium allocated to the cost basis of the GCIC assets acquired was immediately recognized as unrealized depreciation on our Consolidated Statement of Operations. The purchase premium allocated to investments in loan securities will amortize over the life of the loans through interest income with a corresponding reversal of the unrealized depreciation on such loans acquired through their ultimate disposition. The purchase premium allocated to investments in equity securities will not amortize over the life of the equity securities through interest income and, assuming no subsequent change to the fair value of the equity securities acquired from GCIC and disposition of such equity securities at fair value, we will recognize a realized loss with a corresponding reversal of the unrealized depreciation upon disposition of the equity securities acquired.

As a supplement to our GAAP financial measures, we have provided the following non-GAAP financial measures that we believe are useful for the reasons described below:
•“Adjusted Net Investment Income” - excludes the amortization of the purchase price premium and the accrual for the capital gain incentive fee (including the portion of such accrual that is not payable under the Investment Advisory Agreement) from net investment income calculated in accordance with GAAP;
•“Adjusted Net Realized and Unrealized Gain/(Loss)” - excludes the unrealized loss resulting from the purchase premium write-down and the corresponding reversal of the unrealized loss resulting from the amortization of the premium on loans or from the sale of equity investments from the determination of realized and unrealized gain/(loss) determined in accordance with GAAP; and
•“Adjusted Net Income/(Loss)” – calculates net income and earnings per share based on Adjusted Net Investment Income and Adjusted Net Realized and Unrealized Gain/(Loss).
Three months ended
December 31, 2020 December 31, 2019
   (In thousands)
Net investment income $ 39,007  $ 32,731 
Add: GCIC acquisition purchase premium amortization 9,230  11,837 
Adjusted net investment income $ 48,237  $ 44,568 
Net gain (loss) on investment transactions $ 55,432  $ 14,317 
Add: Realized loss on investment transactions due to purchase premium 79  40 
Less: Net change in unrealized appreciation on investment transactions due to purchase premium (9,309) (11,877)
Adjusted net realized and unrealized gain/(loss) $ 46,202  $ 2,480 
Net increase (decrease) in net assets resulting from operations $ 94,439  $ 47,048 
Add: GCIC acquisition purchase premium amortization 9,230  11,837 
Add: Realized loss on investment transactions due to purchase premium 79  40 
Less: Net change in unrealized appreciation on investment transactions due to purchase premium (9,309) (11,877)
Adjusted net income/(loss) $ 94,439  $ 47,048 

We believe that excluding the financial impact of the purchase premium in the above non-GAAP financial measures is useful for investors as this is a non-cash expense/loss and is one method we use to measure our results of operations.

Although these non-GAAP financial measures are intended to enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.
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Investment Income

Investment income decreased from the three months ended December 31, 2019 to the three months ended December 31, 2020 by $4.6 million primarily due to a decrease in LIBOR and the slight decrease in the average earning debt investments balance, partially offset by a reduction of GCIC acquisition purchase price premium amortization of $2.6 million. As of December 31, 2019, 3-month LIBOR was 1.9% compared to 0.2% as of December 31, 2020. Due to

The annualized income yield by debt security type for the three months ended December 31, 2020 and 2019 was as follows:
Three months ended
   December 31, 2020 December 31, 2019
Senior secured 6.5% 6.9%
One stop 7.6% 8.1%
Second lien 10.9% 11.3%
Subordinated debt 10.7% 10.4%

Income yields on one stop and senior secured loans decreased for the three months ended December 31, 2020 as compared to the three months ended December 31, 2019 primarily due to a decrease in the average LIBOR for the three months ended December 31, 2020 compared to the three months ended December 31, 2019, which was partially offset due to over 90% of our loans at fair value have a weighted average LIBOR floor of 1.01%. As of December 31, 2020, we have six second lien investments and three subordinated debt investments as shown in the Consolidated Schedule of Investments. Due to the limited number of second lien and subordinated debt investments, income yields on second lien and subordinated debt investments can be significantly impacted by the addition, subtraction or refinancing of one investment.

For additional details on investment yields and asset mix, refer to the “Liquidity and Capital Resources - Portfolio Composition, Investment Activity and Yield” section below.

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Expenses

The following table summarizes our expenses for the three months ended December 31, 2020 and 2019:

Three months ended December 31,
   2020 2019 Variances
   (In thousands)
Interest and other debt financing expenses $ 13,877  $ 21,707  $ (7,830)
Amortization of debt issuance costs 1,204  571  633 
Base management fee 15,224  15,206  18 
Income incentive fee 2,004  5,904  (3,900)
Capital gain incentive fee —  —  — 
Professional fees 837  939  (102)
Administrative service fee 1,602  1,402  200 
General and administrative expenses 291  147  144 
Total expenses $ 35,039  $ 45,876  $ (10,837)
Average debt outstanding $ 2,086,099  $ 2,284,590  $ (198,491)

Interest Expense

Interest and other debt financing expenses decreased by $7.8 million from the three months ended December 31, 2019 to the three months ended December 31, 2020 primarily due to a decrease in LIBOR on our floating rate facilities for the three months ended December 31, 2020 from the three months ended December 31, 2019. For more information about our outstanding borrowings for the three months ended December 31, 2020 and 2019, including the terms thereof, see Note 7. Borrowings in the notes to our consolidated financial statements and the “Liquidity and Capital Resources” section below.

For the three months ended December 31, 2020 and 2019, the effective annualized average interest rate, which includes amortization of debt financing costs, amortization of discounts on notes issued and non-usage facility fees, on our total debt was 2.9% and 3.9%, respectively. The decrease was primarily due to a lower average LIBOR, partially offset by the issuance of the 2024 Unsecured Notes (as defined in Note 7 of our consolidated financial statements) that bear interest at a fixed rate of 3.375%.

Management Fee

The base management fee slightly increased from the three months ended December 31, 2019 to the three months ended December 31, 2020 as a result of a slight increase in average adjusted gross assets from 2019 to 2020.

Incentive Fees

The incentive fee payable under the Investment Advisory Agreement consists of two parts: (1) the income component, or the Income Incentive Fee, and (2) the capital gains component, or the Capital Gain Incentive Fee. The Income Incentive Fee decreased by $3.9 million from the three months ended December 31, 2019 to the three months ended December 31, 2020 primarily due to a lower rate of return on the value of our net assets driven by a decrease in LIBOR, partially offset by an increase in Pre-Incentive Fee Net Investment Income (as defined in Note 3 of our consolidated financial statements). As we remain in the “catch-up” provision of the calculation of the Income Incentive Fee, an increase in net investment income causes a corresponding increase in the Income Incentive Fee until we are fully through the catch-up. For the three months ended December 31, 2020, while still not fully through the “catch-up” provision of the Income Incentive Fee calculation, the Income Incentive Fee as a percentage of the Pre-Incentive Fee Net Investment Income decreased to 4.9% compared to 15.3% for the three months ended December 31, 2019.

For each of the three months ended December 31, 2020 and 2019, there was no Capital Gain Incentive Fee payable as calculated under the Investment Advisory Agreement. In accordance with GAAP, we are required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. There was no capital gain incentive fee accrual calculated in accordance with GAAP as of December 31, 2020 and
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September 30, 2020. Any payment due under the terms of the Investment Advisory Agreement is calculated in arrears at the end of each calendar year. No Capital Gain Incentive Fees as calculated under the Investment Advisory Agreement or any prior investment advisory agreements, as applicable, have been payable since December 31, 2018.

For additional details on unrealized appreciation and depreciation of investments, refer to the “Net Realized and Unrealized Gains and Losses” section below.

Professional Fees, Administrative Service Fee, and General and Administrative Expenses

In total, professional fees, the administrative service fee, and general and administrative expenses increased slightly from the three months ended December 31, 2019 to the three months ended December 31, 2020. In general, we expect certain of our operating expenses, including professional fees, the administrative service fee, and other general and administrative expenses to decline as a percentage of our total assets during periods of growth other than as a result of a merger or other large acquisition and increase as a percentage of our total assets during periods of asset declines.

The Administrator pays for certain expenses incurred by us. These expenses are subsequently reimbursed in cash. Total expenses reimbursed to the Administrator during the three months ended December 31, 2020 and 2019, were $1.6 million and $1.7 million, respectively.

As of December 31, 2020 and September 30, 2020, included in accounts payable and other liabilities were $1.5 million and $1.6 million, respectively, for expenses paid on behalf of us by the Administrator.

Net Realized and Unrealized Gains and Losses

The following table summarizes our net realized and unrealized gains (losses) for the periods presented:
Three months ended December 31,
   2020 2019 Variances
   (In thousands)
Net realized gain (loss) on investments $ (1,614) $ 2,656  $ (4,270)
Foreign currency transactions (778) (155) (623)
Net realized gain (loss) on investment transactions
$ (2,392) $ 2,501  $ (4,893)
Unrealized appreciation on investments 74,714  38,067  36,647 
Unrealized (depreciation) on investments (11,624) (21,659) 10,035 
Unrealized appreciation (depreciation) on investments in SLF and GCIC SLF(1)
—  (192) 192 
Unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies
(1,374) (3,150) 1,776 
Unrealized appreciation (depreciation) on forward currency contracts
(3,892) (1,250) (2,642)
Net change in unrealized appreciation (depreciation) on investment transactions
$ 57,824  $ 11,816  $ 46,008 

(1)Unrealized appreciation (depreciation) on investments in SLF and GCIC SLF includes our investments in LLC equity interests in SLF and GCIC SLF. The investment in GCIC SLF was acquired by us in the Merger. On January 1, 2020, SLF and GCIC SLF became our wholly-owned subsidiaries and the assets and liabilities of the Senior Loan Funds were consolidated into us.
During the three months ended December 31, 2020, we had a net realized loss of $2.4 million primarily attributable to recognized realized losses on the restructure, sale, or write-off on multiple portfolio companies, partially offset by net realized gains from the sale of equity investments in multiple portfolio companies.

For the three months ended December 31, 2019, we had a net realized gain of $2.5 million primarily due to sale of equity investments in multiple portfolio companies.

For the three months ended December 31, 2020, we had $74.7 million in unrealized appreciation on 193 portfolio company investments, which was offset by $11.6 million in unrealized depreciation on 75 portfolio company investments. Unrealized appreciation for the three months ended December 31, 2020 primarily resulted from better than expected performance of our portfolio companies and credit market conditions beginning to recover. Unrealized depreciation for the three months ended December 31, 2020 primarily resulted from decreases in the fair value in many of our portfolio company investments due to the adverse economic effects of the COVID-19 pandemic, the continuing uncertainty surrounding its long-term impact and increases in the spread between the yields realized on risk-free and higher risk securities.
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For the three months ended December 31, 2019, we had $38.1 million in unrealized appreciation on 222 portfolio company investments, which was offset by $21.7 million in unrealized depreciation on 218 portfolio company investments. Unrealized appreciation during the three months ended December 31, 2019 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments and the reversal of the net unrealized depreciation associated with the sale or restructure of a few portfolio company investments. Besides the unrealized depreciation recognized due to the purchase premium write-down, unrealized depreciation resulted from the amortization of discounts, negative credit related adjustments that caused a reduction in fair value and the reversal of the net unrealized appreciation associated with the sale of portfolio company investments during the three months ended December 31, 2019.

For the three months ended December 31, 2019, we had $0.2 million in unrealized depreciation on our investments
in SLF and GCIC SLF LLC equity interests. The unrealized appreciation on our investment in SLF of $0.5 million
was primarily driven by net investment income earned by SLF netted against negative credit adjustments at SLF.
The unrealized depreciation on our investment in GCIC SLF of $0.7 million was primarily driven by net investment
income earned by GCIC SLF netted against dividends GCIC SLF paid to us of $1.9 million during the three months
ended December 31, 2019. We did not receive any dividends from SLF during the three months ended December
31, 2019.

Liquidity and Capital Resources

For the three months ended December 31, 2020, we experienced a net increase in cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies of $86.5 million. During the period, cash used in operating activities was $164.9 million, primarily as a result of fundings of portfolio investments of $490.0 million, partially offset by the proceeds from principal payments and sales of portfolio investments of $278.7 million and net investment income of $39.0 million. Lastly, cash provided by financing activities was $251.4 million, primarily driven by borrowings on debt of $797.4 million, partially offset by repayments of debt of $491.3 million, distributions paid of $33.8 million, and repurchases of common stock under the DRIP of $14.7 million.

For the three months ended December 31, 2019, we experienced a net increase in cash, cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies of $49.1 million. During the period, cash used in operating activities was $111.8 million, primarily as a result of fundings of portfolio investments of $296.8 million, partially offset by the proceeds from principal payments and sales of portfolio investments of $154.3 million and net investment income of $32.7 million. Lastly, cash provided by financing activities was $160.9 million, primarily driven by borrowings on debt of $332.0 million and proceeds from short-term borrowings of $64.8 million that were partially offset by repayments of debt of $193.9 million and distributions paid of $40.8 million.

As of December 31, 2020 and September 30, 2020, we had cash and cash equivalents of $26.5 million and $24.6 million, respectively. In addition, we had foreign currencies of $0.5 million and $0.6 million as of December 31, 2020 and September 30, 2020, respectively, restricted cash and cash equivalents of $242.8 million and $157.6 million as of December 31, 2020 and September 30, 2020, respectively, and restricted foreign currencies of $1.4 million and $1.7 million as of December 31, 2020 and September 30, 2020, respectively. Cash and cash equivalents and foreign currencies are available to fund new investments, pay operating expenses and pay distributions. Restricted cash and cash equivalents and restricted foreign currencies can be used to pay principal and interest on borrowings and to fund new investments that meet the guidelines under our debt securitizations or credit facilities, as applicable.

This “Liquidity and Capital Resources” section should be read in conjunction with the “COVID-19 Developments" section above.

Revolving Debt Facilities

MS Credit Facility II - As of December 31, 2020 and September 30, 2020, we had $279.5 million and $313.3 million outstanding under the MS Credit Facility II (as defined in Note 7 of our consolidated financial statements), respectively. As of December 31, 2020, the MS Credit Facility II allowed Golub Capital BDC Funding II LLC, or Funding II, to borrow up to $325.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of December 31, 2020 and September 30, 2020, subject to leverage and borrowing base restrictions,
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we had approximately $45.5 million and $86.7 million of remaining commitments, respectively, and $45.5 million and $8.0 million of availability, respectively, on the MS Credit Facility II. On January 29, 2021, we entered into an amendment for the MS Credit Facility II that extended the reinvestment period to May 3, 2021 from February 1, 2021, extended the maturity date to May 1, 2024 from February 1, 2024 and reduced borrowing capacity to $250.0 million from $325.0 million.

WF Credit Facility - As of December 31, 2020 and September 30, 2020, we had outstanding debt under the WF Credit Facility (as defined in Note 7 of our consolidated financial statements) of $275.6 million and $199.6 million, respectively. As of December 31, 2020, the WF Credit Facility allowed GCIC Funding LLC, or GCIC Funding, to borrow up to $300.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of December 31, 2020 and September 30, 2020, subject to leverage and borrowing base restrictions, we had approximately $24.4 million and $100.4 million of remaining commitments, respectively, and $24.4 million and $15.3 million of availability, respectively, on the WF Credit Facility.

DB Credit Facility - As of September 30, 2020, we had outstanding debt under the DB Credit Facility (as defined in Note 7 of our consolidated financial statements) of $153.5 million. On October 9, 2020, all outstanding borrowings under the DB Credit Facility were repaid following which the DB Credit Facility was terminated. As of September 30, 2020, subject to leverage and borrowing base restrictions, we had approximately $96.5 million of remaining commitments and $82.7 million of availability on the DB Credit Facility.

Adviser Revolver - On June 22, 2016, we entered into the Adviser Revolver (as defined in Note 7 of our consolidated financial statements), which, as amended, permitted us to borrow up to $100.0 million at any one time outstanding as of December 31, 2020. We entered into the Adviser Revolver in order to have the ability to borrow funds on a short-term basis and have in the past repaid, and generally intend in the future to repay, borrowings under the Adviser Revolver within 30 to 45 days from which they are drawn. As of each of December 31, 2020 and September 30, 2020, we had no amounts outstanding on the Adviser Revolver.

Debt Securitizations

2014 Debt Securitization - On August 26, 2020, in conjunction with the 2020 Debt Securitization, the 2014 Notes were redeemed and following such redemption, the agreements governing the 2014 Debt Securitization were terminated.

2018 Debt Securitization - On November 16, 2018, we completed the 2018 Debt Securitization. The Class A, Class B and Class C-1 2018 Notes are included in the December 31, 2020 and September 30, 2020 Consolidated Statements of Financial Condition as our debt and the Class C-2, Class D and Subordinated 2018 Notes were eliminated in consolidation. As of December 31, 2020 and September 30, 2020, we had outstanding debt under the 2018 Debt Securitization of $408.2 million and $408.2 million, respectively.

GCIC 2018 Debt Securitization - Effective September 16, 2019, we assumed as a result of the Merger, the GCIC 2018 Debt Securitization. The Class A-1, Class A-2 (Class A-2-R GCIC 2018 Notes after refinancing on December 21, 2020) and Class B-1 GCIC 2018 Notes are included in the December 31, 2020 and September 30, 2020 Consolidated Statements of Financial Condition as our debt. As of December 31, 2020 and September 30, 2020 the Class B-2, Class C and Class D GCIC 2018 Notes and the Subordinated GCIC 2018 Notes were eliminated in consolidation. As of December 31, 2020 and September 30, 2020, we had outstanding debt under the GCIC 2018 Debt Securitization of $542.8 million and $542.4 million, respectively.

2020 Debt Securitization - On August 26, 2020, we completed the 2020 Debt Securitization. The Class A-1, Class A-2, and Class B Notes are included in the December 31, 2020 and September 30, 2020 Consolidated Statements of Financial Condition as our debt. As of December 31, 2020 and September 30, 2020, the Class C 2020 Notes and the Subordinated 2020 Notes were eliminated in consolidation. As of December 31, 2020 and September 30, 2020, we had outstanding debt under the 2020 Debt Securitization of $189.0 million and $189.0 million, respectively.

Due to the interplay of the 1940 Act restrictions on principal and joint transactions and the U.S. risk retention rules adopted pursuant to Section 941 of Dodd-Frank, as a business development company, we sought and received no action relief from the SEC to ensure we could engage in CLO financings in which assets are transferred through GC Advisors.

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SBA Debentures

Under present small business investment company, or SBIC, regulations, the maximum amount of debentures guaranteed by the U.S. Small Business Administration, or SBA, issued by multiple licensees under common management is $350.0 million and the maximum amount issued by a single SBIC licensee is $175.0 million. As of December 31, 2020, GC SBIC IV, L.P., or SBIC IV, GC SBIC V, L.P., or SBIC V, and GC SBIC VI, L.P., or SBIC VI, had $0, $151.8 million, and $86.0 million, respectively, of outstanding SBA-guaranteed debentures that mature between March 2024 and March 2031. As of September 30, 2020, SBIC IV, SBIC V and SBIC VI, had $0, $151.8 million and $66.0 million, respectively, of outstanding SBA-guaranteed debentures that mature between March 2024 and March 2030. The original amount of debentures committed to SBIC IV and SBIC V by the SBA were $150.0 million and $175.0 million, respectively. Through December 31, 2020, SBIC IV and SBIC V have repaid $150.0 million and $23.3 million of outstanding debentures, respectively, and these commitments have effectively been terminated. As of December 31, 2020 and September 30, 2020, SBIC VI had $55.5 million and $29.0 million, respectively, of undrawn debenture commitments, of which $9.0 million and $29.0 million, respectively, were available to be drawn, subject to SBA regulatory requirements.

2024 Unsecured Notes

On October 2, 2020, we issued $400.0 million in aggregate principal amount of the 2024 Unsecured Notes, all of which remained outstanding as our debt as of December 31, 2020.

As of December 31, 2020, in accordance with the 1940 Act, with certain limited exceptions, we were allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. Prior to February 6, 2019, in accordance with the 1940 Act, with certain limited exceptions, we were allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, was at least 200% after such borrowing. We currently intend to continue to target a GAAP debt-to-equity ratio between 0.85x to 1.15x.

On September 13, 2011, we received exemptive relief from the SEC allowing us to modify the asset coverage requirement to exclude the SBA debentures from our asset coverage calculation. As such, our ratio of total consolidated assets to outstanding indebtedness may be less than 150%. This provides us with increased investment flexibility but also increases our risks related to leverage. As of December 31, 2020, our asset coverage for borrowed amounts was 216.0% (excluding the SBA debentures).

In August 2020, our board of directors reapproved a share repurchase program, or the Program, which allows us
to repurchase up to $150.0 million of our outstanding common stock on the open market at prices below the NAV per share as reported in our then most recently published consolidated financial statements. The Program is implemented at the discretion of management with shares to be purchased from time to time at prevailing market
prices, through open market transactions, including block transactions. We did not make any repurchases of our common stock during the three months ended December 31, 2020 and 2019.

As of December 31, 2020 and September 30, 2020, we had outstanding commitments to fund investments totaling $169.7 million and $141.8 million, respectively. As of December 31, 2020, total commitments of $169.7 million included $43.5 million of unfunded commitments on revolvers. There is no guarantee that these amounts will be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but the entire amount was eligible for funding to the borrowers, subject to the terms of each loan’s respective credit agreement. As of December 31, 2020, we believe that we had sufficient assets and liquidity to adequately cover future obligations under our unfunded commitments based on historical rates of drawings upon unfunded commitments, cash and restricted cash balances that we maintain, availability under our Adviser Revolver and ongoing principal repayments on debt investments. In addition, we generally hold some syndicated loans in larger portfolio companies that are saleable over a relatively short period to generate cash.

Although we expect to fund the growth of our investment portfolio through the net proceeds from future securities offerings and future borrowings, to the extent permitted by the 1940 Act, we cannot assure you that our efforts to raise capital will be successful. In addition, from time to time, we can amend or refinance our leverage facilities and securitization financings, to the extent permitted by applicable law. In addition to capital not being available, it also may not be available on favorable terms. To the extent we are not able to raise capital on what we believe are favorable terms, we will focus on optimizing returns by investing capital generated from repayments into new investments we believe are attractive from a risk/reward perspective. Furthermore, to the extent we are not able to
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raise capital and are at or near our targeted leverage ratios, we expect to receive smaller allocations, if any, on new investment opportunities under GC Advisors’ allocation policy and have, in the past, received such smaller allocations under similar circumstances.

Portfolio Composition, Investment Activity and Yield

As of December 31, 2020 and September 30, 2020, we had investments in 253 and 254 portfolio companies, respectively, with a total fair value of $4.5 billion and $4.2 billion, respectively.

The following table shows the asset mix of our new investment commitments for the three months ended December 31, 2020 and 2019:

Three months ended December 31,
   2020 2019
   (In thousands) Percentage of
Commitments 		(In thousands) Percentage of
Commitments
Senior secured $ 116,773  22.2% $ 11,610  4.3%
One stop 396,147  75.2 257,329  94.9
Second lien 8,013  1.5 —  —
Subordinated debt —  — 138  0.1
Equity 5,907  1.1 2,015  0.7
Total new investment commitments $ 526,840  100.0  % $ 271,092  100.0  %


For the three months ended December 31, 2020 and 2019, we had approximately $278.7 million and $154.3 million, respectively, in proceeds from principal payments and sales of portfolio investments.

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The following table shows the principal, amortized cost and fair value of our portfolio of investments by asset class:

As of December 31, 2020(1)
As of September 30, 2020(2)
   Principal Amortized
Cost 		Fair
Value 		Principal Amortized
Cost 		Fair
Value
   (In thousands) (In thousands)
Senior secured:                  
Performing $ 721,897  $ 723,114  $ 704,156  $ 645,886  $ 649,259  $ 627,471 
Non-accrual(3)
19,864  9,272  2,779  37,849  27,026  12,742 
One stop:                  
Performing 3,681,964  3,692,149  3,617,688  3,518,814  3,540,446  3,429,012 
Non-accrual(3)
69,876  63,150  50,081  81,897  75,239  56,573 
Second lien:                  
Performing 27,965  28,038  27,821  19,640  19,886  19,640 
Non-accrual(3)
—  —  —  —  —  — 
Subordinated debt:                  
Performing 302  300  349  537  541  575 
Non-accrual(3)
—  —  —  —  —  — 
Equity N/A 88,795  104,344  N/A 86,503  92,197 
Total $ 4,521,868  $ 4,604,818  $ 4,507,218  $ 4,304,623  $ 4,398,900  $ 4,238,210 

(1)As of December 31, 2020, $585.3 million and $548.1 million of our loans at amortized cost and fair value, respectively, included a feature permitting a portion of the interest due on such loan to be PIK interest.
(2)As of September 30, 2020, $488.1 million and $454.9 million of our loans at amortized cost and fair value, respectively, included a feature permitting a portion of the interest due on such loan to be PIK interest.
(3)We refer to a loan as non-accrual when we cease recognizing interest income on the loan because we have stopped pursuing repayment of the loan or, in certain circumstances, it is past due 90 days or more on principal and interest or our management has reasonable doubt that principal or interest will be collected. See “— Critical Accounting Policies — Revenue Recognition.”
As of December 31, 2020, we had loans in seven portfolio companies on non-accrual status, and non-accrual
investments as a percentage of total debt investments at cost and fair value were 1.6% and 1.2%, respectively. 
As of September 30, 2020, we had loans in nine portfolio companies on non-accrual status, and non-accrual investments as a percentage of total investments at cost and fair value were 2.4% and 1.7%, respectively. As of December 31, 2020 and September 30, 2020, the fair value of our debt investments as a percentage of the outstanding principal value was 97.4% and 96.3%, respectively.

The following table shows the weighted average rate, spread over LIBOR of floating rate and fees of investments originated and the weighted average rate of sales and payoffs of portfolio companies during the three months ended December 31, 2020 and 2019:
For the three months ended
   December 31, 2020 December 31, 2019
Weighted average rate of new investment fundings 7.1% 7.4%
Weighted average spread over LIBOR of new floating rate investment fundings 6.1% 5.7%
Weighted average fees of new investment fundings 1.3% 1.4%
Weighted average rate of sales and payoffs of portfolio investments 7.1% 7.8%


As of December 31, 2020, 93.5% and 93.4% of our debt portfolio at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans. As of September 30, 2020, 91.2% and 91.3% of our debt portfolio at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans.
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As of December 31, 2020 and September 30, 2020, the portfolio median earnings before interest, taxes, depreciation and amortization, or EBITDA, for our portfolio companies was $32.8 million and $31.4 million, respectively. The portfolio median EBITDA is based on the most recently reported trailing twelve-month EBITDA received from the portfolio company.

As part of the monitoring process, GC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on an internal system developed by Golub Capital and its affiliates. This system is not generally accepted in our industry or used by our competitors. It is based on the following categories, which we refer to as GC Advisors’ internal performance ratings:
 
Internal Performance Ratings
Rating   Definition
5   Involves the least amount of risk in our portfolio. The borrower is performing above expectations, and the trends and risk factors are generally favorable.
4   Involves an acceptable level of risk that is similar to the risk at the time of origination. The borrower is generally performing as expected, and the risk factors are neutral to favorable.
3   Involves a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination. The borrower could be out of compliance with debt covenants; however, loan payments are generally not past due.
2   Involves a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments could be past due (but generally not more than 180 days past due).
1   Involves a borrower performing substantially below expectations and indicates that the loan’s risk has substantially increased since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 1 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

Our internal performance ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments.

For any investment rated 1, 2 or 3, GC Advisors will increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending events and suggesting recommended actions.

GC Advisors monitors and, when appropriate, changes the internal performance ratings assigned to each investment in our portfolio. In connection with our valuation process, GC Advisors and our board of directors review these internal performance ratings on a quarterly basis.

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The following table shows the distribution of our investments on the 1 to 5 internal performance rating scale at fair value as of December 31, 2020 and September 30, 2020:
As of December 31, 2020 As of September 30, 2020
Internal
Performance
Rating 		Investments
at Fair Value
(In thousands) 		Percentage of
Total
Investments 		Investments
at Fair Value
(In thousands) 		Percentage of
Total
Investments
5 $ 313,341  7.0% $ 257,409  6.1%
4 3,334,609  74.0 3,085,610  72.8
3 808,152  17.9 836,560  19.7
2 50,258  1.1 57,754  1.4
1 858  0.0* 877  0.0*
Total $ 4,507,218  100.0% $ 4,238,210  100.0%


* Represents an amount less than 0.1%.

Contractual Obligations and Off-Balance Sheet Arrangements

A summary of our significant contractual payment obligations as of December 31, 2020 is as follows:
Payments Due by Period (In thousands)
   Total Less Than
1 Year 		1 – 3 Years 3 – 5 Years More Than
5 Years
2018 Debt Securitization $ 408,200  $ —  $ —  $ —  $ 408,200 
2018 GCIC Debt Securitization 542,826  —  —  —  542,826 
2020 Debt Securitization 189,000  —  —  —  189,000 
SBA debentures 237,750  —  —  51,750  186,000 
WF Credit Facility 275,556  —  —  275,556  — 
MS Credit Facility II 279,528  —  —  279,528  — 
Adviser Revolver —  —  —  —  — 
2024 Unsecured Notes 399,703  —  —  399,703  — 
Unfunded commitments(1)
169,706  169,706  —  —  — 
Total contractual obligations $ 2,502,269  $ 169,706  $ —  $ 1,006,537  $ 1,326,026 

(1)Unfunded commitments represent unfunded commitments to fund investments as of December 31, 2020 and includes $43.5 million of commitments on undrawn revolvers. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but we are showing this amount in the less than one year category as this entire amount was eligible for funding to the borrowers as of December 31, 2020, subject to the terms of each loan’s respective credit agreement.
We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of December 31, 2020, we had outstanding commitments to fund investments totaling $169.7 million.

We have certain contracts under which we have material future commitments. We have entered into the Investment Advisory Agreement with GC Advisors in accordance with the 1940 Act. Under the Investment Advisory Agreement, GC Advisors provides us with investment advisory and management services.

Under the Administration Agreement, the Administrator furnishes us with office facilities and equipment, provides us with clerical, bookkeeping and record keeping services at such facilities and provides us with other administrative services necessary to conduct our day-to-day operations. The Administrator also provides on our behalf managerial assistance to those portfolio companies to which we are required to offer to provide such assistance.

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If any of the contractual obligations discussed above are terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we receive under our Investment Advisory Agreement and our Administration Agreement. Any new investment advisory agreement would also be subject to approval by our stockholders.

Distributions

We intend to make quarterly distributions to our stockholders as determined by our board of directors. For additional details on distributions, see “Income taxes” in Note 2 to our consolidated financial statements.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of our distributions from time to time. In addition, the asset coverage requirements applicable to us as a business development company under the 1940 Act could limit our ability to make distributions. If we do not distribute a certain percentage of our income annually, we will suffer adverse U.S. federal income tax consequences, including the possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions.

Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations can differ from net investment income and realized gains recognized for financial reporting purposes. Differences are permanent or temporary. Permanent differences are reclassified within capital accounts in the financial statements to reflect their tax character. For example, permanent differences in classification result from the treatment of distributions paid from short-term gains as ordinary income dividends for tax purposes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

To the extent our taxable earnings fall below the total amount of our distributions for any tax year, a portion of those distributions could be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders could be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, our stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock unless a stockholder specifically “opts out” of our dividend reinvestment plan. If a stockholder opts out, that stockholder will receive cash distributions. Although distributions paid in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, stockholders participating in our dividend reinvestment plan will not receive any corresponding cash distributions with which to pay any such applicable taxes.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:

•We entered into the Investment Advisory Agreement with GC Advisors. Mr. Lawrence Golub, our chairman, is a manager of GC Advisors, and Mr. David Golub, our chief executive officer, is a manager of GC Advisors, and each of Messrs. Lawrence Golub and David Golub owns an indirect pecuniary interest in GC Advisors.

•Golub Capital LLC provides, and other affiliates of Golub Capital have historically provided, us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement.

•We have entered into a license agreement with Golub Capital LLC, pursuant to which Golub Capital LLC has granted us a non-exclusive, royalty-free license to use the name “Golub Capital.”

•Under a staffing agreement, or the Staffing Agreement, Golub Capital LLC has agreed to provide GC Advisors with the resources necessary to fulfill its obligations under the Investment Advisory Agreement. The Staffing Agreement provides that Golub Capital LLC will make available to GC Advisors experienced investment professionals and provide access to the senior investment personnel of Golub Capital LLC for
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purposes of evaluating, negotiating, structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of GC Advisors’ investment committee will serve in such capacity. Services under the Staffing Agreement are provided on a direct cost reimbursement basis. We are not a party to the Staffing Agreement.

•GC Advisors served as collateral manager to the 2014 Issuer under the 2014 Collateral Management Agreement and serves as collateral manager to the 2018 Issuer, the GCIC 2018 Issuer and the 2020 Issuer under the 2018 Collateral Management Agreement, the GCIC 2018 Collateral Management Agreement, and the 2020 Collateral Management Agreement, respectively. Fees payable to GC Advisors for providing these services offset against the base management fee payable by us under the Investment Advisory Agreement.

•We have entered into the Adviser Revolver with GC Advisors in order to have the ability to borrow funds on a short-term basis.

•During calendar years 2020 and 2019, the Golub Capital Employee Grant Program Rabbi Trust, or the Trust, purchased approximately $54.7 million, or 4,103,225 shares, and $47.4 million, or 2,609,558 shares, of our common stock, respectively, for the purpose of awarding incentive compensation to employees of Golub Capital.

•On September 16, 2019, we completed our acquisition of GCIC pursuant to the Merger Agreement.

•On January 1, 2020, we purchased the equity interests held by RGA and Aurora in the Senior Loans Funds pursuant to the Purchase Agreement.

•In the transferable rights offering completed on May 15, 2020, 3,191,448 shares of our common stock were purchased by affiliates of GC Advisors.

•On October 2, 2020, an affiliate of GC Advisors purchased $40.0 million of the 2024 Unsecured Notes. On October 8, 2020, the affiliate sold $15.0 million of the 2024 Unsecured Notes to an unaffiliated party.

GC Advisors also sponsors or manages, and expects in the future to sponsor or manage, other investment funds, accounts or investment vehicles (together referred to as “accounts”) that have investment mandates that are similar, in whole and in part, with ours. For example, GC Advisors presently serves as the investment adviser to Golub Capital BDC 3, Inc., an unlisted business development company that primarily focuses on investing in one stop and other senior secured loans. In addition, our officers and directors serve in similar capacity for Golub Capital BDC 3, Inc. If GC Advisors and its affiliates determine that an investment is appropriate for us and for Golub Capital BDC 3, Inc., and other accounts, depending on the availability of such investment and other appropriate factors, and pursuant to GC Advisors’ allocation policy, GC Advisors or its affiliates could determine that we should invest side-by-side with one or more other accounts. We do not intend to make any investments if they are not permitted by applicable law and interpretive positions of the SEC and its staff, or if they are inconsistent with GC Advisors’ allocation procedures.

In addition, we have adopted a formal code of ethics that governs the conduct of our and GC Advisors’ officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the General Corporation Law of the State of Delaware.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.

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Fair Value Measurements

We value investments for which market quotations are readily available at their market quotations. However, a readily available market value is not expected to exist for many of the investments in our portfolio, and we value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process.

Valuation methods include comparisons of the portfolio companies to peer companies that are public, determination of the enterprise value of a portfolio company, discounted cash flow analysis and a market interest rate approach. The factors that are taken into account in fair value pricing investments include: available current market data, including relevant and applicable market trading and transaction comparables; applicable market yields and multiples; security covenants; call protection provisions; information rights; the nature and realizable value of any collateral; the portfolio company’s ability to make payments, its earnings and discounted cash flows and the markets in which it does business; comparisons of financial ratios of peer companies that are public; comparable merger and acquisition transactions; and the principal market and enterprise values. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments can differ significantly from the values that would have been used had a readily available market value existed for such investments and differ materially from values that are ultimately received or settled.

Our board of directors is ultimately and solely responsible for determining, in good faith, the fair value of investments that are not publicly traded, whose market prices are not readily available on a quarterly basis or any other situation where portfolio investments require a fair value determination.

With respect to investments for which market quotations are not readily available, our board of directors undertakes a multi-step valuation process each quarter, as described below:

Our quarterly valuation process begins with each portfolio company investment being initially valued by the investment professionals of GC Advisors responsible for credit monitoring. Preliminary valuation conclusions are then documented and discussed with our senior management and GC Advisors. The audit committee of our board of directors reviews these preliminary valuations. At least once annually the valuation for each portfolio investment, subject to a de minimis threshold, is reviewed by an independent valuation firm. The board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith.

Determination of fair values involves subjective judgments and estimates. Under current accounting standards, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

We follow ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. Our fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the assets or liabilities.
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Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and we consider factors specific to the asset or liability. We assess the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three months ended December 31, 2020 and 2019. The following section describes the valuation techniques used by us to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

Valuation of Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by our board of directors, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of our valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. As of December 31, 2020 and September 30, 2020, with the exception of money market funds included in cash and cash equivalents and restricted cash and cash equivalents (Level 1 investments) and forward currency contracts (Level 2 investments), all investments were valued using Level 3 inputs of the fair value hierarchy.

When determining fair value of Level 3 debt and equity investments, we may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s EBITDA. A portfolio company’s EBITDA may include pro-forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, we will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, we use a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, we may base our valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that we and others may be willing to pay. Ask prices represent the lowest price that we and others may be willing to accept. We generally use the midpoint of the bid/ask range as our best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize significantly less than the value at which such investment had previously been recorded.

Our investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.
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Valuation of Other Financial Assets and Liabilities

Fair value of our debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

Revenue Recognition:

Our revenue recognition policies are as follows:

Investments and Related Investment Income: Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments. Premiums, discounts, and origination fees are amortized or accreted into interest income over the life of the respective debt investment. For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we do not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not likely to be collectible. In addition, we may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans and record these fees as fee income when received. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Distributions received from LLC and limited partnership, or LP, investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

We account for investment transactions on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. We report changes in fair value of investments from the prior period that is measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in our Consolidated Statements of Operations.

Non-accrual: Loans may be left on accrual status during the period we are pursuing repayment of the loan. Management reviews all loans that become past due 90 days or more on principal and interest or when there is reasonable doubt that principal or interest will be collected for possible placement on non-accrual status. We generally reverse accrued interest when a loan is placed on non-accrual. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. We restore non-accrual loans to accrual status when past due principal and interest is paid and, in our management’s judgment, are likely to remain current. The total fair value of our non-accrual loans was $52.9 million and $69.3 million as of December 31, 2020 and September 30, 2020, respectively.

Income taxes: We have elected to be treated as a RIC under Subchapter M of the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, we are required to meet certain source of income and asset diversification requirements, as well as timely distribute to our stockholders dividends for U.S. federal income tax purposes of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. We have made and intend to continue to make the requisite distributions to our stockholders, which will generally relieve us from U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, we may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next tax year. We may then be required to incur a 4% excise tax on such income. To the extent that we determine that our estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, we accrue excise tax, if any, on estimated excess taxable income as taxable income is earned. For each of the three months ended December 31, 2020 and 2019, we did not incur any U.S federal excise tax.
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Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified within capital accounts in the financial statements to reflect their tax character. For example, permanent differences in classification may result from the treatment of distributions paid from short-term gains as ordinary income dividends for tax purposes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. Many of the loans in our portfolio have floating interest rates, and we expect that our loans in the future may also have floating interest rates. These loans are usually based on a floating LIBOR and typically have interest rate reset provisions that adjust applicable interest rates under such loans to current market rates on a quarterly basis. The loans that are subject to the floating LIBOR are also subject to a minimum base rate, or floor, that we charge on our loans if the current market rates are below the respective floors. As of December 31, 2020 and September 30, 2020, the weighted average LIBOR floor on the loans subject to floating interest rates was 1.01%. The Class A, B and C-1 2018 Notes issued in connection with the 2018 Debt Securitization have floating rate interest provisions based on three-month LIBOR that resets quarterly, as do the Class A-1 and B-1 GCIC 2018 Notes as issued as part of the GCIC 2018 Debt Securitization and the Class A-1, A-1-L, A-2 and B 2020 Notes as issued as part of the 2020 Debt Securitization. Finally, the MS Credit Facility II and the WF Credit Facility each have a floating interest rate provision primarily based on one-month LIBOR plus 2.45% and one-month LIBOR plus 2.15%, respectively. We expect that other credit facilities into which we enter in the future may have floating interest rate provisions.

In connection with the COVID-19 pandemic, the U.S. Federal Reserve and other central banks have reduced certain interest rates and LIBOR has decreased. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on any portfolio investments, a decrease in in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR.

Assuming that the Consolidated Statement of Financial Condition as of December 31, 2020 were to remain constant and that we took no actions to alter interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates.
Change in interest rates Increase (decrease) in
interest income 		Increase (decrease) in
interest expense 		Net increase
(decrease) in
investment income
(In thousands)
Down 25 basis points $ (697) $ (4,142) $ 3,445 
Up 50 basis points 1,395  8,283  (6,888)
Up 100 basis points 12,464  16,566  (4,102)
Up 150 basis points 34,320  24,849  9,471 
Up 200 basis points 56,284  33,132  23,152 

Although we believe that this analysis is indicative of our sensitivity to interest rate changes as of December 31, 2020, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments, including borrowings under the Debt Securitizations, the MS Credit Facility II, the WF Credit Facility, Adviser Revolver, or other borrowings, that could affect net increase in net assets resulting from operations, or net income. Accordingly, we can offer no assurances that actual results would not differ materially from the analysis above.

We may in the future hedge against interest rate fluctuations by using standard hedging instruments such as interest rate swaps, futures, options and forward contracts to the limited extent permitted under the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in our portfolio with fixed interest rates.


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Item 4. Controls and Procedures.

As of December 31, 2020 (the end of the period covered by this report), management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on that evaluation, our management, including the chief executive officer and chief financial officer, concluded that, at the end of such period, our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports. There has not been any change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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Part II - Other Information

Item 1: Legal Proceedings.

We, GC Advisors and Golub Capital LLC may, from time to time, be involved in legal and regulatory proceedings arising out of our respective operations in the normal course of business or otherwise. While there can be no assurance of the ultimate disposition of any such proceedings, each of us, GC Advisors and Golub Capital LLC do not believe it is currently subject to any material legal proceedings.

Item 1A: Risk Factors.

There have been no material changes during the three months ended December 31, 2020 to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2020.


Item 2: Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3: Defaults Upon Senior Securities.

None.

Item 4: Mine Safety Disclosures

None.

Item 5: Other Information.

None.
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Item 6: Exhibits.

EXHIBIT INDEX
     
Number   Description
4.1
Indenture, dated as of October 2, 2020, by and between Golub Capital BDC, Inc. and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K (File No. 814-00794), filed on October 5, 2020).
4.2
First Supplemental Indenture, dated as of October 2, 2020, relating to the 3.375% Notes due 2024, by and between Golub Capital BDC, Inc. and U.S. Bank National Association, as trustee. (Incorporated by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K (File No. 814-00794), filed on October 5, 2020).
4.3
Form of 3.375% Notes due 2024. (Incorporated by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K (File No. 814-00794), filed on October 5, 2020).
First Supplemental Indenture, dated as of December 21, 2020, by and between GCIC CLO II LLC, as Issuer, and The Bank of New York Mellon Trust Company, National Association, as Trustee to the Indenture, dated as of December 13, 2018, among the Issuer and Trustee.*
Sixth Amendment to Loan and Servicing Agreement, dated as of January 15, 2021, among Golub Capital BDC Funding II LLC, as borrower, Golub Capital BDC, Inc., as servicer, and as the originator, Morgan Stanley Senior Funding, Inc., as administrative agent, and Morgan Stanley Bank, N.A., as lender.*
Seventh Amendment to Loan and Servicing Agreement, dated as of January 29, 2021, among Golub Capital BDC Funding II LLC, as borrower, Golub Capital BDC, Inc., as servicer and as the originator, Morgan Stanley Senior Funding, Inc., as administrative agent, and Morgan Stanley Bank, N.A., as lender. (Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 814-00794), filed on February 3, 2021).

  Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
   Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

_________________
* Filed herewith
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Golub Capital BDC, Inc.
Dated: February 8, 2021 By /s/ David B. Golub
David B. Golub
Chief Executive Officer
(Principal Executive Officer)
Dated: February 8, 2021 By /s/ Ross A. Teune
Ross A. Teune
Chief Financial Officer
(Principal Accounting and Financial Officer)

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Exhibit 10

 

 

FIRST SUPPLEMENTAL INDENTURE

 

dated as of December 21, 2020

 

by and between

 

GCIC CLO II LLC,

as Issuer

 

and

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee

 

to

 

the Indenture, dated as of December 13, 2018,
among the Issuer and the Trustee

 

  

 

 

THIS FIRST SUPPLEMENTAL INDENTURE, dated as of December 21, 2020 (the “Supplemental Indenture”), between GCIC CLO II LLC, a limited liability company organized under the laws of the State of Delaware (the “Issuer”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (together with its permitted successors and assigns, the “Trustee”), is entered into pursuant to the terms of the indenture, dated as of December 13, 2018 (the “Original Closing Date”), between the Issuer and the Trustee (as amended, restated or supplemented as of the date hereof and as may be further amended, restated or supplemented from time to time, the “Indenture”). Capitalized terms used but not defined in this Supplemental Indenture have the meanings assigned thereto in the Indenture.

 

PRELIMINARY STATEMENT

 

WHEREAS, the Issuer issued subordinated notes on the Original Closing Date (the “Subordinated Notes”), and a Majority of the Holders of such Subordinated Notes (the “Subordinated Noteholders”) desire to cause an Partial Refinancing of certain Secured Notes issued on the Original Closing Date;

 

WHEREAS, pursuant to Sections 9.2 and 8.1(xii) of the Indenture, at the direction of a Majority of the Subordinated Noteholders and with the consent of the Collateral Manager and the U.S. Retention Provider, the Issuer desires to enter into this Supplemental Indenture to make changes necessary to issue replacement securities in connection with a Partial Refinancing, occurring on the Refinancing Date, of the Class A-2 Senior Secured Fixed Rate Notes issued on the Original Closing Date (collectively, the “Redeemed Secured Notes”);

 

WHEREAS, the foregoing actions will take place simultaneously, and the Redeemed Secured Notes are being redeemed simultaneously with the execution of this Supplemental Indenture from proceeds of the issuance of the Refinancing Notes (as defined below) and Partial Refinancing Interest Proceeds;

 

WHEREAS, pursuant to Sections 8.1, 8.3, 9.2(a) and 9.4(a) of the Indenture, by affixing its signature hereto, the Collateral Manager and U.S. Retention Provider have consented to the terms of this Supplemental Indenture;

 

WHEREAS, pursuant to Section 8.1(a)(xii) and 9.2 of the Indenture, the Holders of at least a Majority of the Subordinated Notes have consented to the terms of this Supplemental Indenture;

 

WHEREAS, each Holder or beneficial owner of a Refinancing Note, by its purchase or acquisition thereof, will be deemed to have consented to the execution of this Supplemental Indenture; and

 

WHEREAS, for purposes of the amendments effected, a copy of this Supplemental Indenture has been delivered at least 4 Business Days prior to the date hereof in accordance with Section 8.1 and 9.4(a) of the Indenture.

 

NOW THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, the Issuer and the Trustee hereby agree as follows.

 

Section 1.               Issuance and Authentication of Refinancing Notes.

 

 

 

(a)           In accordance with Section 9.2(a) and Section 8.1(xii) of the Indenture, the Issuer hereby redeems the Redeemed Secured Notes and issues as replacement securities for the Redeemed Secured Notes the Class A-2-R Senior Secured Fixed Rate Notes (the “Refinancing Notes”). The Refinancing Notes shall have the designations, original principal amounts, and other characteristics as follows:

 

 

Class Designation A-2-R
Original Principal Amount $38,500,000
Stated Maturity January 20, 2031
Fixed Rate Note Yes
Interest Rate 2.498%
Index N/A
Index Maturity N/A
Initial Rating(s):  
S&P AAA(sf)
Fitch N/A
Priority Classes A-1
Pari Passu Classes None
Junior Classes B-1, B-2, C, D, Subordinated
Interest Deferrable No

 

The Refinancing Notes shall be issued in minimum denominations of U.S.$250,000 and integral multiples of U.S.$1.00 in excess thereof. The Refinancing Notes shall only be transferred or resold in compliance with the terms of the Indenture, as amended by this Supplemental Indenture.

 

(b)           The Issuer hereby directs the Trustee to (i) deposit the proceeds of the Refinancing Notes into the Payment Account; (ii) transfer available Partial Refinancing Interest Proceeds in an amount equal to $304,326.46 from the Interest Collection Subaccount to the Payment Account; and (iii) make payments in the following order of priority: (A) to the extent directed by the Collateral Manager, to pay for expenses incurred in connection with the issuance of the Refinancing Notes; (B) to pay the Redemption Price of the Redeemed Secured Notes; and (C) any remaining proceeds from the Refinancing Notes to be deposited in the Collection Account as Principal Proceeds. For administrative convenience, any of the foregoing described steps or transfers of cash will take place simultaneously. Amounts to be directed to a certain account and then deposited into another account may be directly deposited into such other account.

 

(c)           The Refinancing Notes shall be issued as Rule 144A Global Secured Notes and Regulation S Global Secured Notes except that Refinancing Notes shall be issued in the form of Certificated Notes to a Person that, at the time of the acquisition, purported acquisition or proposed acquisition of any such Refinancing Note is an Institutional Accredited Investor and a Qualified Purchaser (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser). The Refinancing Notes shall be issued substantially in the forms attached to the Indenture and shall be executed by the Issuer and delivered to the Trustee for authentication and thereupon the same shall be authenticated and delivered to the Issuer by the Trustee upon Issuer Order and upon receipt by the Trustee of the following:

 

2

 

 

(i)            Rating Letter. An Officer’s certificate of the Issuer to the effect that it has received a letter from S&P confirming that S&P’s rating of the Refinancing Notes is as set forth in Section 1(a) of this Supplemental Indenture.

 

(ii)           Governmental Approvals. From the Issuer either (A) a certificate of the Issuer or other official document evidencing the due authorization, approval, or consent of any governmental body or bodies, at the time having jurisdiction in the premises, together with an Opinion of Counsel of the Issuer that no other authorization, approval, or consent of any governmental body is required for the valid issuance of such Refinancing Notes; or (B) an Opinion of Counsel of the Issuer that no such authorization, approval, or consent of any governmental body is required for the valid issuance of such Refinancing Notes except as has been given.

 

(iii)          Legal Opinions. Opinions of (A) Dechert LLP, special counsel to the Issuer, (B) Clark Hill PLC, Delaware counsel to the Issuer and (C) Locke Lord LLP, counsel to the Trustee, in each case dated as of the Refinancing Date.

 

(iv)          Officers’ Certificates of the Issuer Regarding Corporate Matters. An Officer’s certificate of the Issuer (A) evidencing the authorization by Resolution of the execution and authentication of the securities applied for by it and specifying the Stated Maturity, principal amount and Interest Rate of the Refinancing Notes to be delivered and authenticated by it as set forth in Section 1(a) hereto; and (B) certifying that (1) the attached copy of the Resolutions is a true and complete copy thereof, (2) such Resolutions have not been rescinded and are in full force and effect on and as of the Refinancing Date and (3) the Officers authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon.

 

(v)           Officers’ Certificates of Issuer Regarding this Supplemental Indenture. An Officer’s certificate of the Issuer stating that, to the best of the signing Officer’s knowledge, the Issuer is not in default under the Indenture (before and after giving effect to this Supplemental Indenture) and that the issuance of the Refinancing Notes applied for by it will not result in a default or a breach of any of the terms, conditions or provisions of, or constitute a default under, its organizational documents, any indenture or other agreement or instrument to which it is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which it is a party or by which it may be bound or to which it may be subject; that all conditions precedent provided in the Indenture relating to the authentication and delivery of the Refinancing Notes applied for by it have been complied with and that the authentication and delivery of the Refinancing Notes is authorized or permitted under the Indenture; and that all expenses due or accrued with respect to the offering of the Refinancing Notes or relating to actions taken on or in connection with the Refinancing Date have been paid or reserves therefor have been made. The Officer’s certificate of the Issuer shall also state that all of its representations and warranties contained in the Indenture (as amended by this Supplemental Indenture) are true and correct as of the Refinancing Date.

 

3

 

 

(vi)          Officers’ Certificate of Collateral Manager. An Officer’s certificate of the Collateral Manager stating that the conditions set forth in Section 9.2(f) of the Indenture have been satisfied.

 

(d)           On the Refinancing Date, all Global Notes representing the Redeemed Secured Notes that are held by the Trustee on behalf of Cede & Co. shall be deemed to be surrendered and shall be deemed to be cancelled in accordance with Section 2.9 of the Indenture.

 

Section 2.              Amendments to the Indenture. As of the date hereof, the Indenture is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the bold and double-underlined text (indicated textually in the same manner as the following example: bold and double-underlined text) as set forth on the pages of the Indenture attached as Appendix A hereto and the exhibits to the Indenture are amended and restated in their entirety and replaced with the Exhibits attached to the Indenture attached as Appendix A hereto.

 

Section 3.              Indenture to Remain in Effect.

 

(a)           Except as expressly modified herein, the Indenture shall continue in full force and effect in accordance with its terms. Upon issuance and authentication of the Refinancing Notes and redemption in full of the Redeemed Secured Notes, all references in the Indenture to the Class of Redeemed Secured Notes shall apply mutatis mutandis to the Class of the Refinancing Notes issued hereunder. All references in the Indenture to the Indenture or to “this Indenture” shall apply mutatis mutandis to the Indenture as modified by this Supplemental Indenture. The Trustee shall be entitled to all rights, protections, immunities and indemnities set forth in the Indenture as if fully set forth in this Supplemental Indenture.

 

(b)           For the avoidance of doubt, the changes set forth in Appendix A hereto shall supersede any terms or provisions of the Indenture that are inconsistent with such changes.

 

Section 4.               Waivers and Acknowledgements

 

(a)           By its purchase of a Refinancing Note issued hereunder, each Holder or beneficial owner waives any notices in connection with this Supplemental Indenture, and any notice periods pertaining thereto, required to be given to such Holder or beneficial owner pursuant to the terms of the Indenture, including Section 8.1 of the Indenture.

 

(b)           By its purchase of a Refinancing Note hereunder, each Holder or beneficial owner is deemed to consent to the terms of this Supplemental Indenture, which consents shall be considered to be “in writing” for purposes of Section 14.2 of the Indenture and each such Holder or beneficial owner waives any other conditions or requirements applicable to such amendment.

 

Section 5.               Miscellaneous.

 

(a)           THIS Supplemental Indenture SHALL BE CONSTRUED IN ACCORDANCE WITH, AND any matters arising out of or relating in any way whatsoever to this Supplemental Indenture (whether in contract, tort or otherwise) shall be GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.

 

4

 

 

(b)           This Supplemental Indenture (and each amendment, modification and waiver in respect of it), the Refinancing Notes may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original, and all of which together constitute one and the same instrument. This Supplemental Indenture shall be valid, binding, and enforceable against a party when executed and delivered by ‎an authorized individual on behalf of the party by means of (i) an original manual signature; (ii) a faxed, ‎scanned, or photocopied manual signature, or (iii) any other electronic signature permitted by the federal ‎Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic ‎Transactions Act, and/or any other relevant electronic signatures law, including any relevant provisions of ‎the UCC‎ ‎ (collectively, “Signature Law”), in each case to the extent ‎applicable. Each faxed, scanned, or photocopied manual signature, or other electronic signature, shall for ‎all purposes have the same validity, legal effect, and admissibility in evidence as an original manual ‎signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with ‎respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any ‎other party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity ‎thereof. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be ‎deemed to be an original, but such counterparts shall, together, constitute one and the same instrument. ‎For the avoidance of doubt, original manual signatures shall be used for execution or indorsement of ‎writings when required under the UCC or other Signature Law due to the character or intended character ‎of the writings.‎

 

(c)           Notwithstanding any other provision of this Supplemental Indenture, the obligations of the Issuer under the Refinancing Notes and the Indenture as supplemented by this Supplemental Indenture are limited recourse obligations of the Issuer payable solely from the Assets and following realization of the Assets, and application of the proceeds thereof in accordance with the Indenture as supplemented by this Supplemental Indenture, all obligations of and any claims against the Issuer hereunder or in connection herewith after such realization shall be extinguished and shall not thereafter revive. No recourse shall be had against any officer, director, member, manager, partner, employee, shareholder or authorized person of the Issuer, the Collateral Manager, the Retention Provider or their respective successors or assigns for any amounts payable under the Refinancing Notes (except as otherwise provided herein) or the Indenture as supplemented by this Supplemental Indenture. It is understood that the foregoing provisions of this Section 5(c) shall not (i) prevent recourse to the Assets for the sums due or to become due under any security, instrument or agreement which is part of the Assets or (ii) constitute a waiver, release or discharge of any indebtedness or obligation evidenced by the Refinancing Notes or secured by the Indenture as supplemented by this Supplemental Indenture until the assets constituting the Assets have been realized. It is further understood that the foregoing provisions of this Section 5(c) shall not limit the right of any Person to name the Issuer as a party defendant in any Proceeding or in the exercise of any other remedy under the Refinancing Notes or the Indenture as supplemented by this Supplemental Indenture, so long as no judgment in the nature of a deficiency judgment or seeking personal liability shall be asked for or (if obtained) enforced against any such Person.

 

5

 

 

(d)           Notwithstanding any other provision of the Indenture as supplemented by this Supplemental Indenture, neither the Trustee nor the Holders or beneficial owners of the Refinancing Notes may, prior to the date which is one year (or if longer, any applicable preference period) and one day after the payment in full of all Notes, institute against, or join any other Person in instituting against, the Issuer any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation Proceedings, or other Proceedings under U.S. federal or State bankruptcy or similar laws. Nothing in this Section 5(d) shall preclude, or be deemed to stop, the Trustee (i) from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily filed or commenced by the Issuer or (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Trustee, or (ii) from commencing against the Issuer any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation Proceeding.

 

(e)           The Trustee assumes no responsibility for the correctness of the recitals contained herein, which shall be taken as the statements of the Issuer and, except as provided in the Indenture, the Trustee shall not be responsible or accountable in any way whatsoever for or with respect to the validity, execution or sufficiency of this Supplemental Indenture and makes no representation with respect thereto. In entering into this Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.

 

(f)            The Issuer hereby directs the Trustee to execute this Supplemental Indenture and the Issuer hereby acknowledges and agrees that the Trustee shall be fully protected in relying upon the foregoing direction.

 

(g)           The Issuer represents and warrants to the Trustee that this Supplemental Indenture has been duly and validly executed and delivered by the Issuer and constitutes its respective legal, valid and binding obligation, enforceable against the Issuer in accordance with its terms.

 

(h)           The Issuer hereby acknowledges that, to the extent any expenses incurred in connection with this Supplemental Indenture are not paid on the Refinancing Date, such expenses shall be paid pursuant to Section 11.1 of the Indenture starting on the Payment Date immediately following the Refinancing Date.

 

(i)            This Supplemental Indenture shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

[Remainder of the Page Intentionally Left Blank.]

 

6

 

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Supplemental Indenture as of the date first written above.

 

  GCIC CLO II LLC, as Issuer
   
  By: Golub Capital BDC, Inc., its designated manager
   
  By: /s/ Ross A. Teune
    Name: Ross A. Teune
    Title: Chief Financial Officer

 

7

 

 

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION,

as Trustee

   
  By: /s/ Bruce C. Boyd
    Name: Bruce C. Boyd
    Title: Vice President

 

8

 

 

Consented to by:  
   
GC ADVISORS LLC,
as Collateral Manager 		 
   
   
By: /s/ Joshua M. Levinson  
  Name: Joshua M. Levinson  
  Title: Co-General Counsel and Chief Compliance Officer  

 

9

 

 

Consented to by:  
   
GCIC CLO II DEPOSITOR II LLC,  
as Majority Subordinated Noteholder and U.S. Retention Provider  
   
By: Golub Capital BDC, Inc., its designated manager  
   
   
By: /s/ Ross A. Teune  
  Name: Ross A. Teune  
  Title: Chief Financial Officer  

 

10

 

 

APPENDIX A

 

[attached below]

 

11

 

 

 

EXECUTION VERSION

Conformed Through First Supplemental Indenture

Dated as of December 21, 2020

  

  

INDENTURE

 

by and between

 

GCIC CLO II LLC,
Issuer

 

and

 

THE BANK OF NEW YORK MELLON TRUST COMPANY,
NATIONAL ASSOCIATION,
Trustee

 

Dated as of December 13, 2018

  

 

 

 

 

TABLE OF CONTENTS

 

    Page
     
ARTICLE I Definitions 2
     
Section 1.1 Definitions 2
Section 1.2 Usage of Terms 75
Section 1.3 Assumptions as to Assets 76
     
ARTICLE II The Notes 7879
     
Section 2.1 Forms Generally 7879
Section 2.2 Forms of Notes 7879
Section 2.3 Authorized Amount; Stated Maturity; Denominations 81
Section 2.4 Execution, Authentication, Delivery and Dating 82
Section 2.5 Registration, Registration of Transfer and Exchange 8283
Section 2.6 Mutilated, Defaced, Destroyed, Lost or Stolen Note 9394
Section 2.7 Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved 95
Section 2.8 Persons Deemed Owners 98
Section 2.9 Cancellation 98
Section 2.10 DTC Ceases to be Depository 99
Section 2.11 Non-Permitted Holders 99100
Section 2.12 Treatment and Tax Certification 101102
Section 2.13 Additional Issuance 104105
     
ARTICLE III Conditions Precedent 106107
     
Section 3.1 Conditions to Issuance of Notes on Closing Date 106107
Section 3.2 Conditions to Additional Issuance 109110
Section 3.3 Custodianship; Delivery of Collateral Obligations and Eligible Investments 111112
     
ARTICLE IV Satisfaction And Discharge 112113
     
Section 4.1 Satisfaction and Discharge of Indenture 112113
Section 4.2 Application of Trust Money 113114
Section 4.3 Repayment of Monies Held by Paying Agent 113114
Section 4.4 Liquidation of Assets 114
     
ARTICLE V Remedies 114115
     
Section 5.1 Events of Default 114115
Section 5.2 Acceleration of Maturity; Rescission and Annulment 116117
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee 117118
Section 5.4 Remedies 119120
Section 5.5 Optional Preservation of Assets 121121
Section 5.6 Trustee May Enforce Claims Without Possession of Notes 123
Section 5.7 Application of Money Collected 123
Section 5.8 Limitation on Suits 123124

 

-i-

 

 

TABLE OF CONTENTS

(continued)

 

    Page
     
Section 5.9 Unconditional Rights of Secured Noteholders to Receive Principal and Interest 124
Section 5.10 Restoration of Rights and Remedies 124125
Section 5.11 Rights and Remedies Cumulative 124125
Section 5.12 Delay or Omission Not Waiver 124125
Section 5.13 Control by Supermajority of Controlling Class 124125
Section 5.14 Waiver of Past Defaults 125126
Section 5.15 Undertaking for Costs 126
Section 5.16 Waiver of Stay or Extension Laws 126127
Section 5.17 Sale of Assets 126127
Section 5.18 Action on the Notes 127128
     
ARTICLE VI The Trustee 127128
     
Section 6.1 Certain Duties and Responsibilities 127128
Section 6.2 Notice of Event of Default 129130
Section 6.3 Certain Rights of Trustee 129130
Section 6.4 Not Responsible for Recitals or Issuance of Notes 133134
Section 6.5 May Hold Notes 133134
Section 6.6 Money Held in Trust 133134
Section 6.7 Compensation and Reimbursement 133134
Section 6.8 Corporate Trustee Required; Eligibility 135
Section 6.9 Resignation and Removal; Appointment of Successor 135136
Section 6.10 Acceptance of Appointment by Successor 136137
Section 6.11 Merger, Conversion, Consolidation or Succession to Business of Trustee 137
Section 6.12 Co-Trustees 137138
Section 6.13 Certain Duties of Trustee Related to Delayed Payment of Proceeds 138139
Section 6.14 Authenticating Agents 138139
Section 6.15 Withholding 139140
Section 6.16 Representative for Secured Noteholders only; Agent for each other Secured Party and the Holders of the Subordinated Notes 139140
Section 6.17 Representations and Warranties of the Bank 140
     
ARTICLE VII Covenants 140141
     
Section 7.1 Payment of Principal and Interest 140141
Section 7.2 Maintenance of Office or Agency 141
Section 7.3 Money for Note Payments to be Held in Trust 141142
Section 7.4 Existence of Issuer 143144
Section 7.5 Protection of Assets 145
Section 7.6 Opinions as to Assets 145146
Section 7.7 Performance of Obligations 145146
Section 7.8 Negative Covenants 145146

 

-ii-

 

 

TABLE OF CONTENTS

(continued)

 

    Page
Section 7.9 Statement as to Compliance 147148
Section 7.10 Issuer May Consolidate, etc., Only on Certain Terms 147148
Section 7.11 Successor Substituted 149150
Section 7.12 No Other Business 149150
Section 7.13 [Reserved]. 149150
Section 7.14 Annual Rating Review 150
Section 7.15 Reporting 150151
Section 7.16 Calculation Agent 150151
Section 7.17 Certain Tax Matters 151152
Section 7.18 Effective Date; Purchase of Additional Collateral Obligations 156157
Section 7.19 Representations Relating to Security Interests in the Assets 159160
     
ARTICLE VIII Supplemental Indentures 163
     
Section 8.1 Supplemental Indentures Without Consent of Holders of Notes 163
Section 8.2 Supplemental Indentures With Consent of Holders of Notes 167
Section 8.3 Execution of Supplemental Indentures 167168
Section 8.4 Effect of Supplemental Indentures 171
Section 8.5 Reference in Notes to Supplemental Indentures 171
Section 8.6 Hedge Agreements 171172
     
ARTICLE IX Redemption Of Notes 171172
     
Section 9.1 Mandatory Redemption 171172
Section 9.2 Optional Redemption 171172
Section 9.3 Tax Redemption 175176
Section 9.4 Redemption Procedures 175176
Section 9.5 Notes Payable on Redemption Date 177178
Section 9.6 Special Redemption 178179
Section 9.7 Issuer Purchases of Secured Notes 178179
Section 9.8 Optional Re-Pricing 180181
Section 9.9 Clean-Up Call Redemption 184
     
ARTICLE X Accounts, Accountings And Releases 184185
     
Section 10.1 Collection of Money 184185
Section 10.2 Collection Account 185
Section 10.3 Transaction Accounts. 187188
Section 10.4 The Revolver Funding Account 189190
Section 10.5 Ownership of the Accounts 191
Section 10.6 Reinvestment of Funds in Accounts; Reports by Trustee 190191
Section 10.7 Accountings 191192
Section 10.8 Release of Assets 200
Section 10.9 Reports by Independent Accountants 202
Section 10.10 Reports to the Rating Agencies and Additional Recipients 202203

 

-iii-

 

 

TABLE OF CONTENTS

(continued)

 

    Page
     
Section 10.11 Procedures Relating to the Establishment of Accounts Controlled by the Trustee 203
Section 10.12 Section 3(c)(7) Procedures 203
Section 10.13 No Further Reporting Following the Redemption of the Secured Notes 206207
     
ARTICLE XI Application Of Monies 206207
     
Section 11.1 Disbursements of Monies from Payment Account 206207
     
ARTICLE XII SALE OF COLLATERAL OBLIGATIONS; PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS 213214
     
Section 12.1 Sales of Collateral Obligations 214
Section 12.2 Purchase of Additional Collateral Obligations 217
Section 12.3 Conditions Applicable to All Sale and Purchase Transactions 220
     
ARTICLE XIII Noteholders’ Relations 221
     
Section 13.1 Subordination 221
Section 13.2 Standard of Conduct 221222
     
ARTICLE XIV MISCELLANEOUS 222
     
Section 14.1 Form of Documents Delivered to Trustee 222
Section 14.2 Acts of Holders 223224
Section 14.3 Notices, etc., to Trustee, the Issuer, the Collateral Manager, the Initial Purchaser, the Collateral Administrator, the Paying Agent and each Rating Agency 224225
Section 14.4 Notices to Holders; Waiver 226
Section 14.5 Effect of Headings and Table of Contents 226227
Section 14.6 Successors and Assigns 227
Section 14.7 Severability 227
Section 14.8 Benefits of Indenture 227
Section 14.9 Legal Holidays 227228
Section 14.10 Governing Law 227228
Section 14.11 Submission to Jurisdiction 227228
Section 14.12 Waiver of Jury Trial 228
Section 14.13 Counterparts 228
Section 14.14 Acts of Issuer 228
Section 14.15 Confidential Information 228229
Section 14.16 Liability of Issuer 230
Section 14.17 Notices to S&P; Rule 17g-5 Procedures 230231
Section 14.18 Proceedings 232233
     
ARTICLE XV Assignment Of Certain Agreements 233
     
Section 15.1 Assignment of Collateral Management Agreement 233
     

 

-iv-

 

 

Schedules and Exhibits

 

Schedule 1 List of Collateral Obligations  
Schedule 2 S&P Industry Classifications  
Schedule 3 Moody’s Rating Definitions  
Schedule 4 S&P Recovery Rate Tables  
Schedule 5 [Reserved]  
Schedule 6 Diversity Score Calculation  
Schedule 7 Fitch Rating Definitions  
Schedule 8 S&P Region Diversity Table  
     
     
Exhibit A Forms of Notes  
A-1 Form of Global Secured Note  
A-2 Form of Rule 144A Global Subordinated Note  
A-3 Form of Certificated Secured Note  
A-4 Form of Certificated Subordinated Note  
     
Exhibit B Forms of Transfer and Exchange Certificates  
B-1 Form of Transferor Certificate for Transfer of Rule 144A Global Secured Note or Certificated Secured Note to Regulation S Global Secured Note  
B-2 Form of Purchaser Representation Letter for Certificated Secured Notes  
B-3 Form of Transferor Certificate for Transfer of Regulation S Global Secured Note or Certificated Secured Note to Rule 144A Global Secured Note  
B-4 Form of Purchaser Representation Letter for Certificated Subordinated Notes  
B-5 Form of Subordinated Note ERISA Certificate  
B-6 Form of Transferee Certificate of Rule 144A Global Secured Note  
B-7 Form of Transferee Certificate of Temporary Regulation S Global Secured Note or Regulation S Global Secured Note  
     
B-8 Form of Transferor Certificate for Transfer of Certificated Subordinated Note to Rule 144A Global Subordinated Note  
B-9 Form of Transferee Certificate of Rule 144A Global Subordinated Note  

 

Exhibit C Calculation of LIBOR
Exhibit D Form of Beneficial Ownership Certificate
Exhibit E Form of NRSRO Certification
Exhibit F Form of Notice of Contribution

 

-v-

 

 

INDENTURE, dated as of December 13, 2018, between GCIC CLO II LLC, a limited liability company organized under the laws of the State of Delaware (the “Issuer”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (herein, together with its permitted successors and assigns in the trusts hereunder, the “Trustee”).

 

PRELIMINARY STATEMENT

 

The Issuer is duly authorized to execute and deliver this Indenture to provide for the Notes issuable as provided herein. The Issuer is entering into this Indenture, and the Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

 

All things necessary to make this Indenture a valid agreement of the Issuer in accordance with the agreement’s terms have been done.

 

GRANTING CLAUSES

 

The Issuer hereby Grants to the Trustee, for the benefit and security of the Holders of the Secured Notes, the Trustee, the Collateral Manager and the Collateral Administrator (collectively, the “Secured Parties”), all of its right, title and interest in, to and under, in each case, whether now owned or existing, or hereafter acquired or arising any and all accounts, chattel paper, deposit accounts, financial assets, general intangibles, instruments, investment property, letter-of-credit rights, documents, goods and supporting obligations and other assets in which the Issuer has an interest and specifically including: (a) the Collateral Obligations (listed, as of the Closing Date, in Schedule 1 to this Indenture) which the Issuer causes to be delivered to the Trustee (directly or through an intermediary or bailee) herewith and all payments thereon or with respect thereto, and all Collateral Obligations which are delivered to the Trustee in the future pursuant to the terms hereof and all payments thereon or with respect thereto, (b) each of the Accounts, and in each case any Eligible Investments purchased with funds on deposit in any of the Accounts, and all income from the investment of funds therein, (c) the Collateral Management Agreement as set forth in Article XV hereof, the Securities Account Control Agreement, the Master Loan Sale Agreements and the Collateral Administration Agreement, (d) all Cash or Money delivered to the Trustee (or its bailee) from any source for the benefit of the Secured Parties or the Issuer, (e) any Equity Securities received by the Issuer; it being understood that Equity Securities may not be purchased by the Issuer but it is possible that the Issuer may receive an Equity Security in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout in such case that would be considered “received in lieu of debts previously contracted with respect to the Collateral Obligation” under the Volcker Rule, (f) all accounts, chattel paper, deposit accounts, financial assets, general intangibles, payment intangibles, instruments, investment property, letter-of-credit rights, securities, money, documents, goods, commercial tort claims and securities entitlements, and other supporting obligations (as such terms are defined in the UCC), (g) any other property otherwise delivered to the Trustee by or on behalf of the Issuer (whether or not constituting Collateral Obligations, Equity Securities or Eligible Investments); and (h) all proceeds (as defined in the UCC) and products with respect to the foregoing (the assets referred to in (a) through (h) are collectively referred to as the “Assets”).

 

 

 

 

The above Grant is made in trust to secure the Secured Notes, the Issuer’s other obligations to the Secured Parties under this Indenture, the other Transaction Documents, and certain other amounts payable by the Issuer as described herein. Except as set forth in the Priority of Payments and Article XIII of this Indenture, the Secured Notes are secured by the Grant equally and ratably without prejudice, priority or distinction between any Secured Note and any other Secured Note by reason of difference in time of issuance or otherwise. The Grant is made to secure, in accordance with the priorities set forth in the Priority of Payments and Article XIII of this Indenture, (i) the payment of all amounts due on the Secured Notes in accordance with their terms, (ii) the payment of all other sums (other than in respect of the Subordinated Notes) payable under this Indenture, (iii) the payment of amounts owing by the Issuer under the Collateral Management Agreement, the Collateral Administration Agreement and the Master Loan Sale Agreements and (iv) compliance with the provisions of this Indenture, all as provided herein (collectively, the “Secured Obligations”). The foregoing Grant shall, for the purpose of determining the property subject to the lien of this Indenture, be deemed to include any securities and any investments granted to the Trustee by or on behalf of the Issuer, whether or not such securities or investments satisfy the criteria set forth in the definitions of “Collateral Obligation” or “Eligible Investments”, as the case may be.

 

The Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with the provisions hereof, and agrees to perform the duties herein in accordance with the terms hereof.

 

ARTICLE I

 

Definitions

 

Section 1.1            Definitions. Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms. The word “including” shall mean “including without limitation.” All references herein to designated “Articles”, “Sections”, “sub-sections” and other subdivisions are to the designated articles, sections, sub-sections and other subdivisions of this Indenture. The words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular article, section, sub-section or other subdivision.

 

“1940 Act”: The United States Investment Company Act of 1940, as amended from time to time.

 

“ABL Facility”: A lending facility pursuant to which the loans thereunder are secured by a perfected, first priority security interest in accounts receivable, inventory, machinery, equipment, real estate, oil and gas reserves, vessels or periodic revenues, where such collateral security consists of assets generated or acquired by the related Obligor in its business.

 

“Accountants’ Effective Date AUP Reports”: The meaning specified in Section 7.18(c)(iii).

 

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“Accountants’ Effective Date Comparison AUP Report”: The meaning specified in Section 7.18(c)(iii).

 

“Accountants’ Effective Date Recalculation AUP Report”: The meaning specified in Section 7.18(c)(iii).

 

“Accountants’ Report”: An agreed upon procedures report of the firm or firms appointed by the Issuer pursuant to Section 10.9(a).

 

“Accounts”: (i) The Payment Account, (ii) the Collection Account, (iii) the Ramp-Up Account, (iv) the Revolver Funding Account, (v) the Expense Reserve Account, (vi) the Custodial Account and (vii) the Supplemental Reserve Account.

 

“Accredited Investor”: The meaning set forth in Rule 501(a) under the Securities Act.

 

“Act” and “Act of the Holders”: The meanings specified in Section 14.2.

 

“Additional Notes”: Any Notes issued pursuant to Section 2.13.

 

“Additional Notes Closing Date”: The closing date for the issuance of any Additional Notes pursuant to Section 2.13 as set forth in an indenture supplemental to this Indenture pursuant to Section 8.1(a)(xii).

 

“Adjusted Class Break-even Default Rate”: The rate equal to (a) (i) the Class Break-even Default Rate multiplied by (ii) (x) the Target Initial Par Amount divided by (y) the Collateral Principal Amount plus the S&P Collateral Value of all Defaulted Obligations plus (b) (i) (x) the Collateral Principal Amount plus the S&P Collateral Value of all Defaulted Obligations minus (y) the Target Initial Par Amount, divided by (ii) (x) the Collateral Principal Amount plus the S&P Collateral Value of all Defaulted Obligations multiplied by (y) 1 minus the Weighted Average S&P Recovery Rate.

 

“Adjusted Collateral Principal Amount”: As of any date of determination, (a) the Aggregate Principal Balance of the Collateral Obligations (other than Defaulted Obligations, Deferring Obligations (except Permitted Deferrable Obligations), Discount Obligations (to the extent set forth in clause (d) below) and Long-Dated Obligations); plus (b) without duplication, the amounts on deposit in any Account (including Eligible Investments therein but excluding the Revolver Funding Account) representing Principal Proceeds; plus (c) the aggregate, for each Defaulted Obligation and Deferring Obligation (other than Permitted Deferrable Obligations), of the Defaulted Obligation Balance of such Defaulted Obligation or Deferring Obligation; plus (d) the aggregate, for such portion of a Discount Obligation that does not fall into the Excess CCC Adjustment Amount, of the purchase price, excluding accrued interest, expressed as a percentage of par and multiplied by the outstanding principal balance thereof, for such Discount Obligation; minus (e) the Excess CCC Adjustment Amount; plus (f) the sum of the Long-Dated Obligation Amount for each Long-Dated Obligation; provided that, with respect to any Collateral Obligation that satisfies more than one of the definitions of Defaulted Obligation, Deferring Obligation (except Permitted Deferrable Obligations), Discount Obligation, Long-Dated Obligation or any asset that falls into the Excess CCC Adjustment Amount, such Collateral Obligation shall, for the purposes of this definition, be treated as belonging to the category of Collateral Obligations which results in the lowest Adjusted Collateral Principal Amount on any date of determination; provided further that Long-Dated Obligations which are included in the CCC Excess shall be treated as belonging in both categories as set forth in this definition of Adjusted Collateral Principal Amount.

 

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“Administrative Expense Cap”: An amount equal on any Payment Date (when taken together with any Administrative Expenses in the order of priority contained in the definition thereof paid during the period since the preceding Payment Date or in the case of the first Payment Date, the period since the Closing Date), to the sum of (a) 0.02% per annum (prorated for the related Interest Accrual Period on the basis of a 360-day year and the actual number of days elapsed) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date and (b) U.S.$200,000 per annum (prorated for the related Interest Accrual Period on the basis of a 360-day year consisting of twelve 30-day months); provided that (1) in respect of any Payment Date after the third Payment Date following the Closing Date, if the aggregate amount of Administrative Expenses paid pursuant to Sections 11.1(a)(i)(A), 11.1(a)(ii)(A) and 11.1(a)(iii)(A) (including any excess applied in accordance with this proviso) on the three immediately preceding Payment Dates and during the related Collection Periods is less than the stated Administrative Expense Cap (without regard to any excess applied in accordance with this proviso) in the aggregate for such three preceding Payment Dates, then the excess may be applied to the Administrative Expense Cap with respect to the then-current Payment Date; and (2) in respect of the third Payment Date following the Closing Date, such excess amount shall be calculated based on the Payment Dates preceding such Payment Date.

 

“Administrative Expenses”: The fees, expenses (including indemnities) and other amounts due or accrued with respect to any Payment Date (including, with respect to any Payment Date, any such amounts that were due and not paid on any prior Payment Date in accordance with the Priority of Payments) and payable in the following order by the Issuer: first, to the Trustee pursuant to Section 6.7 and the other provisions of this Indenture, second, to the Collateral Administrator pursuant to the Collateral Administration Agreement and the Bank in any of its other capacities under the Transaction Documents, third, on a pro rata basis, the following amounts (excluding indemnities) to the following parties: (i) the Independent accountants, agents (other than the Collateral Manager) and counsel of the Issuer for fees and expenses; (ii) the Rating Agencies for fees and expenses (including any annual fee, amendment fees and surveillance fees) in connection with any rating of the Secured Notes or in connection with the rating of (or provision of credit estimates in respect of) any Collateral Obligations; (iii) the Collateral Manager under this Indenture and the Collateral Management Agreement, including without limitation reasonable expenses of the Collateral Manager (including fees for its accountants, agents and counsel) incurred in connection with the purchase or sale of any Collateral Obligations, any other expenses incurred in connection with the Collateral Obligations and any other amounts payable pursuant to the Collateral Management Agreement but excluding the Aggregate Collateral Management Fee; (iv) the Independent Manager for any fees or expenses due under the management agreement between the Issuer and Independent Manager; and (v) any other Person in respect of any other fees or expenses permitted under this Indenture and the documents delivered pursuant to or in connection with this Indenture (including without limitation the payment of all legal and other fees and expenses incurred in connection with the purchase or sale of any Collateral Obligations and any other expenses incurred in connection with the Collateral Obligations) and the Notes, including but not limited to, amounts owed to the Issuer pursuant to Section 7.1 and any amounts due in respect of the listing of the Secured Notes on any stock exchange or trading system; and fourth, on a pro rata basis, indemnities payable to any Person pursuant to any Transaction Document; provided that (x) amounts due in respect of actions taken on or before the Closing Date shall not be payable as Administrative Expenses but shall be payable only from the Expense Reserve Account pursuant to this Indenture and (y) for the avoidance of doubt, amounts that are expressly payable to any Person under the Priority of Payments in respect of an amount that is stated to be payable as an amount other than as Administrative Expenses (including, without limitation, interest and principal in respect of the Notes) shall not constitute Administrative Expenses.

 

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“Affected Class”: Any Class of Secured Notes that, as a result of the occurrence of a Tax Event described in the definition of “Tax Redemption” has not received 100% of the aggregate amount of principal and interest that would otherwise be due and payable to such Class on any Payment Date.

 

“Affiliate”: With respect to a Person, (i) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (ii) any other Person who is a director, Officer, employee or general partner (a) of such Person, (b) of any subsidiary or parent company of such Person or (c) of any Person described in clause (i) above. For the purposes of this definition, “control” of a Person shall mean the power, direct or indirect, (x) to vote more than 50% of the securities having ordinary voting power for the election of directors of such Person or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

“Agent Members”: Members of, or participants in, DTC, Euroclear or Clearstream.

 

“Aggregate Collateral Management Fee”: All accrued and unpaid Collateral Management Fees, Current Deferred Management Fees, Cumulative Deferred Management Fees and Collateral Management Fee Shortfall Amounts (including accrued interest) due and payable to the Collateral Manager.

 

“Aggregate Coupon”: As of any Measurement Date, the sum of the products obtained by multiplying, in the case of each Fixed Rate Obligation (other than a Defaulted Obligation or Deferrable Obligation (other than a Permitted Deferrable Obligation)) (including, for any Permitted Deferrable Obligation, only the required current cash interest required by the Underlying Instruments thereon), (i) the stated coupon on such Collateral Obligation expressed as a percentage and (ii) the outstanding principal balance of such Collateral Obligation.

 

“Aggregate Funded Spread”: As of any Measurement Date, the sum of: (a) in the case of each Floating Rate Obligation (excluding the unfunded portion of any Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation) that bears interest at a spread over a London interbank offered rate based index, (i) the stated interest rate spread on such Collateral Obligation above such index as of the immediately preceding Interest Determination Date multiplied by (ii) the outstanding principal balance of such Collateral Obligation; and (b) in the case of each Floating Rate Obligation (excluding the unfunded portion of any Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation) that bears interest at a spread over an index other than a London interbank offered rate based index, (i) the excess of the sum of such spread and such index over LIBOR as of the immediately preceding Interest Determination Date (which spread or excess may be expressed as a negative percentage) multiplied by (ii) the outstanding principal balance of each such Collateral Obligation.

 

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For purposes of calculating the Aggregate Funded Spread, (i) such calculation shall exclude any Deferring Obligation until the obligor thereof has resumed the payment of cash interest in cash, (ii) with respect to any LIBOR Floor Obligation, the stated interest rate spread on such Collateral Obligation over the applicable index shall be deemed to be equal to the sum of (x) the stated interest rate spread over the applicable index and (y) the excess, if any, of the specified “floor” rate relating to such Collateral Obligation over LIBOR as in effect for the current Interest Accrual Period (or portion thereof, in the case of the first Interest Accrual Period) and (iii) the stated interest rate of a Collateral Obligation will be excluded from such calculation to the extent the Issuer or the Collateral Manager has actual knowledge that such payment of interest will not be made by the obligor thereof during the applicable period.

 

“Aggregate Outstanding Amount”: With respect to any of the Notes as of any date, the aggregate unpaid principal amount of such Notes Outstanding on such date.

 

“Aggregate Principal Balance”: When used with respect to all or a portion of the Collateral Obligations or the Assets, the sum of the Principal Balances of all or of such portion of the Collateral Obligations or Assets, respectively.

 

“Aggregate Risk Adjusted Par Amount”: The amount specified below for the applicable Interest Accrual Period, listed sequentially, starting with the Interest Accrual Period commencing on the Closing Date:

 

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Interest Accrual Period   Aggregate Risk Adjusted
Par Amount ($) 		 
1     900,000,000  
2     898,095,000  
3     896,747,858  
4     895,402,736  
5     894,059,632  
6     892,718,542  
7     891,379,464  
8     890,042,395  
9     888,707,332  
10     887,374,271  
11     886,043,209  
12     884,714,144  
13     883,387,073  
14     882,061,993  
15     880,738,900  
16     879,417,791  
17     878,098,664  
18     876,781,516  
19     875,466,344  
20     874,153,145  
21     872,841,915  
22     871,532,652  
23     870,225,353  
24     868,920,015  
25     867,616,635  
26     866,315,210  
27     865,015,737  
28     863,718,214  
29     862,422,636  
30     861,129,002  
31     859,837,309  
32     858,547,553  
33     857,259,732  
34     855,973,842  
35     854,689,881  
36     853,407,846  
37     852,127,735  
38     850,849,543  
39     849,573,269  
40     848,298,909  
41     847,026,461  
42     845,755,921  
43     844,487,287  
44     843,220,556  
45     841,955,725  
46     840,692,792  
47     839,431,752  
48     838,172,605  
49     836,915,346  

 

“Aggregate Unfunded Spread”: As of any Measurement Date, the sum of the products obtained by multiplying (i) for each Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation (other than Defaulted Obligations), the related commitment fee rate then in effect as of such date and (ii) the undrawn commitments of each such Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation as of such date.

 

“AIFMD Level 2 Regulation”: The meaning specified in the definition of the term “E.U. Retention Requirement Laws”.

 

“Alternative Method”: The meaning specified in Section 7.17(l).

 

“Alternative Rate”: The meaning set forth in Exhibit C hereto.

 

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“Asset-backed Commercial Paper”: Commercial paper or other short-term obligations of a program that primarily issues externally rated commercial paper backed by assets or exposures held in a bankruptcy-remote, special purpose entity.

 

“Assets”: The meaning assigned in the Granting Clause hereof.

 

“Assigned Moody’s Rating”: The meaning specified in Schedule 3 hereto.

 

“Assumed Reinvestment Rate”: LIBOR (as determined on the most recent Interest Determination Date relating to an Interest Accrual Period beginning on a Payment Date or the Closing Date) minus 0.25% per annum; provided that the Assumed Reinvestment Rate shall not be less than 0.00%.

 

“Authenticating Agent”: With respect to the Notes or a Class of the Notes, the Person designated by the Trustee to authenticate such Notes on behalf of the Trustee pursuant to Section 6.14 hereof.

 

“Balance”: On any date, with respect to Cash or Eligible Investments in any account, the aggregate of the (i) current balance of Cash, demand deposits, time deposits, certificates of deposit and federal funds; (ii) principal amount of interest-bearing corporate and government securities, money market accounts and repurchase obligations; and (iii) purchase price (but not greater than the face amount) of non-interest-bearing government and corporate securities and commercial paper.

 

“Bank”: The Bank of New York Mellon Trust Company, National Association, in its individual capacity and not as Trustee, or any successor thereto.

 

“Bankruptcy Code”: The federal Bankruptcy Code, Title 11 of the United States Code, as amended from time to time.

 

“Bankruptcy Law”: The Bankruptcy Code, as amended from time to time, and any bankruptcy, insolvency, winding up, reorganization or similar law enacted under the laws of the United States or other applicable jurisdiction.

 

“BDC”: Golub Capital Investment Corporation, a Maryland corporation

 

“Beneficial Ownership Certificate”: The meaning specified in Section 14.2(e).

 

“Benefit Plan Investor”: An employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the fiduciary responsibility provisions of Title I of ERISA, a plan to which Section 4975 of the Code applies or an entity whose underlying assets include “plan assets” by reason of such an employee benefit plan’s or a plan’s investment in such entity.

 

“Bond”: A debt security (that is not a loan) that is issued by a corporation, limited liability company, partnership or trust.

 

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“Bridge Loan”: Any loan or other obligation that (x) is incurred in connection with a merger, acquisition, consolidation, or sale of all or substantially all of the assets of a Person or similar transaction and (y) by its terms, is required to be repaid within one year of the incurrence thereof with proceeds from additional borrowings or other refinancings (it being understood that any such loan or debt security that has a nominal maturity date of one year or less from the incurrence thereof but has a term-out or other provision whereby (automatically or at the sole option of the obligor thereof) the maturity of the indebtedness thereunder may be extended to a later date is not a Bridge Loan).

 

“Broadly Syndicated Loan”: A Loan (a) that is part of a credit facility with a Facility Size on the date of origination thereof at least equal to U.S.$250,000,000 and (b) as to which, on the date of origination thereof, (i) Moody’s has either (x) assigned a corporate family rating on an Obligor thereon or (y) assigned to such credit facility a monitored publicly available rating or (ii) S&P has either (x) assigned an issuer credit rating to the issuer thereof or (y) assigned to such credit facility a monitored publicly available rating.

 

“Business Day”: Any day other than (i) a Saturday or a Sunday or (ii) a day on which commercial banks are authorized or required by applicable law, regulation or executive order to close in New York, New York or in the city in which the Corporate Trust Office of the Trustee is located or, for any final payment of principal, in the relevant place of presentation.

 

“Calculation Agent”: The meaning specified in Section 7.16(a).

 

“Cash”: Such funds denominated in currency of the United States of America as at the time shall be legal tender for payment of all public and private debts, including funds standing to the credit of an Account.

 

“CCC Collateral Obligation”: A CCC S&P Collateral Obligation or a CCC Fitch Collateral Obligation, as the context requires.

 

“CCC Excess”: An amount equal to the greater of (i) the excess of the Principal Balance of all CCC S&P Collateral Obligations over an amount equal to 17.5% of the Collateral Principal Amount as of such date of determination; and (ii) the excess of the Principal Balance of all CCC Fitch Collateral Obligations over an amount equal to 17.5% of the Collateral Principal Amount as of such date of determination; provided that, in determining which of the CCC Collateral Obligations shall be included in the CCC Excess, the CCC Collateral Obligations with the lowest Market Value (expressed as a percentage of the outstanding principal balance of such Collateral Obligations as of such date of determination) shall be deemed to constitute such CCC Excess.

 

“CCC Fitch Collateral Obligation”: A Collateral Obligation (other than a Defaulted Obligation or a Deferring Obligation) with a Fitch Rating of “CCC+” or lower; provided that, for purposes of the “CCC Excess”, each Discount Obligation will be included at its purchase price.

 

“CCC S&P Collateral Obligation”: A Collateral Obligation (other than a Defaulted Obligation or a Deferring Obligation) with an S&P Rating of “CCC+” or lower.

 

“Certificate of Authentication”: The meaning specified in Section 2.1.

 

“Certificated Notes”: The meaning specified in Section 2.2(b)(iv).

 

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“Certificated Secured Note”: The meaning specified in Section 2.2(b)(iii).

 

“Certificated Security”: The meaning specified in Section 8-102(a)(4) of the UCC.

 

“Certificated Subordinated Note”: The meaning specified in Section 2.2(b)(iv).

 

“CFR”: The meaning specified in Schedule 3 hereto.

 

“Class”: In the case of the (x) Secured Notes, all of the Secured Notes having the same Interest Rate, Stated Maturity and class designation and (y) Subordinated Notes, all of the Subordinated Notes. With respect to any exercise of voting rights, any Pari Passu Classes of Notes that are entitled to vote on a matter will vote together as a single Class except as otherwise expressly provided or in connection with any supplemental indenture that affects one such Pari Passu Class in a manner that is distinct from its effect on the other Class or Classes to which it ranks pari passu.

 

“Class A/B Coverage Tests”: The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class A Notes and the Class B Notes.

 

“Class A Notes”: Collectively, the Class A-1 Notes and the Class A-2 Notes.

 

“Class A-1 Notes”: The Class A-1 Senior Secured Floating Rate Notes issued on the Closing Date pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

“Class A-2 Notes”: The Prior to the Refinancing Date, the Class A-2 Senior Secured Fixed Rate Notes issued on the Closing Date and, on and after the Refinancing Date, the Class A-2-R Notes.

 

“Class A-2-R Notes”: The Class A-2-R Senior Secured Fixed Rate Notes issued on the Refinancing Date pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

“Class B Notes”: Collectively, the Class B-1 Notes and the Class B-2 Notes.

 

“Class B-1 Notes”: The Class B-1 Senior Secured Floating Rate Notes issued on the Closing Date pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

“Class B-2 Notes”: The Class B-2 Senior Secured Floating Rate Notes issued on the Closing Date pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

“Class Break-even Default Rate”: With respect to the Class A-2 Notes (or, if the Class A-2 Notes are no longer Outstanding, the most senior Class of Secured Notes Outstanding):

 

(i)            during any S&P CDO Formula Election Period, the rate equal to (a) 0.161701 plus (b) the product of (x) 2.925789 and (y) the Weighted Average Floating Spread plus (c) the product of (x) 1.238762 and (y) the Weighted Average S&P Recovery Rate; or

 

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(ii)           during any S&P CDO Monitor Election Period, the maximum percentage of defaults, at any time, that the Current Portfolio or the Proposed Portfolio, as applicable, can sustain, determined through application of the S&P CDO Monitor, which, after giving effect to S&P’s assumptions on recoveries, defaults and timing and to the Priority of Payments, will result in sufficient funds remaining for the payment of such Class or Classes of Notes in full. After any S&P CDO Monitor Election Date, S&P will provide the Collateral Manager with the Class Break-even Default Rates for each S&P CDO Monitor input file based upon the Weighted Average Floating Spread and the Weighted Average S&P Recovery Rate to be associated with such S&P CDO Monitor input file as selected by the Collateral Manager (with a copy to the Collateral Administrator) from Section 2 of Schedule 4 or any other Weighted Average Floating Spread and Weighted Average S&P Recovery Rate selected by the Collateral Manager from time to time.

 

“Class C Coverage Tests”: The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class C Notes.

 

“Class C Notes”: The Class C Secured Deferrable Floating Rate Notes issued on the Closing Date pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

“Class D Coverage Tests”: The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class D Notes.

 

“Class D Notes”: The Class D Secured Deferrable Floating Rate Notes issued on the Closing Date pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

“Class Default Differential”: With respect to the Class A-2 Notes (or, if the Class A-2 Notes are no longer Outstanding, the most senior Class of Secured Notes Outstanding), the rate calculated by subtracting the Class Scenario Default Rate at such time for such Class of Notes from (x) during any S&P CDO Formula Election Period, the Adjusted Class Break-even Default Rate or (y) during any S&P CDO Monitor Election Period, the Class Break-even Default Rate for such Class of Notes at such time.

 

“Class Scenario Default Rate”: With respect to the Class A-2 Notes (or, if the Class A-2 Notes are no longer Outstanding, the most senior Class of Secured Notes Outstanding):

 

(i)             during any S&P CDO Formula Election Period, the rate at such time equal to (a) 0.329915 plus (b) the product of (x) 1.210322 and (y) the Expected Portfolio Default Rate minus (c) the product of (x) 0.586627 and (y) the Default Rate Dispersion plus (d) (x) 2.538684 divided by (y) the Obligor Diversity Measure plus (e) (x) 0.216729 divided by (y) the Industry Diversity Measure plus (f) (x) 0.0575539 divided by (y) the Regional Diversity Measure minus (g) the product of (x) 0.0136662 and (y) the S&P Weighted Average Life; or

 

(ii)           during any S&P CDO Monitor Election Period, an estimate of the cumulative default rate for the Current Portfolio or the Proposed Portfolio, as applicable, consistent with S&P’s Initial Rating of such Class of Notes, determined by the Collateral Manager (which determination shall be made solely by application of the S&P CDO Monitor at such time).

 

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“Clean-Up Call Purchase Price”: The meaning specified in Section 9.9(b).

 

“Clean-Up Call Redemption”: The meaning specified in Section 9.9(a).

 

“Clearing Agency”: An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

 

“Clearing Corporation”: (i) Clearstream, (ii) DTC, (iii) Euroclear and (iv) any entity included within the meaning of “clearing corporation” under Section 8-102(a)(5) of the UCC.

 

“Clearing Corporation Security”: Securities which are in the custody of or maintained on the books of a Clearing Corporation or a nominee subject to the control of a Clearing Corporation and, if they are Certificated Securities in registered form, properly endorsed to or registered in the name of the Clearing Corporation or such nominee.

 

“Clearstream”: Clearstream Banking, société anonyme, a corporation organized under the laws of the Duchy of Luxembourg (formerly known as Cedelbank, société anonyme).

 

“Closing Date”: December 13, 2018.

 

“Closing Date Master Loan Sale Agreement”: An agreement, dated as of the Closing Date, among the BDC, as seller, the Collateral Manager, as closing date seller, the Issuer, as buyer, and GCIC Funding LLC, as warehouse borrower.

 

“Closing Date Participation Condition”: A condition satisfied as of any date of determination if all Closing Date Participation Interests have been elevated to assignments on or prior to such date.

 

“Closing Date Participation Interests”: Participation arrangements entered into by the Issuer with the BDC and/or one or more of its subsidiaries to provide for participation interests in certain Collateral Obligations (whose title is held by the BDC or a subsidiary thereof) prior to being elevated to a full assignment.

 

“Code”: The United States Internal Revenue Code of 1986, as amended.

 

“Collateral Administration Agreement”: An agreement dated as of the Closing Date among the Issuer, the Collateral Manager and the Collateral Administrator, as amended from time to time in accordance with the terms thereof.

 

“Collateral Administrator”: The Bank of New York Mellon Trust Company, National Association, in its capacity as collateral administrator under the Collateral Administration Agreement, and any successor thereto.

 

“Collateral Interest Amount”: As of any date of determination, without duplication, the aggregate amount of Interest Proceeds that has been received or that is expected to be received (other than Interest Proceeds expected to be received from Defaulted Obligations and Deferring Obligations, but including Interest Proceeds actually received from Defaulted Obligations and Deferring Obligations), in each case during the Collection Period in which such date of determination occurs (or after such Collection Period but on or prior to the related Payment Date if such Interest Proceeds would be treated as Interest Proceeds with respect to such Collection Period).

 

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“Collateral Management Agreement”: The agreement dated as of the Closing Date, between the Issuer and the Collateral Manager relating to the management of the Collateral Obligations and the other Assets by the Collateral Manager on behalf of the Issuer, as amended from time to time in accordance with the terms thereof.

 

“Collateral Management Fee”: The fee payable to the Collateral Manager in arrears on each Payment Date (prorated for the related Interest Accrual Period) pursuant to Section 8(a) of the Collateral Management Agreement and Section 11.1 of this Indenture, in an amount equal to 0.35% per annum (calculated on the basis of the actual number of days in the applicable Collection Period divided by 360) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date.

 

“Collateral Management Fee Shortfall Amount”: To the extent the Collateral Management Fee is not paid on a Payment Date due to insufficient Interest Proceeds or Principal Proceeds (and such fee was not voluntarily deferred or waived by the Collateral Manager), the Collateral Management Fee due on such Payment Date (or the unpaid portion thereof, as applicable). Such amount is automatically deferred for payment on the succeeding Payment Date, with interest at the rate specified in the Collateral Management Agreement, as certified to the Trustee by the Collateral Manager (with a copy to the Collateral Administrator), in accordance with the Priority of Payments.

 

“Collateral Manager”: GC Advisors LLC, a Delaware limited liability company, until a successor Person shall have become the Collateral Manager pursuant to the provisions of the Collateral Management Agreement, and thereafter “Collateral Manager” shall mean such successor Person.

 

“Collateral Manager Notes”: Any Notes owned by the Collateral Manager, an Affiliate thereof, or any account, fund, client or portfolio established and controlled by the Collateral Manager or an Affiliate thereof or for which the Collateral Manager or an Affiliate thereof acts as the investment adviser or with respect to which the Collateral Manager or an Affiliate thereof exercises discretionary control.

 

“Collateral Manager Standard”: The standard of care applicable to the Collateral Manager set forth in the Collateral Management Agreement.

 

“Collateral Obligation”: A Senior Secured Loan (including, but not limited to, interests in Broadly Syndicated Loans and Middle Market Loans acquired by way of a purchase or assignment), or a Participation Interest therein, or a Second Lien Loan, or a Participation Interest therein, that as of the date of purchase by the Issuer:

 

(i)           is not a Bond or letter of credit;

 

(ii)          is not (A) an Equity Security or (B) by its terms convertible into or exchangeable for an Equity Security;

 

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(iii)          is not a Synthetic Security;

 

(iv)         is U.S. Dollar denominated and is neither convertible by the issuer thereof into, nor payable in, any other currency;

 

(v)          is not (A) a Defaulted Obligation or (B) a Credit Risk Obligation;

 

(vi)         is not a lease (including a finance lease);

 

(vii)        provides for a fixed amount of principal payable in Cash on scheduled payment dates and/or at maturity and does not by its terms provide for earlier amortization or prepayment at a price of less than par;

 

(viii)       does not constitute Margin Stock;

 

(ix)          has payments that do not and will not subject the Issuer to withholding tax or other similar tax (except for withholding or other similar taxes on commitment fees or similar fees or fees that by their nature are commitment fees or similar fees) unless the related obligor is required to make “gross up” payments that ensure that the net amount actually received by the Issuer (after payment of all such taxes) will equal the full amount that the Issuer would have received had no such taxes been imposed;

 

(x)           is not a debt obligation whose repayment is subject to substantial non-credit related risk as determined by the Collateral Manager;

 

(xi)          except for Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations, is not an obligation pursuant to which any future advances or payments to the borrower or the Obligor thereof may be required to be made by the Issuer; provided that the Issuer may be required, as a lender under the Underlying Instruments, to make customary protective advances or provide customary indemnities to the agent of the Collateral Obligation (for which the Issuer may receive a participation interest or other right of repayment);

 

(xii)         does not have an “f”, “p”, “pi”, “sf” or “t” subscript assigned by S&P or an “sf” subscript assigned by Moody’s;

 

(xiii)        is not a repurchase obligation, a Zero Coupon Bond, an Unsecured Loan, a Bridge Loan, a Commercial Real Estate Loan, a Structured Finance Obligation, a Non-Recourse Obligation, an Interest Only Obligation, a Step-Up Obligation or a Step-Down Obligation;

 

(xiv)       will not require the Issuer or the pool of Assets to be registered as an investment company under the 1940 Act;

 

(xv)        is not the subject of an Offer of exchange, or tender by its issuer, for cash, securities or any other type of consideration other than a Permitted Offer;

 

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(xvi)            has an S&P Rating of at least “CCC-” and a Fitch Rating of at least “CCC-”;

 

(xvii)           does not mature after the Stated Maturity of the Secured Notes;

 

(xviii)          other than in the case of a Fixed Rate Obligation, accrues interest at a floating rate determined by reference to (a) the Dollar prime rate, federal funds rate or LIBOR or (b) a similar interbank offered rate, commercial deposit rate or any other index in respect of which the S&P Rating Condition is satisfied;

 

(xix)             is Registered;

 

(xx)              does not pay interest less frequently than semi-annually;

 

(xxi)             is not an interest in a grantor trust;

 

(xxii)            is purchased at a price of at least equal to 65% of its outstanding principal balance;

 

(xxiii)           is issued by a Non-Emerging Market Obligor;

 

(xxiv)           if it is a Participation Interest, the Third Party Credit Exposure Limits are satisfied with respect to the acquisition thereof;

 

(xxv)            is not an obligation of a Portfolio Company;

 

(xxvi)           is not a commodity forward contract;

 

(xxvii)         does not include or support a letter of credit;

 

(xxviii)        if it is a Deferrable Obligation, it (a) is a Permitted Deferrable Obligation and (b) is not deferring or capitalizing the payment of current cash pay interest thereon, paying current cash pay interest “in kind” or otherwise does not have an interest “in kind” balance outstanding with respect to cash pay interest;

 

(xxix)           is not issued by a sovereign, or by a corporate issuer located in a country, which sovereign or country on the date on which the obligation is acquired by the Issuer imposes foreign exchange controls that effectively limit the availability or use of U.S. Dollars to make when due the scheduled payments of principal thereof and interest thereon; and

 

(xxx)            is not issued by an Obligor with a most-recently calculated EBITDA (calculated in accordance with the related Underlying Instruments) of less than $5,000,000.

 

provided that, notwithstanding anything contained herein to the contrary, any debt obligation received in exchange for a Collateral Obligation pursuant to the terms of this Indenture shall be deemed a “Collateral Obligation”; provided, further that, if any obligation received in exchange for a Collateral Obligation is a security, the Issuer may acquire such obligation only if it would be considered “received in lieu of debts previously contracted with respect to the Collateral Obligation” under the Volcker Rule, and such security will be treated as an Equity Security for all purposes under the Indenture.

 

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“Collateral Principal Amount”: As of any date of determination, the sum of (a) the aggregate outstanding principal balance of the Collateral Obligations (other than Defaulted Obligations, except as otherwise expressly set forth herein) and (b) without duplication, the amounts on deposit in any Account (including Eligible Investments therein but excluding the Revolver Funding Account) representing Principal Proceeds.

 

“Collateral Quality Tests”: A test satisfied on any date of determination on or after the Effective Date and during the Reinvestment Period if, in the aggregate, the Collateral Obligations owned (or in relation to a proposed purchase of a Collateral Obligation on or after the Effective Date, proposed to be owned) by the Issuer satisfy each of the tests set forth below, calculated in each case as required by Section 1.3 herein:

 

(i)                the Minimum Floating Spread Test;

 

(ii)               the Minimum Weighted Average Coupon Test;

 

(iii)              the S&P CDO Monitor Test;

 

(iv)              the Maximum Fitch Rating Factor Test;

 

(v)               the Minimum Weighted Average Fitch Recovery Rate Test;

 

(vi)              at any time during the S&P CDO Monitor Election Period, the Minimum Weighted Average S&P Recovery Rate Test;

 

(vii)             the Minimum Fitch Floating Spread Test; and

 

(viii)            the Weighted Average Life Test.

 

“Collection Account”: The trust account established pursuant to Section 10.2 which consists of the Principal Collection Subaccount and the Interest Collection Subaccount.

 

“Collection Period”: (i) With respect to the first Payment Date, the period commencing on the Closing Date and ending at the close of business on the tenth Business Day prior to the first Payment Date; and (ii) with respect to any other Payment Date, the period commencing on the day immediately following the prior Collection Period and ending (a) in the case of the final Collection Period preceding the latest Stated Maturity of any Class of Notes, on the day of such Stated Maturity, (b) in the case of the final Collection Period preceding an Optional Redemption, Tax Redemption or Clean-Up Call Redemption in whole of the Notes, on the Redemption Date and (c) in any other case, at the close of business on the tenth Business Day prior to the Payment Date; provided that, with respect to any Payment Date after the date on which no Secured Notes are deemed or considered Outstanding, “Collection Period” shall mean the period commencing on the third Business Day prior to the preceding Payment Date (or in the case of the first Payment Date following the date in which the Secured Notes are no longer Outstanding, commencing on the day immediately following the prior Collection Period) and ending on (but excluding) the third Business Day prior to such Payment Date.

 

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“Commercial Real Estate Loan”: Any Loan for which the underlying collateral consists primarily of real property owned by the obligor and is evidenced by a note or other evidence of indebtedness.

 

“Commodity Exchange Act”: The United States Commodity Exchange Act of 1936, as amended.

 

“common equity”: Any security that by its terms does not provide for periodic payments of interest at a stated coupon rate and repayment of principal at a stated maturity.

 

“Concentration Limitations”: Limitations satisfied on any date of determination on or after the Effective Date and during the Reinvestment Period if, in the aggregate, the Collateral Obligations owned (or in relation to a proposed purchase of a Collateral Obligation on or after the Effective Date, proposed to be owned) by the Issuer comply with all of the requirements (excluding clause (x)(b)) set forth below, calculated in each case as required by Section 1.3 herein:

 

(i)                not less than 96.0% of the Collateral Principal Amount may consist of Senior Secured Loans, Cash and Eligible Investments;

 

(ii)               not more than 4.0% of the Collateral Principal Amount may, in the aggregate, consist of First-Lien Last-Out Loans and Second Lien Loans;

 

(iii)              not more than 2.5% of the Collateral Principal Amount may consist of obligations issued by a single Obligor and its Affiliates, except that, Collateral Obligations issued by up to five Obligors and their respective Affiliates may each constitute up to 3.0% of the Collateral Principal Amount;

 

(iv)              not more than 1.5% of the Collateral Principal Amount may consist of First-Lien Last-Out Loans and Second Lien Loans issued by a single Obligor and its Affiliates;

 

(v)               (x) not more than 17.5% of the Collateral Principal Amount may consist of CCC S&P Collateral Obligations and (y) not more than 17.5% of the Collateral Principal Amount may consist of CCC Fitch Collateral Obligations;

 

(vi)              not more than 5.0% of the Collateral Principal Amount may consist of Fixed Rate Obligations;

 

(vii)             not more than 5.0% of the Collateral Principal Amount may consist of Current Pay Obligations;

 

(viii)            not more than 5.0% of the Collateral Principal Amount may consist of DIP Collateral Obligations;

 

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(ix)               not more than 10.0% of the Collateral Principal Amount may consist, in the aggregate, of unfunded commitments under Delayed Drawdown Collateral Obligations and unfunded and funded commitments under Revolving Collateral Obligations;

 

(x)               (a) not more than 5.0% of the Collateral Principal Amount may consist of Participation Interests and (b) the Third Party Credit Exposure Limits may not be exceeded with respect to any such Participation Interest;

 

(xi)              not more than 10.0% of the Collateral Principal Amount may have an S&P Rating derived from a Moody’s Rating as set forth in clause (iii)(a) of the definition of the term “S&P Rating”;

 

(xii)              (a) all of the Collateral Obligations must be issued by Non-Emerging Market Obligors; and (b) no more than the percentage listed below of the Collateral Principal Amount may be issued by Obligors Domiciled in the country or countries set forth opposite such percentage:

 

% Limit Country or Countries
   
15.0% All countries (in the aggregate) other than the United States;
   
15.0% Canada;
   
5.0% all countries (in the aggregate) other than the United States, Canada and the United Kingdom;
   
2.5% any individual Group I Country;
   
2.0% all Group II Countries in the aggregate;
   
2.0% any individual Group II Country;
   
1.5% all Group III Countries in the aggregate, except that up to 5.0% of the Collateral Principal Amount, collectively with all Collateral Obligations issued by Obligors Domiciled in Group III Countries, may be issued by Obligors Domiciled in the country of Luxembourg;
   
0.0%

Greece, Italy, Portugal and Spain in the aggregate; and 

   
1.0% any individual country other than the United States, the United Kingdom, Canada, the Netherlands, any Group I Country, any Group II Country or any Group III Country.

 

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(xiii)            not more than 12.0% of the Collateral Principal Amount may consist of Collateral Obligations that are issued by Obligors that belong to any single S&P Industry Classification, except that (x) the largest S&P Industry Classification may represent up to 20.0% of the Collateral Principal Amount; (y) the second-largest S&P Industry Classification may represent up to 17.0% of the Collateral Principal Amount and (z) the third-largest S&P Industry Classification may represent up to 15.0% of the Collateral Principal Amount;

 

(xiv)            not more than 5.0% of the Collateral Principal Amount may consist of Collateral Obligations that pay interest less frequently than quarterly;

 

(xv)             not more than 10.0% of the Collateral Principal Amount may consist of Collateral Obligations that are Discount Obligations;

 

(xvi)            not more than 2.5% of the Collateral Principal Amount may consist of Collateral Obligations that are Deferrable Obligations; and

 

(xvii)          not more than 25.0% of the Collateral Principal Amount may consist of Cov-Lite Loans; provided that, 0% of the Collateral Principal Amount may consist of Cov-Lite Loans that are First-Lien Last-Out Loans.

 

“Confidential Information”: The meaning specified in Section 14.15(b).

 

“Contribution”: The meaning specified in Section 11.1(e).

 

“Contributor”: The meaning specified in Section 11.1(e).

 

“Controlling Class”: The Class A-1 Notes so long as any Class A-1 Notes are Outstanding; then the Class A-2 Notes so long as any Class A-2 Notes are Outstanding; then the Class B Notes so long as any Class B Notes are Outstanding; then the Class C Notes so long as any Class C Notes are Outstanding; then the Class D Notes so long as any Class D Notes are Outstanding; and then the Subordinated Notes.

 

“Controlling Person”: A Person (other than a Benefit Plan Investor) who has discretionary authority or control with respect to the assets of an entity or any Person who provides investment advice for a fee (direct or indirect) with respect to such assets or an affiliate of any such Person. For this purpose, an “affiliate” of a Person includes any Person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Person. “Control,” with respect to a Person other than an individual, means the power to exercise a controlling influence over the management or policies of such Person, and “Controlling” shall have the meaning correlative to the foregoing.

 

“Corporate Trust Office”: The principal corporate trust office of the Trustee, currently located at (a) for Note transfer purposes and for presentment and surrender by of the Notes for final payment thereon, The Bank of New York Mellon Trust Company, National Association, 2001 Bryan Street, 10th Floor, Dallas, Texas 75201, Attention: Global Corporate Trust—GCIC CLO II LLC and (b) for all other purposes, The Bank of New York Mellon Trust Company, National Association, 601 Travis Street, 16th Floor, Houston, Texas 77002, e-mail: Golub@bnymellon.com, Attention: Global Corporate Trust—GCIC CLO II LLC or, in each case, such other address as the Trustee may designate from time to time by notice to the Holders, the Collateral Manager and the Issuer or the principal corporate trust office of any successor Trustee.

 

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“Cov-Lite Loan”: A Collateral Obligation that is an interest in any Loan, the Underlying Instruments for which (i) do not contain any financial covenants or (ii) require the borrower to comply with an Incurrence Covenant, but do not require the borrower to comply with a Maintenance Covenant.

 

“Coverage Tests”: The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied to each specified Class or Classes of Secured Notes.

 

“Covered Audit Adjustment”: The meaning specified in Section 7.17(l).

 

“Credit Improved Obligation”: (a) If a Restricted Trading Period is not in effect, any Collateral Obligation that in the Collateral Manager’s commercially reasonable business judgment has significantly improved in credit quality from the condition of its credit at the time of purchase which judgment may (but need not) be based on one or more of the following facts:

 

(i)                 it has a market price that is greater than the price that is warranted by its terms and credit characteristics, or improved in credit quality since its acquisition by the Issuer;

 

(ii)                the issuer of such Collateral Obligation has shown improved financial results since the published financial reports first produced after it was purchased by the Issuer;

 

(iii)               the obligor of such Collateral Obligation since the date on which such Collateral Obligation was purchased by the Issuer has raised significant equity capital or has raised other capital that has improved the liquidity or credit standing of such obligor; or

 

(iv)              with respect to which one or more of the following criteria applies:

 

(A)              such Collateral Obligation has been upgraded or put on a watch list for possible upgrade by either Rating Agency since the date on which such Collateral Obligation was acquired by the Issuer;

 

(B)              if such Collateral Obligation is a loan, the Sale Proceeds (excluding Sale Proceeds that constitute Interest Proceeds) of such loan would be at least 101% of its purchase price;

 

(C)              if such Collateral Obligation is a loan, the price of such loan has changed during the period from the date on which it was acquired by the Issuer to the proposed sale date by a percentage either at least 0.25% more positive, or 0.25% less negative, as the case may be, than the percentage change in the average price of the applicable Eligible Loan Index over the same period;

 

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(D)              if such Collateral Obligation is a loan, the spread over the applicable reference rate for such Collateral Obligation has been decreased in accordance with the underlying Collateral Obligation since the date of acquisition by (1) 0.25% or more (in the case of a loan with a spread (prior to such decrease) less than or equal to 2.00%), (2) 0.375% or more (in the case of a loan with a spread (prior to such decrease) greater than 2.00% but less than or equal to 4.00%) or (3) 0.50% or more (in the case of a loan with a spread (prior to such decrease) greater than 4.00%) due, in each case, to an improvement in the related borrower’s financial ratios or financial results;

 

(E)              with respect to fixed rate Collateral Obligations, there has been a decrease in the difference between its yield compared to the yield on the relevant United States Treasury security of more than 7.5% since the date of purchase; or

 

(F)               it has a projected cash flow interest coverage ratio (earnings before interest and taxes divided by cash interest expense as estimated by the Collateral Manager) of the underlying borrower or other obligor of such Collateral Obligation that is expected to be more than 1.15 times the current year’s projected cash flow interest coverage ratio; and

 

(b)       if a Restricted Trading Period is in effect, any Collateral Obligation:

 

(i)                 that in the Collateral Manager’s commercially reasonable business judgment has significantly improved in credit quality from the condition of its credit at the time of purchase and with respect to which one or more of the criteria referred to in clause (a)(iv) above applies, or

 

(ii)                with respect to which a Majority of the Controlling Class vote to treat such Collateral Obligation as a Credit Improved Obligation.

 

“Credit Risk Obligation”: (a) So long as a Restricted Trading Period is not in effect, any Collateral Obligation that in the Collateral Manager’s commercially reasonable business judgment has a significant risk of declining in credit quality or market value which judgment may (but need not) be based on one or more of the following facts:

 

(i)                 such Collateral Obligation has been downgraded or put on a watch list for possible downgrade by either Rating Agency since the date on which such Collateral Obligation was acquired by the Issuer;

 

(ii)                if such Collateral Obligation is a loan, the price of such loan has changed during the period from the date on which it was acquired by the Issuer to the proposed sale date by a percentage either at least 0.25% more negative, or at least 0.25% less positive, as the case may be, than the percentage change in the average price of an Eligible Loan Index;

 

(iii)               if such Collateral Obligation is a loan, the Market Value of such Collateral Obligation has decreased by at least 1.00% of the price paid by the Issuer for such Collateral Obligation;

 

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(iv)               if such Collateral Obligation is a loan, the spread over the applicable reference rate for such Collateral Obligation has been increased in accordance with the underlying Collateral Obligation since the date of acquisition by (1) 0.25% or more (in the case of a loan with a spread (prior to such increase) less than or equal to 2.00%), (2) 0.375% or more (in the case of a loan with a spread (prior to such increase) greater than 2.00% but less than or equal to 4.00%) or (3) 0.50% or more (in the case of a loan with a spread (prior to such increase) greater than 4.00%) due, in each case, to a deterioration in the related borrower’s financial ratios or financial results;

 

(v)               such Collateral Obligation has a projected cash flow interest coverage ratio (earnings before interest and taxes divided by cash interest expense as estimated by the Collateral Manager) of the underlying borrower or other obligor of such Collateral Obligation of less than 1.00 or that is expected to be less than 0.85 times the current year’s projected cash flow interest coverage ratio; or

 

(vi)              with respect to fixed rate Collateral Obligations, an increase since the date of purchase of more than 7.5% in the difference between the yield on such Collateral Obligation and the yield on the relevant United States Treasury security; or

 

(b)       if a Restricted Trading Period is in effect:

 

(i)                 any Collateral Obligation as to which one or more of the criteria set forth in (a)(i) through (a)(vi) above applies; or

 

(ii)               with respect to which a Majority of the Controlling Class consents to treat such Collateral Obligation as a Credit Risk Obligation.

 

“CRR”: The meaning specified in the definition of the term “E.U. Retention Requirement Laws”.

 

“Cumulative Deferred Management Fee”: All or a portion of the previously deferred Collateral Management Fees or Collateral Management Fee Shortfall Amounts (including accrued interest prior to the Payment Date on which the payment of such Collateral Management Fee Shortfall Amount was deferred by the Collateral Manager), which may be declared due and payable by the Collateral Manager on any Payment Date (with written notice to the Trustee and the Collateral Administrator).

 

“Current Deferred Management Fee”: With respect to a Payment Date, all or a portion of the Collateral Management Fees or Collateral Management Fee Shortfall Amounts (including accrued interest), due and owing to the Collateral Manager the payment of which is voluntarily deferred (for payment on a subsequent Payment Date), without interest, by the Collateral Manager (with written notice to the Trustee and the Collateral Administrator).

 

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“Current Pay Obligation”: Any Collateral Obligation (other than a DIP Collateral Obligation) that would otherwise be treated as a Defaulted Obligation but as to which no payments are due and payable that are unpaid and with respect to which the Collateral Manager has certified to the Trustee (with a copy to the Collateral Administrator) in writing that it believes, in its reasonable business judgment, that (a) the Obligor or issuer of such Collateral Obligation is current on all interest payments, principal payments and other amounts due and payable thereunder and will continue to make scheduled payments of interest thereon and will pay the principal thereof and all other amounts due and payable thereunder by maturity or as otherwise contractually due, (b) if the Obligor or issuer is subject to a bankruptcy proceeding, it has been the subject of an order of a bankruptcy court that permits it to make the scheduled payments on such Collateral Obligation and all interest payments, principal payments and other amounts due and payable thereunder have been paid in Cash when due, (c) the Collateral Obligation has a Market Value of at least 80% of its par value, (d) the Collateral Obligation has (A) an S&P Rating of at least “CCC+” (which if the facility rating of the Obligor has been withdrawn shall for the purposes of this definition be the facility rating prior to such withdrawal) and a Market Value of at least 80% of its par value or (B) an S&P Rating of at least “CCC” (which if the facility rating of the Obligor has been withdrawn shall for the purposes of this definition be the facility rating prior to such withdrawal) and its Market Value is at least 85% of its par value (Market Value being determined, solely for the purposes of clauses (c) and (d), without taking into consideration clause (iii) of the definition of the term “Market Value”) and (e) if any of the Secured Notes are then rated by Fitch and no S&P Rating is at such time available for such Collateral Obligation, the Collateral Obligation has a Fitch Rating of at least “CCC”.

 

“Current Portfolio”: At any time, the portfolio of Collateral Obligations, Cash and Eligible Investments representing Principal Proceeds (determined in accordance with Section 1.3 to the extent applicable) then held by the Issuer.

 

“Custodial Account”: The custodial account established pursuant to Section 10.3(b).

 

“Custodian”: The meaning specified in the first sentence of Section 3.3(a) with respect to items of collateral referred to therein, and each entity with which an Account is maintained, as the context may require, each of which shall be a Securities Intermediary.

 

“Cut-Off Date”: Each date on or after the Closing Date on which a Collateral Obligation was or is transferred to the Issuer.

 

“Default”: Any Event of Default or any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

 

“Default Rate Dispersion”: As of any date of determination, the number obtained by (a) summing the products for each Collateral Obligation (other than Defaulted Obligations) of (i) the absolute value of (x) the S&P Default Rate of such Collateral Obligation minus (y) the Expected Portfolio Default Rate multiplied by (ii) the outstanding principal balance at such time of such Collateral Obligation and (b) dividing such sum by the aggregate outstanding principal balance on such date of all Collateral Obligations (other than Defaulted Obligations).

 

“Defaulted Obligation”: Any Collateral Obligation included in the Assets as to which:

 

(a)                 a default as to the payment of principal and/or interest has occurred and is continuing with respect to such Collateral Obligation (without regard to any grace period applicable thereto, or waiver thereof, after the passage (in the case of a default that in the Collateral Manager’s judgment, as certified to the Trustee and the Collateral Administrator in writing, is not due to credit-related causes) of five Business Days or seven calendar days, whichever is greater, but in no case beyond the passage of any grace period applicable thereto);

 

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(b)                a default known to the Collateral Manager as to the payment of principal and/or interest has occurred and is continuing on another debt obligation of the same Obligor or issuer which is senior or pari passu in right of payment to such Collateral Obligation (in the case of a default that in the Collateral Manager’s judgment, as certified to the Trustee and the Collateral Administrator in writing, is not due to credit-related causes) after the passage of five Business Days or seven calendar days, whichever is greater, but in no case beyond the passage of any grace period applicable thereto; provided that both the Collateral Obligation and such other debt obligation are full recourse obligations of the applicable Obligor or issuer or secured by the same collateral;

 

(c)                 the Obligor, issuer or others have instituted proceedings to have the Obligor or issuer adjudicated as bankrupt or insolvent or placed into receivership and such proceedings have not been stayed or dismissed or such Obligor or issuer has filed for protection under Chapter 11 of the Bankruptcy Code;

 

(d)                 such Collateral Obligation has an S&P Rating of “D,” “SD” or “CC” or lower or had such rating before such rating was withdrawn or such Collateral Obligation has a Fitch Rating of “D” or “RD” or had such rating immediately before such rating was withdrawn;

 

(e)                 such Collateral Obligation is junior or pari passu in right of payment as to the payment of principal and/or interest to another debt obligation of the same Obligor which has an S&P Rating of “D,” “SD” or “CC” or lower or had such rating before such rating was withdrawn or another debt obligation of an Obligor which has a Fitch Rating of “D” or “RD” or had such rating immediately before such rating was withdrawn; provided that both the Collateral Obligation and such other debt obligation are full recourse obligations of the applicable Obligor or secured by the same collateral;

 

(f)                  the Collateral Manager has received notice or a Responsible Officer thereof has actual knowledge that a default has occurred under the Underlying Instruments and any applicable grace period has expired and the holders of such Collateral Obligation have accelerated the repayment of the Collateral Obligation (but only until such acceleration has been rescinded) in the manner provided in the Underlying Instruments;

 

(g)                 the Collateral Manager has in its reasonable commercial judgment otherwise declared such debt obligation to be a “Defaulted Obligation” or determined that such debt obligation will be disposed of in connection with a “Distressed Exchange”;

 

(h)                 such Collateral Obligation is a Participation Interest with respect to which the Selling Institution has defaulted in any respect in the performance of any of its payment obligations under the Participation Interest;

 

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(i)                  such Collateral Obligation is a Participation Interest in a Loan that would, if such Loan were a Collateral Obligation, constitute a “Defaulted Obligation” or with respect to which the Selling Institution has an S&P Rating of “D,” “SD” or “CC” or lower or had such rating before such rating was withdrawn; or

 

(j)                 such Collateral Obligation has, since the date it was acquired by the Issuer, become subject to an amendment, waiver or modification that had the effect of reducing the principal amount of such Collateral Obligation;

 

provided that (x) a Collateral Obligation shall not constitute a Defaulted Obligation pursuant to clauses (b) through (e) above if such Collateral Obligation (or, in the case of a Participation Interest, the underlying Loan) is a Current Pay Obligation (provided that the Aggregate Principal Balance of Current Pay Obligations exceeding 5% of the Collateral Principal Amount will be treated as Defaulted Obligations), (y) a Collateral Obligation shall not constitute a Defaulted Obligation pursuant to any of clauses (b), (c), (d), (e) and (i) above if such Collateral Obligation (or, in the case of a Participation Interest, the underlying Loan) is a DIP Collateral Obligation (other than a DIP Collateral Obligation that has an S&P Rating of “SD” or “CC” or lower or a Fitch Rating of “D” or “RD”) and (z) a Collateral Obligation shall not constitute a Defaulted Obligation pursuant to clause (j) above if, since the effective date of such amendment, waiver or modification, such Collateral Obligation has received a new S&P Rating (in the case of S&P, so long as any Notes are Outstanding and rated by S&P) or rating or credit estimate (or a confirmation of a prior S&P Rating, rating or credit estimate, as applicable) assigned by each Rating Agency then rating the Notes, which S&P Rating or other rating or credit estimate must be at least “CCC”.

 

Notwithstanding anything in this Indenture to the contrary, the Collateral Manager shall give the Trustee and the Collateral Administrator prompt written notice should any Collateral Obligation become a Defaulted Obligation. Until so notified or until a Responsible Officer of the Trustee obtains actual knowledge that a Collateral Obligation has become a Defaulted Obligation, the Trustee shall not be deemed to have any notice or knowledge that a Collateral Obligation has become a Defaulted Obligation.

 

“Defaulted Obligation Balance”: For any Defaulted Obligation or Deferring Obligation, the lesser of the (i) S&P Collateral Value of such Defaulted Obligation or Deferring Obligation and (ii) Fitch Collateral Value of such Defaulted Obligation or Deferring Obligation.

 

“Deferrable Obligation”: A Collateral Obligation that by its terms permits the deferral or capitalization of payment of accrued, unpaid interest; provided that the foregoing shall include any Permitted Deferrable Obligation.

 

“Deferred Interest”: With respect to the Class C Notes and the Class D Notes, the meaning specified in Section 2.7(a).

 

“Deferring Obligation”: A Deferrable Obligation that deferring the payment of the cash interest due thereon and (i) with respect to Collateral Obligations that have an S&P Rating of at least “BBB-,” has been so deferring the payment of cash interest due thereon for twelve consecutive months or has deferred payments of interest in an amount equal to two periodic payments, and (ii) with respect to Collateral Obligations that have an S&P Rating of “BB+” or below, has been so deferring the payment of interest for six consecutive months or deferred payments of interest in an amount equal to one periodic interest payment, which deferred capitalized interest has not, as of the date of determination, been paid in Cash.

 

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“Delayed Drawdown Collateral Obligation”: A Collateral Obligation that (a) requires the Issuer to make one or more future advances to the borrower under the Underlying Instruments relating thereto, (b) specifies a maximum amount that can be borrowed on one or more fixed borrowing dates, and (c) does not permit the re-borrowing of any amount previously repaid by the borrower thereunder; but any such Collateral Obligation will be a Delayed Drawdown Collateral Obligation only until all commitments by the Issuer to make advances to the borrower expire or are terminated or are reduced to zero.

 

“Deliver” or “Delivered” or “Delivery”: The taking of the following steps:

 

(i)          in the case of each Certificated Security (other than a Clearing Corporation Security), Instrument and Participation Interest in which the underlying loan is represented by an Instrument,

 

(a) causing the delivery of such Certificated Security or Instrument to the Custodian by registering the same in the name of the Custodian or its affiliated nominee or by endorsing the same to the Custodian or in blank;

 

(b) causing the Custodian to indicate continuously on its books and records that such Certificated Security or Instrument is credited to the applicable Account; and

 

(c) causing the Custodian to maintain continuous possession of such Certificated Security or Instrument;

 

(ii)         in the case of each Uncertificated Security (other than a Clearing Corporation Security),

 

(a) causing such Uncertificated Security to be continuously registered on the books of the issuer thereof to the Custodian; and

 

(b) causing the Custodian to indicate continuously on its books and records that such Uncertificated Security is credited to the applicable Account;

 

(iii)        in the case of each Clearing Corporation Security,

 

(a) causing the relevant Clearing Corporation to credit such Clearing Corporation Security to the securities account of the Custodian, and

 

(b) causing the Custodian to indicate continuously on its books and records that such Clearing Corporation Security is credited to the applicable Account;

 

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(iv)        in the case of each security issued or guaranteed by the United States of America or agency or instrumentality thereof and that is maintained in book-entry records of a Federal Reserve Bank (“FRB”) (each such security, a “Government Security”),

 

(a) causing the creation of a Security Entitlement to such Government Security by the credit of such Government Security to the securities account of the Custodian at such FRB, and

 

(b) causing the Custodian to indicate continuously on its books and records that such Government Security is credited to the applicable Account;

 

(v)         in the case of each Security Entitlement not governed by clauses (i) through (iv) above,

 

(a) causing a Securities Intermediary (x) to indicate on its books and records that the underlying Financial Asset has been credited to the Custodian’s securities account, (y) to receive a Financial Asset from a Securities Intermediary or acquire the underlying Financial Asset for a Securities Intermediary, and in either case, accepting it for credit to the Custodian’s securities account or (z) to become obligated under other law, regulation or rule to credit the underlying Financial Asset to a Securities Intermediary’s securities account,

 

(b) causing such Securities Intermediary to make entries on its books and records continuously identifying such Security Entitlement as belonging to the Custodian and continuously indicating on its books and records that such Security Entitlement is credited to the Custodian’s securities account, and

 

(c) causing the Custodian to indicate continuously on its books and records that such Security Entitlement (or all rights and property of the Custodian representing such Security Entitlement) is credited to the applicable Account;

 

(vi)        in the case of Cash or Money,

 

(a) causing the delivery of such Cash or Money to the Trustee for credit to the applicable Account or to the Custodian,

 

(b) if delivered to the Custodian, causing the Custodian to treat such Cash or Money as a Financial Asset maintained by such Custodian for credit to the applicable Account in accordance with the provisions of Article 8 of the UCC or causing the Custodian to deposit such Cash or Money to a deposit account over which the Custodian has control (within the meaning of Section 9-104 of the UCC), and

 

(c) causing the Custodian to indicate continuously on its books and records that such Cash or Money is credited to the applicable Account; and

 

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(vii)       in the case of each general intangible (including any Participation Interest in which neither the Participation Interest nor the underlying loan is represented by an Instrument),

 

(a) causing the filing of a Financing Statement in the office of the Secretary of State of the State of Delaware.

 

In addition, the Collateral Manager on behalf of the Issuer will obtain any and all consents required by the Underlying Instruments relating to any general intangibles for the transfer of ownership and/or pledge hereunder (except to the extent that the requirement for such consent is rendered ineffective under Section 9-406 of the UCC).

 

“Delivery Certificate”: An Officer’s certificate of the Collateral Manager to the effect that immediately before the Delivery of the Collateral Obligations:

 

(A)       the information with respect to each Collateral Obligation in the Schedule of Collateral Obligations is true and correct and such schedule is complete with respect to each such Collateral Obligation;

 

(B)       each Collateral Obligation in the Schedule of Collateral Obligations satisfies the requirements of the definition of “Collateral Obligation”; and

 

(C)       the Issuer purchased or entered into each Collateral Obligation in the Schedule of Collateral Obligations in compliance with Section 12.2.

 

“Determination Date”: The last day of each Collection Period and, for the purposes of determining whether Interest Proceeds and Principal Proceeds can be transferred to the Payment Account and applied pursuant to the Priority of Payments in connection with a Redemption Distribution Date, the Business Day preceding such Redemption Distribution Date.

 

“DIP Collateral Obligation”: A loan made to a debtor-in-possession pursuant to Section 364 of the Bankruptcy Code having the priority allowed by either Section 364(c) or 364(d) of the Bankruptcy Code and fully secured by senior liens.

 

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“Discount Obligation”: Any Collateral Obligation forming part of the Assets which was purchased (as determined without averaging prices of purchases on different dates) for less than (a) 85% of its outstanding principal balance, if such Collateral Obligation has an S&P Rating lower than “B-”, or (b) 80% of its outstanding principal balance, if such Collateral Obligation has an S&P Rating of “B-” or higher; provided that (x) such Collateral Obligation shall cease to be a Discount Obligation at such time as the Market Value (expressed as a percentage of the par amount of such Collateral Obligation) determined for such Collateral Obligation on each day during any period of 30 consecutive days since the acquisition by the Issuer of such Collateral Obligation, equals or exceeds 90% on each such day; (y) any Collateral Obligation that would otherwise be considered a Discount Obligation, but that is purchased in accordance with the Investment Criteria with the proceeds of a sale of a Collateral Obligation that was not a Discount Obligation at the time of its purchase, so long as such purchased Collateral Obligation (A) is purchased or committed to be purchased within five Business Days of such sale, (B) is purchased at a purchase price (expressed as a percentage of the par amount of such Collateral Obligation) equal to or greater than the sale price of the sold Collateral Obligation, (C) is purchased at a purchase price (expressed as a percentage of the par amount of such Collateral Obligation) not less than 65% of its outstanding principal balance and (D) has an S&P Rating or a Fitch Rating that is equal to or higher than the S&P Rating or Fitch Rating of the sold Collateral Obligation; and (z) clause (y) above in this proviso shall not apply to any such Collateral Obligation at any time on or after the acquisition by the Issuer of such Collateral Obligation if, as determined at the time of such acquisition, such application would result in (A) more than 5% of the Collateral Principal Amount consisting of Collateral Obligations to which such clause (y) has been applied (or more than 2.5% of the Collateral Principal Amount consisting of Collateral Obligations to which such clause (y) has been applied if the purchase price of the Collateral Obligation is less than 75% of the outstanding principal balance thereof) or (B) the Aggregate Principal Balance of all Collateral Obligations to which such clause (y) has been applied since the Closing Date being more than 10% of the Reinvestment Target Par Balance.

 

“Distressed Exchange”: In connection with any Collateral Obligation, a distressed exchange or other debt restructuring has occurred, as reasonably determined by the Collateral Manager, pursuant to which the Obligor or issuer of such Collateral Obligation or any affiliate thereof has issued to the holders of such Collateral Obligation a new debt obligation or security or package of debt obligations or securities that, in the sole judgment of the Collateral Manager, amounts to a diminished financial obligation or has the purpose of helping the Obligor or issuer of such Collateral Obligation avoid imminent default; provided that each such security or debt obligation (i) shall not be subject to a “Distressed Exchange” and shall be treated as a Collateral Obligation that is not a Defaulted Obligation only if (x) such security or debt obligation satisfies the definition of Collateral Obligation and (y) the aggregate principal balance of all securities and debt obligations to which this clause (i) applies or has applied, measured cumulatively from the Closing Date, does not exceed 25.0% of the Target Initial Par Amount and (ii) in all other cases, any such (x) debt obligation shall be treated as a Collateral Obligation that is a Defaulted Obligation and (y) security shall be treated as an Equity Security.

 

“Distribution Compliance Period”: The 40-day period prescribed by Regulation S commencing on the later of (a) the date upon which Notes are first offered to Persons other than the initial Holders and any other distributor (as such term is defined in Regulation S) of the Notes and (b) the Closing Date.

 

“Distribution Report”: The meaning specified in Section 10.7(b).

 

“Dollar” or “U.S.$”: A dollar or other equivalent unit in such coin or currency of the United States of America as at the time shall be legal tender for all debts, public and private.

 

“Domicile” or “Domiciled”: With respect to any Obligor with respect to, or issuer of, a Collateral Obligation:

 

(a)                 its country of organization;

 

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(b)                if it is organized in a Tax Jurisdiction, each of such jurisdiction and the country in which, in the Collateral Manager’s good faith estimate, a substantial portion of its operations are located or from which a substantial portion of its revenue is derived, in each case directly or through subsidiaries (which shall be any jurisdiction and country known at the time of designation by the Collateral Manager to be the source of the majority of revenues, if any, of such Obligor or issuer); or

 

(c)                 if its payment obligations in respect of such Collateral Obligation are guaranteed by a person or entity that is organized in the United States or Canada, then the United States or Canada.

 

“DTC”: The Depository Trust Company, its nominees, and their respective successors.

 

“Due Date”: Each date on which any payment is due on an Asset in accordance with its terms.

 

“Effective Date”: The earlier to occur of (i) March 8, 2019 and (ii) the first date on which the Collateral Manager certifies to the Trustee and the Collateral Administrator that the Target Initial Par Condition has been satisfied.

 

“Effective Date Certificate”: The meaning specified in Section 7.18(c)(iv).

 

“Effective Date Condition”: The meaning specified in Section 7.18(c).

 

“Effective Date Report”: The meaning specified in Section 7.18(c)(ii).

 

“Eligible Investment Required Ratings”: (a) Such obligation or security has a short-term credit rating of at least “A-1” from S&P and, in the case of any obligation or security with a maturity of greater than 60 days, a long-term credit rating of at least “AA-” by S&P and (b) to the extent that Fitch is rating any Notes then Outstanding, for obligations or securities (i) with remaining maturities up to 30 days, such obligation or security has a short-term credit rating of at least “F1” or a long-term credit rating of at least “A” from Fitch or (ii) with remaining maturities of more than 30 days but not in excess of 60 days, such obligation or security has a short-term credit rating of “F1+” or a long-term credit rating of at least “AA-” from Fitch.

 

“Eligible Investments”: Either (a) Cash or (b) any Dollar investment that is a “cash equivalent” for purposes of the loan securitization exclusion under the Volcker Rule and at the time it is Delivered (directly or through an intermediary or bailee), is one or more of the following obligations or securities:

 

(i)                direct Registered obligations of, and Registered obligations the timely payment of principal and interest on which is fully and expressly guaranteed by, the United States of America or any agency or instrumentality of the United States of America the obligations of which are expressly backed by the full faith and credit of the United States of America and which obligations of such agency or instrumentality satisfy the Eligible Investment Required Ratings;

 

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(ii)               demand and time deposits in, certificates of deposit of, bank deposit products of, trust accounts with, bankers’ acceptances issued by, or federal funds sold by any depository institution or trust company incorporated under the laws of the United States of America (including the Bank) or any state thereof and subject to supervision and examination by federal and/or state banking authorities, in each case payable within 183 days after issuance, so long as the commercial paper and/or the debt obligations of such depository institution or trust company at the time of such investment or contractual commitment providing for such investment have the Eligible Investment Required Ratings;

 

(iii)              commercial paper or other short-term obligations (other than Asset-backed Commercial Paper and extendible commercial paper) with the Eligible Investment Required Ratings and that either bear interest or are sold at a discount from the face amount thereof and have a maturity of not more than 183 days from their date of issuance; and

 

(iv)              registered money market funds that have, at all times, credit ratings of “AAAm” by S&P and, to the extent that Fitch is rating any Notes then Outstanding, either the highest credit rating assigned by Fitch to the extent rated by Fitch or otherwise the highest rating assigned by any other NRSRO, respectively (provided that such equivalent ratings shall comply with each of Fitch’s and S&P’s then current criteria);

 

provided that (1) Eligible Investments purchased with funds in the Collection Account shall be held until maturity except as otherwise specifically provided herein and shall include only such obligations, other than those referred to in clause (iv) above, as mature (or are putable at par to the issuer thereof) no later than the earlier of (a) 60 days from the date of purchase and (b) the Business Day prior to the next Payment Date unless such Eligible Investments are issued by the Trustee in its capacity as a banking institution, in which event such Eligible Investments may mature on such Payment Date; and (2) none of the foregoing obligations shall constitute Eligible Investments if (a) such obligation has an “f”, “p”, “pi”, “t” or “sf” subscript assigned to the rating by S&P, (b) all, or substantially all, of the remaining amounts payable thereunder consist of interest and not principal payments, (c) payments with respect to such obligations or proceeds of disposition are subject to withholding taxes by any jurisdiction unless the payor is required to make “gross-up” payments that cover the full amount of any such withholding tax on an after-tax basis, (d) such obligation is secured by real property, (e) such obligation is purchased at a price greater than 100% of the principal or face amount thereof, (f) such obligation is subject of a tender offer, voluntary redemption, exchange offer, conversion or other similar action, (g) in the Collateral Manager’s judgment, such obligation is subject to material non-credit related risks, (h) such obligation is a Structured Finance Obligation or (i) such obligation is represented by a certificate of interest in a grantor trust. Eligible Investments may include, without limitation, those investments issued by or made with the Bank or for which the Bank or the Trustee or an Affiliate of the Bank or the Trustee acts as offeror, is the obligor or depository institution, or provides services and receives compensation. The Trustee shall not be responsible for determining or overseeing compliance with the foregoing.

 

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“Eligible Loan Index”: With respect to each Collateral Obligation that is a Senior Secured Loan or a Second Lien Loan, one of the following indices as selected by the Collateral Manager in writing delivered to the Trustee and the Collateral Administrator upon acquisition of such Collateral Obligation: CS Leveraged Loan Index (formerly CSFB Leveraged Loan Index), the Deutsche Bank Leveraged Loan Index, the Goldman Sachs/Loan Pricing Corporation Liquid Leveraged Loan Index, the Banc of America Securities Leveraged Loan Index, the S&P/LSTA Leveraged Loan Indices or any other loan index for which the Global Rating Agency Condition has been obtained.

 

“Enforcement Event”: The meaning specified in Section 11.1(a)(iii).

 

“Equity Security”: Any security or debt obligation which at the time of acquisition, conversion or exchange does not satisfy the requirements of a Collateral Obligation and is not an Eligible Investment (but in either case not including any debt obligation received as part of a Distressed Exchange or otherwise in connection with a restructuring or insolvency); it being understood that Equity Securities may only be received in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout and if, in the commercially reasonable judgment of the Collateral Manager (not to be called into question as a result of subsequent events), such Equity Securities would be considered “in lieu of debts previously contracted” with respect to the Collateral Obligation under the Volcker Rule.

 

“ERISA”: The United States Employee Retirement Income Security Act of 1974, as amended.

 

“E.U. Retained Interest”: The net economic interest the E.U. Retention Provider will retain in the securitized exposures (as such term is used in Article 405(1) of the CRR, Article 51 of the AIFMD Level 2 Regulation and Article 254 of the Solvency II Level 2 Regulation) pursuant to the terms of the E.U. Risk Retention Letter, being in an amount of not less than 5% in the form specified in paragraph (d) of Article 405(1) of the CRR, paragraph (d) of Article 51(1) of the AIFMD Level 2 Regulation, as each such regulation is in effect as of the Closing Date, and paragraph (d) of Article 254(2) of the Solvency II Level 2 Regulation, by way of holding, subject to the provisions of the E.U. Risk Retention Letter, the minimum principal amount of Subordinated Notes required by the E.U. Retention Requirement Laws, as each such regulation is in effect as of the Closing Date, being an amount equal to 5% of the nominal value of the Collateral Obligations.

 

“E.U. Retention Deficiency”: The failure of the E.U. Retention Provider to hold the E.U. Retained Interest at such time.

 

“E.U. Retention Provider”: GCIC CLO II Depositor LLC, in its capacity as the E.U. Retention Provider.

 

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“E.U. Retention Requirement Laws”: Collectively, (i) Articles 404-410 of the European Union Capital Requirements Regulation (Regulation (EU) 575/2013) on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, of June 27, 2013 (the “CRR”), as supplemented by Commission Delegated Regulation (EU) No. 625/2014 of March 13, 2014, together with any final guidance and technical standards published in relation thereto and the guidelines and related documents previously published in relation to the preceding risk retention legislation by the European Banking Authority which continue to apply to the provisions of the CRR, and any implementing law or regulation in force in any Member State of the European Union, (ii) Section5, Articles 50-56 (inclusive) of the European Union Commission Delegated Regulation (EU) 231/2013 implementing Article 17 of European Union Directive 2011/61/EU on Alternative Investment Fund Managers (the “AIFMD Level 2 Regulation”), together with any applicable guidance, technical standards and related documents published by any European regulator in relation thereto and any implementing law or regulation in force in any Member State of the European Union, and (iii) Articles 254-257 (inclusive) of European Union Commission Delegated Regulation (EU) 2015/35 of October 10, 2014 (the “Solvency II Level 2 Regulation”) supplementing Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) of November 25, 2009, together with any applicable guidance, technical standards and related documents published by any European regulator in relation thereto and any implementing law or regulation in force in any Member State of the European Union.

 

“E.U. Risk Retention Letter”: The letter relating to the retention of net economic interest by the E.U. Retention Provider, and addressed to the Issuer and the Trustee.

 

“Euroclear”: Euroclear Bank S.A./N.V.

 

“Event of Default”: The meaning specified in Section 5.1.

 

“Excess CCC Adjustment Amount”: As of any date of determination, an amount equal to the excess, if any, of (i) the Aggregate Principal Balance of all Collateral Obligations included in the CCC Excess, over (ii) the sum of the Market Values of all Collateral Obligations included in the CCC Excess (which for any Discount Obligation included therein shall not exceed the purchase price thereof); provided that (x) any Long-Dated Obligation shall be included in clause (i) at its value in the Long-Dated Obligation Amount and (y) for purposes of this definition, the Market Value, with respect to each Long-Dated Obligation, shall not exceed its value in the Long-Dated Obligation Amount.

 

“Excess Par Amount”: An amount, as of any Determination Date, equal to the greater of (a) zero and (b) (i) the Adjusted Collateral Principal Amount less (ii) the Reinvestment Target Par Balance.

 

“Excess Weighted Average Coupon”: A percentage equal as of any date of determination to a number obtained by multiplying (a) the excess, if any, of the Weighted Average Coupon over the Minimum Weighted Average Coupon by (b) the number obtained by dividing the aggregate outstanding principal balance of all Fixed Rate Obligations by the aggregate outstanding principal balance of all Floating Rate Obligations.

 

“Excess Weighted Average Floating Spread”: A percentage equal as of any date of determination to a number obtained by multiplying (a) the excess, if any, of the Weighted Average Floating Spread over the Minimum Floating Spread by (b) the number obtained by dividing the aggregate outstanding principal balance of all Floating Rate Obligations by the aggregate outstanding principal balance of all Fixed Rate Obligations.

 

“Exchange Act”: The United States Securities Exchange Act of 1934, as amended.

 

“Exercise Notice”: The meaning specified in Section 9.8.

 

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“Expected Portfolio Default Rate”: As of any date of determination, the number obtained by (a) summing the products for each Collateral Obligation (other than Defaulted Obligations) of (i) the outstanding principal balance on such date of such Collateral Obligation by (ii) the S&P Default Rate of such Collateral Obligation and (b) dividing such sum by the aggregate outstanding principal balance on such date of all Collateral Obligations (other than Defaulted Obligations).

 

“Expense Reserve Account”: The trust account established pursuant to Section 10.3(d).

 

“Facility Size”: With respect to any credit facility on any date of determination, the maximum aggregate principal amount of indebtedness for borrowed money that is or, in accordance with commitments to extend additional credit, may become outstanding under the term loan agreement, revolving loan agreement or other similar credit agreement that governs such credit facility; provided that, for this purpose, such aggregate principal amount shall include deposits and reimbursement obligations arising from drawings pursuant to letters of credit and other similar instruments.

 

“Failed Optional Redemption”: Any announced Optional Redemption (i) with respect to which notice of redemption has been given pursuant to Section 9.4, (ii) such notice is no longer capable of being withdrawn pursuant to Section 9.4(c), and (iii) the Issuer has insufficient funds to pay the Redemption Price due and payable on the Secured Notes in respect of such announced Optional Redemption on the related Redemption Date in accordance with the Priority of Payments.

 

“Federal Reserve Board”: The Board of Governors of the Federal Reserve System.

 

“Fee Basis Amount”: As of any date of determination, the sum of (a) the Collateral Principal Amount, (b) the aggregate outstanding principal balance of all Defaulted Obligations and (c) the aggregate amount of all Principal Financed Accrued Interest.

 

“Financial Asset”: The meaning specified in Section 8-102(a)(9) of the UCC.

 

“Financing Statements”: The meaning specified in Section 9-102(a)(39) of the UCC.

 

“First Interest Determination End Date”: January 20, 2019.

 

“First-Lien Last-Out Loan”: A Collateral Obligation that is a Senior Secured Loan that, prior to an event of default under the applicable Underlying Instruments, is entitled to receive payments pari passu with other senior secured loans of the same Obligor, but following an event of default under the applicable Underlying Instruments, such Collateral Obligation becomes fully subordinated to other senior secured loans of the same Obligor and is not entitled to any payments until such other senior secured loans are paid in full.

 

“Fitch”: Fitch Ratings, Inc. and any successor thereto.

 

“Fitch Collateral Value”: With respect to any Defaulted Obligation or Deferring Obligation, the lesser of (i) the product of the Fitch Recovery Rate of such Defaulted Obligation or Deferring Obligation multiplied by its principal balance, in each case, as of the relevant Measurement Date and (ii) the Market Value of such Defaulted Obligation or Deferring Obligation as of the relevant Measurement Date; provided that if the Market Value cannot be determined for any reason, the Fitch Collateral Value shall be determined in accordance with clause (i) above.

 

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“Fitch Rating”: The meaning specified in Schedule 7 hereto.

 

“Fitch Rating Factor”: In respect of any Collateral Obligation, the number set forth in the table below opposite the Fitch Rating in respect of such Collateral Obligation:

 

Fitch Rating

Fitch Rating Factor

AAA 0.19
AA+ 0.35
AA 0.64
AA- 0.86
A+ 1.17
A 1.58
A- 2.25
BBB+ 3.19
BBB 4.54
BBB- 7.13
BB+ 12.19
BB 17.43
BB- 22.80
B+ 27.80
B 32.18
B- 40.60
CCC+ 62.80
CCC 62.80
CCC- 62.80
CC 100.00
C 100.00
D 100.00

 

“Fitch Recovery Rate”: The meaning specified in Schedule 7 hereto.

 

“Fitch Test Matrix”: The meaning specified in Schedule 7 hereto.

 

“Fitch Weighted Average Rating Factor”: The number determined by (a) summing the products of (i) the Principal Balance of each Collateral Obligation multiplied by (ii) its Fitch Rating Factor, (b) dividing such sum by the aggregate Principal Balance of all such Collateral Obligations and (c) rounding the result down to the nearest two decimal places. For the purposes of determining the Principal Balance and aggregate Principal Balance of Collateral Obligations in this definition, the Principal Balance of each Defaulted Obligation shall be excluded.

 

“Fixed Rate Notes”: Any notes issued under the Indenture (or loans entered into by the Issuer in connection with a Refinancing) that bear a fixed rate of interest.

 

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“Fixed Rate Obligation”: Any Collateral Obligation that bears a fixed rate of interest.

 

“Floating Rate Notes”: All of the Secured Notes (or loans entered into by the Issuer in connection with a Refinancing), collectively, other than the Fixed Rate Notes.

 

“Floating Rate Obligation”: Any Collateral Obligation that bears a floating rate of interest.

 

“FRB”: The meaning specified in the definition of the terms “Deliver”, “Delivered” or “Delivery”.

 

“GAAP”: The meaning specified in Section 6.3(j).

 

“Global Note”: The Global Secured Notes and the Rule 144A Global Subordinated Notes.

 

“Global Rating Agency Condition”: With respect to any action taken or to be taken by or on behalf of the Issuer, satisfaction of the S&P Rating Condition (to the extent applicable) together with prior notice to Fitch delivered at least five Business Days prior to such action (to the extent that Fitch is rating any Notes then Outstanding).

 

“Global Secured Note”: Any Regulation S Global Secured Note or Rule 144A Global Secured Note.

 

“Government Security”: The meaning specified in the definition of the terms “Deliver”, “Delivered” or “Delivery”.

 

“Grant” or “Granted”: To grant, bargain, sell, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over and confirm. A Grant of the Assets, or of any other instrument, shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including, the immediate continuing right to claim for, collect, receive and receipt for principal and interest payments in respect of the Assets, and all other Monies payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

 

“Group I Country”: The Netherlands, Australia, Japan, Singapore and New Zealand.

 

“Group II Country”: Germany, Ireland, Sweden and Switzerland.

 

“Group III Country”: Austria, Belgium, Denmark, Finland, France, Luxembourg and Norway.

 

“Incurrence Covenant”: A covenant by any borrower to comply with one or more financial covenants only upon the occurrence of certain actions of the borrower, including a debt issuance, dividend payment, share purchase, merger, acquisition or divestiture.

 

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“Indenture”: This instrument as originally executed and, if from time to time supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, as so supplemented or amended.

 

“Independent”: As to any Person, any other Person (including, in the case of an accountant or lawyer, a firm of accountants or lawyers, and any member thereof, or an investment bank and any member thereof) who (i) does not have and is not committed to acquire any material direct or any material indirect financial interest in such Person or in any Affiliate of such Person, and (ii) is not connected with such Person as an Officer, employee, promoter, underwriter, voting trustee, partner, manager, director or Person performing similar functions. “Independent” when used with respect to any accountant may include an accountant who audits the books of such Person if in addition to satisfying the criteria set forth above, the accountant is independent with respect to such Person within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants. For purposes of this definition, no manager or director of any Person will fail to be Independent solely because such Person acts as an independent manager or independent director thereof or of any such Person’s Affiliates.

 

Whenever any Independent Person’s opinion or certificate is to be furnished to the Trustee, such opinion or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof.

 

Any pricing service, certified public accountant or legal counsel that is required to be Independent of another Person under this Indenture must satisfy the criteria above with respect to the Issuer, the Collateral Manager and their Affiliates.

 

“Independent Manager”: A natural person who, (A) for the five-year period prior to his or her appointment as Independent Manager, has not been, and during the continuation of his or her service as Independent Manager is not: (i) an employee, director, stockholder, member, manager, partner or officer or direct or indirect legal or beneficial owner (or a Person who controls, whether directly, indirectly, or otherwise any of the foregoing) of the Issuer, the member of the Issuer or any of their respective Affiliates (other than his or her service as a special member or an independent manager of the Issuer or other Affiliates that are structured to be “bankruptcy remote”); (ii) a customer, consultant, creditor, contractor or supplier (or a Person who controls, whether directly, indirectly, or otherwise any of the foregoing) of the Issuer, the member of the Issuer or any of their respective Affiliates (other than his or her service as a special member or an independent manager of the Issuer); (iii) affiliated with a tax-exempt entity that receives significant contributions from the member of the Issuer or any of its Affiliates; or (iv) any member of the immediate family of a person described in clause (i), (ii) or (iii) above (other than with respect to clause (i), (ii) or (iii) relating to his or her service as (y) an Independent Manager of the Issuer or (z) an independent manager of any Affiliate of the Issuer which is a bankruptcy remote limited purpose entity), and (B) has, (i) prior experience as an Independent Manager for a corporation or limited liability company whose charter documents required the unanimous consent of all Independent Managers thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities.

 

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“Index Maturity”: With respect to any Class of Secured Notes, the period indicated with respect to such Class in Section 2.3.

 

“Industry Diversity Measure”: As of any date of determination, the number obtained by dividing (a) 1 by (b) the sum of the squares of the quotients, for each S&P Industry Classification, obtained by dividing (i) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations) issued by Obligors that belong to such S&P Industry Classification by (ii) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations).

 

“Information”: S&P’s “Credit Estimate Information Requirements” dated April 2011 and any other available information S&P reasonably requests in order to produce a credit estimate for a particular asset.

 

“Information Agent”: The Collateral Administrator.

 

“Initial Purchaser”: Wells Fargo Securities, LLC, in its capacity as initial purchaser of and placement agent for the Offered Notes under the Purchase Agreement or the Refinancing Purchase Agreement, as applicable.

 

“Initial Rating”: With respect to the Secured Notes, the rating or ratings, if any, indicated in Section 2.3.

 

“Initial Subordinated Noteholder”: The Retention Provider, in its capacity as initial Subordinated Noteholder, together with its respective successors and assigns.

 

“Institutional Accredited Investor”: An Accredited Investor identified in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

“Instrument”: The meaning specified in Section 9-102(a)(47) of the UCC.

 

“Interest Accrual Period”: (i) With respect to the initial Payment Date following the Closing Date (or, in the case of a Re-Priced Class or a Class that is subject to Refinancing or Notes issued in connection with an additional issuance, the first Payment Date following the Re-Pricing Date, the Refinancing or the date of such additional issuance, respectively), the period from and including the Closing Date (or, in the case of (x) a Refinancing, the date of issuance of the replacement notes or debt obligations and (y) a Re-Pricing, the Re-Pricing Date) to but excluding such Payment Date; and (ii) with respect to each succeeding Payment Date, the period from and including the immediately preceding Payment Date to but excluding the following Payment Date (or, in the case of a Class that is being redeemed on a Partial Redemption Date, to but excluding such Partial Redemption Date) until the principal of the Secured Notes is paid or made available for payment.

 

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“Interest Collection Subaccount”: The meaning specified in Section 10.2(a).

 

“Interest Coverage Ratio”: For any designated Class or Classes of Secured Notes, as of any date of determination, the percentage derived from the following equation: (A – B) / C, where:

 

A = The Collateral Interest Amount as of such date of determination;

 

B = Amounts payable (or expected as of the date of determination to be payable) on the following Payment Date as set forth in clauses (A) and (B) in Section 11.1(a)(i); and

 

C = Interest due and payable on the Secured Notes of such Class or Classes and each Class of Secured Notes that rank senior to or pari passu with such Class or Classes (excluding Deferred Interest but including any interest on Deferred Interest with respect to the Class C Notes and the Class D Notes) on such Payment Date.

 

“Interest Coverage Test”: A test that is satisfied with respect to any Class or Classes of Secured Notes as of any date of determination on, or subsequent to, the Determination Date occurring immediately prior to the second Payment Date, if (i) the Interest Coverage Ratio for such Class or Classes on such date is at least equal to the Required Interest Coverage Ratio for such Class or Classes or (ii) such Class or Classes of Secured Notes are no longer outstanding.

 

“Interest Determination Date”: (a) With respect to the first Interest Accrual Period (x) for the period from and including the Closing Date to but excluding the First Interest Determination End Date, the second London Banking Day preceding the Closing Date and (y) for the period from and including the First Interest Determination End Date to but excluding the first Payment Date, the second London Banking Day preceding the First Interest Determination End Date and (b) with respect to each Interest Accrual Period thereafter, the second London Banking Day preceding the first day of each Interest Accrual Period; provided that, in connection with any Refinancing upon a redemption of the Secured Notes in whole, but not in part, solely with respect to the first Interest Accrual Period following the related Redemption Date, the Interest Determination Date for the replacement securities issued in connection with such Refinancing will be determined by the Collateral Manager in connection with such Refinancing.

 

“Interest Only Obligation”: Any obligation or security that does not provide in the related Underlying Instruments for the payment or repayment of a stated principal amount in one or more installments on or prior to its stated maturity.

 

“Interest Proceeds”: With respect to any Collection Period or Determination Date, without duplication, the sum of:

 

(i)            all payments of interest and delayed compensation (representing compensation for delayed settlement) received in Cash by the Issuer during the related Collection Period on the Collateral Obligations and Eligible Investments, including the accrued interest received in connection with a sale thereof during the related Collection Period, less any such amount that represents Principal Financed Accrued Interest;

 

(ii)           all principal and interest payments received by the Issuer during the related Collection Period on Eligible Investments purchased with Interest Proceeds;

 

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(iii)          all amendment and waiver fees, late payment fees and other fees received by the Issuer during the related Collection Period, except for those in connection with (a) the lengthening of the maturity of the related Collateral Obligation or (b) except with respect to call premiums or prepayment fees, the reduction of the par amount of the related Collateral Obligation, in each case, as determined by the Collateral Manager with notice to the Trustee and the Collateral Administrator;

 

(iv)          commitment fees and other similar fees received by the Issuer during such Collection Period in respect of Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations;

 

(v)           any amounts deposited in the Expense Reserve Account as Interest Proceeds pursuant to Section 3.1(xi)(B);

 

(vi)          any Principal Proceeds designated by the Collateral Manager (with notice to the Collateral Administrator) as Interest Proceeds in connection with any Refinancing of the Secured Notes in whole, up to the Excess Par Amount for payment on the Redemption Date of such Refinancing; and

 

(vii)         any Contributions made to the Issuer which are designated as Interest Proceeds as permitted by this Indenture;

 

provided that any amounts received in respect of any Defaulted Obligation will constitute Principal Proceeds (and not Interest Proceeds) until the aggregate of all collections in respect of such Defaulted Obligation since it became a Defaulted Obligation equals the outstanding principal balance of such Collateral Obligation at the time it became a Defaulted Obligation; provided further that capitalized interest shall not constitute Interest Proceeds. Notwithstanding the foregoing, the Collateral Manager may designate in its discretion (to be exercised on or before the related Determination Date), on any date after the first Payment Date, that any portion of Interest Proceeds in a Collection Period be deemed to be Principal Proceeds so long as the Collateral Manager believes that such designation will not result in an Event of Default pursuant to clause (a) of the definition thereof on the next succeeding Payment Date.

 

“Interest Rate”: With respect to each Class of Secured Notes, the per annum stated interest rate payable on such Class with respect to each Interest Accrual Period equal to LIBOR for such Interest Accrual Period plus the spread specified in Section 2.3.

 

“Investment Advisers Act”: The Investment Advisers Act of 1940, as amended.

 

“Investment Criteria”: The criteria specified in Section 12.2.

 

“Investment Criteria Adjusted Balance”: With respect to each Collateral Obligation, the outstanding principal balance of such Collateral Obligation; provided that the Investment Criteria Adjusted Balance of any:

 

(i)   Deferring Obligation will be the S&P Collateral Value of such Deferring Obligation;

 

(ii)   Defaulted Obligation will be the S&P Collateral Value of such Defaulted Obligation;

 

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(iii)   Discount Obligation, will be the product of the (x) purchase price (expressed as a percentage of par) and (y) the principal balance of such Collateral Obligation;

 

(iv)   Long-Dated Obligation will equal its applicable Long-Dated Obligation Amount; and

 

(v)   Collateral Obligation included in the CCC Excess will be the Market Value of such Collateral Obligation;

 

provided further that the Investment Criteria Adjusted Balance for any Collateral Obligation that satisfies more than one of the definitions of Deferring Obligation, Defaulted Obligation or Discount Obligation and/or is included in the CCC Excess will be the lowest amount determined pursuant to clauses (i) – (v) above.

 

“IRS”: The U.S. Internal Revenue Service.

 

“Issuer”: The Person named as such on the first page of this Indenture until a successor Person shall have become the Issuer pursuant to the applicable provisions of this Indenture, and thereafter “Issuer” shall mean such successor Person.

 

“Issuer Order” and “Issuer Request”: A written order or request (which may be a standing order or request) dated and signed in the name of the Issuer or by a Responsible Officer of the Issuer or the Issuer or by the Collateral Manager by a Responsible Officer thereof, on behalf of the Issuer. An order or request provided in a facsimile, email or other electronic communication by a Responsible Officer of the Issuer or the Issuer or by a Responsible Officer of the Collateral Manager on behalf of the Issuer shall constitute an Issuer Order, in each case except to the extent the Trustee requests otherwise.

 

“Issuer’s Website”: The internet website of the Issuer, initially located at www.structuredfn.com access to which is limited to Fitch and S&P and to NRSRO’s that have provided an NRSRO Certification.

 

“Junior Class”: With respect to a particular Class of Notes, each Class of Notes that is subordinated to such Class, as indicated in Section 2.3.

 

“Knowledgeable Employee”: The meaning set forth in Rule 3c-5(a)(4) promulgated under the 1940 Act.

 

“LIBOR”: The meaning set forth in Exhibit C hereto.

 

“LIBOR Floor Obligation”: As of any date of determination, a Floating Rate Obligation (a) the interest in respect of which is paid based on a London interbank offered rate and (b) that provides that such London interbank offered rate is (in effect) calculated as the greater of (i) a specified “floor” rate per annum and (ii) the London interbank offered rate for the applicable interest period for such Collateral Obligation.

 

“Lien”: Any grant of a security interest in, mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing (including any UCC financing statement or any similar instrument filed against a Person’s assets or properties).

 

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“Loan”: Any obligation for the payment or repayment of borrowed money that is documented by a term loan agreement, revolving loan agreement or other similar credit agreement.

 

“London Banking Day”: A day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in London, England.

 

“Long-Dated Obligation”: Any Collateral Obligation (or portion thereof) with a maturity later than the earliest Stated Maturity of the Notes.

 

“Long-Dated Obligation Amount”: As of any date of determination, for each Long-Dated Obligation, an amount equal to the product of the Principal Balance of such Long-Dated Obligation multiplied by 70%.

 

“Maintenance Covenant”: A covenant by any borrower to comply with one or more financial covenants during each reporting period, whether or not such borrower has taken any specified action and includes a covenant that applies only when the related Loan is funded.

 

“Majority”: With respect to any Class or Classes of Notes, the Holders of more than 50% of the Aggregate Outstanding Amount of the Notes of such Class or Classes, as applicable.

 

“Margin Stock”: “Margin Stock” as defined under Regulation U issued by the Federal Reserve Board, including any debt security which is by its terms convertible into “Margin Stock.”

 

“Market Value”: With respect to any loans or other assets, the amount (determined by the Collateral Manager) equal to the product of the Principal Balance thereof and the price (expressed as a percentage of par) determined in the following manner:

 

(i)                 the bid price determined by the Loan Pricing Corporation, LoanX Inc., Markit Group Limited or any other nationally recognized pricing service subscribed to by the Collateral Manager; or

 

(ii)                 if the price described in clause (i) is not available or the Collateral Manager determines in accordance with the Collateral Manager Standard that such price does not reflect the value of such asset;

 

(A)              the average of the bid prices determined by three broker-dealers active in the trading of such asset that are Independent (without giving effect to the last sentence in the definition thereof) from each other and the Issuer and the Collateral Manager;

 

(B)              if only two such bids can be obtained, the lower of the bid prices of such two bids; or

 

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(C)              if only one such bid can be obtained, and such bid was obtained from a Qualified Broker/Dealer, such bid; or

 

(iii)                if a value cannot be obtained by the Collateral Manager exercising reasonable efforts pursuant to the means contemplated by clauses (i) or (ii), the value determined as the bid side market value of such Collateral Obligation as reasonably determined by the Collateral Manager (so long as the Collateral Manager is a Registered Investment Adviser, or has applied to be a Registered Investment Adviser) consistent with the Collateral Manager Standard and certified by the Collateral Manager to the Trustee; provided that, the value determined pursuant to this clause (iii) for any CCC Fitch Collateral Obligation or CCC S&P Collateral Obligation included in the CCC Excess may not exceed 70%; or

 

(iv)               if the Market Value of an asset is not determined in accordance with clause (i), (ii) or (iii) above, then such Market Value shall be deemed to be zero until such determination is made in accordance with clause (i), (ii) or (iii) above.

 

“Master Loan Sale Agreements”: Collectively, the Closing Date Master Loan Sale Agreement and the Retention Provider Master Loan Sale Agreement.

 

“Material Covenant Default”: A default by an Obligor with respect to any Collateral Obligation, and subject to any grace periods contained in the related Underlying Instruments, that gives rise to the right of the lender(s) thereunder to accelerate the principal of such Collateral Obligation.

 

“Maturity”: With respect to any Note, the date on which the unpaid principal of such Note becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

 

“Maturity Amendment”: An amendment (other than in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof if the Collateral Manager determines (i) in the case of a Collateral Obligation that in the Collateral Manager’s determination is likely to become a Defaulted Obligation, that such amendment in connection therewith would reduce the likelihood that such Collateral Obligation will become a Defaulted Obligation or (ii) if such Collateral Obligation is already a Defaulted Obligation, would in the Collateral Manager’s determination be advisable to increase recovery; provided that, in either case, the extended maturity date of such Collateral Obligation would not be later than the earliest Stated Maturity of the Secured Notes) to the Underlying Instruments governing a Collateral Obligation that extends the stated maturity of such Collateral Obligation. For the avoidance of doubt, an amendment that would extend the stated maturity date of any tranche of the credit facility of which a Collateral Obligation is part, but would not extend the stated maturity date of the Collateral Obligation held by the Issuer, does not constitute a Maturity Amendment.

 

“Maximum Fitch Rating Factor Test”: A test that will be satisfied on any date of determination if the Fitch Weighted Average Rating Factor as at such date is less than or equal to the applicable level in the Fitch Test Matrix.

 

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“Measurement Date”: (i) Any day on which a purchase of a Collateral Obligation occurs, (ii) any Determination Date, (iii) the date as of which the information in any Monthly Report is calculated, (iv) with five Business Days prior written notice, any Business Day requested by either Rating Agency and (v) the Effective Date.

 

“Merging Entity”: The meaning specified in Section 7.10.

 

“Middle Market Loan”: Any Loan other than a Broadly Syndicated Loan.

 

“Minimum Fitch Floating Spread”: As of any date of determination, the weighted average spread (expressed as a percentage) applicable to the current Fitch Test Matrix selected by the Collateral Manager.

 

“Minimum Fitch Floating Spread Test”: A test that will be satisfied on any date of determination if the Weighted Average Floating Spread plus the Excess Weighted Average Coupon equals or exceeds the Minimum Fitch Floating Spread.

 

“Minimum Floating Spread”: The applicable percentage set forth in the definition of “S&P CDO Monitor” upon the option chosen by the Collateral Manager in accordance with Section 2 of Schedule 4.

 

“Minimum Floating Spread Test”: The test that is satisfied on any date of determination if the Weighted Average Floating Spread plus the Excess Weighted Average Coupon equals or exceeds the Minimum Floating Spread.

 

“Minimum Weighted Average Coupon”: If any of the Collateral Obligations are Fixed Rate Obligations, 7.00%.

 

“Minimum Weighted Average Coupon Test”: A test that is satisfied on any date of determination as of which the Collateral Obligations include any Fixed Rate Obligations if the Weighted Average Coupon plus the Excess Weighted Average Floating Spread equals or exceeds the Minimum Weighted Average Coupon.

 

“Minimum Weighted Average Fitch Recovery Rate Test”: A test that will be satisfied on any date of determination if the Weighted Average Fitch Recovery Rate is greater than or equal to the applicable level in the Fitch Test Matrix.

 

“Minimum Weighted Average S&P Recovery Rate Test”: A test that will be satisfied on any date of determination, during any S&P CDO Monitor Election Period if the Weighted Average S&P Recovery Rate for the Class A-2 Notes (or, if the Class A-2 Notes are no longer Outstanding, the most senior Class of Secured Notes Outstanding) equals or exceeds the Weighted Average S&P Recovery Rate for such Class selected by the Collateral Manager in connection with the S&P CDO Monitor.

 

“Money”: The meaning specified in Section 1-201(24) of the UCC.

 

“Monthly Report”: The meaning specified in Section 10.7(a).

 

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“Monthly Report Determination Date”: The meaning specified in Section 10.7(a).

 

“Moody’s”: Moody’s Investors Service, Inc. and any successor thereto.

 

“Moody’s Default Probability Rating”: With respect to any Collateral Obligation, the rating determined pursuant to Schedule 3 hereto (or such other schedule provided by Moody’s to the Issuer, the Trustee, the Collateral Administrator and the Collateral Manager).

 

“Moody’s Derived Rating”: With respect to any Collateral Obligation whose Moody’s Rating or Moody’s Default Probability Rating cannot otherwise be determined pursuant to the definitions thereof, the rating determined for such Collateral Obligation as set forth in Schedule 3 hereto (or such other schedule provided by Moody’s to the Issuer, the Trustee, the Collateral Administrator and the Collateral Manager).

 

“Moody’s Rating”: With respect to any Collateral Obligation, the rating determined pursuant to Schedule 3 hereto (or such other schedule provided by Moody’s to the Issuer, the Trustee, the Collateral Administrator and the Collateral Manager).

 

“Net Exposure Amount”: As of the applicable Cut-Off Date, with respect to any Collateral Obligation which is a Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, the lesser of (i) the aggregate amount of the then unfunded funding obligations thereunder and (ii) the amount necessary to cause, on the applicable Cut-Off Date with respect to such Collateral Obligation, the amount of funds on deposit in the Revolver Funding Account to be at least equal to the sum of the unfunded funding obligations under all Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations then included in the Assets.

 

“Net Purchased Loan Balance”: As of any date of determination, an amount equal to (a) the sum of (i) the aggregate principal balance of all Collateral Obligations conveyed by the E.U. Retention Provider to the Issuer prior to such date, calculated as of the respective Cut-Off Dates of such Collateral Obligations, and (ii) the aggregate principal balance of all Collateral Obligations acquired by the Issuer other than from the E.U. Retention Provider prior to such date minus (b) the aggregate principal balance of all Collateral Obligations sold to, or otherwise transferred to, the E.U. Retention Provider prior to such date.

 

“Non-Call Period”: The(i) With respect to the Notes issued on the Closing Date, the period from the Closing Date to December 13, 2020 and (ii) with respect to the Class A-2-R Notes, the period from the Refinancing Date to but excluding June 21, 2021.

 

“Non-Emerging Market Obligor”: An Obligor that is Domiciled in (a) the United States of America, (b) any country that has a foreign currency government bond rating of at least “Aa3” by Moody’s and a foreign currency issuer credit rating of at least “AA-” by S&P or (c) a Tax Jurisdiction.

 

“Non-Permitted ERISA Holder”: The meaning specified in Section 2.11(d).

 

“Non-Permitted Holder”: The meaning specified in Section 2.11(b).

 

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“Non-Recourse Obligation”: An asset that falls into any one of the following types of specialized lending, except any obligation that is assigned a rating by S&P pursuant to clause (i)(a) of the definition of S&P Rating:

 

(a)               Project Finance: a method of funding in which the lender looks primarily to the revenues generated by a single project, both as the source of repayment and as security for the exposure. Repayment depends primarily on the project’s cash flow and on the collateral value of the project’s assets, such as power plants, chemical processing plants, mines, transportation infrastructure, environment, and telecommunications infrastructure.

 

(b)               Object Finance: a method of funding the acquisition of physical assets (e.g. ships, aircraft, satellites, railcars, and fleets) where the repayment of the exposure is dependent on the cash flows generated by the specific assets that have been financed and pledged or assigned to the lender. A primary source of these cash flows might be rental or lease contracts with one or several third parties.

 

(c)               Commodities Finance: a structured short-term lending to finance reserves, inventories, or receivable of exchange-traded commodities (e.g. crude oil, metals, or crops), where the exposure will be repaid from the proceeds of the sale of the commodity and the borrower has no independent capacity to repay the exposure. This is the case when the borrower has no other activities and no other material assets on its balance sheet.

 

(d)               Income-producing real estate: a method of providing funding to real estate (such as, office buildings to let, retail space, multifamily residential buildings, industrial or warehouse space, and hotels) where the prospects for repayment and recovery on the exposure depend primarily on the cash flows generated by the asset. The primary source of these cash flows would generally be lease or rental payments or the sale of the asset.

 

(e)               High-volatility commercial real estate: a financing any of the land acquisition, development and construction phases for properties of those types in such jurisdictions, where the source of repayment at origination of the exposure is either the future uncertain sale of the property or cash flows whose source of repayment is substantially uncertain (e.g. the property has not yet been leased to the occupancy rate prevailing in that geographic market for that type of commercial real estate).

 

“Non-U.S. Beneficial Ownership Certification”: The meaning specified in Section 2.2(b)(i).

 

“Note Interest Amount”: With respect to any Class of Secured Notes and any Payment Date, the amount of interest for the related Interest Accrual Period payable in respect of each U.S.$100,000 of outstanding principal amount of such Class of Secured Notes.

 

“Note Payment Sequence”: The application, in accordance with the Priority of Payments, of Interest Proceeds or Principal Proceeds, as applicable, in the following order:

 

(i)              to the payment of principal of the Class A-1 Notes until the Class A-1 Notes have been paid in full;

 

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(ii)             to the payment of principal of the Class A-2 Notes until the Class A-2 Notes have been paid in full;

 

(iii)            to the payment of principal of the Class B-1 Notes and the Class B-2 Notes, pro rata based on their respective Aggregate Outstanding Amounts, until the Class B Notes have been paid in full;

 

(iv)           to the payment of (1) first, any accrued and unpaid interest (excluding Deferred Interest but including interest on Deferred Interest) on the Class C Notes and (2) second, to the payment of any Deferred Interest on the Class C Notes, in each case, until such amounts have been paid in full;

 

(v)             to the payment of principal of the Class C Notes until the Class C Notes have been paid in full;

 

(vi)           to the payment of (1) first, any accrued and unpaid interest (excluding Deferred Interest but including interest on Deferred Interest) on the Class D Notes and (2) second, to the payment of any Deferred Interest on the Class D Notes, in each case, until such amounts have been paid in full; and

 

(vii)           to the payment of principal of the Class D Notes, until the Class D Notes have been paid in full.

 

“Noteholder” or “Holder”: With respect to any Note, the Person whose name appears on the Register as the registered holder of such Note.

 

“Notes”: Collectively, the Secured Notes and the Subordinated Notes authorized by, and authenticated and delivered under, this Indenture (as specified in Section 2.4) or any supplemental indenture (and including any Additional Notes issued hereunder pursuant to Section 2.13).

 

“NRSRO”: A nationally recognized statistical rating organization registered with the SEC under the Exchange Act.

 

“NRSRO Certification”: A certification substantially in the form of Exhibit E executed by a NRSRO in favor of the Issuer that states that such NRSRO has provided the Issuer with the appropriate certifications under Exchange Act Rule 17g-5(e) and that such NRSRO has access to the Issuer’s Website.

 

“Obligor”: With respect to any Collateral Obligation, any Person or Persons obligated to make payments pursuant to or with respect to such Collateral Obligation, including any guarantor thereof, but excluding, in each case, any such Person that is an obligor or guarantor that is in addition to the primary obligors or guarantors with respect to the assets, cash flows or credit on which the related Collateral Obligation is principally underwritten.

 

“Obligor Diversity Measure”: As of any date of determination, the number obtained by dividing (a) 1 by (b) the sum of the squares of the quotients, for each Obligor, obtained by dividing (i) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations) issued by such Obligor by (ii) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations).

 

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“Offer”: The meaning specified in Section 10.8(c).

 

“Offered Notes”: Collectively(i) With respect to the Notes issued on the Closing Date, collectively, the Class A-1 Notes, the Class A-2 Notes and the Class B-1 Notes and (ii) with respect to the Notes issued on the Refinancing Date, the Class A-2-R Notes.

 

“Offering”: The offering of any Notes by the Issuer on the Closing Date pursuant to this Indenture and the other Transaction Documents.

 

“Offering Circular”: Each offering circular relating to the offer and sale of the Notes, including any supplements thereto.

 

“Officer”: (a) With respect to the Issuer and any limited liability company, any managing member or manager thereof or any person to whom the rights and powers of management thereof are delegated in accordance with the limited liability company agreement of such limited liability company and (b) with respect to the Collateral Manager, any manager of the Collateral Manager or any duly authorized officer of the Collateral Manager (as indicated on an incumbency certificate delivered to the Trustee) with direct responsibility for the administration of the Collateral Management Agreement and this Indenture and also, with respect to a particular matter, any other duly authorized officer of the Collateral Manager to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“Opinion of Counsel”: A written opinion addressed to the Trustee and, if required by the terms hereof, each Rating Agency, in form and substance reasonably satisfactory to the Trustee (and, if so addressed, each Rating Agency), of an attorney admitted to practice, or a nationally or internationally recognized and reputable law firm one or more of the partners of which are admitted to practice, before the highest court of any State of the United States or the District of Columbia, which attorney or law firm, as the case may be, may, except as otherwise expressly provided herein, be counsel for the Issuer, and which attorney or law firm, as the case may be, shall be reasonably satisfactory to the Trustee. Whenever an Opinion of Counsel is required hereunder, such Opinion of Counsel may rely on opinions of other counsel who are so admitted and so satisfactory, which opinions of other counsel shall accompany such Opinion of Counsel and shall be addressed to the Trustee (and, if required by the terms hereof, each Rating Agency) or shall state that the Trustee (and, if required by the terms hereof, each Rating Agency) shall be entitled to rely thereon.

 

“Optional Redemption”: A redemption of the Notes in accordance with Section 9.2.

 

“Other Plan Law”: Any state, local, federal, non-U.S. or other laws or regulations that are substantially similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code.

 

“Outstanding”: With respect to the Notes or the Notes of any specified Class, as of any date of determination, all of the Notes or all of the Notes of such Class, as the case may be, theretofore authenticated and delivered under this Indenture, except:

 

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(i)              Notes theretofore canceled by the Registrar or delivered to the Registrar for cancellation in accordance with the terms of Section 2.9 (including, without limitation and for the avoidance of doubt, pursuant to Section 9.7);

 

(ii)             Notes or portions thereof for whose payment or redemption funds in the necessary amount have been theretofore irrevocably deposited with the Trustee or any Paying Agent in trust for the Holders of such Notes pursuant to Section 4.1(a)(ii); provided that if such Notes or portions thereof are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

 

(iii)            Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, unless proof satisfactory to the Trustee is presented that any such Notes are held by a “protected purchaser” (within the meaning of Section 8-303 of the UCC); and

 

(iv)            Notes alleged to have been mutilated, destroyed, lost or stolen for which replacement Notes have been issued as provided in Section 2.6;

 

provided that in determining whether the Holders of the requisite Aggregate Outstanding Amount of any Class of Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (a) Notes owned by the Issuer or (only in the case of a vote on (i) the removal of the Collateral Manager for “cause” and (ii) the waiver of any event constituting “cause”, in each case, unless all Notes of such Class are Collateral Manager Notes) Collateral Manager Notes shall be disregarded and deemed not to be Outstanding, except that (x) in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Trust Officer of the Trustee actually knows, based solely on transfer certificates received pursuant to the terms of Section 2.5, to be so owned shall be so disregarded and (y) if all Notes of such Class are Collateral Manager Notes, Collateral Manager Notes shall not be so disregarded and (b) Notes so owned that have been pledged in good faith shall be regarded as Outstanding if the pledgee establishes to the reasonable satisfaction of the Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not one of the Persons specified above.

 

“Overcollateralization Ratio”: With respect to any specified Class or Classes of Secured Notes as of any date of determination, the percentage derived from: (i) the Adjusted Collateral Principal Amount on such date divided by (ii) the Aggregate Outstanding Amount on such date of the Secured Notes of such Class or Classes (including, in the case of the Class C Notes and the Class D Notes, any accrued Deferred Interest that remains unpaid), each Priority Class of Secured Notes and each Pari Passu Class of Secured Notes.

 

“Overcollateralization Ratio Test”: A test that is satisfied with respect to any designated Class or Classes of Secured Notes as of any date of determination on which such test is applicable if (i) the Overcollateralization Ratio for such Class or Classes on such date is at least equal to the Required Overcollateralization Ratio for such Class or Classes or (ii) such Class or Classes of Secured Notes is no longer Outstanding.

 

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“Pari Passu Class”: With respect to any specified Class of Notes, each Class of Notes that ranks pari passu to such Class, as indicated in Section 2.3.

 

“Partial Redemption Date”: Any date on which a Refinancing of one or more but not all Classes of Secured Notes occurs.

 

“Partial Refinancing”: Any Refinancing in connection with an Optional Redemption of fewer than all Classes of Secured Notes.

 

“Partial Refinancing Interest Proceeds”: In connection with a Refinancing in part by Class of one or more Classes of Secured Notes, with respect to each such Class, Interest Proceeds up to the amount of accrued and unpaid interest on such Class, but only to the extent that such Interest Proceeds would be available under the Priority of Payments to pay accrued and unpaid interest on such Class on the date of a Refinancing of such Class (or, in the case of a Refinancing occurring on a date other than a Payment Date (without giving effect to clause (ii) of the definition thereof), only to the extent that the Collateral Manager determines that such Interest Proceeds would be available under the Priority of Payments to pay accrued and unpaid interest on such Class on the next Payment Date, taking into account Scheduled Distributions on the Assets that are expected to be received prior to the next Determination Date).

 

“Participation Interest”: An undivided 100% participation interest in a loan that, at the time of acquisition, or the Issuer’s commitment to acquire the same, satisfies each of the following criteria: (i) such participation would constitute a Collateral Obligation were it acquired directly, (ii) the seller of the participation is the lender on the loan, (iii) the aggregate participation in the loan does not exceed the principal amount or commitment of such loan, (iv) such participation does not grant, in the aggregate, to the participant in such participation a greater interest than the seller holds in the loan or commitment that is the subject of the participation, (v) the entire purchase price for such participation is paid in full (without the benefit of financing from the selling institution or its affiliates) at the time of its acquisition (or, in the case of a participation in a Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, at the time of the funding of such loan), (vi) the participation provides the participant all of the economic benefit and risk of the whole or part of the loan or commitment that is the subject of the loan participation, and (vii) such participation is documented under a Loan Syndications and Trading Association, Loan Market Association or similar agreement standard for loan participation transactions among institutional market participants; provided that, any Closing Date Participation Interest shall be deemed to (a) be a Collateral Obligation for all purposes under the Indenture (provided that the related Senior Secured Loan or Second Lien Loan in which such Closing Date Participation Interest is granted satisfies the definition of Collateral Obligation) and (b) not be a Participation Interest until the 90th day following the Closing Date if such Closing Date Participation Interest has not been elevated by such day. For the avoidance of doubt a Participation Interest shall not include a sub-participation interest in any loan.

 

“Partner”: The meaning specified in Section 7.17(a).

 

“Partnership Interest”: The meaning specified in Section 7.17(a).

 

“Partnership Representative”: The meaning specified in Section 7.17(l).

 

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“Partnership Tax Audit Rules”: The meaning specified in Section 7.17(l).

 

“Paying Agent”: Any Person authorized by the Issuer to pay the principal of or interest on any Notes on behalf of the Issuer as specified in Section 7.2.

 

“Payment Account”: The payment account of the Trustee established pursuant to Section 10.3(a).

 

“Payment Date”: (i) Each of the 20th day of January, April, July and October of each year (or, if such day is not a Business Day, the next succeeding Business Day), commencing in April 2019, except that the final Payment Date (subject to any earlier redemption or payment of the Notes) shall be the latest Stated Maturity, (ii) each Redemption Date (other than a Redemption Date in connection with a Failed Optional Redemption or a Redemption Date in connection with a redemption of Secured Notes in part by Class) and Re-Pricing Date and (iii) after the date on which no Secured Notes are deemed or considered Outstanding, any Business Day that the Collateral Manager shall designate as a “Payment Date” pursuant to Section 11.1(f).

 

“PBGC”: The United States Pension Benefit Guaranty Corporation.

 

“Permitted Deferrable Obligation”: Any Deferrable Obligation that (or the Underlying Instruments of which) carries a current cash pay interest rate of not less than (a) in the case of a Floating Rate Obligation, LIBOR plus 1.00% per annum or (b) in the case of a Fixed Rate Obligation, the zero-coupon swap rate in a fixed/floating interest rate swap with a term equal to five years.

 

“Permitted Liens”: With respect to the Assets: (i) security interests, liens and other encumbrances created pursuant to the Transaction Documents, (ii) with respect to agented Collateral Obligations, security interests, liens and other encumbrances in favor of the lead agent, the collateral agent or the paying agent on behalf of all holders of indebtedness of such Obligor under the related facility, (iii) with respect to any Equity Security, any security interests, liens and other encumbrances granted on such Equity Security to secure indebtedness of the related Obligor and/or any security interests, liens and other rights or encumbrances granted under any governing documents or other agreement between or among or binding upon the Issuer as the holder of equity in such Obligor and (iv) security interests, liens and other encumbrances, if any, which have priority over first priority perfected security interests in the Collateral Obligations or any portion thereof under the UCC or any other applicable law.

 

“Permitted Offer”: An Offer (i) pursuant to the terms of which the offeror offers to acquire a debt obligation (including a Collateral Obligation) in exchange for consideration consisting solely of Cash in an amount equal to or greater than the full face amount of such debt obligation plus any accrued and unpaid interest and (ii) as to which the Collateral Manager has determined in its reasonable commercial judgment that the offeror has sufficient access to financing to consummate the Offer.

 

“Permitted Use”: With respect to any amount on deposit in the Supplemental Reserve Account, any of the following uses: (i) the transfer of the applicable portion of such amount to the Collection Account for application as Principal Proceeds; (ii) the repurchase of Secured Notes of any Class through a tender offer, in the open market, or in a private negotiated transaction (in each case, subject to applicable law and the provisions of Section 9.7); (iii) the purchase of one or more Specified Equity Securities; (iv) after the Non-Call Period, to pay expenses or other amounts due in connection with an Optional Redemption and (v) any other application or purpose not specifically prohibited by this Indenture.

 

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“Person”: An individual, corporation (including a business trust), partnership, limited liability company, joint venture, association, joint stock company, statutory trust, trust (including any beneficiary thereof), unincorporated association or government or any agency or political subdivision thereof.

 

“Portfolio Company”: Any company that at the time the Loan is acquired by the Issuer is controlled by the Collateral Manager, an Affiliate thereof, or an account, fund, client or portfolio established and controlled by the Collateral Manager or an Affiliate thereof.

 

“Post-Reinvestment Period Settlement Obligation”: The meaning specified in Section 12.2.

 

“Principal Balance”: Subject to Section 1.3, with respect to (a) any Asset other than a Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, as of any date of determination, the outstanding principal amount of such Asset (excluding any capitalized interest) and (b) any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, as of any date of determination, the outstanding principal amount of such Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation (excluding any capitalized interest), plus (except as expressly set forth herein) any undrawn commitments that have not been irrevocably reduced or withdrawn with respect to such Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation; provided that for all purposes the Principal Balance of any Equity Security or interest only strip shall be deemed to be zero.

 

“Principal Collection Subaccount”: The meaning specified in Section 10.2(a).

 

“Principal Financed Accrued Interest”: The amount of Principal Proceeds, if any, applied towards the purchase of accrued interest on a Collateral Obligation.

 

“Principal Proceeds”: With respect to any Collection Period or Determination Date, all amounts received by the Issuer during the related Collection Period that do not constitute Interest Proceeds and any other amounts that have been designated as Principal Proceeds pursuant to the terms of this Indenture.

 

“Priority Category”: With respect to any Collateral Obligation, the applicable category listed in the table under the heading “Priority Category” in Section 1(b) of Schedule 4.

 

“Priority Class”: With respect to any specified Class of Notes, each Class of Notes that ranks senior to such Class, as indicated in Section 2.3.

 

“Priority of Payments”: The meaning specified in Section 11.1(a).

 

“Proceeding”: Any suit in equity, action at law or other judicial or administrative proceeding.

 

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“Proposed Portfolio”: The portfolio of Collateral Obligations and Eligible Investments resulting from the proposed purchase, sale, maturity or other disposition of a Collateral Obligation or a proposed reinvestment in an additional Collateral Obligation, as the case may be.

 

“Prospectus Directive”: European Union Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), including any relevant implementing measure in a Relevant Member State.

 

“Purchase Agreement”: The note purchase agreement dated as of the Closing Date by and between the Issuer and the Initial Purchaser, as amended from time to time.

 

“QIB/QP”: Any Person that, at the time of its acquisition, purported acquisition or proposed acquisition of Notes is both a Qualified Institutional Buyer and a Qualified Purchaser.

 

“Qualified Broker/Dealer”: Any of Bank of America/Merrill Lynch; The Bank of Montreal; The Bank of New York Mellon; Barclays Bank plc; BNP Paribas; Broadpoint Securities; Calyon; Citibank, N.A.; Credit Agricole S.A.; Canadian Imperial Bank of Commerce; Credit Suisse; Deutsche Bank AG; Dresdner Bank AG; GE Capital; Goldman Sachs & Co.; Guggenheim Securities LLC; HSBC Bank; Imperial Capital LLC; Jefferies & Company, Inc.; JPMorgan Chase Bank, N.A.; Key Bank National Association; Lloyds TSB Bank; Madison Capital; Merrill Lynch, Pierce, Fenner & Smith Incorporated; Morgan Stanley & Co.; Natixis; NewStar Financial, Inc.; Northern Trust Company; Royal Bank of Canada; The Royal Bank of Scotland plc; Société Générale; SunTrust Bank, Inc.; The Toronto-Dominion Bank; UBS AG; U.S. Bank National Association; and Wells Fargo Bank, National Association, and any successor or successors to each of the foregoing.

 

“Qualified Institutional Buyer”: The meaning specified in Rule 144A under the Securities Act.

 

“Qualified Purchaser”: The meaning specified in Section 2(a)(51) of the 1940 Act and Rule 2a51-1, 2a51-2 or 2a51-3 under the 1940 Act.

 

“Ramp-Up Account”: The trust account established pursuant to Section 10.3(c).

 

“Rating Agency”: Each of Fitch and S&P, or, with respect to Assets generally, if at any time Fitch or S&P ceases to provide rating services with respect to debt obligations, any other nationally recognized investment rating agency selected by the Issuer (or the Collateral Manager on behalf of the Issuer).

 

“Record Date”: With respect to any applicable Payment Date, Redemption Date, Redemption Distribution Date or Re-Pricing Date, (i) with respect to the Global Secured Notes and the Rule 144A Global Subordinated Notes, the date one day prior to such Payment Date, Redemption Date, Redemption Distribution Date or Re-Pricing Date, as applicable, and (ii) with respect to the Certificated Secured Notes and the Certificated Subordinated Notes, the last day of the month immediately preceding such Payment Date, Redemption Date, Redemption Distribution Date or Re-Pricing Date, as applicable (whether or not a Business Day) (or, after the date on which no Secured Notes are deemed or considered Outstanding, the Business Day preceding such Payment Date).

 

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“Redemption Date”: Any Business Day specified for a redemption of Notes pursuant to Article IX (other than a mandatory redemption pursuant to Section 9.1).

 

“Redemption Distribution Date”: The meaning set forth in Section 9.2(j).

 

“Redemption Distribution Direction”: The meaning set forth in Section 10.7(k).

 

“Redemption Price”: (a) For each Secured Note to be redeemed (x) 100% of the Aggregate Outstanding Amount of such Secured Note, plus (y) accrued and unpaid interest thereon (including any defaulted interest and any accrued and unpaid interest thereon and any Deferred Interest and any accrued and unpaid interest thereon) to the Redemption Date or Re-Pricing Date, as applicable, and (b) for each Subordinated Note, (x) if such Subordinated Note is being redeemed in connection with a liquidation of Assets, its proportional share (based on the outstanding principal amount of such Subordinated Note) of the amount of the proceeds of the Assets remaining after giving effect to the Optional Redemption, Tax Redemption or Clean-Up Call Redemption of the Secured Notes in whole or after all of the Secured Notes have been repaid in full and payment in full of (and/or creation of a reserve for) all expenses (including all Aggregate Collateral Management Fees and Administrative Expenses) of the Issuer or (y) if such Subordinated Note is being redeemed upon the occurrence of a Refinancing of all of the Secured Notes, the applicable Subordinated Note Redemption Price; provided that, in connection with any Re-Pricing, Tax Redemption, Optional Redemption or Clean-Up Call Redemption of the Secured Notes in whole, holders of 100% of the Aggregate Outstanding Amount of any Class of Secured Notes may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the holders of such Class of Secured Notes, and such price shall be the “Redemption Price”.

 

“Reference Banks”: The meaning specified in Exhibit C hereto.

 

“Refinanced Notes”: Each Class of Secured Notes that are the subject of a Partial Refinancing.

 

“Refinancing”: A loan or an issuance of replacement securities, whose terms in each case will be negotiated by the Collateral Manager on behalf of the Issuer, from one or more financial institutions or purchasers to refinance the Notes in connection with an Optional Redemption.

 

“Refinancing Date”: December 21, 2020.

 

“Refinancing Proceeds”: The Cash proceeds from a Refinancing.

 

“Refinancing Purchase Agreement”: The note purchase agreement dated as of December 15, 2020 between the Issuer and Wells Fargo Securities, LLC, as initial purchaser of the Class A-2-R Notes, as may be amended from time to time.

 

“Refinancing Rate Condition”: With respect to any Partial Refinancing, a condition that is satisfied for the related Refinanced Notes that are to be Refinanced by the related Replacement Notes when: (i)(a) the spread over LIBOR of the Replacement Notes is not greater than the spread over LIBOR of the Refinanced Notes, if both the Replacement Notes and the Refinanced Notes are Floating Rate Notes, (b) the Interest Rate of the Replacement Notes is not greater than the Interest Rate of the Refinanced Notes, if both the Refinanced Notes and the Replacement Notes are Fixed Rate Notes or (c) the weighted average interest rate of the Replacement Notes does not exceed the weighted average interest rate of the Refinanced Notes (measured as of the date of such Refinancing); (ii) if either (x) the Refinanced Notes are Fixed Rate Notes, and the Replacement Notes are Floating Rate Notes (in either case in whole or in part), or (y) the Refinanced Notes are Floating Rate Notes, and the Replacement Notes are Fixed Rate Notes (in either case in whole or in part), the rate of interest payable on the Replacement Notes (in the reasonable determination of the Collateral Manager) is expected to be lower than the rate of interest that would have been payable on the Refinanced Notes over the expected remaining life of the Refinanced Notes (in each case determined on a weighted average basis over such expected remaining life), had such Partial Refinancing not occurred; (iii) the Issuer and the Trustee have received an officer’s certificate of the Collateral Manager certifying that the conditions specified in clauses (i) or (ii) above, as applicable, have been satisfied with respect to such Partial Refinancing; and (iv) in the case of a Partial Refinancing of the Class A-1 Notes, the Class A-2 Notes, the Class B-1 Notes and/or the Class B-2 Notes effected under clause (ii) above, if the Global Rating Agency Condition is satisfied.

 

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“Regional Diversity Measure”: As of any date of determination, the number obtained by dividing (a) 1 by (b) the sum of the squares of the quotients, for each S&P region classification, obtained by dividing (i) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations) issued by Obligors that belong to such S&P region classification by (ii) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations).

 

“Register” and “Registrar”: The respective meanings specified in Section 2.5(a).

 

“Registered”: In registered form for U.S. federal income tax purposes (or in registered or bearer form if not a “registration-required obligation” as defined in Section 163(f)(2)(A) of the Code).

 

“Registered Investment Adviser”: A Person duly registered as an investment adviser in accordance with and pursuant to Section 203 of the Investment Advisers Act.

 

“Regulation S”: Regulation S, as amended, under the Securities Act.

 

“Regulation S Global Secured Note”: The meaning specified in Section 2.2(b)(i).

 

“Reinvestment Balance Criteria”: Criteria that shall be satisfied if, excluding Collateral Obligations being sold but including, without duplication, the Collateral Obligations being purchased and the anticipated cash proceeds, if any, of such sale that are not applied to the purchase of such additional Collateral Obligations, either (1) the Investment Criteria Adjusted Balance is maintained or increased, (2) the Collateral Principal Amount is greater than or equal to the Reinvestment Target Par Balance or (3) the Aggregate Principal Balance of the Collateral Obligations and Eligible Investments constituting Principal Proceeds is maintained or increased.

 

“Reinvestment Period”: The period from and including the Closing Date to and including the earliest of (i) January 20, 2023, (ii) the date of the acceleration of the Maturity of any Class of Secured Notes pursuant to Section 5.2 and (iii) (A) an Optional Redemption in whole from Sale Proceeds and/or Contributions of Cash pursuant to Section 9.2(b) and (B) a redemption in whole of the Subordinated Notes pursuant to Section 9.2(c), in each case, in connection with which all Assets are sold; provided that in the case of clause (iii), the Collateral Manager notifies the Issuer, the Trustee (who shall notify the Holders of the Notes) and the Collateral Administrator thereof in writing at least one Business Day prior to such date.

 

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“Reinvestment Target Par Balance”: (x) Solely for purposes of the definition of Restricted Trading Period, the Aggregate Risk Adjusted Par Amount plus the Aggregate Outstanding Amount of any Additional Notes issued pursuant to Sections 2.13 and 3.2 or, if greater, the aggregate amount of Principal Proceeds that result from the issuance of Additional Notes and (y) for all other purposes, as of any date of determination, the Target Initial Par Amount plus the Aggregate Outstanding Amount of any Additional Notes issued pursuant to Sections 2.13 and 3.2, or, if greater, the aggregate amount of Principal Proceeds that result from the issuance of such Additional Notes minus, in each case, the amount of any reduction in the Aggregate Outstanding Amount of the Notes through the payment of Principal Proceeds.

 

“Relevant Member State”: Each member state of the European Economic Area which has implemented the Prospectus Directive.

 

“Replacement Notes”: The meaning set forth in Section 9.2(d).

 

“Re-Priced Class”: The meaning specified in Section 9.8.

 

“Re-Pricing”: The meaning specified in Section 9.8.

 

“Re-Pricing Date”: The meaning specified in Section 9.8.

 

“Re-Pricing Intermediary”: The meaning specified in Section 9.8.

 

“Re-Pricing Rate”: The meaning specified in Section 9.8(a).

 

“Required Interest Coverage Ratio”: (a) For the Class A Notes and the Class B Notes (in aggregate and not separately by Class), 120%; (b) for the Class C Notes, 110%; and (c) for the Class D Notes, 105%.

 

“Required Overcollateralization Ratio”: (a) For the Class A Notes and the Class B Notes (in aggregate and not separately by Class), 147.9%; (b) for the Class C Notes, 127.1%; and (c) for the Class D Notes, 117.5%.

 

“Resolution”: With respect to the Issuer, a resolution of the board of directors of the designated manager of the Issuer.

 

“Responsible Officer”: With respect to any Person, any duly authorized director, officer or manager of such Person with direct responsibility for the administration of the applicable agreement and also, with respect to a particular matter, any other duly authorized director, officer or manager of such Person to whom such matter is referred because of such director’s, officer’s or manager’s knowledge of and familiarity with the particular subject. Each party may receive and accept a certification of the authority of any other party (which may contain contact information including an email address) as conclusive evidence of the authority of any Person to act, and such certification may be considered as in full force and effect until receipt by such other party of written notice to the contrary.

 

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“Restricted Trading Period”: Each day during which, both: (i) (a) S&P’s rating of the Class A-1 Notes or Fitch’s rating of the Class A-1 Notes is one or more subcategories below its initial rating thereof or has been withdrawn (unless it has been reinstated) or (b) S&P’s rating of the Class A-2 Notes, the Class B-1 Notes, the Class B-2 Notes, the Class C Notes or the Class D Notes is two or more subcategories below its initial rating thereof or has been withdrawn (unless it has been reinstated) and (ii) after giving effect to the applicable sale and reinvestment in Collateral Obligations, the sum of the aggregate principal balance of all Collateral Obligations (excluding the Collateral Obligations being sold) and all Eligible Investments constituting Principal Proceeds (including, without duplication, the net proceeds of any such sale) is less than the Reinvestment Target Par Balance; provided however that a Majority of the Controlling Class may elect to waive the Restricted Trading Period, which waiver will remain in effect until the earlier of (A) revocation of such waiver by a Majority of the Controlling Class and (B) further downgrade or withdrawal of the rating of the Class A-1 Notes, the Class A-2 Notes, the Class B-1 Notes, the Class B-2 Notes, the Class C Notes or the Class D Notes.

 

“Retention Basis Amount”: On any date of determination, an amount equal to the Collateral Principal Amount on such date with the following adjustments: (i) Defaulted Obligations shall be included in the Collateral Principal Amount and the principal balances thereof shall be deemed equal to their respective outstanding principal amounts and (ii) any Equity Security owned by the Issuer shall be included in the Collateral Principal Amount with a principal balance determined as follows: (a) in the case of a debt obligation or other debt security, the principal amount outstanding of such obligation or security, (b) in the case of an equity security received upon a “debt for equity swap” in relation to a restructuring or other similar event, the principal amount outstanding of the debt which was swapped for the equity security and (c) in the case of any other equity security, the nominal value thereof as determined by the Collateral Manager.

 

“Retention Provider”: GCIC CLO II Depositor LLC, in its capacity as E.U. Retention Provider and U.S. Retention Provider.

 

“Retention Provider Master Loan Sale Agreement”: An agreement, dated as of the Closing Date, among the BDC, as seller, the Retention Provider, as intermediate seller, and the Issuer, as buyer.

 

“Revolver Funding Account”: The account established pursuant to Section 10.4.

 

“Revolving Collateral Obligation”: Any Collateral Obligation (other than a Delayed Drawdown Collateral Obligation) that is a loan (including, without limitation, revolving loans, including funded and unfunded portions of revolving credit lines, unfunded commitments under specific facilities and other similar loans and investments) that by its terms may require one or more future advances to be made to the borrower by the Issuer; provided that any such Collateral Obligation will be a Revolving Collateral Obligation only until all commitments to make advances to the borrower expire or are terminated or irrevocably reduced to zero.

 

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“Risk Retention Issuance”: An additional issuance of Notes directed by the Collateral Manager for purpose of compliance with the U.S. Risk Retention Rules.

 

“Rule 144A”: Rule 144A, as amended, under the Securities Act.

 

“Rule 144A Global Secured Note”: The meaning specified in Section 2.2(b)(ii).

 

“Rule 144A Global Subordinated Note”: The meaning specified in Section 2.2(b)(ii).

 

“Rule 144A Information”: The meaning specified in Section 7.15.

 

“Rule 17g-5”: Rule 17g-5 under the Exchange Act.

 

“S&P”: S&P Global Ratings, an S&P Global Ratings Inc. business, and any successor or successors thereto.

 

“S&P CDO Formula Election Date”: The date designated by the Collateral Manager upon at least five Business Days’ prior written notice to S&P, the Trustee and the Collateral Administrator as the date on which the Issuer will cease to utilize the S&P CDO Monitor in determining compliance with the S&P CDO Monitor Test.

 

“S&P CDO Formula Election Period”: (i) The period from the Effective Date until the occurrence of an S&P CDO Monitor Election Date and (ii) thereafter, any date on and after an S&P CDO Formula Election Date. Only one S&P CDO Formula Election Date may occur following the Closing Date.

 

“S&P CDO Monitor”: The dynamic, analytical computer model developed by S&P used to calculate the default frequency in terms of the amount of debt assumed to default as a percentage of the original principal amount of the Collateral Obligations consistent with a specified benchmark rating level based upon certain assumptions (including the applicable Weighted Average S&P Recovery Rate) and S&P’s proprietary corporate default studies, as may be amended by S&P from time to time upon notice to the Issuer, the Trustee, the Collateral Manager and the Collateral Administrator. The model is available at https://www.sp.sfproducttools.com/sfdist/login.ex. Each S&P CDO Monitor will be chosen by the Collateral Manager and associated with either (x) a Weighted Average S&P Recovery Rate and a Weighted Average Floating Spread from Section 2 of Schedule 4 or (y) a Weighted Average S&P Recovery Rate and a Weighted Average Floating Spread confirmed by S&P; provided that as of any date of determination the Weighted Average S&P Recovery Rate for the Class A-2 Notes (or, if the Class A-2 Notes are no longer Outstanding, the most senior Class of Secured Notes Outstanding) equals or exceeds the Weighted Average S&P Recovery Rate for such Class chosen by the Collateral Manager and the Weighted Average Floating Spread equals or exceeds the Weighted Average Floating Spread chosen by the Collateral Manager.

 

“S&P CDO Monitor Benchmarks”: The Expected Portfolio Default Rate, the Default Rate Dispersion, the Obligor Diversity Measure, the Industry Diversity Measure, the Regional Diversity Measure and the S&P Weighted Average Life.

 

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“S&P CDO Monitor Election Period”: Any date on and after an S&P CDO Monitor Election Date so long as no S&P CDO Formula Election Date has occurred since such S&P CDO Monitor Election Date.

 

“S&P CDO Monitor Non-Model Adjustments”: For purposes of determining compliance with the S&P CDO Monitor Test in connection with the Effective Date Report, the Aggregate Funded Spread will be calculated (a) without giving effect to clause (ii) in the second paragraph thereof and each LIBOR Floor Obligation will be assumed to bear interest at a rate equal to the stated interest rate spread over the LIBOR-based index for such Collateral Obligation and (b) without including any Principal Proceeds that may be designated by the Collateral Manager as Interest Proceeds.

 

“S&P CDO Monitor Test”: A test that will be satisfied on any date of determination after the Effective Date (and, during any S&P CDO Monitor Election Period, following receipt by the Collateral Manager of the Class Break-even Default Rates for each S&P CDO Monitor input file (in accordance with the definition of “Class Break-even Default Rate”)) if, after giving effect to the sale of a Collateral Obligation or the purchase of a Collateral Obligation, the Class Default Differential of the Proposed Portfolio with respect to the Class A-2 Notes (or, if the Class A-2 Notes are no longer Outstanding, the most senior Class of Secured Notes Outstanding) is positive. The S&P CDO Monitor Test will be considered to be improved if each Class Default Differential of the Proposed Portfolio with respect to the Class A-2 Notes (or, if the Class A-2 Notes are no longer Outstanding, the most senior Class of Secured Notes Outstanding) is greater than the corresponding Class Default Differential of the Current Portfolio.

 

“S&P Collateral Value”: With respect to any Defaulted Obligation or Deferring Obligation, the lesser of (i) the S&P Recovery Amount of such Defaulted Obligation or Deferring Obligation, as of the relevant Measurement Date and (ii) the Market Value of such Defaulted Obligation or Deferring Obligation, as of the relevant Measurement Date.

 

“S&P Default Rate”: With respect to a Collateral Obligation, the default rate as determined in accordance with Section 3 of Schedule 4 hereto. If the number of years to maturity is not an integer, the default rate is determined using linear interpolation.

 

“S&P Distressed Exchange Offer”: An offer by the issuer of a Collateral Obligation to exchange one or more of its outstanding debt obligations for a different debt obligation or to repurchase one or more of its outstanding debt obligations for cash, or any combination thereof; in each case that, in the sole judgment of the Collateral Manager, amounts to a diminished financial obligation or has the purpose of helping the issuer of such Collateral Obligation to avoid imminent default; provided that, an offer by such issuer to exchange unregistered debt obligations for registered debt obligations shall not be considered an S&P Distressed Exchange Offer.

 

“S&P Equivalent Diversity Score”: A single number that indicates collateral concentration in terms of both issuer and industry concentration, calculated as set forth in Schedule 6 hereto.

 

“S&P Equivalent Weighted Average Rating Factor”: The number determined by summing the products obtained by multiplying the Principal Balance of each Collateral Obligation by its S&P Rating Factor, dividing such sum by the Aggregate Principal Balance of all such Collateral Obligations and then rounding the result up to the nearest whole number.

 

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“S&P Industry Classification”: The S&P Industry Classifications set forth in Schedule 2 hereto, which industry classifications may be updated at the option of the Collateral Manager if S&P publishes revised industry classifications.

 

“S&P Rating”: With respect to any Collateral Obligation (excluding Current Pay Obligations whose issuer has made an S&P Distressed Exchange Offer), as of any date of determination, the rating determined in accordance with the following methodology:

 

(i)           (a) if there is an issuer credit rating of the issuer of such Collateral Obligation by S&P as published by S&P, or the guarantor which unconditionally and irrevocably guarantees such Collateral Obligation pursuant to a form of guaranty that complies with the then-current S&P criteria, then the S&P Rating shall be such rating (regardless of whether there is a published rating by S&P on the Collateral Obligations of such issuer held by the Issuer; provided that private ratings (that is, ratings provided at the request of the Obligor) may be used for purposes of this definition if the related Obligor has consented to the disclosure thereof and a copy of such consent has been provided to S&P) or (b) if there is no issuer credit rating of the issuer by S&P but (1) there is a senior secured rating on any obligation or security of the issuer, then the S&P Rating of such Collateral Obligation shall be one sub-category below such rating; (2) if clause (1) above does not apply, but there is a senior unsecured rating on any obligation or security of the issuer, the S&P Rating of such Collateral Obligation shall equal such rating; and (3) if neither clause (1) nor clause (2) above applies, but there is a subordinated rating on any obligation or security of the issuer, then the S&P Rating of such Collateral Obligation shall be one sub-category above such rating;

 

(ii)          with respect to any Collateral Obligation that is a DIP Collateral Obligation, (a) the S&P Rating thereof shall be the credit rating assigned to such issue by S&P, or if such DIP Collateral Obligation was assigned a point-in-time rating by S&P that was withdrawn, such withdrawn rating may be used for 12 months after the assignment of such rating, and (b) the Collateral Manager (on behalf of the Issuer) will notify S&P if the Collateral Manager has actual knowledge of the occurrence of any material amendment or event with respect to such Collateral Obligation that would, in the reasonable business judgment of the Collateral Manager, have a material adverse impact on the credit quality of such Collateral Obligation, including any amortization modifications, extensions of maturity, reductions of principal amount owed, or non-payment of timely interest or principal due;

 

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(iii)         if there is not a rating by S&P on the issuer or on an obligation of the issuer, then the S&P Rating may be determined pursuant to clauses (a) through (c) below:

  

  (a) if an obligation of the issuer is publicly rated by Moody’s, then the S&P Rating will be determined in accordance with the methodologies for establishing the Moody’s Rating set forth above except that the S&P Rating of such obligation will be (1) one sub-category below the S&P equivalent of the Moody’s Rating if such Moody’s Rating is “Baa3” or higher and (2) two sub-categories below the S&P equivalent of the Moody’s Rating if such Moody’s Rating is “Ba1” or lower;

 

  (b) the S&P Rating may be based on a credit estimate provided by S&P, and in connection therewith, the Issuer, the Collateral Manager on behalf of the Issuer or the issuer of such Collateral Obligation shall, prior to or within 30 days after the acquisition of such Collateral Obligation, apply (and concurrently submit all available Information in respect of such application) to S&P for a credit estimate which shall be its S&P Rating; provided that, until the receipt from S&P of such estimate, such Collateral Obligation shall have an S&P Rating as determined by the Collateral Manager in its sole discretion if the Collateral Manager certifies to the Trustee that it believes that such S&P Rating determined by the Collateral Manager is commercially reasonable and will be at least equal to such rating; provided further, that if such Information is not submitted within such 30-day period, then, pending receipt from S&P of such estimate, the Collateral Obligation shall have (1) the S&P Rating as determined by the Collateral Manager for a period of up to 90 days after the acquisition of such Collateral Obligation and (2) an S&P Rating of “CCC-” following such 90-day period; unless, during such 90-day period, the Collateral Manager has requested the extension of such period and S&P, in its sole discretion, has granted such request; provided further, that if the Collateral Obligation has had a public rating by S&P that S&P has withdrawn or suspended within six months prior to the date of such application for a credit estimate in respect of such Collateral Obligation, the S&P Rating in respect thereof shall be “CCC-” pending receipt from S&P of such estimate, and S&P may elect not to provide such estimate until a period of six months (or such other period as provided in S&P’s then current criteria) have elapsed after the withdrawal or suspension of the public rating; provided further that with respect to any Collateral Obligation for which S&P has provided a credit estimate, the Collateral Manager (on behalf of the Issuer) will request that S&P confirm or update such estimate annually (and pending receipt of such confirmation or new estimate, the Collateral Obligation will have the prior estimate); provided further that such credit estimate shall expire 12 months after the acquisition of such Collateral Obligation, following which such Collateral Obligation shall have an S&P Rating of “CCC-” unless, during such 12-month period, the Issuer applies for renewal thereof in accordance with Section 7.14(b) (and concurrently submits all available Information in respect of such renewal), in which case such credit estimate shall continue to be the S&P Rating of such Collateral Obligation until S&P has confirmed or revised such credit estimate, upon which such confirmed or revised credit estimate shall be the S&P Rating of such Collateral Obligation; provided further that such confirmed or revised credit estimate shall expire on the next succeeding 12-month anniversary of the date of the acquisition of such Collateral Obligation and (when renewed annually in accordance with Section 7.14(b)) on each 12-month anniversary thereafter; provided further that the Issuer will submit all available Information in respect of such Collateral Obligation to S&P notwithstanding that the Issuer is not applying to S&P for a confirmed or updated credit estimate; provided further that the Issuer will promptly notify S&P of any material events affecting any such Collateral Obligation if the Collateral Manager reasonably determines that such notice is required in accordance with S&P’s publication on credit estimates titled “What Are Credit Estimates And How Do They Differ From Ratings?” dated April 2011 (as the same may be amended or updated from time to time); or

 

(c) with respect to a Collateral Obligation that is not a Defaulted Obligation, the S&P Rating of such Collateral Obligation will at the election of the Issuer (at the direction of the Collateral Manager) be “CCC-”; provided that (i) neither the issuer of such Collateral Obligation nor any of its Affiliates are subject to any bankruptcy or reorganization proceedings and (ii) the issuer has not defaulted on any payment obligation in respect of any debt security or other obligation of the issuer at any time within the two year period ending on such date of determination, all such debt securities and other obligations of the issuer that are pari passu with or senior to the Collateral Obligation are current and the Collateral Manager reasonably expects them to remain current; provided that the Issuer will submit all available Information in respect of such Collateral Obligation to S&P as if the Issuer were applying to S&P for a credit estimate; provided further that the Issuer will promptly notify S&P of any material events affecting any such Collateral Obligation if the Collateral Manager reasonably determines that such notice is required in accordance with S&P’s publication on credit estimates titled “What Are Credit Estimates And How Do They Differ From Ratings?” dated April 2011 (as the same may be amended or updated from time to time); or

 

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(iv)          with respect to a DIP Collateral Obligation that has no issue rating by S&P or a Current Pay Obligation that is rated “D” or “SD” by S&P, the S&P Rating of such DIP Collateral Obligation or Current Pay Obligation, as applicable, will be, at the election of the Issuer (at the direction of the Collateral Manager), “CCC-” or the S&P Rating determined pursuant to clause (iii)(b) above; provided that the Collateral Manager may not determine such S&P Rating pursuant to clause (iii)(b)(1) above; provided that the Collateral Manager will provide Information with respect to such DIP Collateral Obligation to S&P, if available; provided that, for purposes of the determination of the S&P Rating, (x) if the applicable rating assigned by S&P to an obligor or its obligations is on “credit watch positive” by S&P, such rating will be treated as being one sub-category above such assigned rating and (y) if the applicable rating assigned by S&P to an obligor or its obligations is on “credit watch negative” by S&P, such rating will be treated as being one sub-category below such assigned rating; provided further that, for purposes of the determination of the S&P Rating, if (x) the issuer or Obligor of any Collateral Obligation was a debtor under Chapter 11, during which time such issuer, Obligor or Selling Institution, as applicable, or any of its obligations (including any Collateral Obligation) either had an S&P rating of “SD” or “CC” or lower from S&P or had an S&P rating that was withdrawn by S&P and (y) such issuer, Obligor or Selling Institution, as applicable, is no longer a debtor under Chapter 11, then, notwithstanding the fact that such issuer, Obligor or Selling Institution, as applicable, or any of its obligations (including any Collateral Obligation) continues to have an S&P rating of “SD” or “CC” or lower from S&P (or, in the case of any withdrawal, continues to have no S&P rating), the S&P Rating for any such obligation (including any Collateral Obligation), issuer, Obligor or Selling Institution, as applicable, shall be deemed to be “CCC-”, so long as S&P has not taken any rating action with respect thereto since the date on which the issuer, Obligor or Selling Institution, as applicable, ceased to be a debtor under Chapter 11; provided further that, (i) if any issuer, Obligor or Selling Institution, as applicable, has not exited the applicable bankruptcy proceeding and (ii) the applicable rating assigned by S&P to such issuer, Obligor or Selling Institution, as applicable, or any of its obligations (including any Collateral Obligation) has been withdrawn, then the S&P Rating for such issuer, Obligor or Selling Institution, as applicable, or any of its obligations (including any Collateral Obligation) shall be deemed to be such withdrawn S&P rating, so long as S&P has not taken any rating action with respect thereto since the date on which such S&P rating was withdrawn.

 

The S&P Rating of any Collateral Obligation that is a Current Pay Obligation whose issuer has made an S&P Distressed Exchange Offer will be determined as follows:

 

(a)               subject to clause (d) below, if applicable, if the Collateral Obligation is and will remain senior to the debt obligations on which the related S&P Distressed Exchange Offer has been made and the issuer is not subject to a bankruptcy proceeding, the issuer credit rating of the issuer published by S&P of the Collateral Obligation is below “CCC-” as a result of the S&P Distressed Exchange Offer and S&P has not published revised ratings following the completion or withdrawal of the S&P Distressed Exchange Offer and:

 

(i)                 there is an issue credit rating published by S&P for the Collateral Obligation;

 

(A)             the Collateral Obligation has an S&P Recovery Rating of 1+, then the S&P Rating of such Collateral Obligation will be the higher of (x) three subcategories below such issue credit rating and (y) “CCC-”;

 

(B)              the Collateral Obligation has an S&P Recovery Rating of 1, then the S&P Rating of such Collateral Obligation will be the higher of (x) two subcategories below such issue credit rating and (y) “CCC-”;

 

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(C)              the Collateral Obligation has an S&P Recovery Rating of 2, then the S&P Rating of such Collateral Obligation will be the higher of (x) one subcategory below such issue credit rating and (y) “CCC-”;

 

(D)             the Collateral Obligation has an S&P Recovery Rating of 3 or 4, then the S&P Rating of such Collateral Obligation will be the higher of (x) such issue credit rating and (y) “CCC-”;

 

(E)              the Collateral Obligation has an S&P Recovery Rating of 5, then the S&P Rating of such Collateral Obligation will be the higher of (x) one subcategory above such issue credit rating and (y) “CCC-”;

 

(F)              the Collateral Obligation has an S&P Recovery Rating of 6, then the S&P Rating of such Collateral Obligation will be the higher of (x) two subcategories above such issue credit rating and (y) “CCC-”; or

 

(ii)              there is either no issue credit rating or no S&P Recovery Rating for the Collateral Obligation, then the S&P Rating of such Collateral Obligations will be “CCC-”.

 

(b)               subject to clause (d) below, if applicable, if the Collateral Obligation is the debt obligation on which the related S&P Distressed Exchange Offer has been made, until S&P publishes revised ratings following the completion or withdrawal of the offer, the S&P Rating of such Collateral Obligation will be “CCC-”;

 

(c)               subject to clause (d) below, if applicable, if the Collateral Obligation is subordinate to the debt obligation on which the related S&P Distressed Exchange Offer has been made, until S&P publishes revised ratings following the completion or withdrawal of the offer the S&P Rating of such Collateral Obligation will be “CCC-”

 

(d)               if multiple Collateral Obligations have the same issuer and such issuer made an S&P Distressed Exchange Offer, the S&P Rating for each such Collateral Obligation will be determined as follows:

 

(i)                 first, an S&P Rating for each such Collateral Obligation will be determined in accordance with clauses (a), (b) and (c) immediately above;

 

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(ii)              second, the S&P Rating for each such Collateral Obligation determined in accordance with sub-clause (d)(i) above will be converted into “Rating Points” equivalent pursuant to the table set forth below:

  

S&P Rating

“Rating Points”

“Weighted Average
Rating Points”

AAA 1 1
AA+ 2 2
AA 3 3
AA- 4 4
A+ 5 5
A 6 6
A- 7 7
BBB+ 8 8
BBB 9 9
BBB- 10 10
BB+ 11 11
BB 12 12
BB- 13 13
B+ 14 14
B 15 15
B- 16 16
CCC+ 17 17
CCC 18 18
CCC- 19 19

  

(iii)            third, “Weighted Average Rating Points” for each such Collateral Obligation will be calculated by dividing “X” by “Y” where:

 

(A)             “X” will equal the sum of each of the products obtained by multiplying the Rating Points of each such Collateral Obligation by the Aggregate Principal Balance of such Collateral Obligation, and

 

(B)              “Y” will equal the Aggregate Principal Balance of all the Collateral Obligations subject to the same S&P Distressed Exchange Offer.

 

fourth, the “Weighted Average Rating Points” determined in accordance with sub-clause (d)(iii) above will be rounded to the nearest whole number and converted into an S&P Rating by matching the “Weighted Average Rating Points” of such Collateral Obligation with the S&P Rating set forth in the table in sub-clause (d)(ii) above. The S&P Rating that matches the “Weighted Average Rating Points” for such Collateral Obligations will be the S&P Rating for each Collateral Obligation for which an S&P Rating is required to be determined pursuant to this clause (iv).

 

“S&P Rating Condition”: With respect to any action taken or to be taken by or on behalf of the Issuer, a condition that is satisfied if S&P has confirmed in writing (including by means of electronic message, facsimile transmission, press release or posting to its internet website) to the Issuer, the Trustee, the Collateral Administrator and the Collateral Manager (unless in the form of a press release or posted to its internet website that does not require the Issuer and the Trustee to be identified as addressees) that no immediate withdrawal or reduction with respect to its then-current rating by S&P of any Class of Secured Notes will occur as a result of such action; provided that such rating condition shall be deemed inapplicable with respect to such event or circumstance if (i) S&P has given notice to the effect that it will no longer review events or circumstances of the type requiring satisfaction of the S&P Rating Condition for purposes of evaluating whether to confirm the then-current ratings (or initial ratings) of obligations rated by S&P; or (ii) S&P has communicated to the Issuer, the Collateral Manager or the Trustee (or their counsel) that it will not review such event or circumstance for purposes of evaluating whether to confirm the then-current ratings (or Initial Ratings) of the Notes. In the event that S&P no longer rates any class of Notes, the S&P Rating Condition shall not apply to such class.

 

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“S&P Rating Factor”: With respect to each Collateral Obligation, it is the number set forth in the table below opposite the S&P Rating of such Collateral Obligation.

 

S&P Rating

Rating Factor

S&P Rating

Rating Factor

AAA 1 BB+ 940
AA+ 10 BB 1,350
AA 20 BB- 1,766
AA- 40 B+ 2,220
A+ 70 B 2,720
A 120 B- 3,490
A-1 180 CCC+ 4,770
BBB+ 260 CCC 6,500
BBB 360 CCC- 8,070
BBB- 610 CC+ or lower 10,000

 

“S&P Recovery Amount”: With respect to any Collateral Obligation, an amount equal to: (a) the applicable S&P Recovery Rate multiplied by (b) the Principal Balance of such Collateral Obligation.

 

“S&P Recovery Rate”: With respect to a Collateral Obligation, the recovery rate set forth in Section 1 of Schedule 4 using the Initial Rating of the Class A-2 Notes (or, if the Class A-2 Notes are no longer Outstanding, the most senior Class of Secured Notes Outstanding) at the time of determination.

 

“S&P Recovery Rating”: With respect to a Collateral Obligation for which an S&P Recovery Rate is being determined, the “Recovery Rating” assigned by S&P to such Collateral Obligation based upon the tables set forth in Schedule 4 hereto.

 

“S&P Weighted Average Life”: As of any date of determination with respect to all Collateral Obligations other than Defaulted Obligations, the number of years following such date obtained by dividing (a) the sum of the products of (i) the number of years (rounded to the nearest one-hundredth thereof) from such date of determination to the stated maturity of each such Collateral Obligation multiplied by (ii) the outstanding principal balance of such Collateral Obligation by (b) the aggregate remaining principal balance at such time of all Collateral Obligations other than Defaulted Obligations.

 

“Sale”: The meaning specified in Section 5.17(a).

 

“Sale Proceeds”: All proceeds (excluding accrued interest, if any) received with respect to Assets as a result of sales of such Assets in accordance with Article XII less any reasonable expenses incurred by the Collateral Manager, the Collateral Administrator or the Trustee (other than amounts payable as Administrative Expenses) in connection with such sales. Sale Proceeds will include Principal Financed Accrued Interest received in respect of such sale.

 

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“Schedule of Collateral Obligations”: The schedule of Collateral Obligations attached as Schedule 1 hereto, which schedule shall include the issuer, Principal Balance, coupon/spread, the stated maturity, the S&P Rating (unless such rating is based on a credit estimate or is a private or confidential rating from either Rating Agency), Fitch Rating and the S&P Industry Classification for each Collateral Obligation and the percentage of the aggregate commitment under each Revolving Collateral Obligation and Delayed Drawdown Collateral Obligation that is funded, as amended from time to time (without the consent of or any action on the part of any Person) to reflect the release of Collateral Obligations pursuant to Article X hereof, the inclusion of additional Collateral Obligations pursuant to Section 7.18 hereof and the inclusion of additional Collateral Obligations as provided in Section 12.2 hereof.

 

“Scheduled Distribution”: With respect to any Collateral Obligation, each payment of principal and/or interest scheduled to be made by the related Obligor under the terms of such Collateral Obligation (determined in accordance with the assumptions specified in Section 1.3 hereof) after the related Cut-Off Date, as adjusted pursuant to the terms of the related Underlying Instruments.

 

“Second Lien Loan”: Any assignment of or Participation Interest in a Loan that: (a) is not (and cannot by its terms become) subordinate in right of payment to any other obligation of the Obligor of the Loan but which is subordinated (with respect to liquidation preferences with respect to pledged collateral but subject to exceptions for customary permitted liens) to a Senior Secured Loan of the obligor; and (b) is secured by a valid second-priority perfected security interest or lien in, to or on specified collateral securing the Obligor’s obligations under the Second Lien Loan the value of which is adequate (in the commercially reasonable judgment of the Collateral Manager) to repay the Loan in accordance with its terms and to repay all other Loans of equal or higher seniority secured by a lien or security interest in the same collateral.

 

“Section 13 Banking Entity”: An entity that (i) is defined as a “banking entity” under the Volcker Rule regulations (Section __.2(c)), (ii) provides written certification that it is a “banking entity” under the Volcker Rule regulations (Section __.2(c)) thereof to the Issuer and the Trustee (which, in connection with a supplemental indenture pursuant to this Indenture, shall be provided within 7 days of notice of such supplemental indenture), and (iii) identifies the Class or Classes of Notes held by such entity and the outstanding principal amount thereof. Any holder that does not provide such certification in connection with a supplemental indenture will be deemed for purposes of such supplemental indenture not to be a Section 13 Banking Entity. If no entity provides such certification, then no Section 13 Banking Entities will be deemed to exist for purposes of any required consent or action under this Indenture. Any beneficial owner of an interest in a Global Secured Note which has provided a written certification as described above as to its status as a Section 13 Banking Entity shall provide prompt written notice to the Issuer, the Collateral Manager and the Trustee of any transfer of such interests.

 

“Secured Noteholders”: The Holders of the Secured Notes.

 

“Secured Notes”: The Class A-1 Notes, the Class A-2 Notes, the Class B-1 Notes, the Class B-2 Notes, the Class C Notes and the Class D Notes.

 

“Secured Obligations”: The meaning specified in the Granting Clauses.

 

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“Secured Parties”: The meaning specified in the Granting Clauses.

 

“Securities Account Control Agreement”: The Securities Account Control Agreement dated as of the Closing Date between the Issuer, the Trustee and The Bank of New York Mellon Trust Company, National Association, as custodian.

 

“Securities Act”: The United States Securities Act of 1933, as amended.

 

“Securities Intermediary”: The meaning specified in Section 8-102(a)(14) of the UCC.

 

“Security Entitlement”: The meaning specified in Section 8-102(a)(17) of the UCC.

 

“Selling Institution”: The entity obligated to make payments to the Issuer under the terms of a Participation Interest.

 

“Senior Secured Debt Instrument”: The meaning specified in Schedule 4 hereto.

 

“Senior Secured Loan”: Any assignment of or Participation Interest in a Loan that: (a) is not (and cannot by its terms become) subordinate in right of payment to any other obligation of the Obligor of the Loan (other than with respect to liquidation, trade claims, capitalized leases or similar obligations); (b) is secured by a valid first-priority perfected security interest or lien in, to or on specified collateral securing the Obligor’s obligations under the Loan; and (c) the value of the collateral securing the Loan at the time of purchase together with other attributes of the Obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for that cash flow) is adequate (in the commercially reasonable judgment of the Collateral Manager) to repay the Loan in accordance with its terms and to repay all other Loans of equal seniority secured by a first lien or security interest in the same collateral.

 

“Similar Law”: Any federal, state, local, non-U.S. or other law or regulation that could cause the underlying assets of the Issuer to be treated as assets of the investor in any Note (or any interest therein) by virtue of its interest and thereby subject the Issuer or the Collateral Manager (or other Persons responsible for the investment and operation of the Issuer’s assets) to Other Plan Law.

 

“Solvency II Level 2 Regulation”: The meaning specified in the definition of the term “E.U. Retention Requirement Laws”.

 

“Special Redemption”: The meaning specified in Section 9.6.

 

“Special Redemption Amount”: The meaning specified in Section 9.6.

 

“Special Redemption Date”: The meaning specified in Section 9.6.

 

“Specified Equity Securities”: The securities or interests resulting from the exercise of an option, warrant, right of conversion, pre-emptive right, rights offering, credit bid or similar right in connection with the workout or restructuring of a Collateral Obligation or an equity security or interest received in connection with the workout or restructuring of a Collateral Obligation, in each case to the extent such security or interest does not constitute Margin Stock and in the reasonable judgment of the Collateral Manager would be considered “received in lieu of debt previously contracted” with respect to the Collateral Obligations under the Volcker Rule.

 

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“Specified Obligor Information”: The meaning specified in Section 14.15(b).

 

“STAMP”: The meaning specified in Section 2.5.

 

“Standby Directed Investment”: The Morgan Stanley Institutional ILF Treasury Securities Fund (61747C525) (which for the avoidance of doubt, is an Eligible Investment) or such other Eligible Investment designated by the Issuer (or the Collateral Manager on behalf of the Issuer) by written notice to the Trustee.

 

“Stated Maturity”: With respect to (i) the Secured Notes, January 20, 2031 and (ii) the Subordinated Notes, December 13, 2118.

 

“Step-Down Obligation”: An obligation or security which by the terms of the related Underlying Instruments provides for a decrease in the per annum interest rate on such obligation or security (other than by reason of any change in the applicable index or benchmark rate used to determine such interest rate) or in the spread over the applicable index or benchmark rate, solely as a function of the passage of time; provided that an obligation or security providing for payment of a constant rate of interest at all times after the date of acquisition by the Issuer shall not constitute a Step-Down Obligation.

 

“Step-Up Obligation”: An obligation or security which by the terms of the related Underlying Instruments provides for an increase in the per annum interest rate on such obligation or security, or in the spread over the applicable index or benchmark rate, solely as a function of the passage of time; provided that an obligation or security providing for payment of a constant rate of interest at all times after the date of acquisition by the Issuer shall not constitute a Step-Up Obligation.

 

“Structured Finance Obligation”: Any obligation issued by a special purpose vehicle and secured directly by, referenced to, or representing ownership of, a pool of receivables or other financial assets of any obligor, including collateralized debt obligations and mortgage-backed securities; provided that any ABL Facility and loans directly to financial service companies, factoring businesses, health care providers and other genuine operating businesses do not constitute Structured Finance Obligations.

 

“Subordinated Note Purchase Agreements”: The agreements to be entered into between the Issuer and the Initial Subordinated Noteholder, and between the Issuer and GC Advisors LLC, each as amended from time to time in accordance with the terms thereof.

 

“Subordinated Note Redemption Price”: The price for such Subordinated Note, as determined by the Collateral Manager on the date of a Refinancing, equal to the following: (a) amounts on deposit in the Principal Collection Subaccount, the Interest Collection Subaccount and the Revolver Funding Account immediately prior to such Refinancing plus (b) an amount equal to the sum of the products of (x) the average of the “bid” and “ask” price for each Collateral Obligation held by the Issuer (as determined in the sole discretion by the Collateral Manager) and (y) the principal balance of each such Collateral Obligation (excluding, solely for purposes of this definition, the unfunded commitments under any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation) plus (c) an amount equal to the sum of the products of (x) the average of the “bid” and “ask” price of each Revolving Collateral Obligation and Delayed Drawdown Collateral Obligation minus 100% and (y) the unfunded commitments under each Revolving Collateral Obligation and Delayed Drawdown Collateral Obligation plus (d) an amount equal to the accrued interest on the Collateral Obligations (other than Defaulted Obligations) held by the Issuer immediately prior to such Refinancing minus (e) the Redemption Price of the Secured Notes minus (f) any fees and expenses incurred in connection with such Refinancing and the associated supplemental indenture.

 

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“Subordinated Notes”: The subordinated notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

“Successor Entity”: The meaning specified in Section 7.10(a).

 

“Supermajority”: With respect to any Class of Notes, the Holders of at least 66-2/3% of the Aggregate Outstanding Amount of the Notes of such Class.

 

“Supplemental Reserve Account”: The trust account established pursuant to Section 10.3(e).

 

“Synthetic Security”: A security or swap transaction, other than a Participation Interest, that has payments associated with either payments of interest on and/or principal of a reference obligation or the credit performance of a reference obligation.

 

“Target Initial Par Amount”: U.S.$900,000,000.

 

“Target Initial Par Condition”: A condition satisfied as of the Effective Date if the Aggregate Principal Balance of Collateral Obligations (i) that are held by the Issuer and (ii) of which the Issuer has committed to purchase on such date, together with (a) any unreceived Principal Financed Accrued Interest, (b) the amount of any proceeds of prepayments, maturities or redemptions of Collateral Obligations purchased by the Issuer prior to such date (other than any such proceeds that have been reinvested, or committed to be reinvested, in Collateral Obligations by the Issuer on the Effective Date) and (c) without duplication of clause (a) or (b) above, amounts designated as Principal Proceeds and transferred to the Collection Account (other than any such amounts that have been reinvested or committed to be reinvested in Collateral Obligations, by the Issuer on the Effective Date) will equal or exceed the Target Initial Par Amount.

 

“Tax”: Any tax, levy, impost, duty, charge, assessment, deduction, withholding, or fee of any nature (including interest, penalties and additions thereto) imposed by any governmental taxing authority.

 

“Tax Event”: An event that occurs if either (i) (x) one or more Collateral Obligations that were not subject to withholding tax when the Issuer committed to purchase them have become subject to withholding tax or the rate of withholding has increased on one or more Collateral Obligations that were subject to withholding tax when the Issuer committed to purchase them and (y) in any Collection Period, the aggregate of the payments subject to withholding tax on new withholding tax obligations and the increase in payments subject to withholding tax on increased rate withholding tax obligations, in each case to the extent not “grossed-up” (on an after-tax basis) by the related obligor, represent 5% or more of the aggregate amount of Interest Proceeds that have been received or that is expected to be received for such Collection Period; or (ii) taxes, fees, assessments, or other similar charges are imposed on the Issuer in an aggregate amount in any twelve-month period in excess of U.S.$2,000,000, other than any deduction or withholding for or on account of any tax with respect to any payment owing in respect of any obligation that at the time of acquisition, conversion, or exchange does not satisfy the requirements of a Collateral Obligation.

 

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Notwithstanding anything in this Indenture, the Collateral Manager shall give the Trustee prompt written notice of the occurrence of a Tax Event upon its discovery thereof. Until the Trustee receives written notice from the Collateral Manager or otherwise, the Trustee shall not be deemed to have notice or knowledge to the contrary.

 

“Tax Jurisdiction”: A sovereign jurisdiction that is commonly used as the place of organization of special purpose vehicles (including, by way of example, the Cayman Islands, Ireland, Bermuda, Curacao, St. Maarten and the Channel Islands).

 

“Tax Matters Partner”: The meaning specified in Section 7.17(k).

 

“Tax Redemption”: The meaning specified in Section 9.3(a).

 

“Temporary Regulation S Global Secured Note”: The meaning specified in Section 2.2(b)(i).

 

“Third Party Credit Exposure”: As of any date of determination, the sum (without duplication) of the outstanding Principal Balance of each Collateral Obligation that consists of a Participation Interest.

 

“Third Party Credit Exposure Limits”: Limits that shall be satisfied if the Third Party Credit Exposure with counterparties having the ratings below from S&P do not exceed the percentage of the Collateral Principal Amount specified below:

 

S&P’s credit rating of Selling Institution   Aggregate
Percentage
Limit 		    Individual
Percentage
Limit 		 
AAA     20 %     20 %
AA+     10 %     10 %
AA     10 %     10 %
AA-     10 %     10 %
A+     5 %     5 %
A     5 %     5 %
A- or below     0 %     0 %

 

provided that a Selling Institution having an S&P credit rating of “A” must also have a short-term S&P rating of “A-1” otherwise its “Aggregate Percentage Limit” and “Individual Percentage Limit” (each as shown above) shall be 0%.

 

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“Trading Plan”: The meaning specified in Section 12.2(f).

 

“Trading Plan Period”: The meaning specified in Section 12.2(f).

 

“Transaction Documents”: This Indenture, the Collateral Management Agreement, the Collateral Administration Agreement, the Securities Account Control Agreement, the Subordinated Note Purchase Agreements, the Master Loan Sale Agreements and, the Purchase Agreement and the Refinancing Purchase Agreement.

 

“Transfer Agent”: The Person or Persons, which may be the Issuer, authorized by the Issuer to exchange or register the transfer of Notes.

 

“Transfer Deposit Amount”: On any date of determination with respect to any Collateral Obligation, an amount equal to the sum of the outstanding principal balance of such Collateral Obligation, together with accrued interest thereon through such date of determination, and in connection with any Collateral Obligation which is a Revolving Collateral Obligation or a Delayed Drawdown Collateral Obligation, an amount equal to the Net Exposure Amount thereof as of the applicable Cut-Off Date.

 

“Treasury Regulations”: The United States Department of Treasury regulations promulgated under the Code.

 

“Trust Officer”: When used with respect to the Trustee, any officer within the Corporate Trust Office (or any successor group of the Trustee) including any vice president, assistant vice president or officer of the Trustee customarily performing functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Corporate Trust Office because of such Person’s knowledge of and familiarity with the particular subject and, in each case, having direct responsibility for the administration of this transaction.

 

“Trustee”: The meaning specified in the first sentence of this Indenture.

 

“UCC”: The Uniform Commercial Code as in effect in the State of New York or, if different, the political subdivision of the United States that governs the perfection of the relevant security interest, as amended from time to time.

 

“Uncertificated Security”: The meaning specified in Section 8-102(a)(18) of the UCC.

 

“Underlying Instruments”: The loan agreement, credit agreement or other customary agreement pursuant to which an Asset has been created or issued and each other agreement that governs the terms of or secures the obligations represented by such Asset or of which the holders of such Asset are the beneficiaries.

 

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“United States Tax Person”: A “United States person” within the meaning of Section 7701(a)(30) of the Code.

 

“Unregistered Securities”: The meaning specified in Section 5.17(c).

 

“Unsaleable Asset”: (a) Any Defaulted Obligation (during the continuation of an Event of Default only), Equity Security, obligation received in connection with a tender offer, voluntary redemption, exchange offer, conversion, restructuring or plan of reorganization with respect to the Obligor, or other exchange or any other security or debt obligation that is part of the Assets, in respect of which the Issuer has not received a payment in Cash during the preceding 12 months or (b) any asset, claim or other property identified in a certificate of the Collateral Manager as having a Market Value of less than U.S.$1,000, in each case with respect to which the Collateral Manager certifies to the Trustee that (x) it has made commercially reasonable efforts to dispose of such Collateral Obligation for at least 90 days and (y) in its commercially reasonable judgment such Collateral Obligation is not expected to be saleable for the foreseeable future.

 

“Unsecured Loan”: A senior unsecured Loan obligation of any Person which is not (and by its terms is not permitted to become) subordinate in right of payment to any other debt for borrowed money incurred by the obligor under such Loan.

 

“U.S. Retention Interest”: The “eligible horizontal residual interest” offset, transferred and allocated by the Collateral Manager (as the “sponsor” for purposes of the U.S. Risk Retention Rules) to the U.S. Retention Provider.

 

“U.S. Retention Provider”: On the Closing Date, GCIC CLO II Depositor LLC, and thereafter any successor, assignee or transferee thereof or any Person permitted under the U.S. Risk Retention Rules to hold the U.S. Retention Interest.

 

“U.S. Risk Retention Rules”: The federal interagency credit risk retention rules, codified at 17 C.F.R. part 246.

 

“U.S. Person” and “U.S. person”: The meanings specified in Regulation S.

 

“Volcker Rule”: Section 13 of the U.S. Bank Holding Company Act of 1956, as amended, and the applicable rules and regulations thereunder.

 

“Weighted Average Coupon”: As of any Measurement Date, the number obtained by dividing:

 

(a)               the amount equal to the Aggregate Coupon; by

 

(b)               an amount equal to the aggregate outstanding principal balance of all Fixed Rate Obligations as of such Measurement Date.

 

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“Weighted Average Fitch Recovery Rate”: As of any date of determination, the rate (expressed as a percentage) determined by summing the products obtained by multiplying the Principal Balance of each Collateral Obligation by the Fitch Recovery Rate in relation thereto and dividing such sum by the aggregate principal balance of all Collateral Obligations and rounding up to the nearest 0.1 percent. For the purposes of determining the Principal Balance and aggregate Principal Balance of Collateral Obligations in this definition, the Principal Balance of each Defaulted Obligation shall be excluded.

  

“Weighted Average Floating Spread”: As of any Measurement Date, the number obtained by dividing: (a) the amount equal to (A) the Aggregate Funded Spread plus (B) the Aggregate Unfunded Spread by (b) an amount equal to the aggregate outstanding principal balance of all Floating Rate Obligations as of such Measurement Date.

 

“Weighted Average Life”: On any date of determination with respect to any Collateral Obligation (other than any Defaulted Obligation), the number obtained by (a) summing the products obtained by multiplying (i) the Average Life at such time of each such Collateral Obligation by (ii) the outstanding principal balance of such Collateral Obligation and (b) dividing such sum by the aggregate outstanding principal balance at such time of all Collateral Obligations (excluding any Defaulted Obligation); provided, that when determining the Weighted Average Life of the Collateral Obligations for the Weighted Average Life Test the Issuer and the Collateral Manager shall only take into account that portion of the aggregate outstanding principal balance that is equal to or less than the product of (1) the Reinvestment Target Par Balance and (2) 100.25% (using the Collateral Obligations that will result in the shortest Weighted Average Life) and the outstanding aggregate principal balance of all other Collateral Obligations may be excluded from the calculation thereof.

 

For the purposes of the foregoing, the “Average Life” is, on any date of determination with respect to any Collateral Obligation, the quotient obtained by dividing (i) the sum of the products of (a) the number of years (rounded to the nearest one hundredth thereof) from such date of determination to the respective dates of each successive Scheduled Distribution of principal of such Collateral Obligation and (b) the respective amounts of principal of such Scheduled Distributions by (ii) the sum of all successive Scheduled Distributions of principal on such Collateral Obligation.

 

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“Weighted Average Life Test”: A test satisfied on any date of determination if the Weighted Average Life of the Collateral Obligations as of such date is less than or equal to the value in the column entitled “Weighted Average Life Value” in the table below corresponding to the immediately preceding Payment Date (or, prior to the first Payment Date, the Closing Date):

 

Weighted Average Life Value

Closing Date 8.00
April 20, 2019 7.65
July 20, 2019 7.40
October 20, 2019 7.15
January 20, 2020 6.90
April 20, 2020 6.65
July 20, 2020 6.40
October 20, 2020 6.15
January 20, 2021 5.90
April 20, 2021 5.65
July 20, 2021 5.40

 

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Weighted Average Life Value
October 20, 2021 5.15
January 20, 2022 4.90
April 20, 2022 4.65
July 20, 2022 4.40
October 20, 2022 4.15
January 20, 2023 3.90
April 20, 2023 3.65
July 20, 2023 3.40
October 20, 2023 3.15
January 20, 2024 2.90
April 20, 2024 2.65
July 20, 2024 2.40
October 20, 2024 2.15
January 20, 2025 1.90
April 20, 2025 1.65
July 20, 2025 1.40
October 20, 2025 1.15
January 20, 2026 0.90
April 20, 2026 0.65
July 20, 2026 0.40
October 20, 2026 0.15
January 20, 2027 0.00

 

“Weighted Average S&P Recovery Rate”: As of any date of determination, the number, expressed as a percentage and determined separately for each Class of Secured Notes, obtained by summing the products obtained by multiplying the Principal Balance of each Collateral Obligation (excluding any Defaulted Obligation) by its corresponding recovery rate as determined in accordance with Section 1 of Schedule 4 hereto, dividing such sum by the Aggregate Principal Balance of all Collateral Obligations (excluding any Defaulted Obligations), and rounding to the nearest tenth of a percent.

 

“Zero Coupon Bond”: Any debt security that by its terms (a) does not bear interest for all or part of the remaining period that it is outstanding, (b) provides for periodic payments of interest in cash less frequently than semi-annually or (c) pays interest only at its stated maturity.

 

Section 1.2            Usage of Terms. With respect to all terms in this Indenture, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to “writing” include printing, typing, lithography and other means of reproducing words in a visible form; references to agreements and other contractual instruments include all amendments, modifications and supplements thereto or any changes therein entered into in accordance with their respective terms and not prohibited by this Indenture; references to Persons include their permitted successors and assigns; and the term “including” means “including without limitation.”

 

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Section 1.3            Assumptions as to Assets. In connection with all calculations required to be made pursuant to this Indenture with respect to Scheduled Distributions on any Asset, or any payments on any other assets included in the Assets, with respect to the sale of and reinvestment in Collateral Obligations, and with respect to the income that can be earned on Scheduled Distributions on such Assets and on any other amounts that may be received for deposit in the Collection Account, the provisions set forth in this Section 1.3 shall be applied. The provisions of this Section 1.3 shall be applicable to any determination or calculation that is covered by this Section 1.3, whether or not reference is specifically made to Section 1.3, unless some other method of calculation or determination is expressly specified in the particular provision.

 

(a)               All calculations with respect to Scheduled Distributions on the Assets securing the Notes shall be made on the basis of information as to the terms of each such Asset and upon reports of payments, if any, received on such Asset that are furnished by or on behalf of the issuer of such Asset and, to the extent they are not manifestly in error, such information or reports may be conclusively relied upon in making such calculations.

 

(b)               For purposes of calculating the Coverage Tests, except as otherwise specified in the Coverage Tests, such calculations will not include scheduled interest and principal payments on Defaulted Obligations unless or until such payments are actually made.

 

(c)                For each Collection Period and as of any date of determination, the Scheduled Distribution on any Asset (including Current Pay Obligations and DIP Collateral Obligations but excluding Defaulted Obligations, which, except as otherwise provided herein, shall be assumed to have Scheduled Distributions of zero, except to the extent any payments have actually been received) shall be the sum of (i) the total amount of payments and collections to be received during such Collection Period in respect of such Asset (including the proceeds of the sale of such Asset received and, in the case of sales which have not yet settled, to be received during the Collection Period and not reinvested in additional Collateral Obligations or Eligible Investments or retained in the Collection Account for subsequent reinvestment pursuant to Section 12.2) that, if received as scheduled, will be available in the Collection Account at the end of the Collection Period and (ii) any such amounts received in prior Collection Periods that were not disbursed on a previous Payment Date.

 

(d)                Each Scheduled Distribution receivable with respect to an Asset shall be assumed to be received on the applicable Due Date, and each such Scheduled Distribution shall be assumed to be immediately deposited in the Collection Account to earn interest at the Assumed Reinvestment Rate. All such funds shall be assumed to continue to earn interest until the date on which they are required to be available in the Collection Account for application, in accordance with the terms hereof, to payments of principal of or interest on the Notes or other amounts payable pursuant to this Indenture. For purposes of the applicable determinations required by Section 10.7(b)(v), Article XII and the definition of “Interest Coverage Ratio”, the expected interest on the Secured Notes and Floating Rate Obligations will be calculated using the then current interest rates applicable thereto.

 

(e)                References in Section 11.1(a) to calculations and determinations made on a “pro forma basis” or to the extent such Class of Notes “are the Controlling Class” shall mean such calculations and determinations after giving effect to all payments, in accordance with the Priority of Payments described herein, that precede (in priority of payment) or include the clause in which such calculation is made.

 

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(f)                For purposes of calculating all Concentration Limitations, in both the numerator and the denominator of any component of the Concentration Limitations, Defaulted Obligations will be treated as having a Principal Balance equal to the Defaulted Obligation Balance.

 

(g)               If a Collateral Obligation included in the Assets would be deemed a Current Pay Obligation but for the applicable percentage limitation in clause (x) of the proviso to the definition of “Defaulted Obligation”, then the Current Pay Obligations with the lowest Market Value (expressed as a percentage of the outstanding principal balance of such Current Pay Obligations as of the date of determination) shall be deemed Defaulted Obligations. Each such Defaulted Obligation will be treated as a Defaulted Obligation for all purposes until such time as the Aggregate Principal Balance of Current Pay Obligations would not exceed, on a pro forma basis including such Defaulted Obligation, the applicable percentage of the Collateral Principal Amount.

 

(h)               Except where expressly referenced herein for inclusion in such calculations, Defaulted Obligations will not be included in the calculation of the Collateral Quality Tests, the S&P Equivalent Weighted Average Rating Factor or the S&P Equivalent Diversity Score.

 

(i)                 For purposes of calculating compliance with the Investment Criteria, upon the direction of the Collateral Manager by notice to the Trustee and the Collateral Administrator, any Eligible Investment representing Principal Proceeds received upon the sale or other disposition of a Collateral Obligation shall be deemed to have the characteristics of such Collateral Obligation as of the date of such sale or other disposition until reinvested in an additional Collateral Obligation. Such calculations shall be based upon the principal amount of such Collateral Obligation, except in the case of Defaulted Obligations and Credit Risk Obligations, in which case the calculations will be based upon the Principal Proceeds received on the disposition or sale of such Defaulted Obligation or Credit Risk Obligation.

 

(j)                For the purposes of calculating compliance with each of the Concentration Limitations all calculations will be rounded to the nearest 0.1%. All other calculations, unless otherwise set forth herein or the context otherwise requires, shall be rounded to the nearest ten-thousandth if expressed as a percentage, and to the nearest one-hundredth if expressed otherwise.

 

(k)               Except as expressly set forth in this Indenture, the “principal balance” and “outstanding principal balance” of a Revolving Collateral Obligation or a Delayed Drawdown Collateral Obligation shall include all unfunded commitments that have not been irrevocably reduced or withdrawn.

 

(l)                 Notwithstanding any other provision of this Indenture to the contrary, all monetary calculations under this Indenture shall be in Dollars.

 

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(m)              Any reference herein to an amount of the Trustee’s or the Collateral Administrator’s fees calculated with respect to a period at a per annum rate shall be computed on the basis of the actual number of days in the applicable Interest Accrual Period divided by 360 and shall be based on the aggregate face amount of the Assets.

 

(n)               To the extent of any ambiguity in the interpretation of any definition or term contained herein or to the extent more than one methodology can be used to make any of the determinations or calculations set forth herein, the Collateral Manager may direct the Collateral Administrator or the Collateral Administrator may request direction from the Collateral Manager, as to the interpretation and/or methodology to be used, and the Collateral Administrator shall follow such direction, and together with the Trustee, shall be entitled to conclusively rely thereon without any responsibility or liability therefor.

 

(o)               For purposes of calculating the Collateral Quality Tests, DIP Collateral Obligations will be treated as having an S&P Recovery Rate equal to the S&P Recovery Rate for Senior Secured Loans.

 

(p)               For purposes of calculating compliance with any tests under this Indenture, the trade date (and not the settlement date) with respect to any acquisition or disposition of a Collateral Obligation or Eligible Investment shall be used to determine whether and when such acquisition or disposition has occurred.

 

(q)               For all purposes where expressly used in this Indenture, the “principal balance” and “outstanding principal balance” shall exclude capitalized interest, if any.

 

(r)                For purposes of the definition of Collateral Obligation, the reference to the “purchase” of an obligation shall include the purchase of an obligation with cash, the receipt of an obligation by the Issuer in connection with a Contribution and the receipt of a new obligation in connection with the redemption and re-issuance of an obligation in a cashless roll where the redemption proceeds with respect to the Collateral Obligation being redeemed are “rolled” into the new obligation.

 

(s)               For purposes of calculating the Sale Proceeds of a Collateral Obligation in sale transactions, Sale Proceeds will include any Principal Financed Accrued Interest received in respect of such sale.

 

(t)                Any direction or Issuer Order required hereunder relating to the purchase, acquisition, sale, disposition or other transfer of Assets may be in the form of a trade ticket, confirmation of trade, instruction to post or to commit to the trade or similar instrument or document or other written instruction (including by email or other electronic communication) from the Collateral Manager on which the Trustee and Collateral Administrator may rely.

 

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ARTICLE II


The Notes

 

Section 2.1            Forms Generally. The Notes and the Trustee’s or Authenticating Agent’s certificate of authentication thereon (the “Certificate of Authentication”) shall be in substantially the forms required by this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may be consistent herewith, determined by the Responsible Officers of the Issuer executing such Notes as evidenced by their execution of such Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

 

Section 2.2            Forms of Notes. (a) The forms of the Notes, including the forms of Certificated Secured Notes, Certificated Subordinated Notes, Temporary Regulation S Global Secured Notes, Regulation S Global Secured Notes, Rule 144A Global Secured Notes and Rule 144A Global Subordinated Notes, shall be as set forth in the applicable part of Exhibit A hereto.

 

(b)               Secured Notes and Subordinated Notes.

 

(i)                The Notes of each Class of Secured Notes sold to Qualified Purchasers that are not U.S. persons in offshore transactions (as defined in Regulation S) in reliance on Regulation S that are Qualified Purchasers shall each be issued initially in the form of one temporary global Secured Note per Class in definitive, fully registered form without interest coupons substantially in the applicable form attached as Exhibit A-1 hereto (each, a “Temporary Regulation S Global Secured Note”), which shall be deposited on the Closing Date on behalf of the purchasers of such Secured Notes represented thereby with the Trustee, at its Corporate Trust Office, as custodian for, and registered in the name of a nominee of, DTC for the account of designated agents holding on behalf of Euroclear and/or Clearstream. Prior to the end of the Distribution Compliance Period, beneficial interests in each Temporary Regulation S Global Secured Note may be held only through Euroclear or Clearstream. After the expiration of the Distribution Compliance Period, beneficial interests in a Temporary Regulation S Global Secured Note shall be exchanged for an interest in one permanent global note per Class in definitive, fully registered form without interest coupons substantially in the applicable form attached as Exhibit A-1 hereto (each, a “Regulation S Global Secured Note”), and shall be deposited on behalf of the subscribers for such Secured Notes represented thereby with the Trustee as custodian for, and registered in the name of a nominee of, DTC for the respective accounts of Euroclear and Clearstream, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. During the Distribution Compliance Period, distributions due in respect of a beneficial interest in a Temporary Regulation S Global Secured Note shall only be made upon delivery to the Trustee by Euroclear or Clearstream, as applicable, of a certificate (a “Non-U.S. Beneficial Ownership Certification”) to the effect that Euroclear or Clearstream, as applicable, has received a certificate substantially in the form of Exhibit B-7 hereto. After the expiration of the Distribution Compliance Period, distributions due in respect of any beneficial interests in a Temporary Regulation S Global Secured Note shall not be made to the holders of such beneficial interests unless exchange for a beneficial interest in the Regulation S Global Secured Note is improperly withheld or refused.

 

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(ii)              The Notes of each Class sold to Persons that are QIB/QPs shall each be issued initially in the form of one permanent global Secured Note per Class in definitive, fully registered form without interest coupons substantially in the applicable form attached as Exhibit A-1 hereto, in the case of the Secured Notes (each, a “Rule 144A Global Secured Note”) and in the form of one permanent global Subordinated Note in definitive, fully registered form without interest coupons substantially in the applicable form attached as Exhibit A-2 hereto, in the case of the Subordinated Notes (each, a “Rule 144A Global Subordinated Note”) and shall be deposited on behalf of the subscribers for such Notes represented thereby with the Trustee as custodian for, and registered in the name of Cede & Co., a nominee of, DTC, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

 

(iii)             The Secured Notes sold to persons that, at the time of the acquisition, purported acquisition or proposed acquisition of any such Secured Note, are Institutional Accredited Investors (that are not Qualified Institutional Buyers) or Accredited Investors shall be issued in the form of definitive, fully registered notes without coupons substantially in the applicable form attached as Exhibit A-3 hereto (a “Certificated Secured Note”) which shall be registered in the name of the beneficial owner or a nominee thereof, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

 

(iv)             The Subordinated Notes sold to U.S. Persons that are Accredited Investors (that are not Qualified Institutional Buyers) and either Qualified Purchasers, Knowledgeable Employees with respect to the Issuer, Collateral Manager, or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is either a Qualified Purchaser or a Knowledgeable Employee with respect to the Issuer or the Collateral Manager and shall be issued in the form of definitive, fully registered notes without coupons substantially in the form attached as Exhibit A-4 hereto (each, a “Certificated Subordinated Note” and, together with the Certificated Secured Notes, “Certificated Notes”) which shall be registered in the name of the beneficial owner or a nominee thereof, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

 

(v)              The aggregate principal amount of the Regulation S Global Secured Notes, the Rule 144A Global Secured Notes and the Rule 144A Global Subordinated Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee or DTC or its nominee, as the case may be, as hereinafter provided.

 

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(c)               Book Entry Provisions. This Section 2.2(c) shall apply only to Global Secured Notes deposited with or on behalf of DTC.

 

The provisions of the “Operating Procedures of the Euroclear System” of Euroclear and the “Terms and Conditions Governing Use of Participants” of Clearstream, respectively, will be applicable to the Global Secured Notes and the Rule 144A Global Subordinated Notes insofar as interests in such Global Secured Notes and Rule 144A Global Subordinated Notes are held by the Agent Members of Euroclear or Clearstream, as the case may be.

 

Agent Members shall have no rights under this Indenture with respect to any Global Secured Notes or Rule 144A Global Subordinated Notes held on their behalf by the Trustee, as custodian for DTC, and DTC may be treated by the Issuer, the Trustee, and any agent of the Issuer or the Trustee as the absolute owner of such Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee, or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.

 

Section 2.3            Authorized Amount; Stated Maturity; Denominations. The aggregate principal amount of Secured Notes and Subordinated Notes that may be authenticated and delivered under this Indenture is limited to U.S.$908,195,000 aggregate principal amount of Notes (except for (i) Deferred Interest with respect to the Class C Notes and the Class D Notes, (ii) Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.5, Section 2.6 or Section 8.5 of this Indenture or (iii) Additional Notes issued in accordance with Sections 2.13 and 3.2).

 

Such Notes shall be divided into the Classes, having the designations, original principal amounts and other characteristics as follows:

 

Notes

 

Class Designation   A-1  

A-2-R

  B-1   B-2   C   D   Subordinated
Original Principal Amount   U.S. $490,000,000   U.S. $38,500,000   U.S. $18,000,000   U.S. $27,000,000   U.S. $95,000,000   U.S. $60,000,000   U.S. $179,695,000
Stated Maturity   January 20, 2031   January 20, 2031   January 20, 2031   January 20, 2031   January 20, 2031   January 20, 2031   December 13, 2118
Fixed Rate Note   No   Yes   No   No   No   No   N/A
Interest Rate   LIBOR + 1.48%   4.6652.498%   LIBOR + 2.25%   LIBOR + 1.75%   LIBOR + 2.30%   LIBOR + 2.75%   N/A
Floating Rate
Note 		  Yes   No   Yes   Yes   Yes   Yes   N/A
Index   LIBOR   N/A   LIBOR   LIBOR   LIBOR   LIBOR   N/A
Index Maturity   3 month   N/A   3 month   3 month   3 month   3 month   N/A
Spread1   1.48%   N/A   2.25%   1.75%   2.30%   2.75%   N/A
Initial Rating(s):                            
S&P   “AAA(sf)”   “AAA(sf)”   “AA(sf)”   “AA(sf)”   “A(sf)”   “BBB-(sf)”   N/A

 

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Class Designation   A-1   A-2-R   B-1   B-2   C   D   Subordinated
Fitch   “AAAsf”   N/A   N/A   N/A   N/A   N/A   N/A
Priority Classes   None   A-1   A-1, A-2-R   A-1, A-2-R   A-1. A-2-R, B-1, B-2   A-1, A-2-R, B-1, B-2, C   A-1, A-2-R, B-1, B-2, C, D
Pari Passu
Classes 		  None   None   B-2   B-1   None   None   None
Junior Classes   A-2-R, B-1, B-2, C, D, Subordinated   B-1, B-2, C, D, Subordinated   C, D, Subordinated   C, D, Subordinated   D, Subordinated   Subordinated   None
Interest
Deferrable 		  No   No   No   No   Yes   Yes   N/A

 

 

 

1 The spread over LIBOR for each Class of Secured Notes (other than the Class A-1 Notes) is subject to reduction pursuant to Section 9.8.

 

The Secured Notes shall be issued in minimum denominations of U.S.$250,000 and integral multiples of U.S.$1.00 in excess thereof. The Subordinated Notes shall be issued in minimum denominations of U.S.$2,100,000 and integral multiples of U.S.$1.00 in excess thereof. Notes shall only be transferred or resold in compliance with the terms of this Indenture.

 

Section 2.4            Execution, Authentication, Delivery and Dating. The Notes shall be executed on behalf of the Issuer by one of its respective Officers. The signature of such Officer on the Notes may be manual or facsimile.

 

Notes bearing the manual or facsimile signatures of individuals who were at the time of execution the Officers of the Issuer shall bind the Issuer notwithstanding the fact that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of issuance of such Notes.

 

At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Notes executed by the Issuer to the Trustee or the Authenticating Agent for authentication and the Trustee or the Authenticating Agent, upon Issuer Order (which shall be deemed to be provided upon delivery of such executed Notes), shall authenticate and deliver such Notes as provided herein and not otherwise.

 

Each Note authenticated and delivered by the Trustee or the Authenticating Agent upon Issuer Order on the Closing Date shall be dated as of the Closing Date. All other Notes that are authenticated after the Closing Date for any other purpose under this Indenture shall be dated the date of their authentication.

 

Notes issued upon transfer, exchange or replacement of other Notes shall be issued in authorized denominations reflecting the original aggregate principal amount of the Notes so transferred, exchanged or replaced, but shall represent only the current outstanding principal amount of the Notes so transferred, exchanged or replaced. If any Note is divided into more than one Note in accordance with this Article II, the original principal amount of such Note shall be proportionately divided among the Notes delivered in exchange therefor and shall be deemed to be the original aggregate principal amount of such subsequently issued Notes.

 

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No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a Certificate of Authentication, substantially in the form provided for herein, executed by the Trustee or by the Authenticating Agent by the manual signature of one of their authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

Section 2.5            Registration, Registration of Transfer and Exchange. (a) The Issuer shall cause the Notes to be Registered and shall cause to be kept a register (the “Register”) at the office of the Trustee in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. The Trustee is hereby initially appointed registrar (the “Registrar”) for the purpose of registering Notes and transfers of such Notes with respect to the Register maintained in the United States as herein provided. Upon any resignation or removal of the Registrar, the Issuer shall promptly appoint a successor or, in the absence of such appointment, assume the duties of Registrar.

 

If a Person other than the Trustee is appointed by the Issuer as Registrar, the Issuer will give the Trustee prompt written notice of the appointment of a Registrar and of the location, and any change in the location, of the Register, and the Trustee shall have the right to inspect the Register at all reasonable times and to obtain copies thereof and the Trustee shall have the right to rely upon a certificate executed on behalf of the Registrar by an Officer thereof as to the names and addresses of the Holders of the Notes and the principal or face amounts and numbers of such Notes. Upon written request at any time the Registrar shall provide to the Issuer, the Collateral Manager, the Initial Purchaser or any Holder a current list of Holders as reflected in the Register.

 

Subject to this Section 2.5, upon surrender for registration of transfer of any Notes at the office or agency of the Issuer to be maintained as provided in Section 7.2, the Issuer shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination and of a like aggregate principal or face amount. At any time, the Issuer, the Collateral Manager or the Initial Purchaser may request a list of Holders from the Trustee.

 

In addition, when permitted under this Indenture, the Issuer, the Trustee and the Collateral Manager shall be entitled to rely conclusively upon any certificate of ownership provided to the Trustee by a beneficial owner of a Note (including a Beneficial Ownership Certificate) and/or other forms of reasonable evidence of such ownership as to the names and addresses of such beneficial owner and the Classes, principal amounts and CUSIP numbers of Notes beneficially owned thereby. At any time, upon request of the Issuer, the Collateral Manager or the Initial Purchaser, the Trustee shall provide such requesting Person a copy of each Beneficial Ownership Certificate that the Trustee has received unless directed otherwise; provided, however, the Trustee shall have no obligation or duty to verify information with respect to such Beneficial Ownership Certificate and shall only be required to retain copies of such documents presented to it.

 

At the option of the Holder, Notes may be exchanged for Notes of like terms, in any authorized denominations and of like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Note is surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the Notes that the Holder making the exchange is entitled to receive.

 

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All Notes issued and authenticated upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt (to the extent they evidence debt), and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

 

Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in a form reasonably satisfactory to the Registrar, duly executed by the Holder thereof or such Holder’s attorney duly authorized in writing with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act.

 

No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Trustee may require payment of a sum sufficient to cover any transfer, tax or other governmental charge payable in connection therewith. The Registrar or the Trustee shall be permitted to request such evidence reasonably satisfactory to it documenting the identity and/or signatures of the transferor and transferee.

 

(b)               No Note may be sold or transferred (including, without limitation, by pledge or hypothecation) unless such sale or transfer is exempt from the registration requirements of the Securities Act, is exempt from the registration requirements under applicable state securities laws and will not cause the Issuer to become subject to the requirement that it register as an investment company under the 1940 Act.

 

(c)                No transfer of any Subordinated Note (or any interest therein) will be effective if after giving effect to such transfer 25% or more of the Aggregate Outstanding Amount of the Subordinated Notes would be held by Persons who have represented that they are Benefit Plan Investors. For purposes of these calculations and all other calculations required by this sub-section, (A) any Notes of the Issuer held by a Person (other than a Benefit Plan Investor) who is a Controlling Person, the Trustee, the Collateral Manager, the Retention Provider, the Initial Purchaser or any of their respective affiliates (other than those interests held by a Benefit Plan Investor) shall be disregarded and not treated as Outstanding and (B) an “affiliate” of a Person shall include any Person, directly or indirectly through one or more intermediaries, controlling, controlled by or under common control with the Person, and “control” with respect to a Person other than an individual shall mean the power to exercise a controlling influence over the management or policies of such Person. The Trustee shall be entitled to rely exclusively upon the information set forth in the face of the transfer certificates received pursuant to the terms of this Section 2.5 and only Notes that a Trust Officer of the Trustee actually knows to be so held shall be so disregarded. In addition, no Rule 144A Global Subordinated Notes (other than Rule 144A Global Subordinated Notes purchased from the Issuer as part of the initial offering or on the Closing Date) may be held by or transferred to a Benefit Plan Investor or Controlling Person and each beneficial owner of a Rule 144A Global Subordinated Note acquiring its interest in the Subordinated Notes in the initial offering on the Closing Date shall provide to the Issuer a written certification in the form of Exhibit B-5 attached hereto.

 

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(d)                Each subsequent transferee of a Note, by acceptance of such Note or an interest in such Note, shall be deemed to have agreed to comply with Section 2.12.

 

(e)               Notwithstanding anything contained herein to the contrary, the Trustee shall not be responsible for ascertaining whether any transfer complies with, or for otherwise monitoring or determining compliance with, the registration provisions of or any exemptions from the Securities Act, applicable state securities laws or the applicable laws of any other jurisdiction, ERISA, the Code, the 1940 Act, or the terms hereof; provided that if a certificate is specifically required by the terms of this Section 2.5 to be provided to the Trustee by a prospective transferor or transferee, the Trustee shall be under a duty to receive and examine the same to determine whether or not the certificate substantially conforms on its face to the applicable requirements of this Indenture and shall promptly notify the party delivering the same and the Issuer if such certificate does not comply with such terms.

 

(f)                [Reserved.]

 

(g)               Transfers of Global Secured Notes shall only be made in accordance with Section 2.2(b) and this Section 2.5(g).

 

(i)                Rule 144A Global Secured Note to Temporary Regulation S Global Secured Note or Regulation S Global Secured Note. If a holder of a beneficial interest in a Rule 144A Global Secured Note deposited with DTC wishes at any time to exchange its interest in such Rule 144A Global Secured Note for, during the Distribution Compliance Period, an interest in a corresponding Temporary Regulation S Global Secured Note, or after the Distribution Compliance Period, to transfer its interest in such Rule 144A Global Secured Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Regulation S Global Secured Note, such holder (provided that such holder or, in the case of a transfer, the transferee is a Qualified Purchaser that is not a U.S. person and is acquiring such interest in an offshore transaction (as defined in Regulation S)) may, subject to the immediately succeeding sentence and the rules and procedures of DTC, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Temporary Regulation S Global Secured Note or Regulation S Global Secured Note, as applicable. Upon receipt by the Registrar of (A) instructions given in accordance with DTC’s procedures from an Agent Member directing the Registrar to credit or cause to be credited a beneficial interest in the corresponding Temporary Regulation S Global Secured Note or Regulation S Global Secured Note, as applicable, but not less than the minimum denomination applicable to such holder’s Notes, in an amount equal to the beneficial interest in the Rule 144A Global Secured Note to be exchanged or transferred, (B) a written order given in accordance with DTC’s procedures containing information regarding the participant account of DTC and the Euroclear or Clearstream account to be credited with such increase, (C) a certificate in the form of Exhibit B-1 attached hereto given by the holder of such beneficial interest stating that the exchange or transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global Secured Notes, including that the holder or the transferee, as applicable, is a Qualified Purchaser that is not a U.S. person, and is acquiring such interest in an offshore transaction pursuant to and in accordance with Regulation S and (D) a written certification in the form of Exhibit B-7 attached hereto given by the transferee in respect of such beneficial interest stating, among other things, that such transferee is a Qualified Purchaser that is not a U.S. person purchasing such beneficial interest in an offshore transaction pursuant to Regulation S, then the Registrar shall approve the instructions at DTC to reduce the principal amount of the Rule 144A Global Secured Note and to increase the principal amount of the Temporary Regulation S Global Secured Note or the Regulation S Global Secured Note, as applicable, by the aggregate principal amount of the beneficial interest in the Rule 144A Global Secured Note to be exchanged or transferred, and to credit or cause to be credited to the securities account of the Agent Member specified in such instructions a beneficial interest in the corresponding Temporary Regulation S Global Secured Note or Regulation S Global Secured Note, as applicable, equal to the reduction in the principal amount of the Rule 144A Global Secured Note.

 

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(ii)              Temporary Regulation S Global Secured Note or Regulation S Global Secured Note to Rule 144A Global Secured Note. If a holder of a beneficial interest in, during the Distribution Compliance Period, a Temporary Regulation S Global Secured Note or, after the Distribution Compliance Period, a Regulation S Global Secured Note, as applicable, deposited with DTC wishes at any time to exchange its interest in such Temporary Regulation S Global Secured Note or Regulation S Global Secured Note, as applicable, for an interest in the corresponding Rule 144A Global Secured Note or to transfer its interest in such Temporary Regulation S Global Secured Note or such Regulation S Global Secured Note, as applicable, to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Rule 144A Global Secured Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Rule 144A Global Secured Note. Upon receipt by the Registrar of (A) instructions from Euroclear, Clearstream and/or DTC, as the case may be, directing the Registrar to cause to be credited a beneficial interest in the corresponding Rule 144A Global Secured Note in an amount equal to the beneficial interest in such Temporary Regulation S Global Secured Note or such Regulation S Global Secured Note, as applicable, but not less than the minimum denomination applicable to such holder’s Notes to be exchanged or transferred, such instructions to contain information regarding the participant account with DTC to be credited with such increase, (B) a certificate in the form of Exhibit B-3 attached hereto given by the holder of such beneficial interest and stating, among other things, that, in the case of a transfer, the Person transferring such interest in such Temporary Regulation S Global Secured Note or such Regulation S Global Secured Note, as applicable, reasonably believes that the Person acquiring such interest in a Rule 144A Global Secured Note is a Qualified Purchaser and a Qualified Institutional Buyer, is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction and (C) a written certification in the form of Exhibit B-6 attached hereto given by the transferee in respect of such beneficial interest stating, among other things, that such transferee is a Qualified Institutional Buyer and a Qualified Purchaser, then the Registrar will approve the instructions at DTC to reduce, or cause to be reduced, the Temporary Regulation S Global Secured Note or the Regulation S Global Secured Note, as applicable, by the aggregate principal amount of the beneficial interest in the Temporary Regulation S Global Secured Note or the Regulation S Global Secured Note, as applicable, to be transferred or exchanged and the Registrar shall instruct DTC, concurrently with such reduction, to credit or cause to be credited to the securities account of the Agent Member specified in such instructions a beneficial interest in the corresponding Rule 144A Global Secured Note equal to the reduction in the principal amount of the Temporary Regulation S Global Secured Note or the Regulation S Global Secured Note, as applicable.

 

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(iii)              Global Secured Note to Certificated Secured Note. Subject to Section 2.10(a), if a holder of a beneficial interest in a Global Secured Note (other than a Temporary Regulation S Global Secured Note) deposited with DTC wishes at any time to transfer its interest in such Global Secured Note to a Person who wishes to take delivery thereof in the form of a corresponding Certificated Secured Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, transfer, or cause the transfer of, such interest for a Certificated Secured Note. Upon receipt by the Registrar of (A) certificates substantially in the form of Exhibit B-2 attached hereto executed by the transferee and (B) appropriate instructions from DTC, if required, the Registrar will approve the instructions at DTC to reduce, or cause to be reduced, the Global Secured Note by the aggregate principal amount of the beneficial interest in the Global Secured Note to be transferred, record the transfer in the Register in accordance with Section 2.5(a) and upon execution by the Issuer and authentication and delivery by the Trustee, deliver one or more corresponding Certificated Secured Notes, registered in the names specified in the instructions described in clause (B) above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the interest in such Global Secured Note transferred by the transferor), and in authorized denominations.

 

(iv)             Temporary Regulation S Global Secured Note to Regulation S Global Secured Note. Interests in a Temporary Regulation S Global Secured Note may be exchanged after the Distribution Compliance Period for interests in a Regulation S Global Secured Note. Until so exchanged in full and except as provided therein, the Temporary Regulation S Global Secured Note, and the Notes evidenced thereby, shall in all respects be entitled to the same benefits under this Indenture as the Regulation S Global Secured Note and Rule 144A Global Secured Note authenticated and delivered hereunder.

 

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(v)              Distribution Compliance Period. Prior to the termination of the Distribution Compliance Period with respect to the issuance of the Notes, transfers of interests in the Temporary Regulation S Global Secured Notes to U.S. persons (as defined in Regulation S) shall be limited to transfers made pursuant to the provisions of clause (ii) above.

 

(h)               Transfers of Certificated Secured Notes shall only be made in accordance with Section 2.2(b) and this Section 2.5(h).

 

(i)               Certificated Secured Notes to Global Secured Notes. If a holder of a Certificated Secured Note wishes at any time to transfer such Certificated Secured Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in a corresponding Global Secured Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, exchange or transfer, or cause the exchange or transfer of, such Certificated Secured Note for a beneficial interest in a corresponding Global Secured Note. Upon receipt by the Registrar of (A) a Holder’s Certificated Secured Note properly endorsed for assignment to the transferee, (B) a certificate substantially in the form of Exhibit B-1 or Exhibit B-3 (as applicable) attached hereto executed by the transferor and a certificate substantially in the form of Exhibit B-6 or B-7 (as applicable) attached hereto executed by the transferee, (C) instructions given in accordance with Euroclear, Clearstream or DTC’s procedures, as the case may be, from an Agent Member to instruct DTC to cause to be credited a beneficial interest in the applicable Global Secured Notes in an amount equal to the Certificated Secured Notes to be transferred or exchanged, and (D) a written order given in accordance with DTC’s procedures containing information regarding the Agent Member’s account at DTC and/or Euroclear or Clearstream to be credited with such increase, the Registrar shall cancel such Certificated Secured Note in accordance with Section 2.9, record the transfer in the Register in accordance with Section 2.5(a) and approve the instructions at DTC, concurrently with such cancellation, to credit or cause to be credited to the securities account of the Agent Member specified in such instructions a beneficial interest in the corresponding Global Secured Note equal to the principal amount of the Certificated Secured Note transferred or exchanged.

 

(ii)              Certificated Secured Notes to Certificated Secured Notes. Upon receipt by the Registrar of (A) a Holder’s Certificated Secured Note properly endorsed for assignment to the transferee, and (B) certificates substantially in the form of Exhibit B-2 attached hereto executed by the transferee, the Registrar shall cancel such Certificated Secured Note in accordance with Section 2.9, record the transfer in the Register in accordance with Section 2.5(a) and upon execution by the Issuer and authentication and delivery by the Trustee, deliver one or more Certificated Secured Notes bearing the same designation as the Certificated Secured Note endorsed for transfer, registered in the names specified in the assignment described in clause (A) above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the Certificated Secured Note surrendered by the transferor), and in authorized denominations.

 

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(i)                 Transfers and exchanges of Subordinated Notes shall only be made in accordance with Section 2.2(b) and this Section 2.5(i).

 

(i)               Certificated Subordinated Note to Certificated Subordinated Note. Upon receipt by the Registrar of (A) a Holder’s Certificated Subordinated Note properly endorsed for assignment to the transferee, and (B) certificates in the form of Exhibits B-4 and B-5 attached hereto given by the transferee of such Certificated Subordinated Note, the Registrar shall cancel such Certificated Subordinated Note in accordance with Section 2.9, record the transfer in the Register in accordance with Section 2.5(a) and upon execution by the Issuer and authentication and delivery by the Trustee, deliver one or more Certificated Subordinated Notes bearing the same designation as the Certificated Subordinated Note endorsed for transfer, registered in the names specified in the assignment described in clause (A) above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the Certificated Subordinated Note surrendered by the transferor), and in authorized denominations.

 

(ii)              Rule 144A Global Subordinated Note to Certificated Subordinated Note. Subject to Section 2.10(a), if a holder of a beneficial interest in a Rule 144A Global Subordinated Note deposited with DTC wishes at any time to transfer its interest in such Rule 144A Global Subordinated Note to a Person who wishes to take delivery thereof in the form of a corresponding Certificated Subordinated Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, transfer, or cause the transfer of, such interest for a Certificated Subordinated Note. Upon receipt by the Registrar of (A) certificates substantially in the form of Exhibits B-4 and B-5 attached hereto executed by the transferee and (B) appropriate instructions from DTC, if required, the Registrar will approve the instructions at DTC to reduce, or cause to be reduced, the Rule 144A Global Subordinated Note by the aggregate principal amount of the beneficial interest in the Rule 144A Global Subordinated Note to be transferred, record the transfer in the Register in accordance with Section 2.5(a) and upon execution by the Issuer and authentication and delivery by the Trustee, deliver one or more corresponding Certificated Subordinated Notes, registered in the names specified in the instructions described in clause (B) above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the interest in such Rule 144A Global Subordinated Note transferred by the transferor), and in authorized denominations.

 

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(iii)              Certificated Subordinated Notes to Rule 144A Global Subordinated Notes. If a holder of a Certificated Subordinated Note wishes at any time to transfer such Certificated Subordinated Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in a corresponding Rule 144A Global Subordinated Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, exchange or transfer, or cause the exchange or transfer of, such Certificated Subordinated Note for a beneficial interest in a corresponding Rule 144A Global Subordinated Note. Upon receipt by the Registrar of (A) a Holder’s Certificated Subordinated Note properly endorsed for assignment to the transferee, (B) a certificate substantially in the form of Exhibit B-8 attached hereto executed by the transferor and a certificate substantially in the form of Exhibit B-9 attached hereto executed by the transferee, (C) instructions given in accordance with Euroclear, Clearstream or DTC’s procedures, as the case may be, from an Agent Member to instruct DTC to cause to be credited a beneficial interest in the applicable Rule 144A Global Subordinated Note in an amount equal to the Certificated Subordinated Notes to be transferred or exchanged, and (D) a written order given in accordance with DTC’s procedures containing information regarding the Agent Member’s account at DTC and/or Euroclear or Clearstream to be credited with such increase, the Registrar shall cancel such Certificated Subordinated Note in accordance with Section 2.9, record the transfer in the Register in accordance with Section 2.5(a) and approve the instructions at DTC, concurrently with such cancellation, to credit or cause to be credited to the securities account of the Agent Member specified in such instructions a beneficial interest in the corresponding Rule 144A Global Subordinated Note equal to the principal amount of the Certificated Subordinated Note transferred or exchanged.

 

(j)                 If Notes are issued upon the transfer, exchange or replacement of Notes bearing the applicable legends set forth in the applicable part of Exhibit A hereto, and if a request is made to remove such applicable legend on such Notes, the Notes so issued shall bear such applicable legend, or such applicable legend shall not be removed, as the case may be, unless there is delivered to the Trustee and the Issuer such satisfactory evidence, which may include an Opinion of Counsel acceptable to them, as may be reasonably required by the Issuer (and which shall by its terms permit reliance by the Trustee), to the effect that neither such applicable legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of the Securities Act, the 1940 Act, ERISA or the Code. Upon provision of such satisfactory evidence, the Trustee or its Authenticating Agent, at the written direction of the Issuer shall, after due execution by the Issuer authenticate and deliver Notes that do not bear such applicable legend.

 

(k)                Each Person who becomes a beneficial owner of Notes represented by an interest in a Global Secured Note or a Rule 144A Global Subordinated Note will be deemed to have represented and agreed as follows:

 

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(i)               In connection with the purchase of such Notes: (A) none of the Issuer, the Collateral Manager, the Initial Purchaser, the Trustee, the Collateral Administrator, the Retention Provider or any of their respective Affiliates is acting as a fiduciary or financial or investment adviser for such beneficial owner; (B) such beneficial owner is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Collateral Manager, the Trustee, the Collateral Administrator, the Initial Purchaser, the Retention Provider or any of their respective Affiliates other than any statements in the final Offering Circular for such Notes, and such beneficial owner has read and understands such final Offering Circular; (C) such beneficial owner has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it has deemed necessary and has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to this Indenture) based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the Issuer, the Collateral Manager, the Trustee, the Collateral Administrator, Initial Purchaser, the Retention Provider or any of their respective Affiliates; (D) such beneficial owner is either (1) (in the case of a beneficial owner of an interest in a Rule 144A Global Secured Note or Rule 144A Global Subordinated Note)  both (a) a “qualified institutional buyer” (as defined under Rule 144A under the Securities Act) that is not a broker-dealer which owns and invests on a discretionary basis less than U.S.$25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(d) or (a)(1)(e) of Rule 144A under the Securities Act or a trust fund referred to in paragraph (a)(1)(f) of Rule 144A under the Securities Act that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan and (b) a Qualified Purchaser for purposes of Section 3(c)(7) of the 1940 Act (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser) or (2) (in the case of a beneficial owner of an interest in a Regulation S Global Secured Note) a Qualified Purchaser that is not a “U.S. person” as defined in Regulation S and is acquiring the Notes in an offshore transaction (as defined in Regulation S) in reliance on the exemption from registration provided by Regulation S; (E) such beneficial owner is acquiring its interest in such Notes for its own account; (F) such beneficial owner was not formed for the purpose of investing in such Notes; (G) such beneficial owner understands that the Issuer may receive a list of participants holding interests in the Notes from one or more book-entry depositories; (H) such beneficial owner will hold and transfer at least the minimum denomination of such Notes; (I) such beneficial owner is a sophisticated investor and is purchasing the Notes with a full understanding of all of the terms, conditions and risks thereof, and is capable of and willing to assume those risks; and (J) such beneficial owner will provide notice of the relevant transfer restrictions to subsequent transferees.

 

(ii)              Each Person who acquires a Secured Note or any interest therein will be required or deemed to represent, warrant and agree that (A) if such Person is, or is acting on behalf of, a Benefit Plan Investor, its acquisition, holding and disposition of such interest do not and will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, and (B) if such Person is, or is acting on behalf of, a governmental, church, non-U.S. or other plan which is subject to any Other Plan Law, such Person’s acquisition, holding and disposition of such Note will not constitute or result in a non-exempt violation of any such Other Plan Law.

 

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(iii)             With respect to a Rule 144A Global Subordinated Note or any interest therein (1) if it is a purchaser of Rule 144A Global Subordinated Notes from the Issuer as part of the initial offering on the Closing Date, it will be required to represent and warrant (a) whether or not it is, or is acting on behalf of, a Benefit Plan Investor, (b) whether or not it is a Controlling Person and (c) (i) if it is, or is acting on behalf of, a Benefit Plan Investor, that its acquisition, holding and disposition of such Subordinated Notes will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or (ii) if it is, or is acting on behalf of, a governmental, church, non-U.S. plan or other plan, (x) it is not, and for so long as it holds such Subordinated Notes or interest therein will not be, subject to Similar Law and (y) its acquisition, holding and disposition of such Subordinated Notes will not constitute or result in a non-exempt violation of any Other Plan Law and (2) each purchaser or subsequent transferee, as applicable, of an interest in a Rule 144A Global Subordinated Note other than from the Issuer as part of the initial offering on the Closing Date, on each day from the date on which such beneficial owner acquires its interest in such Subordinated Notes through and including the date on which such beneficial owner disposes of its interest in such Subordinated Notes, will be deemed to have represented and agreed that (a) it is not, and is not acting on behalf of, a Benefit Plan Investor or a Controlling Person and (b) if it is, or is acting on behalf of, a governmental, church, non-U.S. or other plan, (x) it is not, and for so long as it holds such Subordinated Notes or interest therein will not be, subject to Similar Law and (y) its acquisition, holding and disposition of such Subordinated Notes will not constitute or result in a non-exempt violation of any Other Plan Law.

 

(iv)             Such beneficial owner understands that such Notes are being offered only in a transaction not involving any public offering in the United States within the meaning of the Securities Act, such Notes have not been and will not be registered under the Securities Act, and, if in the future such beneficial owner decides to offer, resell, pledge or otherwise transfer such Notes, such Notes may be offered, resold, pledged or otherwise transferred only in accordance with the provisions of this Indenture and the legend on such Notes. Such beneficial owner acknowledges that no representation has been made as to the availability of any exemption under the Securities Act or any state securities laws for resale of such Notes. Such beneficial owner understands that the Issuer has not been registered as an “investment company” under the 1940 Act and is exempt from registration as such by virtue of Section 3(c)(7) of the 1940 Act.

 

(v)              Such beneficial owner is aware that, except as otherwise provided herein, any Secured Notes being sold to it in reliance on Regulation S will be represented by one or more Regulation S Global Secured Notes and that beneficial interests therein may be held only through DTC for the respective accounts of Euroclear or Clearstream.

 

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(vi)             Such beneficial owner will provide notice to each Person to whom it proposes to transfer any interest in the Notes of the transfer restrictions and representations set forth in this Section 2.5, including the Exhibits referenced herein.

 

(vii)           Such beneficial owner is obtaining such beneficial interest in compliance with certain restrictions imposed during the Distribution Compliance Period.

 

(viii)           Such beneficial owner acknowledges and agrees to the representations and restrictions set forth in Section 2.12.

 

(l)                 Each Person who becomes an owner of a Certificated Secured Note will be required to make the representations and agreements set forth in Exhibit B-2. Each Person who purchases an interest in a Rule 144A Global Subordinated Note from the Issuer as part of the initial offering on the Closing Date will be required to make the representations and agreements set forth in Exhibit B-5. Each Person who becomes an owner of a Certificated Subordinated Note (including a transfer of an interest in a Rule 144A Global Subordinated Note to a transferee acquiring a Subordinated Note in certificated form) will be required to make the representations and agreements set forth in Exhibit B-4 and Exhibit B-5.

 

(m)              Any purported transfer of a Note not in accordance with this Section 2.5 shall be null and void and shall not be given effect for any purpose whatsoever.

 

(n)               To the extent required by the Issuer, as determined by the Issuer or the Collateral Manager on behalf of the Issuer, the Issuer may, upon written notice to the Trustee, impose additional transfer restrictions on the Notes to comply with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 and other similar laws or regulations, including, without limitation, requiring each transferee of a Note to make representations to the Issuer in connection with such compliance.

 

(o)               The Registrar, the Trustee and the Issuer shall be entitled to conclusively rely on the information set forth on the face of any transferor and transferee certificate delivered pursuant to this Section 2.5 and shall be able to presume conclusively the continuing accuracy thereof, in each case without further inquiry or investigation. Notwithstanding anything in this Indenture to the contrary, the Trustee shall not be required to obtain any certificate specifically required by the terms of this Section 2.5 if the Trustee is not notified of or in a position to know of any transfer requiring such a certificate to be presented by the proposed transferor or transferee.

 

(p)               For the avoidance of doubt, notwithstanding anything in this Indenture to the contrary, the Initial Purchaser may hold a position in a Regulation S Global Secured Note prior to the distribution of the applicable Secured Notes represented by such position.

 

(q)               Neither the Trustee nor the Registrar shall be liable for any delay in the delivery of directions from the depository and may conclusively rely on, and shall be fully protected in relying on, such direction as to the names of the beneficial owners in whose names such Certificated Notes shall be registered or as to delivery instructions for such Certificated Notes.

 

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Section 2.6            Mutilated, Defaced, Destroyed, Lost or Stolen Note. If (a) any mutilated or defaced Note is surrendered to a Transfer Agent, or if there shall be delivered to the Issuer, the Trustee and the relevant Transfer Agent evidence to their reasonable satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the Issuer, the Trustee and such Transfer Agent such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Issuer, the Trustee or such Transfer Agent that such Note has been acquired by a protected purchaser, the Issuer shall execute and, upon Issuer Order, the Trustee shall authenticate and deliver to the Holder, in lieu of any such mutilated, defaced, destroyed, lost or stolen Note, a new Note, of like tenor (including the same date of issuance) and equal principal or face amount, registered in the same manner, dated the date of its authentication, bearing interest from the date to which interest has been paid on the mutilated, defaced, destroyed, lost or stolen Note and bearing a number not contemporaneously outstanding.

 

If, after delivery of such new Note, a protected purchaser of the predecessor Note presents for payment, transfer or exchange such predecessor Note, the Issuer, the Transfer Agent and the Trustee shall be entitled to recover such new Note from the Person to whom it was delivered or any Person taking therefrom, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer, the Trustee and the Transfer Agent in connection therewith.

 

In case any such mutilated, defaced, destroyed, lost or stolen Note has become due and payable, the Issuer in its discretion may, instead of issuing a new Note pay such Note without requiring surrender thereof except that any mutilated or defaced Note shall be surrendered.

 

Upon the issuance of any new Note under this Section 2.6, the Issuer may require the payment by the Holder thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

 

Every new Note issued pursuant to this Section 2.6 in lieu of any mutilated, defaced, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer and such new Note shall be entitled, subject to the second paragraph of this Section 2.6, to all the benefits of this Indenture equally and proportionately with any and all other Notes of the same Class duly issued hereunder.

 

The provisions of this Section 2.6 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, defaced, destroyed, lost or stolen Notes.

 

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Section 2.7                Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved. (a) The Secured Notes of each Class shall accrue interest during each Interest Accrual Period at the applicable Interest Rate and such interest will be payable in arrears on each Payment Date on the Aggregate Outstanding Amount (and, with respect to the Class C Notes and the Class D Notes, any Deferred Interest thereon, as applicable, as described below) thereof on the first day of the related Interest Accrual Period (after giving effect to payments of principal thereof on such date), except as otherwise set forth below; provided that, for the avoidance of doubt, with respect to any payment of interest on a Redemption Date, such interest shall be determined in accordance with the calculation above solely for the period from, and including, the first day of such Interest Accrual Period through, but excluding, such Redemption Date; provided further that, with respect to any Interest Accrual Period during which a Re-Pricing has occurred, the applicable Interest Rate of any Re-Priced Class shall reflect the applicable Re-Pricing Rate from and including, the applicable Re-Pricing Date. For purposes of determining any Interest Accrual Period, in the case of any Fixed Rate Notes, (i) for any Payment Date that is not a Redemption Date or a Re-Pricing Date, the Payment Date shall be assumed to be the 20th day of the relevant month (irrespective of whether such day is a Business Day) and (ii) for any Payment Date that is a Redemption Date or a Re-Pricing Date, the Payment Date shall be the Redemption Date or the Re-Pricing Date, as applicable. Payment of interest on each Class of Secured Notes (and payments of available Interest Proceeds to the Holders of the Subordinated Notes) will be subordinated to the payment of interest on each related Priority Class as provided in Section 11.1. So long as any Priority Class is Outstanding with respect to the Class C Notes or the Class D Notes, any payment of interest due on the Class C Notes or the Class D Notes which is not available to be paid in accordance with the Priority of Payments on any Payment Date (“Deferred Interest”) shall not be considered “due and payable” for the purposes of Section 5.1(a) (and the failure to pay such interest shall not be an Event of Default) until the earliest of (i) the Payment Date on which funds are available to pay such Deferred Interest in accordance with the Priority of Payments, (ii) the Redemption Date or the Re-Pricing Date, as applicable, with respect to the Class C Notes or the Class D Notes, as applicable and (iii) the Stated Maturity of the Class C Notes or the Class D Notes, as applicable. Deferred Interest on the Class C Notes or the Class D Notes, as applicable, shall be payable on the first Payment Date on which funds are available to be used for such purpose in accordance with the Priority of Payments, but in any event no later than the earlier of the Payment Date (i) which is the Redemption Date or Re-Pricing Date, as applicable, with respect to the Class C Notes or the Class D Notes, as applicable and (ii) which is the Stated Maturity of the Class C Notes or the Class D Notes, as applicable. Regardless of whether any Priority Class is Outstanding with respect to the Class C Notes or the Class D Notes, as applicable, to the extent that funds are not available on any Payment Date (other than the Redemption Date or Re-Pricing Date, as applicable, with respect to, or Stated Maturity of, the Class C Notes or the Class D Notes, as applicable) to pay previously accrued Deferred Interest, such previously accrued Deferred Interest will not be due and payable on such Payment Date and any failure to pay such previously accrued Deferred Interest on such Payment Date will not be an Event of Default. Interest will cease to accrue on each Secured Note, or in the case of a partial repayment, on such repaid part, from the date of repayment. To the extent lawful and enforceable, interest on any interest that is not paid when due on any Class A Notes, or if no Class A Notes are Outstanding, any Class B Notes, or if no Class A Notes or Class B Notes are Outstanding, any Class C Notes, or if no Class A Notes, Class B Notes or Class C Notes are Outstanding, any Class D Notes shall accrue at the Interest Rate for such Class until paid as provided herein.

 

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(b)               The principal of each Secured Note of each Class matures at par and is due and payable on the date of the Stated Maturity for such Class, unless such principal has been previously repaid or unless the unpaid principal of such Secured Note becomes due and payable at an earlier date by declaration of acceleration, call for redemption or otherwise. Notwithstanding the foregoing, the payment of principal of each Class of Secured Notes (and payments of Principal Proceeds to the Holders of the Subordinated Notes) may only occur in accordance with the Priority of Payments. Payments of principal on any Class of Secured Notes, and distributions of Principal Proceeds to Holders of Subordinated Notes, which are not paid, in accordance with the Priority of Payments, on any Payment Date (other than the Payment Date which is the Stated Maturity of such Class of Notes or any Redemption Date or Re-Pricing Date, as applicable), because of insufficient funds therefor shall not be considered “due and payable” for purposes of Section 5.1(a) until the Payment Date on which such principal may be paid in accordance with the Priority of Payments or all Priority Classes with respect to such Class have been paid in full.

 

(c)               Principal payments on the Notes will be made in accordance with the Priority of Payments and Article IX.

 

(d)               The Issuer shall require the previous delivery of properly completed and signed applicable tax certifications (generally, in the case of U.S. federal income tax, an IRS Form W-9 (or applicable successor form) in the case of a United States Tax Person or the appropriate IRS Form W-8 (or applicable successor form) in the case of a Person that is not a United States Tax Person) or other certification acceptable to it to enable the Issuer, the Trustee and any Paying Agent to determine their duties and liabilities with respect to any taxes or other charges that they may be required to pay, deduct or withhold from payments in respect of such Note or the Holder or beneficial owner of such Note under any present or future law or regulation of the United States, any other jurisdiction or any political subdivision thereof or taxing authority therein or to comply with any reporting or other requirements under any such law or regulation and to determine if payments by the Issuer are subject to withholding. The Issuer shall not be obligated to pay any additional amounts to the Holders or beneficial owners of the Notes as a result of deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges with respect to the Notes. Nothing herein shall be construed to obligate the Paying Agent or the Trustee to determine the duties or liabilities of the Issuer or any other paying agent with respect to any tax certification or withholding requirements, or any tax certification or withholding requirements of any jurisdiction, political subdivision or taxing authority outside the United States.

 

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(e)               Payments in respect of interest on and principal of any Secured Note and any payment with respect to any Subordinated Note shall be made by the Trustee in Dollars to DTC or its designee with respect to a Global Secured Note or Rule 144A Global Subordinated Note and to the Holder or its nominee with respect to a Certificated Note, by wire transfer, as directed by the Holder, in immediately available funds to a Dollar account maintained by DTC or its nominee with respect to a Global Secured Note or a Rule 144A Global Subordinated Note, and to the Holder or its nominee with respect to a Certificated Note; provided that in the case of a Certificated Note (1) the Holder thereof shall have provided written wiring instructions to the Trustee on or before the related Record Date and (2) if appropriate instructions for any such wire transfer are not received by the related Record Date, then such payment shall be made by check drawn on a U.S. bank mailed to the address of the Holder specified in the Register. Upon final payment due on the Maturity of a Note, the Holder thereof shall present and surrender such Note at the Corporate Trust Office of the Trustee or at the office of any Paying Agent on or prior to such Maturity; provided that if the Trustee and the Issuer shall have been furnished such security or indemnity as may be required by them to save each of them harmless and an undertaking thereafter to surrender such certificate, then, in the absence of notice to the Issuer or the Trustee that the applicable Note has been acquired by a protected purchaser, such final payment shall be made without presentation or surrender. Neither the Issuer, the Trustee, the Collateral Manager, nor any Paying Agent will have any responsibility or liability for any aspects of the records (or for maintaining, supervising or reviewing such records) maintained by DTC, Euroclear, Clearstream or any of the Agent Members relating to or for payments made thereby on account of beneficial interests in a Global Secured Note or Rule 144A Global Subordinated Note. In the case where any final payment of principal and interest is to be made on any Secured Note (other than on the Stated Maturity thereof) or any final payment is to be made on any Subordinated Note (other than on the Stated Maturity thereof), the Trustee, in the name and at the expense of the Issuer shall prior to the date on which such payment is to be made, mail (by first class mail, postage prepaid) to the Persons entitled thereto at their addresses appearing on the Register a notice which shall specify the date on which such payment will be made, the amount of such payment per U.S.$1,000 original principal amount of Secured Notes, original principal amount of Subordinated Notes and the place where such Notes may be presented and surrendered for such payment.

 

(f)                Payments of principal to Holders of the Secured Notes of each Class shall be made in the proportion that the Aggregate Outstanding Amount of the Secured Notes of such Class registered in the name of each such Holder on the applicable Record Date bears to the Aggregate Outstanding Amount of all Secured Notes of such Class on such Record Date. Payments to the Holders of the Subordinated Notes from Interest Proceeds and Principal Proceeds shall be made in the proportion that the Aggregate Outstanding Amount of the Subordinated Notes registered in the name of each such Holder on the applicable Record Date bears to the Aggregate Outstanding Amount of all Subordinated Notes on such Record Date.

 

(g)               Interest accrued with respect to the Floating Rate Notes shall be calculated on the basis of the actual number of days elapsed in the applicable Interest Accrual Period divided by 360. Interest accrued with respect to any Class of Fixed Rate Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months.

 

(h)               All reductions in the principal amount of a Note (or one or more predecessor Notes) effected by payments of installments of principal made on any Payment Date, Redemption Date or Re-Pricing Date, as applicable, shall be binding upon all future Holders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.

 

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(i)                Notwithstanding any other provision of this Indenture, the obligations of the Issuer under the Notes and this Indenture are limited recourse obligations of the Issuer, payable solely from the Assets and following realization of the Assets, and application of the proceeds thereof in accordance with this Indenture, all obligations of and any claims against the Issuer hereunder or in connection herewith after such realization shall be extinguished and shall not thereafter revive. No recourse shall be had against any officer, director, manager, partner, member, employee, shareholder, authorized Person or incorporator of the Issuer, the Collateral Manager, the Retention Provider or their respective Affiliates, successors or assigns for any amounts payable under the Notes or this Indenture. It is understood that the foregoing provisions of this paragraph (i) shall not (i) prevent recourse to the Assets for the sums due or to become due under any security, instrument or agreement which is part of the Assets or (ii) constitute a waiver, release or discharge of any indebtedness or obligation evidenced by the Notes or secured by this Indenture until such Assets have been realized. It is further understood that the foregoing provisions of this paragraph (i) shall not limit the right of any Person to name the Issuer as a party defendant in any Proceeding or in the exercise of any other remedy under the Notes or this Indenture, so long as no judgment in the nature of a deficiency judgment or seeking personal liability shall be asked for or (if obtained) enforced against any such Person or entity. The Subordinated Notes are not secured hereunder.

 

(j)                Subject to the foregoing provisions of this Section 2.7, each Note delivered under this Indenture and upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to unpaid interest and principal (or other applicable amount) that were carried by such other Note.

 

Section 2.8                Persons Deemed Owners. The Issuer, the Trustee, and any agent of the Issuer or the Trustee shall treat as the owner of each Note the Person in whose name such Note is registered on the Register on the applicable Record Date for the purpose of receiving payments of principal of and interest on such Note and on any other date for all other purposes whatsoever (whether or not such Note is overdue), and none of the Issuer, the Trustee or any agent of the Issuer or the Trustee shall be affected by notice to the contrary.

 

Section 2.9              Cancellation. All Notes surrendered for payment, cancellation pursuant to Section 9.7, registration of transfer, exchange or redemption, or deemed lost or stolen, shall be promptly canceled by the Trustee and may not be reissued or resold. No Note may be surrendered (including any surrender in connection with any abandonment, gift, donation or other cause or event) except for payment as provided herein, for cancellation pursuant to Section 9.7 or for registration of transfer, exchange or redemption in accordance with Article IX hereof (in the case of a Special Redemption or a mandatory redemption, only to the extent that such Special Redemption or mandatory redemption results in payment in full of the applicable Class of Notes), or for replacement in connection with any Note deemed lost or stolen. Any Notes surrendered for cancellation as permitted by this Section 2.9 shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.9, except as expressly permitted by this Indenture. All canceled Notes held by the Trustee shall be destroyed or held by the Trustee in accordance with its standard retention policy unless the Issuer shall direct by an Issuer Order received prior to destruction that they be returned to it.

 

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Section 2.10              DTC Ceases to be Depository. (a) A Global Secured Note or Rule 144A Global Subordinated Note deposited with DTC pursuant to Section 2.2 shall be transferred in the form of a corresponding Certificated Note to the beneficial owners thereof only if (A) such transfer complies with Section 2.5 of this Indenture and (B) either (x) (i) DTC notifies the Issuer that it is unwilling or unable to continue as depository for such Global Secured Note or Rule 144A Global Subordinated Note or (ii) DTC ceases to be a Clearing Agency registered under the Exchange Act and, in each case, a successor depository is not appointed by the Issuer within 90 days after such event or (y) an Event of Default has occurred and is continuing and such transfer is requested by any beneficial owner of an interest in such Global Secured Note or Rule 144A Global Subordinated Note.

 

(b)               Any Global Secured Note or Rule 144A Global Subordinated Note that is transferable in the form of a corresponding Certificated Note to the beneficial owner thereof pursuant to this Section 2.10 shall be surrendered by DTC to the Corporate Trust Office to be so transferred, in whole or from time to time in part, without charge, and the Issuer shall execute and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Secured Note or Rule 144A Global Subordinated Note, an equal aggregate principal amount of definitive physical certificates (pursuant to the instructions of DTC) in authorized denominations. Any Certificated Note delivered in exchange for an interest in a Global Secured Note or Rule 144A Global Subordinated Note shall, except as otherwise provided by Section 2.5, bear the legends set forth in the applicable Exhibit A and shall be subject to the transfer restrictions referred to in such legends.

 

(c)               Subject to the provisions of paragraph (b) of this Section 2.10, the Holder of a Global Secured Note or Rule 144A Global Subordinated Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which such Holder is entitled to take under this Indenture or the Notes.

 

(d)               In the event of the occurrence of any of the events specified in clause (B) of sub-section (a) of this Section 2.10, the Issuer will promptly make available to the Trustee a reasonable supply of Certificated Notes.

 

If Certificated Notes are not so issued by the Issuer to such beneficial owners of interests in Global Secured Notes or Rule 144A Global Subordinated Notes as required by sub-section (a) of this Section 2.10, the Issuer expressly acknowledges that the beneficial owners shall be entitled to pursue any remedy that the Holders of a Global Secured Note or Rule 144A Global Subordinated Note would be entitled to pursue in accordance with Article V of this Indenture (but only to the extent of such beneficial owner’s interest in the Global Secured Note or Rule 144A Global Subordinated Note) as if corresponding Certificated Notes had been issued; provided that the Trustee shall be entitled to rely upon any certificate of ownership provided by such beneficial owners (including a certificate in the form of Exhibit D) and/or other forms of reasonable evidence of such ownership.

 

Neither the Trustee nor the Registrar shall be liable for any delay in the delivery of directions from the depository and may conclusively rely on, and shall be fully protected in relying on, such direction as to the names of the beneficial owners in whose names such Certificated Notes shall be registered or as to delivery instructions for such Certificated Notes.

 

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Section 2.11              Non-Permitted Holders. (a) Notwithstanding anything to the contrary elsewhere herein, (x) any transfer of a beneficial interest in any Secured Note to a U.S. person that is not a QIB/QP (other than a U.S. person that is (i) an Institutional Accredited Investor and is also a Qualified Purchaser (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser) or (ii) with respect to Certificated Secured Notes, an Accredited Investor that is also a Knowledgeable Employee with respect to the Issuer or the Collateral Manager (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser affiliated with the Collateral Manager and/or a Knowledgeable Employee with respect to the Issuer or the Collateral Manager)) and (y) any transfer of a beneficial interest in any Subordinated Note to a U.S. person that is not a Qualified Institutional Buyer, an Institutional Accredited Investor or an Accredited Investor that is also (i) a Knowledgeable Employee with respect to the Issuer or the Collateral Manager, (ii) a Qualified Purchaser or (iii) a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is either a Qualified Purchaser affiliated with the Collateral Manager and/or a Knowledgeable Employee with respect to the Issuer or Collateral Manager shall be null and void and any such purported transfer of which the Issuer or the Trustee shall have notice may be disregarded by the Issuer and the Trustee for all purposes.

 

(b)               If (x) any U.S. person that is not a QIB/QP (other than a U.S. person that is (i) an Institutional Accredited Investor and is also a Qualified Purchaser (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser) or (ii) with respect to Certificated Secured Notes, an Accredited Investor that is also a Knowledgeable Employee with respect to the Issuer or the Collateral Manager (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser affiliated with the Collateral Manager and/or a Knowledgeable Employee with respect to the Issuer or the Collateral Manager)) shall become the beneficial owner of an interest in any Secured Note or (y) any U.S. person that is not a Qualified Institutional Buyer, an Institutional Accredited Investor or an Accredited Investor that is also (i) a Knowledgeable Employee with respect to the Issuer or the Collateral Manager, (ii) a Qualified Purchaser or (iii) a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is either a Qualified Purchaser affiliated with the Collateral Manager and/or a Knowledgeable Employee with respect to the Issuer or Collateral Manager shall become the beneficial owner of an interest in any Subordinated Note (any such Person a “Non-Permitted Holder”), the acquisition of Notes by such holder shall be null and void ab initio. The Issuer (or the Collateral Manager on behalf of the Issuer) shall, promptly after discovery that such person is a Non-Permitted Holder by the Issuer or the Trustee or upon notice to the Issuer from the Trustee (if a Trust Officer of the Trustee obtains actual knowledge), send notice to such Non-Permitted Holder demanding that such Non-Permitted Holder transfer its interest in the Notes held by such Person to a Person that is not a Non-Permitted Holder within 30 days after the date of such notice. If such Non-Permitted Holder fails to so transfer such Notes, the Issuer or the Collateral Manager acting for the Issuer shall have the right, without further notice to the Non-Permitted Holder, to sell such Notes or interest in such Notes to a purchaser selected by the Issuer that is not a Non-Permitted Holder on such terms as the Issuer may choose. The Issuer, or the Collateral Manager acting on behalf of the Issuer, may select the purchaser by soliciting one or more bids from one or more brokers or other market professionals that regularly deal in securities similar to the Notes and sell such Notes to the highest such bidder; provided that the Collateral Manager, its Affiliates and accounts, funds, clients or portfolios established and controlled by the Collateral Manager shall be entitled to bid in any such sale. However, the Issuer or the Collateral Manager may select a purchaser by any other means determined by it in its sole discretion. The Holder of each Note, the Non-Permitted Holder and each other Person in the chain of title from the Holder to the Non-Permitted Holder, by its acceptance of an interest in the Notes agrees to cooperate with the Issuer, the Collateral Manager and the Trustee to effect such transfers. The proceeds of such sale, net of any commissions, expenses and taxes due in connection with such sale shall be remitted to the Non-Permitted Holder. The terms and conditions of any sale under this sub-section shall be determined in the sole discretion of the Issuer, and none of the Issuer, the Trustee or the Collateral Manager shall be liable to any Person having an interest in the Notes sold as a result of any such sale or the exercise of such discretion.

 

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(c)               Notwithstanding anything to the contrary elsewhere herein, any transfer of a beneficial interest in any Subordinated Note to a Person who has made an ERISA-related representation required by Section 2.5(c) that is subsequently shown to be false or misleading shall be null and void and any such purported transfer of which the Issuer or the Trustee shall have notice may be disregarded by the Issuer and the Trustee for all purposes.

 

(d)               If any Person shall become the beneficial owner of an interest in any Note who has made or is deemed to have made a prohibited transaction, Benefit Plan Investor, Controlling Person, Similar Law or Other Plan Law representation required by Section 2.5 that is subsequently shown to be false or misleading or whose beneficial ownership otherwise causes Benefit Plan Investors to hold 25% or more of the value of the Subordinated Notes (any such Person a “Non-Permitted ERISA Holder”), the Issuer (or the Collateral Manager on behalf of the Issuer) shall, promptly after discovery that such Person is a Non-Permitted ERISA Holder by the Issuer or upon notice from the Trustee (if a Trust Officer of the Trustee obtains actual knowledge), send notice to such Non-Permitted ERISA Holder demanding that such Non-Permitted ERISA Holder transfer all or any portion of the Notes held by such Person to a Person that is not a Non-Permitted ERISA Holder within 10 days after the date of such notice. If such Non-Permitted ERISA Holder fails to so transfer such Notes, the Issuer shall have the right, without further notice to the Non-Permitted ERISA Holder, to sell such Notes or interest in such Notes to a purchaser selected by the Issuer that is not a Non-Permitted ERISA Holder on such terms as the Issuer may choose. The Issuer may select the purchaser by soliciting one or more bids from one or more brokers or other market professionals that regularly deal in securities similar to the Notes and selling such Notes to the highest such bidder. However, the Issuer may select a purchaser by any other means determined by the Issuer in its sole discretion. The Holder of each Note, the Non-Permitted ERISA Holder and each other Person in the chain of title from the Holder to the Non-Permitted ERISA Holder, by its acceptance of an interest in the Notes, agrees to cooperate with the Issuer and the Trustee to effect such transfers. The proceeds of such sale, net of any commissions, expenses and taxes due in connection with such sale shall be remitted to the Non-Permitted ERISA Holder. The terms and conditions of any sale under this sub-section shall be determined in the sole discretion of the Issuer, and none of the Issuer, the Trustee or the Collateral Manager shall be liable to any Person having an interest in the Notes sold as a result of any such sale or the exercise of such discretion.

 

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Section 2.12              Treatment and Tax Certification. (a) Each Holder (including, for purposes of this Section 2.12, any beneficial owner of an interest in a Note) of a Secured Note represents and agrees to treat the Secured Notes as indebtedness for U.S. federal, state and local income and franchise tax purposes, except as otherwise required by law.

 

(b)               Each Holder of a Subordinated Note represents and agrees to treat the Subordinated Notes as equity for U.S. federal, state and local income and franchise tax purposes.

 

(c)               Each Holder of a Secured Note agrees and understands that the failure to provide the Issuer and the Trustee (and any of their agents) with the properly completed and signed tax certifications (generally, in the case of U.S. federal income tax, an IRS W-9 (or applicable successor form) in the case of a person that is a United States Tax Person or the appropriate IRS Form W-8 (or applicable successor form) in the case of a person that is not a United States Tax Person) may result in withholding from payments in respect of such Note, including U.S. federal withholding or back-up withholding.

 

(d)               Each Holder of a Subordinated Note represents and warrants that it is a United States Tax Person, agrees to provide the Issuer and the Trustee (and any of their agents) with a correct, complete and properly executed IRS Form W-9 (or applicable successor form), and acknowledges that if it fails to provide the Issuer and the Trustee (and any of their agents) with the properly completed and signed tax certifications specified above, the acquisition of its interest in such Note shall be void ab initio.

 

(e)               Each Holder of a Secured Note agrees to provide the Issuer, the Trustee and any relevant intermediary with any information or documentation that is required under FATCA or that the Issuer or relevant intermediary deems appropriate to enable the Issuer or relevant intermediary to determine their duties and liabilities with respect to any taxes they may be required to withhold pursuant to FATCA in respect of such Note or the Holder of such Note. In addition, each purchaser and subsequent transferee of such Notes (or any interest therein) understands and acknowledges that the Issuer has the right under this Indenture to withhold on any Holder of a Note that fails to comply with FATCA.

 

(f)                Each Holder of a Secured Note that is not a United States Tax Person represents that either (a) it is not (i) a bank (or an entity affiliated with a bank) extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business (within the meaning of Section 881(c)(3)(A) of the Code), (ii) a “10 percent shareholder” with respect to the Issuer within the meaning of Section 871(h)(3) or Section 881(c)(3)(D) of the Code, or (iii) a “controlled foreign corporation” that is related to the Issuer within the meaning of Section 881(c)(3)(C) of the Code; (b) it is a person that is eligible for benefits under an income tax treaty with the United States that eliminates U.S. federal income taxation of U.S. source interest not attributable to a permanent establishment in the United States; or (c) it has provided an IRS Form W-8ECI representing that all payments received or to be received by it on the Notes are effectively connected with the conduct of a trade or business in the United States.

 

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(g)               Each Holder of a Subordinated Note represents, acknowledges and agrees that:

 

(i)                 such Subordinated Note may not be acquired or owned by any person that is classified for U.S. federal income tax purposes as a partnership, Subchapter S corporation or grantor trust unless (i) (a) except in the case of the Retention Provider, none of the direct or indirect beneficial owners of any interest in such person have or ever will have more than 40% of the value of its interest in such person attributable to the aggregate interest of such person in the combined value of the Subordinated Notes (and any other interest treated as equity in the Issuer for U.S. federal income tax purposes), and (b) it is not and will not be a principal purpose of the arrangement involving the investment of such person in any Subordinated Notes and any other equity interests of the Issuer to permit any partnership to satisfy the 100 partner limitation of Treasury Regulations Section 1.7704-1(h)(1)(ii) or (ii) such person obtains written advice of Dechert LLP or an opinion of nationally recognized U.S. tax counsel reasonably acceptable to the Issuer that such transfer will not cause the Issuer to be treated as a publicly traded partnership taxable as a corporation;

 

(ii)             it will not participate in the creation or other transfer of any financial instrument or contract the value of which is determined in whole or in part by reference to the Issuer (including the amount of distributions by the Issuer, the value of the Issuer’s assets, or the results of the Issuer’s operations) or the Subordinated Notes;

 

(iii)            it will not acquire, or sell, transfer, assign, participate, pledge or otherwise dispose of the Subordinated Note or cause the Subordinated Note to be marketed, (i) on or through an “established securities market” within the meaning of Section 7704(b)(1) of the Code and Treasury Regulations Section 1.7704-1(b), including without limitation, an interdealer quotation system that regularly disseminates firm buy or sell quotations or (ii) if such acquisition, sale, transfer, assignment, participation, pledge or other disposition would cause the combined number of holders of the Subordinated Notes and any other equity interests in the Issuer to be more than 88; and

 

(iv)            it acknowledges and agrees that any sale, transfer, assignment, participation, pledge, or other disposition of the Subordinated Note that would violate any of the three preceding paragraphs above or otherwise cause the Issuer to be unable to rely on the “private placement” safe harbor of Treasury Regulations Section 1.7704-1(h) will be void and of no force or effect, and it will not transfer any interest in the Subordinated Note to any Person that does not agree to be bound by the three preceding paragraphs above or by this paragraph.

 

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(h)               Each Holder of a Secured Note that is not a United States Tax Person represents and acknowledges that it is not and will not become a member of an “expanded group” (within the meaning of the regulations issued under Section 385 of the Code) that includes a domestic corporation (as determined for U.S. federal income tax purposes) if either (i) the Issuer is an entity disregarded as separate from such domestic corporation for U.S. federal income tax purposes or (ii) the Issuer is a “controlled partnership” (within the meaning of the regulations) with respect to such expanded group or an entity disregarded as separate from such controlled partnerships for U.S. federal income tax purposes.

 

(i)                 Each Holder of a Subordinated Note acknowledges and agrees that, for so long as the Issuer is classified as a partnership for U.S. federal income tax purposes, it shall not acquire any Subordinated Notes (or any other interest treated as equity in the Issuer for U.S. federal income tax purposes) if such transfer would result in the Issuer being treated as a disregarded entity for U.S. federal income tax purposes.

 

(j)                 Each Holder of a Subordinated Note acknowledges and agrees that, for so long as the Issuer is disregarded as separate from it for U.S. federal income tax purposes, a Note may not be transferred by it (except to a person that is disregarded as separate from such Holder for U.S. federal income tax purposes), unless it has received written advice of Dechert LLP or an opinion of nationally recognized U.S. tax counsel reasonably acceptable to the Issuer that such transfer will not result in the Issuer becoming classified as an association taxable as a corporation or as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes and will not cause the Issuer to be subject to U.S. federal income tax on a net basis.

 

(k)               Each Holder of a Subordinated Note acknowledges and agrees that, it shall not transfer any Secured Note (except to a Person that is disregarded as separate from it for U.S. federal income tax purposes) if at any time prior to such transfer the Issuer was disregarded as separate from such Holder for U.S. federal income tax purposes, unless it shall have received written advice of Dechert LLP or an opinion of tax counsel of nationally recognized standing in the United States experienced in such matters that, immediately following such transfer, such Note and other outstanding Notes of the same Class (other than any Notes that it holds immediately after such transfer) will be fungible for U.S. federal income tax purposes.

 

(l)                Each Holder of a Subordinated Note agrees to deliver to the transferee, with a copy to the Trustee, prior to the transfer of such Note, a properly completed certificate, in a form reasonably acceptable to the transferee and the Trustee, stating, under penalty of perjury, the transferor’s United States taxpayer identification number and that the transferor is not a foreign person within the meaning of Section 1446(f)(2) of the Code (such certificate, a “Non-Foreign Status Certificate”). Each Holder of a Subordinated Note acknowledges that the failure to provide a Non-Foreign Status Certificate to the transferee may result in withholding on the amount realized on its disposition of such Note.

 

(m)              Each Holder of a Note agrees that it will indemnify the Issuer, the Trustee, and their respective agents from any and all damages, cost and expenses (including any amount of taxes, fees, interest, additions to tax, or penalties) resulting from the failure by it to comply with its obligations under the Note. It acknowledges that the indemnification will continue with respect to any period during which it held such Note, notwithstanding it ceasing to be a Holder of the Note.

 

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Section 2.13              Additional Issuance. (a) At any time within the Reinvestment Period, the Issuer may, pursuant to a supplemental indenture in accordance with Section 8.1 hereof, issue Additional Notes of each Class (on a pro rata basis with respect to each Class of Notes that are subordinate to the Class A-1 Notes, except, that a larger proportion of Subordinated Notes may be issued) and use the proceeds to purchase additional Collateral Obligations or as otherwise permitted under this Indenture (including Permitted Uses); provided that the following conditions are met:

 

(i)              the Collateral Manager and the Retention Provider each consent to such issuance and such issuance is consented to by a Supermajority of the Subordinated Notes;

 

(ii)             the aggregate principal amount of Additional Notes of any Class issued in all additional issuances shall not exceed 100% of the respective original outstanding principal amount of the Notes of such Class;

 

(iii)            the terms of the Notes issued must be identical to the respective terms of previously issued Notes of the applicable Class (except that the interest due on additional Secured Notes will accrue from the issue date of such additional Secured Notes and that the interest rate and prices of such may be lower (but not higher) than those of the initial Notes of that Class) and such additional issuance shall not be considered a Refinancing hereunder;

 

(iv)           unless only additional Subordinated Notes are being issued, the Global Rating Agency Condition shall have been satisfied;

 

(v)            the net proceeds of the issuance of any additional Subordinated Notes shall be deposited in the Supplemental Reserve Account and employed in connection with any Permitted Use; provided that this subclause (v) shall only apply if such additional Subordinated Notes are the only Notes included in such additional issuance;

 

(vi)           the proceeds of any Additional Notes (net of fees and expenses incurred in connection with such issuance) shall be treated as Principal Proceeds, used to purchase additional Collateral Obligations or as another Permitted Use;

 

(vii)          to the extent such issuance would be of additional Secured Notes (other than in connection with a Risk Retention Issuance), the prior written consent of a Majority of the Controlling Class has been obtained;

 

(viii)         the Overcollateralization Ratio with respect to each Class of Notes shall not be reduced after giving effect to such issuance;

 

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(ix)            written advice from Dechert LLP or an opinion of tax counsel of nationally recognized standing in the United States experienced in such matters will be delivered to the Issuer (with a copy to the Trustee), in form and substance satisfactory to the Collateral Manager, to the effect that (1) such additional issuance will not result in the Issuer being treated as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes or otherwise subject to U.S. federal income tax on a net basis and (2) any additional Secured Notes will be characterized as indebtedness for U.S. federal income tax purposes; provided, however, that the opinion described in this clause (2) will not be required with respect to any additional Secured Notes that bear a different CUSIP number (or equivalent identifier) from the Secured Notes of the same Class that are outstanding at the time of the additional issuance;

 

(x)             such issuance is accomplished in a manner that allows the independent accountants of the Issuer to accurately provide the tax information relating to original issue discount that this Indenture requires to be provided to the Holders of Secured Notes (including the Additional Notes); and

 

(xi)            an Officer’s certificate of the Issuer shall be delivered to the Trustee stating that the conditions of this Section 2.13(a) have been satisfied.

 

(b)               The terms and conditions of the Additional Notes of each Class issued pursuant to this Section 2.13 shall be identical to those of the initial Notes of that Class (except that the interest due on the Additional Notes that are Secured Notes shall accrue from the issue date of such Additional Notes and the interest rate and price of such Additional Notes may be lower (but not higher) than those of the initial Notes of that Class). Interest on the Additional Notes that are Secured Notes shall be payable commencing on the first Payment Date following the issue date of such Additional Notes (if issued prior to the applicable Record Date). The Additional Notes shall rank pari passu in all respects with the initial Notes of that Class.

 

(c)               Except with respect to a Risk Retention Issuance, any Additional Notes of each Class issued pursuant to this Section 2.13 shall, to the extent reasonably practicable, be offered first to Holders of that Class in such amounts as are necessary to preserve their pro rata holdings of Notes of such Class.

 

(d)               In addition, Additional Notes may be issued in connection with any Refinancing of the Secured Notes in whole without regard to the restrictions in this Section 2.13.

 

(e)               For the avoidance of doubt, at any time the Holders of the Subordinated Notes may make additional capital contributions to the Issuer.

 

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ARTICLE III

 

CONDITIONS PRECEDENT

 

Section 3.1                Conditions to Issuance of Notes on Closing Date. The Notes to be issued on the Closing Date may be executed by the Issuer and delivered to the Trustee for authentication and thereupon the same shall be authenticated and delivered by the Trustee upon Issuer Order and upon receipt by the Trustee of the following:

 

(i)              Officers’ Certificate of the Issuer Regarding Corporate Matters. An Officer’s certificate of the Issuer (A) evidencing the authorization by Resolution of the execution and delivery of this Indenture, the Collateral Management Agreement, the Collateral Administration Agreement, the Master Loan Sale Agreements and related transaction documents and in each case the execution, authentication and delivery of the Notes applied for by it and specifying the Stated Maturity, principal amount and Interest Rate of each Class of Secured Notes to be authenticated and delivered and the Stated Maturity and principal amount of Subordinated Notes to be authenticated and delivered and (B) certifying that (1) the attached copy of the Resolution is a true and complete copy thereof, (2) such Resolutions have not been rescinded and are in full force and effect on and as of the Closing Date and (3) the Officers authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon.

 

(ii)             Governmental Approvals. From the Issuer either (A) a certificate of the Issuer or other official document evidencing the approval or consent of any governmental body or bodies, at the time having jurisdiction in the premises, together with an Opinion of Counsel of the Issuer that no other approval or consent of any governmental body is required for the valid issuance of the Notes or (B) an Opinion of Counsel of the Issuer that no such approval or consent of any governmental body is required for the valid issuance of such Notes except as has been given.

 

(iii)            U.S. Counsel Opinions. Opinions of (A) Dechert LLP, special U.S. counsel to the Issuer, the Collateral Manager, the Retention Provider and special U.S. tax counsel to the Issuer, (B) Clark Hill PLC, Delaware counsel to the Issuer and (C) Locke Lord LLP, counsel to the Trustee and Collateral Administrator, each dated the Closing Date.

 

(iv)            Officers’ Certificate of the Issuer Regarding Indenture. An Officer’s certificate of the Issuer stating that, to the best of the signing Officer’s knowledge, the Issuer is not in default under this Indenture and that the issuance of the Notes applied for by it will not result in a default or a breach of any of the terms, conditions or provisions of, or constitute a default under, its organizational documents, any indenture or other agreement or instrument to which it is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which it is a party or by which it may be bound or to which it may be subject; that all conditions precedent provided herein relating to the authentication and delivery of the Notes applied for by it have been complied with; and that all expenses due or accrued with respect to the Offering of such Notes or relating to actions taken on or in connection with the Closing Date have been paid or reserves therefor have been made. The Officer’s certificate of the Issuer shall also state that, to the best of the signing Officer’s knowledge, all of the Issuer’s representations and warranties contained herein are true and correct as of the Closing Date.

 

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(v)             Transaction Documents. An executed counterpart of each Transaction Document.

 

(vi)            Certificate of the Collateral Manager. An Officer’s certificate of the Collateral Manager, dated as of the Closing Date, to the effect that immediately before the Delivery of the Collateral Obligations on the Closing Date:

 

(A)             the information with respect to each Collateral Obligation in the Schedule of Collateral Obligations is true and correct and such schedule is complete with respect to each such Collateral Obligation;

 

(B)             each Collateral Obligation in the Schedule of Collateral Obligations satisfies the requirements of the definition of “Collateral Obligation”;

 

(C)             the Issuer purchased or entered into each Collateral Obligation in the Schedule of Collateral Obligations in compliance with Section 12.2; and

 

(D)             the Aggregate Principal Balance of the Collateral Obligations which the Issuer has purchased, acquired, entered into binding commitments to purchase, or identified for purchase on or prior to the Closing Date is at least U.S.$889,892,141.42.

 

(vii)          Grant of Collateral Obligations. The Grant pursuant to the Granting Clauses of this Indenture of all of the Issuer’s right, title and interest in and to the Collateral Obligations pledged to the Trustee for inclusion in the Assets on the Closing Date shall be effective, and Delivery of such Collateral Obligations (including each promissory note and all other Underlying Instruments related thereto to the extent received by the Issuer) as contemplated by Section 3.3 shall have been effected.

 

(viii)        Certificate of the Issuer Regarding Assets. An Officer’s certificate of the Issuer, dated as of the Closing Date, to the effect that:

 

(A)             in the case of each Collateral Obligation pledged to the Trustee for inclusion in the Assets, on the Closing Date and immediately prior to the Delivery thereof (or immediately after Delivery thereof, in the case of clause (VI)(ii) below) on the Closing Date;

 

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(I)                the Issuer is the owner of such Collateral Obligation free and clear of any liens, claims or encumbrances of any nature whatsoever except for (i) those which are being released on the Closing Date; (ii) those Granted pursuant to this Indenture and (iii) any other Permitted Liens;

 

(II)              the Issuer has acquired its ownership in such Collateral Obligation in good faith without notice of any adverse claim, except as described in clause (I) above;

 

(III)             the Issuer has not assigned, pledged or otherwise encumbered any interest in such Collateral Obligation (or, if any such interest has been assigned, pledged or otherwise encumbered, it has been released) other than interests Granted pursuant to this Indenture;

 

(IV)             the Issuer has full right to Grant a security interest in and assign and pledge such Collateral Obligation to the Trustee;

 

(V)              based on the certificate of the Collateral Manager delivered pursuant to Section 3.1(vi), the information set forth with respect to such Collateral Obligation in the Schedule of Collateral Obligations is true and correct;

 

(VI)             (i) based on the certificate of the Collateral Manager delivered pursuant to Section 3.1(vi), each Collateral Obligation included in the Assets satisfies the requirements of the definition of “Collateral Obligation” and (ii) the requirements of Section 3.1(vii) have been satisfied;

 

(VII)            upon the Grant by the Issuer, the Trustee has a first priority perfected security interest in the Collateral Obligations and other Assets, except as permitted by this Indenture; and

 

(B)             based on the certificate of the Collateral Manager delivered pursuant to Section 3.1(vi), the Aggregate Principal Balance of the Collateral Obligations which the Issuer has purchased, acquired, entered into binding commitments to purchase, or identified for purchase on or prior to the Closing Date is at least U.S.$889,892,141.42.

 

(ix)             Rating Letter. An Officer’s certificate of the Issuer to the effect that attached thereto is a true and correct copy of a letter signed by each Rating Agency, as applicable, and confirming that each Class of Secured Notes has been assigned the applicable Initial Rating and that such ratings are in effect on the Closing Date.

 

(x)              Accounts. Evidence of the establishment of each of the Accounts.

 

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(xi)             Issuer Order for Deposit of Funds into Accounts. (A) An Issuer Order signed in the name of the Issuer by a Responsible Officer of the Issuer, dated as of the Closing Date, authorizing the deposit of U.S.$11,359,703.08 from the proceeds of the issuance of the Notes into the Ramp-Up Account for use pursuant to Section 10.3(c) and (B) an Issuer Order signed in the name of the Issuer by a Responsible Officer of the Issuer, dated as of the Closing Date, authorizing the deposit of U.S.$1,200,000 from the proceeds of the issuance of the Notes into the Expense Reserve Account as Interest Proceeds for use pursuant to Section 10.3(d).

 

(xii)           Other Documents. Such other documents as the Trustee may reasonably require; provided that nothing in this clause (xiii) shall imply or impose a duty on the part of the Trustee to require any other documents.

 

Section 3.2                Conditions to Additional Issuance. Additional Notes to be issued on an Additional Notes Closing Date pursuant to Section 2.13 may be executed by the Issuer and delivered to the Trustee for authentication and thereupon the same shall be authenticated and delivered to the Issuer by the Trustee upon Issuer Order (setting forth registration, delivery and authentication instructions) and upon receipt by the Trustee of the following:

 

(i)              Officers’ Certificates of the Issuer Regarding Corporate Matters. An Officer’s certificate of the Issuer (A) evidencing the authorization by Resolution of the execution and delivery of a supplemental indenture pursuant to Section 8.1(a)(xii) and the execution, authentication and delivery of the Additional Notes applied for by it, and specifying the Stated Maturity, the principal amount and Interest Rate of each Class of such Additional Notes that are Secured Notes and the Stated Maturity and principal amount of the Subordinated Notes to be authenticated and delivered and (B) certifying that (1) the attached copy of such Resolution is a true and complete copy thereof, (2) such Resolutions have not been rescinded and are in full force and effect on and as of the Additional Notes Closing Date and (3) the Officers authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon.

 

(ii)             Governmental Approvals. From the Issuer either (A) a certificate of the Issuer or other official document evidencing the due authorization, approval or consent of any governmental body or bodies, at the time having jurisdiction in the premises, together with an Opinion of Counsel of the Issuer to the effect that no other authorization, approval or consent of any governmental body is required for the valid issuance of such Additional Notes or (B) an Opinion of Counsel of the Issuer to the effect that no such authorization, approval or consent of any governmental body is required for the valid issuance of such Additional Notes except as have been given (provided that the opinion delivered pursuant to Section 3.2(iii) may satisfy the requirement).

 

(iii)            U.S. Counsel Opinions. Opinions of Dechert LLP, special U.S. counsel to the Issuer or other counsel acceptable to the Trustee, dated the Additional Notes Closing Date, in form and substance satisfactory to the Issuer and the Trustee. An opinion of special tax counsel or tax counsel of nationally recognized standing in the United States experienced in such matters delivered pursuant to Section 2.13(a)(ix).

 

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(iv)             Officers’ Certificates of Issuer Regarding Indenture. An Officer’s certificate of the Issuer stating that the Issuer is not in default under this Indenture and that the issuance of the Additional Notes applied for by it shall not result in a default or a breach of any of the terms, conditions or provisions of, or constitute a default under, its organizational documents, any indenture or other agreement or instrument to which it is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which it is a party or by which it may be bound or to which it may be subject; that all conditions precedent provided in this Indenture and the supplemental indenture pursuant to Section 8.1(a)(xii) relating to the authentication and delivery of the Additional Notes applied for have been complied with and that the authentication and delivery of the Additional Notes is authorized or permitted under this Indenture and the supplemental indenture entered into in connection with such Additional Notes; and that all expenses due or accrued with respect to the offering of the Additional Notes or relating to actions taken on or in connection with the Additional Notes Closing Date have been paid or reserved. The Officer’s certificate of the Issuer shall also state that all of its representations and warranties contained herein are true and correct as of the Additional Notes Closing Date.

 

(v)               Accountants’ Report. An Accountants’ Report in form and content satisfactory to the Issuer (A) if applicable, comparing the issuer, Principal Balance, coupon/spread, Stated Maturity, S&P Rating, Fitch Rating and country of Domicile with respect to each Collateral Obligation pledged in connection with the issuance of such Additional Notes and the information provided by the Issuer with respect to every other asset included in the Assets, by reference to such sources as shall be specified therein, if additional Assets are pledged directly in accordance with such Additional Notes issuance and (B) specifying the procedures undertaken by them to review data and computations relating to the foregoing statement; provided that if only additional Subordinated Notes are being issued, no such Accountants’ Report shall be required.

 

(vi)             [Reserved].

 

(vii)          Global Rating Agency Condition. Unless only additional Subordinated Notes are being issued, evidence that the Global Rating Agency Condition has been satisfied with respect to such issuance of Additional Notes.

 

(viii)        Other Documents. Such other documents as the Trustee may reasonably require; provided that nothing in this clause (viii) shall imply or impose a duty on the Trustee to so require any other documents.

 

Prior to any Additional Notes Closing Date, the Trustee shall provide to the Holders notice of such issuance of Additional Notes as soon as reasonably practicable but in no case less than fifteen (15) days prior to the Additional Notes Closing Date; provided that the Trustee shall receive such notice at least five (5) Business Days prior to the 15th day prior to such Additional Notes Closing Date. On or prior to any Additional Notes Closing Date, the Trustee shall provide to the Holders copies of any supplemental indentures executed as part of such issuance pursuant to the requirements of Section 8.1.

 

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Section 3.3               Custodianship; Delivery of Collateral Obligations and Eligible Investments. (a) The Collateral Manager, on behalf of the Issuer, shall deliver or cause to be delivered to a custodian appointed by the Issuer, which shall be a Securities Intermediary (the “Custodian”) or the Trustee, as applicable, all Assets in accordance with the definition of “Deliver.” The Custodian appointed hereby shall act as custodian for the Issuer and as custodian, agent and bailee for the Trustee on behalf of the Secured Parties for purposes of perfecting the Trustee’s security interest in those Assets in which a security interest is perfected by Delivery of the related Assets to the Custodian. Initially, the Custodian shall be the Trustee. Any successor custodian shall be a state or national bank or trust company that (i) has (A) capital and surplus of at least U.S.$200,000,000 and (B) a credit risk assessment or senior unsecured rating of at least “BBB+” by S&P and (C) to the extent that Fitch is rating any Class of Notes then Outstanding, a short-term credit rating of at least “F1” and a long-term credit rating of at least “A” by Fitch and (ii) is a Securities Intermediary. Subject to the limited right to relocate Assets as provided in Section 7.5(b), the Trustee or the Custodian, as applicable, shall hold (i) all Collateral Obligations, Eligible Investments, Cash and other investments purchased in accordance with this Indenture and (ii) any other property of the Issuer otherwise Delivered to the Trustee or the Custodian, as applicable, by or on behalf of the Issuer, in the relevant Account established and maintained pursuant to Article X; as to which in each case the Trustee shall have entered into the Securities Account Control Agreement with the Custodian providing, inter alia, that the establishment and maintenance of such Account will be governed by a law of a jurisdiction satisfactory to the Issuer and the Trustee.

 

(b)               Each time that the Collateral Manager on behalf of the Issuer directs or causes the acquisition of any Collateral Obligation, Eligible Investment or other investment, the Collateral Manager (on behalf of the Issuer) shall, if the Collateral Obligation, Eligible Investment or other investment is required to be, but has not already been, transferred to the relevant Account, cause the Collateral Obligation, Eligible Investment or other investment to be Delivered to the Custodian to be held in the Custodial Account (or in the case of any such investment that is not a Collateral Obligation, in the Account in which the funds used to purchase the investment are held in accordance with Article X) for the benefit of the Trustee in accordance with this Indenture. The security interest of the Trustee in the funds or other property used in connection with the acquisition shall, immediately and without further action on the part of the Trustee, be released. The security interest of the Trustee shall nevertheless come into existence and continue in the Collateral Obligation, Eligible Investment or other investment so acquired, including all interests of the Issuer in to any contracts related to and proceeds of such Collateral Obligation, Eligible Investment or other investment.

 

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ARTICLE IV

 

SATISFACTION AND DISCHARGE

 

Section 4.1                Satisfaction and Discharge of Indenture. This Indenture shall be discharged and shall cease to be of further effect except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Notes, (iii) rights of Holders to receive payments of principal thereof and interest thereon, (iv) the rights and immunities of the Trustee hereunder and the obligations set forth in Section 4.2, (v) the rights, obligations and immunities of the Collateral Manager hereunder and under the Collateral Management Agreement, (vi) the rights and immunities of the Collateral Administrator under the Collateral Administration Agreement and (vii) the rights of Holders as beneficiaries hereof with respect to the property deposited with the Trustee and payable to all or any of them (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture) when:

 

(a)               either:

 

(i)              all Notes theretofore authenticated and delivered to Holders (other than (A) Notes which have been mutilated, defaced, destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.6 and (B) Notes for whose payment Money has theretofore irrevocably been deposited in trust and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 7.3) have been delivered to the Trustee for cancellation; or

 

(ii)             all Notes not theretofore delivered to the Trustee for cancellation (A) have become due and payable, or (B) will become due and payable at their Stated Maturity within one year, or (C) are to be called for redemption pursuant to Article IX under an arrangement satisfactory to the Trustee for the giving of notice of redemption by the Issuer pursuant to Section 9.4 and the Issuer has irrevocably deposited or caused to be deposited with the Trustee, in trust for such purpose, Cash or non-callable direct obligations of the United States of America; provided that the obligations are entitled to the full faith and credit of the United States of America or are debt obligations which are rated “Aaa” by Moody’s and “AAA” by S&P, in an amount sufficient, as recalculated in an Accountants’ Report by a firm of Independent certified public accountants which are nationally recognized, to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Notes which have become due and payable), or to their Stated Maturity or Redemption Date, as the case may be, and shall have Granted to the Trustee a valid perfected security interest in such Eligible Investment that is of first priority and free of any adverse claim, as applicable, and shall have furnished an Opinion of Counsel with respect thereto; provided that this sub-section (ii) shall not apply if an election to act in accordance with the provisions of Section 5.5(a) shall have been made and not rescinded, it being understood that the requirements of this clause (a) may be satisfied as set forth in Section 5.7.

 

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(b)               the Issuer has paid or caused to be paid all other sums then due and payable hereunder (including, without limitation, any amounts then due and payable pursuant to the Collateral Administration Agreement and the Collateral Management Agreement, in each case, without regard to the Administrative Expense Cap) by the Issuer and no other amounts are scheduled to be due and payable by the Issuer, it being understood that the requirements of this clause (b) may be satisfied as set forth in Section 5.7; and

 

(c)               the Issuer has delivered to the Trustee Officers’ certificates and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with;

 

Notwithstanding the satisfaction and discharge of this Indenture, the rights and obligations of the Issuer, the Trustee, the Collateral Manager and, if applicable, the Holders, as the case may be, under Sections 2.7, 4.2, 5.4(d), 5.9, 5.18, 6.1, 6.3, 6.6, 6.7, 7.1, 7.3, 13.1, 14.10, 14.11, 14.12 and 14.16 shall survive.

 

Section 4.2                Application of Trust Money. All Cash and obligations deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by it in accordance with the provisions of the Notes and this Indenture, including, without limitation, the Priority of Payments, to the payment of principal and interest (or other amounts with respect to the Subordinated Notes), either directly or through any Paying Agent, as the Trustee may determine; and such Cash and obligations shall be held in a segregated account identified as being held in trust for the benefit of the Secured Parties.

 

Section 4.3                Repayment of Monies Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all Monies then held by any Paying Agent other than the Trustee under the provisions of this Indenture shall, upon demand of the Issuer, be paid to the Trustee to be held and applied pursuant to Section 7.3 hereof and in accordance with the Priority of Payments and thereupon such Paying Agent shall be released from all further liability with respect to such Monies.

 

Section 4.4                Liquidation of Assets. (a) In the event of the liquidation of the Assets as specified in accordance with Article V and the net proceeds from such liquidation and all available Cash has been used for the payment of (or establishment of a reserve for) all Administrative Expenses (in the same manner and order of priority in the definition thereof), Aggregate Collateral Management Fees and interest and principal on the Secured Notes so that the Secured Notes have been redeemed and paid in full, the Subordinated Notes will become the Controlling Class and the holders of the Subordinated Notes will have all rights of the holders of the Controlling Class under this Indenture. In addition, the holders of the Subordinated Notes, as the holders of the Controlling Class, would be able to cause the satisfaction and discharge of this Indenture.

 

(b) To the extent the Assets are liquidated as specified in Article V herein in any way and the net proceeds from such liquidation and all available Cash has been used for the payment of (or establishment of a reserve for) all Administrative Expenses (in the same manner and order of priority in the definition thereof), Aggregate Collateral Management Fees and interest and principal on the Secured Notes so that the Secured Notes have been redeemed and paid in full, any excess amounts shall be paid on the Subordinated Notes pursuant to Section 11.1(a) and if such amounts are insufficient to pay the Subordinated Notes in full or there are no excess amounts to pay on the Subordinated Notes, the Subordinated Notes shall be deemed to be redeemed and paid in full, unless such Subordinated Notes were previously redeemed or repaid prior thereto as otherwise described herein.

 

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ARTICLE V

Remedies

 

Section 5.1            Events of Default. “Event of Default”, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a)               a default in the payment, when due and payable, of (i) any interest on any Class A Note or any Class B Note (and after the Class A Notes and Class B Notes are paid in full, a default in the payment, when due and payable, of any interest on any Secured Note in the Class then comprising the Controlling Class) and, in each case, the continuation of any such default, for five Business Days after a Trust Officer of the Trustee has actual knowledge or receives written notice from any holder of Notes of such payment default or (ii) any principal of, or interest or Deferred Interest on, or any Redemption Price in respect of, any Secured Note at its Stated Maturity or any Redemption Date; provided that the failure to effect any Optional Redemption which is withdrawn by the Issuer in accordance with this Indenture or with respect to which any Refinancing fails to occur shall not constitute an Event of Default and provided further that, solely with respect to clause (i) above, in the case of a failure to disburse funds due to an administrative error or omission by the Collateral Manager, Trustee, Collateral Administrator or any Paying Agent, such failure continues for seven Business Days after a Trust Officer of the Trustee receives written notice or has actual knowledge of such administrative error or omission;

 

(b)               the failure on any Payment Date to disburse amounts available in the Payment Account in excess of U.S.$1,000 in accordance with the Priority of Payments and continuation of such failure for a period of ten Business Days or, in the case of a failure to disburse due to an administrative error or omission by the Trustee, Collateral Administrator or any Paying Agent, such failure continues for five Business Days after a Trust Officer of the Trustee receives written notice or has actual knowledge of such administrative error or omission;

 

(c)               the Issuer or the Assets become an investment company required to be registered under the 1940 Act and such requirement has not been eliminated after a period of 45 days;

 

(d)              except as otherwise provided in this Section 5.1, a material breach of any other covenant of the Issuer herein (other than any failure to satisfy any of the Concentration Limitations, Collateral Quality Tests or Coverage Tests, or other covenants or agreements for which a specific remedy has been provided hereunder or any failure to satisfy the requirements of Section 7.18), or the failure of any material representation or warranty of the Issuer made herein or in any certificate or other writing delivered pursuant hereto or in connection herewith to be correct in each case in all material respects when the same shall have been made which breach or failure has a material adverse effect on the Holders of the Notes, and the continuation of such breach or failure for a period of 45 days after notice to the Issuer and the Collateral Manager by the Trustee (at the direction of a Supermajority of the Controlling Class) or to the Issuer the Collateral Manager and the Trustee by the Holders of at least a Supermajority of the Controlling Class in each case, by registered or certified mail or overnight delivery service, specifying such breach or failure and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; provided that the delivery of a certificate or other report which corrects any inaccuracy contained in a previous report or certification shall be deemed to cure such inaccuracy as of the date of delivery of such updated report or certificate and any and all inaccuracies arising from continuation of such initial inaccurate report or certificate and the sale or other disposition of any asset that did not at the time of its acquisition satisfy clause (a) of the Investment Criteria shall cure any breach or failure arising therefrom as of the date of such failure;

 

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(e)               the entry of a decree or order by a court having competent jurisdiction adjudging the Issuer as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of the Issuer under the applicable Bankruptcy Law or any other applicable law, or appointing a receiver, liquidator, assignee, or sequestrator (or other similar official) of the Issuer or of any substantial part of its property, respectively, or ordering the winding up or liquidation of its affairs, respectively, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days;

 

(f)               the institution by the Issuer of Proceedings to have the Issuer adjudicated as bankrupt or insolvent, or the consent of the Issuer to the institution of bankruptcy or insolvency Proceedings against the Issuer, or the filing by the Issuer of a petition or answer or consent seeking reorganization or relief under the applicable Bankruptcy Law or any other similar applicable law, or the consent by the Issuer to the filing of any such petition or to the appointment in a Proceeding of a receiver, liquidator, assignee, trustee or sequestrator (or other similar official) of the Issuer or of any substantial part of its property, respectively, or the making by the Issuer of an assignment for the benefit of creditors, or the admission by the Issuer in writing of its inability to pay its debts generally as they become due, or the taking of any action by the Issuer in furtherance of any such action; or

 

(g)              on any Measurement Date as of which the Class A-1 Notes are Outstanding, failure of the percentage equivalent of a fraction, (i) the numerator of which is equal to (1) the Collateral Principal Amount plus (2) the aggregate Market Value of all Defaulted Obligations on such date and (ii) the denominator of which is equal to the Aggregate Outstanding Amount of the Class A-1 Notes, to equal or exceed 102.5%.

 

Upon a Responsible Officer’s obtaining knowledge of the occurrence of an Event of Default, each of (i) the Issuer, (ii) the Trustee and (iii) the Collateral Manager shall notify each other. Upon the occurrence of an Event of Default known to a Trust Officer of the Trustee, the Trustee shall promptly (and in no event later than three Business Days thereafter) notify the Noteholders (as their names appear on the Register), each Paying Agent and each Rating Agency (unless such Event of Default has been waived as provided in Section 5.14).

 

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Section 5.2            Acceleration of Maturity; Rescission and Annulment. (a) If an Event of Default occurs and is continuing (other than an Event of Default specified in Section 5.1(e) or (f)), the Trustee may, and shall, upon the written direction of a Supermajority of the Controlling Class, by notice to the Issuer and each Rating Agency, declare the principal of all the Secured Notes to be immediately due and payable, and upon any such declaration such principal, together with all accrued and unpaid interest thereon, and other amounts payable hereunder, shall become immediately due and payable. If an Event of Default specified in Section 5.1(e) or (f) occurs, all unpaid principal, together with all accrued and unpaid interest thereon, of all the Secured Notes, and other amounts payable thereunder and hereunder, shall automatically become due and payable without any declaration or other act on the part of the Trustee or any Noteholder.

 

(b)               At any time after such a declaration of acceleration of maturity has been made and before a judgment or decree for payment of the Money due has been obtained by the Trustee as hereinafter provided in this Article V, a Majority of the Controlling Class by written notice to the Issuer and the Trustee, may rescind and annul such declaration and its consequences if:

 

(i)                 The Issuer has paid or deposited with the Trustee a sum sufficient to pay:

 

(A)             all unpaid installments of interest and principal then due on the Secured Notes (other than any principal amounts due to the occurrence of an acceleration);

 

(B)             to the extent that the payment of such interest is lawful, interest upon any Deferred Interest at the applicable Interest Rate; and

 

(C)             all unpaid taxes and Administrative Expenses of the Issuer and other sums paid or advanced by the Trustee hereunder or by the Collateral Administrator under the Collateral Administration Agreement or hereunder, accrued and unpaid Aggregate Collateral Management Fees then due and owing and any other amounts then payable by the Issuer hereunder prior to such Administrative Expenses and such Aggregate Collateral Management Fees.

 

(ii)              It has been determined that all Events of Default, other than the nonpayment of the interest on or principal of the Secured Notes that has become due solely by such acceleration, have:

 

(A)             been cured; and

 

(I)                in the case of an Event of Default specified in Section 5.1(a) due to failure to pay interest on the Class A Notes or the Class B Notes or in the case of an Event of Default specified in Section 5.1(g), the Holders of at least a Supermajority of the Class A-1 Notes, by written notice to the Trustee, has agreed with such determination (which agreement shall not be unreasonably withheld); provided that no Class of Secured Notes (other than the Class A-1 Notes) shall have any rights pursuant to this subclause (I), regardless of whether any such Class subsequently becomes the Controlling Class; or

 

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(II)              in the case of any other Event of Default, the Holders of at least a Majority of each Class of Secured Notes (voting separately by Class), in each case, by written notice to the Trustee, has agreed with such determination (which agreement shall not be unreasonably withheld); or

 

(B)              been waived as provided in Section 5.14.

 

No such rescission shall affect any subsequent Default or impair any right consequent thereon. The Trustee shall promptly give written notice of any such rescission to each Rating Agency.

 

(c)               Notwithstanding anything in this Section 5.2 to the contrary, the Secured Notes will not be subject to acceleration by the Trustee solely as a result of the failure to pay any amount due on the Secured Notes that are not of the Controlling Class other than any failure to pay interest due on the Class B Notes.

 

Section 5.3            Collection of Indebtedness and Suits for Enforcement by Trustee. The Issuer covenants that if a default shall occur in respect of the payment of any principal of or interest when due and payable on any Secured Note, the Issuer will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holder of such Secured Note, the whole amount, if any, then due and payable on such Secured Note for principal and interest with interest upon the overdue principal and, to the extent that payments of such interest shall be legally enforceable, upon overdue installments of interest, at the applicable Interest Rate, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee and its agents and counsel.

 

If the Issuer fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may, and shall, subject to the terms of this Indenture (including Section 6.3(e)) upon direction of a Majority of the Controlling Class, institute a Proceeding for the collection of the sums so due and unpaid, may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or any other obligor upon the Secured Notes and collect the Monies adjudged or decreed to be payable in the manner provided by law out of the Assets.

 

If an Event of Default occurs and is continuing, the Trustee may in its discretion, and shall, subject to the terms of this Indenture (including Section 6.3(e)) upon written direction of the Supermajority of the Controlling Class, proceed to protect and enforce its rights and the rights of the Secured Parties by such appropriate Proceedings as the Trustee shall deem most effectual (if no such direction is received by the Trustee) or as the Trustee may be directed by the Majority of the Controlling Class, to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement herein or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Trustee by this Indenture or by law.

 

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In case there shall be pending Proceedings relative to the Issuer or any other obligor upon the Secured Notes under the applicable Bankruptcy Law or any other applicable bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its respective property or such other obligor or its property, or in case of any other comparable Proceedings relative to the Issuer or other obligor upon the Secured Notes, or the creditors or property of the Issuer or such other obligor, the Trustee, regardless of whether the principal of any Secured Note shall then be due and payable as therein expressed or by declaration or otherwise and regardless of whether the Trustee shall have made any demand pursuant to the provisions of this Section 5.3, shall be entitled and empowered, by intervention in such Proceedings or otherwise:

 

(a)               to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Secured Notes upon direction by a Majority of the Controlling Class and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all reasonable expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Secured Noteholders allowed in any Proceedings relative to the Issuer or to the creditors or property of the Issuer;

 

(b)               unless prohibited by applicable law and regulations, to vote on behalf of the Secured Noteholders upon the direction of a Majority of the Controlling Class, in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency Proceedings or Person performing similar functions in comparable Proceedings; and

 

(c)               to collect and receive any Monies or other property payable to or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Noteholders and of the Trustee on their behalf; and any trustee, receiver or liquidator, custodian or other similar official is hereby authorized by each of the Secured Noteholders to make payments to the Trustee, and, if the Trustee shall consent to the making of payments directly to the Secured Noteholders to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other reasonable expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith.

 

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Secured Noteholders, any plan of reorganization, arrangement, adjustment or composition affecting the Secured Notes or any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Secured Noteholders, as applicable, in any such Proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

 

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In any Proceedings brought by the Trustee on behalf of the Holders of the Secured Notes (and any such Proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the Holders of the Secured Notes.

 

Notwithstanding anything in this Section 5.3 to the contrary, the Trustee may not sell or liquidate the Assets or institute Proceedings in furtherance thereof pursuant to this Section 5.3 except according to the provisions specified in Section 5.5(a).

 

Section 5.4            Remedies. (a) If an Event of Default has occurred and is continuing, and the Secured Notes have been declared due and payable and such declaration and its consequences have not been rescinded and annulled, the Issuer agrees that the Trustee may, and shall, subject to the terms of this Indenture (including Section 6.3(e)), upon written direction of a Supermajority of the Controlling Class, to the extent permitted by applicable law, exercise one or more of the following rights, privileges and remedies:

 

(i)              institute Proceedings for the collection of all amounts then payable on the Secured Notes or otherwise payable under this Indenture, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Assets any Monies adjudged due;

 

(ii)             sell or cause the sale of all or a portion of the Assets or rights or interests therein, at one or more public or private sales called and conducted in any manner permitted by law and in accordance with Section 5.17 hereof; provided that the Trustee shall promptly give written notice of any such sale of Assets to each Rating Agency;

 

(iii)            institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Assets;

 

(iv)           exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Trustee and the Holders of the Secured Notes hereunder (including exercising all rights of the Trustee under the Securities Account Control Agreement); and

 

(v)            exercise any other rights and remedies that may be available at law or in equity;

 

provided that the Trustee may not sell or liquidate the Assets or institute Proceedings in furtherance thereof pursuant to this Section 5.4 except according to the provisions of Section 5.5(a).

 

The Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking firm of national reputation (the cost of which shall be payable as an Administrative Expense) in structuring and distributing securities similar to the Secured Notes, which may be the Initial Purchaser, as to the feasibility of any action proposed to be taken in accordance with this Section 5.4 and as to the sufficiency of the proceeds and other amounts receivable with respect to the Assets to make the required payments of principal of and interest on the Secured Notes which opinion shall be conclusive evidence as to such feasibility or sufficiency.

 

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(b)               If an Event of Default as described in Section 5.1(d) hereof shall have occurred and be continuing the Trustee may, and at the direction of the Holders of not less than 25% of the Aggregate Outstanding Amount of the Controlling Class shall, subject to the terms of this Indenture (including Section 6.3(e)), institute a Proceeding solely to compel performance of the covenant or agreement or to cure the representation or warranty, the breach of which gave rise to the Event of Default under Section 5.1(d), and enforce any equitable decree or order arising from such Proceeding.

 

(c)               Upon any sale, whether made under the power of sale hereby given or by virtue of judicial Proceedings, any Secured Party may bid for and purchase the Assets or any part thereof and, upon compliance with the terms of sale, may hold, retain, possess or dispose of such property in its or their own absolute right without accountability.

 

Upon any sale, whether made under the power of sale hereby given or by virtue of judicial Proceedings, the receipt of the Trustee, or of the Officer making a sale under judicial Proceedings, shall be a sufficient discharge to the purchaser or purchasers at any sale for its or their purchase Money, and such purchaser or purchasers shall not be obliged to see to the application thereof.

 

Any such sale, whether under any power of sale hereby given or by virtue of judicial Proceedings, shall bind the Issuer, the Trustee and the Holders of the Notes, shall operate to divest all right, title and interest whatsoever, either at law or in equity, of each of them in and to the property sold, and shall be a perpetual bar, both at law and in equity, against each of them and their successors and assigns, and against any and all Persons claiming through or under them.

 

(d)               Notwithstanding any other provision of this Indenture, none of the Trustee, the Secured Parties or the Noteholders may, prior to the date which is one year and one day (or if longer, any applicable preference period and one day) after the payment in full of all Notes, institute against, or join any other Person in instituting against, the Issuer any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation Proceedings, or other Proceedings under U.S. federal or state bankruptcy or similar laws. Nothing in this Section 5.4 shall preclude, or be deemed to stop, the Trustee (i) from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily filed or commenced by the Issuer or (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Trustee, or (ii) from commencing against the Issuer or any of its properties any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation Proceeding.

 

Section 5.5            Optional Preservation of Assets. (a) Notwithstanding anything to the contrary herein (but subject to the right of the Collateral Manager to direct the Trustee to sell Collateral Obligations or Equity Securities in strict compliance with Section 12.1), if an Event of Default shall have occurred and be continuing, the Trustee shall retain the Assets securing the Secured Notes intact, collect and cause the collection of the proceeds thereof and make and apply all payments and deposits and maintain all accounts in respect of the Assets and the Notes in accordance with the Priority of Payments and the provisions of Article X, Article XII and Article XIII unless:

 

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(i)               the Trustee, pursuant to Section 5.5(c), determines that the anticipated proceeds of a sale or liquidation of the Assets (after deducting the reasonable expenses of such sale or liquidation) would be sufficient to discharge in full the amounts then due (or, in the case of interest, accrued) and unpaid on the Secured Notes for principal and interest (including accrued and unpaid Deferred Interest), and all other amounts payable prior to payment of principal on such Secured Notes (including amounts due and owing as Administrative Expenses (without regard to the Administrative Expense Cap) and due and unpaid Aggregate Collateral Management Fees) and a Supermajority of the Controlling Class agrees with such determination;

 

(ii)              in the case of an Event of Default specified in Section 5.1(a) due to failure to pay interest on the Class A-1 Notes, the Holders of at least a Supermajority of the Class A-1 Notes (so long as the Class A-1 Notes are Outstanding) direct the sale and liquidation of the Assets (without regard to whether another Event of Default has occurred prior, contemporaneously or subsequent to such Event of Default); provided that no Class of Secured Notes (other than the Class A-1 Notes) shall have any rights to direct the sale and liquidation of the Assets pursuant to this clause (ii), regardless of whether any such Class subsequently becomes the Controlling Class;

 

(iii)            in the case of an Event of Default specified in Section 5.1(g) of the definition of such term, the Holders of at least a Supermajority of the Class A-1 Notes direct the sale and liquidation of the Assets (without regard to whether another Event of Default has occurred prior, contemporaneously or subsequent to such Event of Default); provided that no Class of Secured Notes (other than the Class A-1 Notes) will have any rights to direct the sale and liquidation of the Assets pursuant to the provisions of this Indenture as described in this clause (iii), regardless of whether any such Class becomes the Controlling Class; or

 

(iv)             in the case of each other Event of Default, the Holders of at least a Supermajority of each Class of Secured Notes (in each case, voting separately by Class) direct the sale and liquidation of the Assets.

 

So long as such Event of Default is continuing, any such retention pursuant to this Section 5.5(a) may be rescinded at any time when the conditions specified in clause (i), (ii), (iii) or (iv) exist. In the event that a liquidation of the Assets is effected pursuant to clause (i), (ii), (iii) or (iv) above, the Trustee shall use reasonable efforts to notify S&P.

 

(b)               Nothing contained in Section 5.5(a) shall be construed to require the Trustee to sell the Assets securing the Secured Notes if the conditions set forth in clause (i), (ii), (iii) or (iv) of Section 5.5(a) are not satisfied. Nothing contained in Section 5.5(a) shall be construed to require the Trustee to preserve the Assets securing the Notes if prohibited by applicable law.

 

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(c)               In determining whether the condition specified in Section 5.5(a)(i)  exists, the Trustee shall use reasonable efforts to obtain, with the cooperation of the Collateral Manager, bid prices with respect to each Asset from two nationally recognized dealers (as specified by the Collateral Manager in writing) at the time making a market in such Assets and shall compute the anticipated proceeds of sale or liquidation on the basis of the lower of such bid prices for each such Asset. In the event that the Trustee, with the cooperation of the Collateral Manager, is only able to obtain bid prices with respect to each Asset from one nationally recognized dealer at the time making a market in such Assets, the Trustee shall compute the anticipated proceeds of the sale or liquidation on the basis of such one bid price for each such Asset. In addition, for the purposes of determining issues relating to the execution of a sale or liquidation of the Assets and the execution of a sale or other liquidation thereof in connection with a determination whether the condition specified in Section 5.5(a)(i) exists, the Trustee may retain and conclusively rely on an opinion of an Independent investment banking firm of national reputation (the cost of which shall be payable as an Administrative Expense).

 

(d)               The Trustee shall deliver to the Noteholders and the Collateral Manager a report stating the results of any determination required pursuant to Section 5.5(a)(i) no later than 10 days after such determination is made. The Trustee shall make the determinations required by Section 5.5(a)(i) at the request of a Supermajority of the Controlling Class at any time during which the Trustee retains the Assets pursuant to Section 5.5(a)(i).

 

(e)               Prior to the sale of any Assets in connection with Section 5.5(a), the Trustee shall offer the Collateral Manager or an Affiliate thereof the right to purchase such Asset at a price equal to the highest bid price received by the Trustee in accordance with Section 5.5(c) (or if only one bid price is received, such bid price). The Collateral Manager or an Affiliate thereof shall have the right to bid on any Assets sold in any sale pursuant to this Section 5.5.

 

Section 5.6            Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or under any of the Secured Notes may be prosecuted and enforced by the Trustee without the possession of any of the Secured Notes or the production thereof in any trial or other Proceeding relating thereto, and any such action or Proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be applied as set forth in Section 5.7 hereof.

 

Section 5.7            Application of Money Collected. Any Money collected by the Trustee with respect to the Notes pursuant to this Article V and any Money that may then be held or thereafter received by the Trustee with respect to the Notes hereunder shall be applied, subject to Section 13.1 and in accordance with the provisions of Section 11.1(a)(iii), at the date or dates fixed by the Trustee. Upon the final distribution of all proceeds of any liquidation effected hereunder, the provisions of Section 4.1(a) and (b) shall be deemed satisfied for the purposes of discharging this Indenture pursuant to Article IV. Furthermore, upon such liquidation and final distribution, the Subordinated Notes shall be deemed to be redeemed and paid in full, even if amounts paid pursuant to Section 11.1(a) are insufficient to pay the Subordinated Notes in full as set forth in Section 4.4(b).

 

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Section 5.8            Limitation on Suits. No Holder of any Note shall have any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

(a)               such Holder has previously given to the Trustee written notice of an Event of Default;

 

(b)              the Holders of not less than 25% of the then Aggregate Outstanding Amount of the Notes of the Controlling Class shall have made written request to the Trustee to institute Proceedings in respect of such Event of Default in its own name as Trustee hereunder and such Holder or Holders have provided the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities to be incurred in compliance with such request;

 

(c)               the Trustee, for 30 days after its receipt of such notice, request and provision of such indemnity, has failed to institute any such Proceeding; and

 

(d)              no direction inconsistent with such written request has been given to the Trustee during such 30-day period by a Majority of the Controlling Class; it being understood and intended that no one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes of the same Class or to obtain or to seek to obtain priority or preference over any other Holders of the Notes of the same Class or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders of Notes of the same Class subject to and in accordance with Section 13.1 and the Priority of Payments.

 

In the event the Trustee shall receive conflicting or inconsistent requests and indemnity pursuant to this Section 5.8 from two or more groups of Holders of the Controlling Class, each representing less than a Majority of the Controlling Class, the Trustee shall act in accordance with the request specified by the group of Holders with the greatest percentage of the Aggregate Outstanding Amount of the Controlling Class, notwithstanding any other provisions of this Indenture. If all such groups represent the same percentage, the Trustee, in its sole discretion, may determine what action, if any, shall be taken.

 

Section 5.9         Unconditional Rights of Secured Noteholders to Receive Principal and Interest. Subject to Section 2.7(i), but notwithstanding any other provision of this Indenture, the Holder of any Secured Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest on such Secured Note, as such principal, interest and other amounts become due and payable in accordance with the Priority of Payments and Section 13.1, as the case may be, and, subject to the provisions of Section 5.8, to institute proceedings for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. Holders of Secured Notes ranking junior to Notes still Outstanding shall have no right to institute Proceedings or, except as otherwise expressly set forth in Section 5.8(b), to request the Trustee to institute proceedings for the enforcement of any such payment until such time as no Secured Note ranking senior to such Secured Note remains Outstanding, which right shall be subject to the provisions of Section 5.8, and shall not be impaired without the consent of any such Holder.

 

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Section 5.10        Restoration of Rights and Remedies. If the Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Noteholder, then and in every such case the Issuer, the Trustee and the Noteholder shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Noteholder shall continue as though no such Proceeding had been instituted.

 

Section 5.11        Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 5.12        Delay or Omission Not Waiver. No delay or omission of the Trustee or any Holder of Secured Notes to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein or of a subsequent Event of Default. Every right and remedy given by this Article V or by law to the Trustee or to the Holders of the Secured Notes may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of the Secured Notes.

 

Section 5.13        Control by Supermajority of Controlling Class. A Supermajority of the Controlling Class shall have the right following the occurrence, and during the continuance, of an Event of Default to cause the institution of and direct the time, method and place of conducting any Proceeding for any remedy available to the Trustee or exercising any trust or power conferred upon the Trustee under this Indenture; provided that:

 

(a)               such direction shall not conflict with any rule of law or with any express provision of this Indenture;

 

(b)               the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction; provided that subject to Section 6.1, the Trustee need not take any action that it determines might involve it in liability or expense (unless the Trustee has received the indemnity as set forth in (c) below);

 

(c)               the Trustee shall have been provided with an indemnity reasonably satisfactory to it; and

 

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(d)               notwithstanding the foregoing, any direction to the Trustee to undertake a Sale of the Assets shall be by the Holders of Notes representing the requisite percentage of the Aggregate Outstanding Amount of Notes specified in Section 5.4 and/or Section 5.5.

 

Section 5.14        Waiver of Past Defaults. Prior to the time a judgment or decree for payment of the Money due has been obtained by the Trustee, as provided in this Article V, a Majority of the Controlling Class may on behalf of the Holders of all the Notes waive any past Default or Event of Default and its consequences, except a Default:

 

(a)               in the payment of the principal of any Secured Note (which may be waived only with the consent of the Holder of such Secured Note);

 

(b)               in the payment of interest on any Secured Note (which may be waived only with the consent of the Holder of such Secured Note);

 

(c)               in respect of a covenant or provision hereof that under Section 8.2 cannot be modified or amended without the waiver or consent of the Holder of each Outstanding Note materially and adversely affected thereby (which may be waived only with the consent of each such Holder); or

 

(d)               in respect of a representation contained in Section 7.19 (which may be waived only by a Majority of the Controlling Class if the S&P Rating Condition is satisfied).

 

In the case of any such waiver, the Issuer, the Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto. The Trustee shall promptly give written notice of any such waiver to each Rating Agency, the Collateral Manager and each Holder. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture. But no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

 

Section 5.15        Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Note by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.15 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Noteholder, or group of Noteholders, holding in the aggregate more than 10% of the Aggregate Outstanding Amount of the Controlling Class, or to any suit instituted by any Noteholder for the enforcement of the payment of the principal of or interest on any Note on or after the applicable Stated Maturity (or, in the case of redemption, on or after the applicable Redemption Date).

 

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Section 5.16        Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any valuation, appraisement, redemption or marshalling law or rights, in each case wherever enacted, now or at any time hereafter in force, which may affect the covenants set forth in, the performance of, or any remedies under this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law or rights, and covenant that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted or rights created.

 

Section 5.17        Sale of Assets. (a) The power to effect any sale (a “Sale”) of any portion of the Assets pursuant to Sections 5.4 and 5.5 shall not be exhausted by any one or more Sales as to any portion of such Assets remaining unsold, but shall continue unimpaired (subject to Section 5.5(e) in the case of sales pursuant to Section 5.5) until the entire Assets shall have been sold or all amounts secured by the Assets shall have been paid. The Trustee may upon notice to the Noteholders, and shall, upon direction of a Majority of the Controlling Class, from time to time postpone any Sale by public announcement made at the time and place of such Sale. The Trustee hereby expressly waives its rights to any amount fixed by law as compensation for any Sale; provided that the Trustee shall be authorized to deduct the reasonable costs, charges and expenses incurred by it in connection with such Sale from the proceeds thereof notwithstanding the provisions of Section 6.7 or other applicable terms hereof.

 

(b)               The Trustee may bid for and acquire any portion of the Assets in connection with a public Sale thereof, and may pay all or part of the purchase price by crediting against amounts owing on the Secured Notes in the case of the Assets or other amounts secured by the Assets, all or part of the net proceeds of such Sale after deducting the reasonable costs, charges and expenses incurred by the Trustee in connection with such Sale notwithstanding the provisions of Section 6.7 hereof or other applicable terms hereof. The Secured Notes need not be produced in order to complete any such Sale, or in order for the net proceeds of such Sale to be credited against amounts owing on the Notes. The Trustee may hold, lease, operate, manage or otherwise deal with any property so acquired in any manner permitted by law in accordance with this Indenture.

 

(c)               If any portion of the Assets consists of securities issued without registration under the Securities Act (“Unregistered Securities”), the Trustee may seek an Opinion of Counsel, or, if no such Opinion of Counsel can be obtained and with the consent of a Majority of the Controlling Class, seek a no action position from the Securities and Exchange Commission or any other relevant federal or State regulatory authorities, regarding the legality of a public or private Sale of such Unregistered Securities.

 

(d)              The Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Assets in connection with a Sale thereof, without recourse, representation or warranty. In addition, the Trustee is hereby irrevocably appointed the agent and attorney in fact of the Issuer to transfer and convey its interest in any portion of the Assets in connection with a Sale thereof, and to take all action necessary to effect such Sale. No purchaser or transferee at such a sale shall be bound to ascertain the Trustee’s authority, to inquire into the satisfaction of any conditions precedent or see to the application of any Monies.

 

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Section 5.18        Action on the Notes. The Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking or obtaining of or application for any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Assets or upon any of the assets of the Issuer.

 

ARTICLE VI

The Trustee

 

Section 6.1            Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default known to the Trustee:

 

(i)               the Trustee undertakes to perform such duties and only such duties as are specifically set forth herein, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(ii)              in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; provided that in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they substantially conform on their face to the requirements of this Indenture and shall promptly, but in any event within three Business Days in the case of an Officer’s certificate furnished by the Collateral Manager, notify the party delivering the same if such certificate or opinion does not conform. If a corrected form shall not have been delivered to the Trustee within 15 days after such notice from the Trustee, the Trustee shall so notify the Noteholders.

 

(b)               In case an Event of Default known to the Trustee has occurred and is continuing, the Trustee shall, prior to the receipt of directions, if any, from a Majority of the Controlling Class, or such other percentage as permitted by this Indenture, exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

 

(c)               No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(i)                this sub-section shall not be construed to limit the effect of sub-section (a) of this Section 6.1;

 

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(ii)              the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it shall be proven that the Trustee was negligent in ascertaining the pertinent facts;

 

(iii)             the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Issuer or the Collateral Manager in accordance with this Indenture and/or a Majority (or such other percentage as may be required by the terms hereof) of the Controlling Class (or other Class if required or permitted by the terms hereof), relating to the time, method and place of conducting any Proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

 

(iv)             no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial or other liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers contemplated hereunder, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is not reasonably assured to it unless such risk or liability relates to the performance of its ordinary incidental services, including mailing of notices under this Indenture; and

 

(v)              in no event shall the Trustee be liable for special, indirect, punitive or consequential loss or damage (including lost profits) even if the Trustee has been advised of the likelihood of such damages and regardless of such action.

 

(d)               For all purposes under this Indenture, the Trustee shall not be deemed to have notice or knowledge of any Default or Event of Default described in Sections 5.1(c), (d), (e), or (f) unless a Trust Officer assigned to and working in the Corporate Trust Office has actual knowledge thereof or unless written notice of any event which is in fact such an Event of Default or Default is received by the Trustee at the Corporate Trust Office, and such notice references the Notes generally, the Issuer, the Assets or this Indenture. For purposes of determining the Trustee’s responsibility and liability hereunder, whenever reference is made herein to such an Event of Default or a Default, such reference shall be construed to refer only to such an Event of Default or Default of which the Trustee is deemed to have notice as described in this Section 6.1.

 

(e)               Upon the Trustee receiving written notice from the Collateral Manager that an event constituting “Cause” as defined in the Collateral Management Agreement has occurred, the Trustee shall, not later than three Business Days thereafter, forward such notice to the Noteholders (as their names appear in the Register).

 

(f)                Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.1.

 

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(g)               The Trustee is hereby directed to accept and acknowledge the E.U. Risk Retention Letter.

 

(h)               The Trustee shall have no duty to monitor or verify whether any Holder (or beneficial owner) is a Section 13 Banking Entity.

 

Section 6.2            Notice of Event of Default. Promptly (and in no event later than three Business Days) after the occurrence of any Event of Default actually known to a Trust Officer of the Trustee or after any declaration of acceleration has been made or delivered to the Trustee pursuant to Section 5.2, the Trustee shall transmit by mail to the Collateral Manager, each Rating Agency, and all Holders, as their names and addresses appear on the Register, notice of all Event of Defaults hereunder known to the Trustee, unless such Default shall have been cured or waived.

 

Section 6.3            Certain Rights of Trustee. Except as otherwise provided in Section 6.1:

 

(a)               the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, note or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(b)               any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request or Issuer Order, as the case may be;

 

(c)               whenever in the administration of this Indenture the Trustee shall (i) deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s certificate or Issuer Order or (ii) be required to determine the value of any Assets or funds hereunder or the cash flows projected to be received therefrom, the Trustee may, in the absence of bad faith on its part, rely on reports of nationally recognized accountants (which may or may not be the Independent accountants appointed by the Issuer pursuant to Section 10.9), investment bankers or other Persons qualified to provide the information required to make such determination, including nationally recognized dealers in Assets of the type being valued, securities quotation services, loan pricing services and loan valuation agents;

 

(d)               as a condition to the taking or omitting of any action by it hereunder, the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in reliance thereon;

 

(e)               the Trustee shall be under no obligation to exercise or to honor any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have provided to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities which might reasonably be incurred by it in compliance with such request or direction;

 

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(f)                the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, note or other paper or document, but the Trustee, in its discretion, may, and upon the written direction of a Majority of the Controlling Class or of a Rating Agency shall (subject to the right hereunder to be indemnified to its reasonable satisfaction for associated expense and liability), make such further inquiry or investigation into such facts or matters as it may see fit or as it shall be directed, and the Trustee shall be entitled, on reasonable prior notice to the Issuer and the Collateral Manager, to examine the books and records relating to the Notes and the Assets, personally or by agent or attorney, during the Issuer’s or the Collateral Manager’s normal business hours; provided that the Trustee shall, and shall cause its agents to, hold in confidence all such information, except (i) to the extent disclosure may be required by law or by any regulatory, administrative or governmental authority and (ii) to the extent that the Trustee, in its sole discretion, may determine that such disclosure is consistent with its obligations hereunder; provided further that the Trustee may disclose on a confidential basis any such information to its agents, attorneys and auditors in connection with the performance of its responsibilities hereunder;

 

(g)               the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys; provided that the Trustee shall not be responsible for any misconduct or negligence on the part of any agent appointed or attorney appointed, with due care by it hereunder;

 

(h)               the Trustee shall not be liable for any action it takes or omits to take in good faith that it reasonably believes to be authorized or within its rights or powers hereunder, including actions or omissions to act at the direction of the Collateral Manager;

 

(i)                nothing herein shall be construed to impose an obligation on the part of the Trustee to monitor, recalculate, evaluate or verify or independently determine the accuracy of any report, certificate or information received from the Issuer or Collateral Manager (unless and except to the extent otherwise expressly set forth herein);

 

(j)                to the extent any defined term hereunder, or any calculation required to be made or determined by the Trustee hereunder, is dependent upon or defined by reference to generally accepted accounting principles (as in effect in the United States) (“GAAP”), the Trustee shall be entitled to request and receive (and rely upon) instruction from the Issuer or the accountants identified in the Accountants’ Report (and in the absence of its receipt of timely instruction therefrom, shall be entitled to obtain from an Independent accountant at the expense of the Issuer) as to the application of GAAP in such connection, in any instance;

 

(k)               the Trustee shall not be liable for the actions or omissions of, or any inaccuracies in the records of, the Collateral Manager, the Issuer, any Paying Agent (other than the Trustee), DTC, Euroclear, Clearstream, or any other clearing agency or depository and without limiting the foregoing, the Trustee shall not be under any obligation to monitor, evaluate or verify compliance by the Collateral Manager with the terms hereof or of the Collateral Management Agreement, or to verify or independently determine the accuracy of information received by the Trustee from the Collateral Manager (or from any selling institution, agent bank, trustee or similar source) with respect to the Assets;

 

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(l)                notwithstanding any term hereof (or any term of the UCC that might otherwise be construed to be applicable to a “securities intermediary” as defined in the UCC) to the contrary, none of the Trustee, the Custodian or the Securities Intermediary shall be under a duty or obligation in connection with the acquisition or Grant by the Issuer to the Trustee of any item constituting the Assets, or to evaluate the sufficiency of the documents or instruments delivered to it by or on behalf of the Issuer in connection with its Grant or otherwise, or in that regard to examine any Underlying Instrument, in each case, in order to determine compliance with applicable requirements of and restrictions on transfer in respect of such Assets;

 

(m)              in the event the Bank is also acting in the capacity of Paying Agent, Registrar, Transfer Agent, Custodian, Calculation Agent or Securities Intermediary, the rights, protections, benefits, immunities and indemnities afforded to the Trustee pursuant to this Article VI shall also be afforded to the Bank acting in such capacities; provided that such rights, protections, benefits, immunities and indemnities shall be in addition to any rights, immunities and indemnities provided in the Securities Account Control Agreement or any other documents to which the Bank in such capacity is a party;

 

(n)               any permissive right of the Trustee to take or refrain from taking actions enumerated herein shall not be construed as a duty;

 

(o)               to the extent permitted by applicable law, the Trustee shall not be required to give any bond or surety in respect of the execution of this Indenture or otherwise;

 

(p)               the Trustee shall not be deemed to have notice or knowledge of any matter unless a Trust Officer has actual knowledge thereof or unless written notice thereof is received by the Trustee at the Corporate Trust Office and such notice references the Notes generally, the Issuer or this Indenture. Whenever reference is made herein to a Default or an Event of Default such reference shall, insofar as determining any liability on the part of the Trustee is concerned, be construed to refer only to a Default or an Event of Default of which the Trustee is deemed to have knowledge in accordance with this paragraph;

 

(q)               the Trustee shall not be responsible for delays or failures in performance resulting from circumstances beyond its control (such circumstances include but are not limited to acts of God, strikes, lockouts, riots, acts of war, loss or malfunctions of utilities, computer (hardware or software) or communications services);

 

(r)                to help fight the funding of terrorism and money laundering activities, the Trustee will obtain, verify, and record information that identifies individuals or entities that establish a relationship or open an account with the Trustee. The Trustee will ask for the name, address, tax identification number and other information that will allow the Trustee to identify the individual or entity who is establishing the relationship or opening the account. The Trustee may also ask for formation documents such as articles of incorporation, an offering memorandum, or other identifying documents to be provided;

 

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(s)               to the extent not inconsistent herewith, the rights, protections, immunities and indemnities afforded to the Trustee pursuant to this Indenture also shall be afforded to the Bank in each of its capacities under the Transaction Documents and also to the Collateral Administrator; provided that, with respect to the Collateral Administrator, such rights, immunities and indemnities shall be in addition to any rights, immunities and indemnities provided in the Collateral Administration Agreement;

 

(t)                in making or disposing of any investment permitted by this Indenture, the Trustee is authorized to deal with itself (in its individual capacity) or with any one or more of its Affiliates, in each case on an arm’s-length basis, whether it or such Affiliate is acting as a subagent of the Trustee or for any third party or dealing as principal for its own account. If otherwise qualified, obligations of the Bank or any of its Affiliates shall qualify as Eligible Investments hereunder;

 

(u)               the Trustee or its Affiliates are permitted to receive additional compensation that could be deemed to be in the Trustee’s economic self-interest for (i) serving as investment adviser, administrator, shareholder, servicing agent, custodian or subcustodian with respect to certain of the Eligible Investments, (ii) using Affiliates to effect transactions in certain Eligible Investments and (iii) effecting transactions in certain Eligible Investments. Such compensation is not payable or reimbursable under Section 6.7 of this Indenture;

 

(v)               the Trustee shall have no duty (i) to see to any recording, filing, or depositing of this Indenture or any supplemental indenture or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording, filing or depositing or to any rerecording, refiling or redepositing of any thereof or (ii) to maintain any insurance;

 

(w)              unless the Trustee receives written notice of an error or omission related to financial information or disbursements provided to Holders within 90 days of Holders’ receipt of the same, the Trustee shall have no liability in connection with such and, absent direction by the requisite percentage of Holders entitled to direct the Trustee, no further obligations in connection thereof;

 

(x)               the Trustee will be under no obligation to (i) confirm or verify whether the conditions to the Delivery of the Assets have been satisfied or to determine whether or not a Collateral Obligation is eligible for purchase hereunder or meets the criteria in the definition thereof or (ii) evaluate the sufficiency of the documents or instruments delivered to it by or on behalf of the Issuer in connection with the Grant by the Issuer to the Trustee of any item constituting the Assets or otherwise, or in that regard to examine any Underlying Instruments, in order to determine compliance with the applicable requirements of and restrictions on transfer of a Collateral Obligation; and

 

(y)               the Trustee shall have no obligation to determine the Retention Basis Amount or verify or monitor whether an E.U. Retention Deficiency has occurred or whether the E.U. Retention Requirement Laws or the U.S. Risk Retention Rules have been or will be complied with.

 

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Section 6.4            Not Responsible for Recitals or Issuance of Notes. The recitals contained herein and in the Notes, other than the Certificate of Authentication thereon, shall be taken as the statements of the Issuer; and the Trustee assumes no responsibility for their correctness. The Trustee makes no representation as to the validity or sufficiency of this Indenture (except as may be made with respect to the validity of the Trustee’s obligations hereunder), the Assets or the Notes. The Trustee shall not be accountable for the use or application by the Issuer of the Notes or the proceeds thereof or any Money paid to the Issuer pursuant to the provisions hereof.

 

Section 6.5            May Hold Notes. The Trustee, any Paying Agent, Registrar or any other agent of the Issuer, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any of its Affiliates with the same rights it would have if it were not Trustee, Paying Agent, Registrar or such other agent.

 

Section 6.6            Money Held in Trust. Money held by the Trustee hereunder shall be held in trust to the extent required herein. The Trustee shall be under no liability for interest on any Money received by it hereunder except to the extent of income or other gain on investments which are deposits in or certificates of deposit of the Bank in its commercial capacity and income or other gain actually received by the Trustee on Eligible Investments.

 

Section 6.7            Compensation and Reimbursement. (a) The Issuer agrees:

 

(i)              to pay the Trustee on each Payment Date reasonable compensation, as set forth in a separate fee schedule, for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

(ii)             except as otherwise expressly provided herein, to reimburse the Trustee in a timely manner upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture or other Transaction Document (including, without limitation, securities transaction charges and the reasonable compensation and expenses and disbursements of its agents and legal counsel and of any accounting firm or investment banking firm employed by the Trustee pursuant to Section 5.4, 5.5, 6.3(c) or 10.7, except any such expense, disbursement or advance as may be attributable to its negligence, willful misconduct or bad faith) but with respect to securities transaction charges, only to the extent any such charges have not been waived during a Collection Period due to the Trustee’s receipt of a payment from a financial institution with respect to certain Eligible Investments, as specified by the Collateral Manager;

 

(iii)            to indemnify the Trustee and its Officers, directors, employees and agents for, and to hold them harmless against, any loss, liability or expense (including reasonable attorney’s fees and expenses) incurred without negligence, willful misconduct or bad faith on their part, arising out of or in connection with the acceptance or administration of this trust or the performance of its duties hereunder, including the costs and expenses of defending themselves (including reasonable attorney’s fees and costs) against any claim or liability in connection with the exercise or performance of any of their powers or duties hereunder and under any other agreement or instrument related hereto; and

 

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(iv)             to pay the Trustee reasonable additional compensation together with its expenses (including reasonable counsel fees) for any collection or enforcement action taken pursuant to Section 6.13 or Article V, respectively.

 

(b)               The Trustee shall receive amounts pursuant to this Section 6.7 and any other amounts payable to it under this Indenture or in any of the Transaction Documents to which the Trustee is a party only as provided in Sections 11.1(a)(i), (ii) and (iii) but only to the extent that funds are available for the payment thereof. Subject to Section 6.9, the Trustee shall continue to serve as Trustee under this Indenture notwithstanding the fact that the Trustee shall not have received amounts due it hereunder; provided that nothing herein shall impair or affect the Trustee’s rights under Section 6.9. No direction by the Noteholders shall affect the right of the Trustee to collect amounts owed to it under this Indenture. If, on any date when a fee or an expense shall be payable to the Trustee pursuant to this Indenture, insufficient funds are available for the payment thereof, any portion of a fee or an expense not so paid shall be deferred and payable on such later date on which a fee or an expense shall be payable and sufficient funds are available therefor.

 

(c)               The Trustee hereby agrees not to cause the filing against the Issuer or any of its subsidiaries, of a petition in bankruptcy for the non-payment to the Trustee of any amounts provided by this Section 6.7 until at least one year and one day, or, if longer, the applicable preference period then in effect and one day, after the payment in full of all Notes issued under this Indenture.

 

(d)               The Issuer’s payment obligations to the Trustee under this Section 6.7 shall be secured by the lien of this Indenture payable in accordance with the Priority of Payments, and shall survive the discharge of this Indenture and the resignation or removal of the Trustee. When the Trustee incurs expenses after the occurrence of a Default or an Event of Default under Section 5.1(e) or Section 5.1(f), the expenses are intended to constitute expenses of administration under the Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency or similar law.

 

Section 6.8            Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be an Independent organization or entity organized and doing business under the laws of the United States of America or of any state thereof, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least U.S.$200,000,000, subject to supervision or examination by federal or state authority, having a rating of at least “BBB+” by S&P and (to the extent that Fitch is rating any Notes then Outstanding) a short-term credit rating of at least “F1” or a long-term credit rating of at least “A” by Fitch and having an office within the United States. If such organization or entity publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 6.8, the combined capital and surplus of such organization or entity shall be deemed to be its combined capital and surplus as set forth in its most recent published report of condition. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.8, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VI.

 

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Section 6.9            Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article VI shall become effective until the acceptance of appointment by the successor Trustee under Section 6.10.

 

(b)               Subject to Section 6.9(a), the Trustee may resign at any time by giving not less than 30 days’ written notice thereof to the Issuer, the Collateral Manager, the Holders of the Notes and each Rating Agency. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees satisfying the requirements of Section 6.8 by written instrument, in duplicate, executed by a Responsible Officer of the Issuer, one copy of which shall be delivered to the Trustee so resigning and one copy to the successor Trustee or Trustees, together with a copy to each Holder and the Collateral Manager; provided that such successor Trustee shall be appointed only upon the written consent of a Majority of the Secured Notes of each Class or, at any time when an Event of Default shall have occurred and be continuing or when a successor Trustee has been appointed pursuant to Section 6.9(e), by an Act of a Majority of the Controlling Class. If no successor Trustee shall have been appointed and an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee or any Holder, on behalf of itself and all others similarly situated, may petition any court of competent jurisdiction for the appointment of a successor Trustee satisfying the requirements of Section 6.8.

 

(c)               The Trustee may be removed at any time upon 30 days written notice by Act of a Majority of each Class of Notes or, at any time when an Event of Default shall have occurred and be continuing by an Act of a Majority of the Controlling Class, delivered to the Trustee and to the Issuer.

 

(d)               If at any time:

 

(i)                 the Trustee shall cease to be eligible under Section 6.8 and shall fail to resign after written request therefor by the Issuer or by any Holder; or

 

(ii)              the Trustee shall become incapable of acting or shall be adjudged as bankrupt or insolvent or a receiver or liquidator of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

 

then, in any such case (subject to Section 6.9(a)), (A) the Issuer, by Issuer Order, may remove the Trustee, or (B) subject to Section 5.15, any Holder may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

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(e)               If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Trustee for any reason (other than resignation), the Issuer, by Issuer Order, shall promptly appoint a successor Trustee. If the Issuer shall fail to appoint a successor Trustee within 30 days after such resignation, removal or incapability or the occurrence of such vacancy, a successor Trustee may be appointed by a Majority of the Controlling Class by written instrument delivered to the Issuer and the retiring Trustee. The successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede any successor Trustee proposed by the Issuer. If no successor Trustee shall have been so appointed by the Issuer or a Majority of the Controlling Class and shall have accepted appointment in the manner hereinafter provided, subject to Section 5.15, the Trustee or any Holder may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

(f)                The Issuer shall give prompt notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first class mail, postage prepaid, to the Collateral Manager, to each Rating Agency and to the Holders of the Notes as their names and addresses appear in the Register. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. If the Issuer fails to mail such notice within ten days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be given at the expense of the Issuer. If the Bank shall resign or be removed as Trustee, the Bank shall also resign or be removed as Custodian, Paying Agent, Calculation Agent, Collateral Administrator, Registrar and any other capacity in which the Bank is then acting pursuant to this Indenture or any other Transaction Document.

 

Section 6.10        Acceptance of Appointment by Successor. Every successor Trustee appointed hereunder shall meet the requirements of Section 6.8 and shall execute, acknowledge and deliver to the Issuer and the retiring Trustee an instrument accepting such appointment. Upon delivery of the required instruments, the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts, duties and obligations of the retiring Trustee; but, on request of the Issuer or a Majority of any Class of Secured Notes or the successor Trustee, such retiring Trustee shall, upon payment of its charges then unpaid, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and Money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

 

Section 6.11        Merger, Conversion, Consolidation or Succession to Business of Trustee. Any organization or entity into which the Trustee may be merged or converted or with which it may be consolidated, or any organization or entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any organization or entity succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder; provided that such organization or entity shall be otherwise qualified and eligible under this Article VI, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any of the Notes has been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Notes.

 

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Section 6.12        Co-Trustees. At any time or times, the Issuer and the Trustee shall have power to appoint one or more Persons to act as co-trustee (subject to written notice to the Rating Agencies), jointly with the Trustee, of all or any part of the Assets, with the power to file such proofs of claim and take such other actions pursuant to Section 5.6 herein and to make such claims and enforce such rights of action on behalf of the Holders, as such Holders themselves may have the right to do, subject to the other provisions of this Section 6.12.

 

The Issuer shall join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint a co-trustee. If the Issuer does not join in such appointment within 15 days after the receipt by it of a request to do so, the Trustee shall have the power to make such appointment.

 

Should any written instrument from the Issuer be required by any co-trustee so appointed, more fully confirming to such co-trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Issuer. The Issuer agrees to pay, to the extent funds are available therefor under Section 11.1(a)(i)(A), for any reasonable fees and expenses in connection with such appointment.

 

Every co-trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms:

 

(a)               the Notes shall be authenticated and delivered and all rights, powers, duties and obligations hereunder in respect of the custody of securities, Cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised solely by the Trustee;

 

(b)               the rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by the appointment of a co-trustee shall be conferred or imposed upon and exercised or performed by the Trustee or by the Trustee and such co-trustee jointly as shall be provided in the instrument appointing such co-trustee;

 

(c)               the Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Issuer evidenced by an Issuer Order, may accept the resignation of or remove any co-trustee appointed under this Section 6.12, and in case an Event of Default has occurred and is continuing, the Trustee shall have the power to accept the resignation of, or remove, any such co-trustee without the concurrence of the Issuer. A successor to any co-trustee so resigned or removed may be appointed in the manner provided in this Section 6.12;

 

(d)               no co-trustee hereunder shall be personally liable by reason of any act or omission of the Trustee hereunder;

 

(e)               the Trustee shall not be liable by reason of any act or omission of a co-trustee; and

 

(f)                any Act of the Holders delivered to the Trustee shall be deemed to have been delivered to each co-trustee.

 

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The Issuer shall notify each Rating Agency of the appointment of a co-trustee hereunder.

 

Section 6.13        Certain Duties of Trustee Related to Delayed Payment of Proceeds. If the Trustee shall not have received a payment with respect to any Asset on its Due Date, (a) the Trustee shall promptly notify the Issuer and the Collateral Manager in writing or electronically and (b) unless within three Business Days (or the end of the applicable grace period for such payment, if any) after such notice (x) such payment shall have been received by the Trustee or (y) the Issuer, in its absolute discretion (but only to the extent permitted by Section 10.2(a)), shall have made provision for such payment satisfactory to the Trustee in accordance with Section 10.2(a), the Trustee shall, not later than the Business Day immediately following the last day of such period and in any case upon request by the Collateral Manager, request the issuer of such Asset, the trustee under the related Underlying Instrument or a paying agent designated by either of them, as the case may be, to make such payment not later than three Business Days after the date of such request. If such payment is not made within such time period, the Trustee, subject to the provisions of clause (iv) of Section 6.1(c), shall take such reasonable action as the Collateral Manager shall direct. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture. If the Issuer or the Collateral Manager requests a release of an Asset and/or delivers an additional Collateral Obligation in connection with any such action under the Collateral Management Agreement or under this Indenture, such release and/or substitution shall be subject to Section 10.8 and Article XII of this Indenture, as the case may be. Notwithstanding any other provision hereof, the Trustee shall deliver to the Issuer or its designee any payment with respect to any Asset or any additional Collateral Obligation received after the Due Date thereof to the extent the Issuer previously made provisions for such payment satisfactory to the Trustee in accordance with this Section 6.13 and such payment shall not be deemed part of the Assets.

 

Section 6.14        Authenticating Agents. Upon the request of the Issuer, the Trustee shall, and if the Trustee so chooses the Trustee may, appoint one or more Authenticating Agents with power to act on its behalf and subject to its direction in the authentication of Notes in connection with issuance, transfers and exchanges under Sections 2.4, 2.5, 2.6 and 8.5, as fully to all intents and purposes as though each such Authenticating Agent had been expressly authorized by such Sections to authenticate such Notes. For all purposes of this Indenture, the authentication of Notes by an Authenticating Agent pursuant to this Section 6.14 shall be deemed to be the authentication of Notes by the Trustee.

 

Any Person into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any Person succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, without the execution or filing of any further act on the part of the parties hereto or such Authenticating Agent or such successor Person.

 

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Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and the Issuer. The Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Issuer. Upon receiving such notice of resignation or upon such a termination, the Trustee shall, upon the written request of the Issuer, promptly appoint a successor Authenticating Agent and shall give written notice of such appointment to the Issuer.

 

Unless the Authenticating Agent is also the same entity as the Trustee, the Issuer agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services, and reimbursement for its reasonable expenses relating thereto as an Administrative Expense. The provisions of Sections 2.8, 6.4 and 6.5 shall be applicable to any Authenticating Agent.

 

Section 6.15        Withholding. The Trustee is hereby authorized and directed to retain from amounts otherwise distributable to any Holder sufficient funds for the payment of any such tax that is legally owed or required to be withheld by the Issuer (but such authorization shall not prevent the Trustee from contesting any such tax in appropriate Proceedings and withholding payment of such tax, if permitted by law, pending the outcome of such Proceedings) or may be withheld because of a failure by a Holder to provide any required information and to timely remit such amounts to the appropriate taxing authority. The amount of any withholding tax imposed with respect to any Note shall be treated as Cash distributed to the relevant Holder at the time it is withheld by the Trustee. If there is a reasonable possibility that withholding is required by applicable law with respect to a distribution, the Paying Agent or the Trustee may, in its sole discretion, withhold such amounts in accordance with this Section 6.15. If any Holder or beneficial owner wishes to apply for a refund of any such withholding tax, the Trustee shall reasonably cooperate with such Person in providing readily available information so long as such Person agrees to reimburse the Trustee for any out-of-pocket expenses incurred. Nothing herein shall impose an obligation on the part of the Trustee to determine the amount of any tax or withholding obligation on the part of the Issuer or in respect of the Notes.

 

Section 6.16        Representative for Secured Noteholders only; Agent for each other Secured Party and the Holders of the Subordinated Notes. With respect to the security interest created hereunder, the delivery of any item of Asset to the Trustee is to the Trustee as representative of the Secured Noteholders and agent for each other Secured Party and the Holders of the Subordinated Notes. In furtherance of the foregoing, the possession by the Trustee of any Asset, and the endorsement to or registration in the name of the Trustee of any Asset (including without limitation as entitlement holder of the Custodial Account) are all undertaken by the Trustee in its capacity as representative of the Secured Noteholders, and agent for each other Secured Party and the Holders of the Subordinated Notes.

 

Section 6.17        Representations and Warranties of the Bank. The Bank hereby represents and warrants as follows:

 

(a)               Organization. The Bank has been duly organized and is validly existing as a national banking association with trust powers under the laws of the United States and has the power to conduct its business and affairs as a trustee, paying agent, registrar, transfer agent, custodian, calculation agent and securities intermediary.

 

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(b)               Authorization; Binding Obligations. The Bank has the corporate power and authority to perform the duties and obligations of Trustee, Paying Agent, Registrar, Transfer Agent, Custodian, Calculation Agent, Collateral Administrator and Securities Intermediary under this Indenture. The Bank has taken all necessary corporate action to authorize the execution, delivery and performance of this Indenture, and all of the documents required to be executed by the Bank pursuant hereto. This Indenture has been duly authorized, executed and delivered by the Bank and constitutes the legal, valid and binding obligation of the Bank enforceable in accordance with its terms subject, as to enforcement, (i) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Bank and (ii) to general equitable principles (whether enforcement is considered in a proceeding at law or in equity).

 

(c)               Eligibility. The Bank is eligible under Section 6.8 to serve as Trustee hereunder.

 

(d)               No Conflict. Neither the execution, delivery and performance of this Indenture, nor the consummation of the transactions contemplated by this Indenture, is prohibited by, or requires the Bank to obtain any consent, authorization, approval or registration under, any law, statute, rule, regulation, judgment, order, writ, injunction or decree that is binding upon the Bank.

 

ARTICLE VII

Covenants

 

Section 7.1            Payment of Principal and Interest. The Issuer will duly and punctually pay the principal of and interest on the Secured Notes, in accordance with the terms of such Notes and this Indenture pursuant to the Priority of Payments. The Issuer will, to the extent funds are available pursuant to the Priority of Payments, duly and punctually pay all required distributions on the Subordinated Notes, in accordance with the Subordinated Notes and this Indenture.

 

Amounts properly withheld under the Code or other applicable law by any Person from a payment under a Note shall be considered as having been paid by the Issuer to the relevant Holder for all purposes of this Indenture.

 

Section 7.2            Maintenance of Office or Agency. The Issuer hereby appoints the Trustee as a Paying Agent for payments on the Notes, and appoints the Trustee as Transfer Agent at its applicable Corporate Trust Office as the Issuer’s agent where Notes may be surrendered for registration of transfer or exchange. The Issuer hereby appoints CT Corporation System as its agent upon whom process or demands may be served in any action arising out of or based on this Indenture or the transactions contemplated hereby in the Borough of Manhattan, the City of New York.

 

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The Issuer may at any time and from time to time vary or terminate the appointment of any such agent or appoint any additional agents for any or all of such purposes; provided that (x) the Issuer will maintain in the Borough of Manhattan, the City of New York, an office or agency where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served and, subject to any laws or regulations applicable thereto, an office or agency outside of the United States where Notes may be presented for payment; and (y) no paying agent shall be appointed in a jurisdiction which subjects payments on the Notes to withholding tax solely as a result of such Paying Agent’s activities. The Issuer shall at all times maintain a duplicate copy of the Register at the Corporate Trust Office. The Issuer shall give prompt written notice to the Trustee, each Rating Agency and the Holders of the appointment or termination of any such agent and of the location and any change in the location of any such office or agency.

 

If at any time the Issuer shall fail to maintain any such required office or agency in the Borough of Manhattan, The City of New York, or outside the United States, or shall fail to furnish the Trustee with the address thereof, presentations and surrenders may be made (subject to the limitations described in the preceding paragraph) at, notices and demands may be served on the Issuer, and Notes may be presented and surrendered for payment to the appropriate Paying Agent at its main office, and the Issuer hereby appoints the same as its agent to receive such respective presentations, surrenders, notices and demands.

 

Section 7.3            Money for Note Payments to be Held in Trust. All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Payment Account shall be made on behalf of the Issuer by the Trustee or a Paying Agent with respect to payments on the Notes.

 

When the Issuer shall have a Paying Agent that is not also the Registrar, it shall furnish, or cause the Registrar to furnish, no later than the fifth calendar day after each Record Date a list, if necessary, in such form as such Paying Agent may reasonably request, of the names and addresses of the Holders and of the certificate numbers of individual Notes held by each such Holder.

 

Whenever the Issuer shall have a Paying Agent other than the Trustee, it shall, on or before the Business Day next preceding each Payment Date and any Redemption Date, as the case may be, direct the Trustee to deposit on such Payment Date or such Redemption Date, as the case may be, with such Paying Agent, if necessary, an aggregate sum sufficient to pay the amounts then becoming due (to the extent funds are then available for such purpose in the Payment Account), such sum to be held in trust for the benefit of the Persons entitled thereto and (unless such Paying Agent is the Trustee) the Issuer shall promptly notify the Trustee of its action or failure so to act. Any Monies deposited with a Paying Agent (other than the Trustee) in excess of an amount sufficient to pay the amounts then becoming due on the Notes with respect to which such deposit was made shall be paid over by such Paying Agent to the Trustee for application in accordance with Article XI.

 

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The initial Paying Agent shall be as set forth in Section 7.2. Any additional or successor Paying Agents shall be appointed by Issuer Order with written notice thereof to the Trustee; provided that so long as the Notes of any Class are rated by a Rating Agency, with respect to any additional or successor Paying Agent, either (i) such Paying Agent has a long-term debt rating of “A+” or higher by S&P or a short-term debt rating of “A-1” by S&P and (to the extent that Fitch is rating any Notes then Outstanding) a short-term crediting rating of at least “F1” or a long-term rating of at least “A” by Fitch or (ii) the Global Rating Agency Condition is satisfied. If such successor Paying Agent ceases to have a long-term debt rating of “A+” or higher by S&P or a short-term debt rating “A-1” by S&P and (to the extent that Fitch is rating any Notes then Outstanding) a short-term credit rating of at least “F1” or a long-term rating of at least “A” by Fitch, the Issuer shall promptly remove such Paying Agent and appoint a successor Paying Agent. The Issuer shall not appoint any Paying Agent that is not, at the time of such appointment, a depository institution or trust company subject to supervision and examination by federal and/or state and/or national banking authorities. The Issuer shall cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee and if the Trustee acts as Paying Agent, it hereby so agrees, subject to the provisions of this Section 7.3, that such Paying Agent will:

 

(a)               allocate all sums received for payment to the Holders of Notes and the Issuer for which it acts as Paying Agent on each Payment Date and any Redemption Date among such Holders in the proportion specified in the applicable Distribution Report to the extent permitted by applicable law;

 

(b)               hold all sums held by it for the payment of amounts due with respect to the Notes and otherwise to the Issuer in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

 

(c)               if such Paying Agent is not the Trustee, immediately resign as a Paying Agent and forthwith pay to the Trustee all sums held by it in trust for the payment of Notes and otherwise to the Issuer if at any time it ceases to meet the standards set forth above required to be met by a Paying Agent at the time of its appointment;

 

(d)               if such Paying Agent is not the Trustee, immediately give the Trustee notice of any default by the Issuer in the making of any payment required to be made; and

 

(e)               if such Paying Agent is not the Trustee, during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

 

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Issuer or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such Money.

 

Except as otherwise required by applicable law, any Money deposited with the Trustee or any Paying Agent in trust for any payment on any Note and remaining unclaimed for two years after such amount has become due and payable shall be paid to the Issuer on Issuer Order; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment of such amounts (but only to the extent of the amounts so paid to the Issuer) and all liability of the Trustee or such Paying Agent with respect to such trust Money shall thereupon cease. The Trustee or such Paying Agent, before being required to make any such release of payment, may, but shall not be required to, adopt and employ, at the expense of the Issuer any reasonable means of notification of such release of payment, including, but not limited to, mailing notice of such release to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in Monies due and payable but not claimed is determinable from the records of any Paying Agent, at the last address of record of each such Holder.

 

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Section 7.4            Existence of Issuer. (a) The Issuer shall, to the maximum extent permitted by applicable law, maintain in full force and effect its existence and rights as a limited liability company organized under the laws of the State of Delaware and shall obtain and preserve its qualification to do business as a limited liability company in each jurisdiction in which such qualifications are or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, or any of the Assets; provided that the Issuer shall be entitled to change its jurisdiction of formation from the State of Delaware to any other jurisdiction reasonably selected by the Issuer so long as (i) the Issuer has received a legal opinion (upon which the Trustee may conclusively rely) to the effect that such change is not disadvantageous in any material respect to the Holders, (ii) written notice of such change shall have been given to the Trustee by the Issuer, which notice shall be promptly forwarded by the Trustee to the Holders, the Collateral Manager and to each Rating Agency, (iii) the Global Rating Agency Condition is satisfied and (iv) on or prior to the 15th Business Day following receipt of such notice the Trustee shall not have received written notice from a Majority of the Controlling Class objecting to such change.

 

 

(b)               The Issuer (i) shall ensure that all limited liability company or other formalities regarding its existence (including, if required, holding regular meetings of its manager(s) and member(s), or other similar, meetings) are followed and (ii) shall not have any employees (other than its managers to the extent they are employees). The Issuer shall not take any action, or conduct its affairs in a manner, that is likely to result in its separate existence being ignored or in its assets and liabilities being substantively consolidated with any other Person in a bankruptcy, reorganization or other insolvency proceeding. Without limiting the foregoing, (A) the Issuer shall not have any subsidiaries; and (B) (x) the Issuer shall not (1) except as contemplated by the Offering Circular, the Collateral Management Agreement or the Issuer’s limited liability company agreement, engage in any transaction with any member that would constitute a conflict of interest or (2) make distributions other than in accordance with the terms of this Indenture and the Issuer’s limited liability company agreement and (y) the Issuer shall (1) maintain books and records separate from any other Person, (2) maintain its accounts separate from those of any other Person, (3) not commingle its assets with those of any other Person, (4) conduct its own business in its own name, (5) maintain separate financial statements, (6) pay its own liabilities out of its own funds, (7) maintain an arm’s length relationship with its Affiliates, (8) use separate stationery, invoices and checks, (9) hold itself out as a separate Person, (10) correct any known misunderstanding regarding its separate identity and (11) have at least one manager that is Independent of the Collateral Manager.

 

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Section 7.5            Protection of Assets. (a) The Collateral Manager on behalf of the Issuer will cause the taking of such action within the Collateral Manager’s control as is reasonably necessary in order to maintain the perfection and priority of the security interest of the Trustee in the Assets; provided that the Collateral Manager shall be entitled to rely on any Opinion of Counsel delivered pursuant to Section 7.6 and any opinion delivered on the Closing Date to determine what actions are reasonably necessary, and shall be fully protected in so relying on such an Opinion of Counsel, unless the Collateral Manager has actual knowledge that the procedures described in any such Opinion of Counsel are no longer adequate to maintain such perfection and priority. The Issuer shall from time to time execute and deliver all such supplements and amendments hereto and file or authorize the filing of all such Financing Statements, continuation statements, instruments of further assurance and other instruments, and shall take such other action as may be necessary or advisable or desirable to secure the rights and remedies of the Holders of the Secured Notes hereunder and to:

 

(i)                 Grant more effectively all or any portion of the Assets;

 

(ii)              maintain, preserve and perfect any Grant made or to be made by this Indenture including, without limitation, the first priority nature of the lien or carry out more effectively the purposes hereof;

 

(iii)            perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture (including, without limitation, any and all actions necessary or desirable as a result of changes in law or regulations);

 

(iv)             enforce any of the Assets or other instruments or property included in the Assets;

 

(v)               preserve and defend title to the Assets and the rights therein of the Trustee and the Holders of the Secured Notes in the Assets against the claims of all Persons and parties; or

 

(vi)             pay or cause to be paid any and all taxes levied or assessed upon all or any part of the Assets.

 

The Issuer hereby designates the Trustee as its agent and attorney in fact to prepare and file and hereby authorizes the filing of any Financing Statement, continuation statement and all other instruments, and take all other actions, required pursuant to this Section 7.5. Such designation shall not impose upon the Trustee, or release or diminish, the Issuer’s and the Collateral Manager’s obligations under this Section 7.5. The Issuer further authorizes and shall cause the Issuer’s counsel to file without the Issuer’s signature a Financing Statement that names the Issuer as debtor and the Trustee, on behalf of the Secured Parties, as secured party and that describes “all personal property of the Debtor now owned or hereafter acquired” as the Assets in which the Trustee has a Grant.

 

(b)               The Trustee shall not, except in accordance with Section 5.5 or Section 10.8(a), (b) and (c), as applicable, permit the removal of any portion of the Assets or transfer any such Assets from the Account to which it is credited, or cause or permit any change in the Delivery made pursuant to Section 3.3 with respect to any Assets, if, after giving effect thereto, the jurisdiction governing the perfection of the Trustee’s security interest in such Assets is different from the jurisdiction governing the perfection at the time of delivery of the most recent Opinion of Counsel pursuant to Section 7.6 (or, if no Opinion of Counsel has yet been delivered pursuant to Section 7.6, the Opinion of Counsel delivered at the Closing Date) unless the Trustee shall have received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture with respect to such property and the priority thereof will continue to be maintained after giving effect to such action or actions.

 

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Section 7.6            Opinions as to Assets. Within the six-month period preceding the fifth anniversary of the Closing Date (and every five years thereafter), the Issuer shall furnish to the Trustee and the Rating Agencies an Opinion of Counsel either (i) stating that, in the opinion of such counsel, such action has been taken (including without limitation with respect to the filing of any Financing Statements and continuation statements) as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action or (ii) describing the filing of any Financing Statements and continuation statements that shall, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture.

 

Section 7.7            Performance of Obligations. (a) The Issuer shall not take any action, and will use its best efforts not to permit any action to be taken by others, that would release any Person from any of such Person’s covenants or obligations under any instrument included in the Assets, except in the case of enforcement action taken with respect to any Defaulted Obligation in accordance with the provisions hereof and actions by the Collateral Manager under the Collateral Management Agreement and in conformity therewith or with this Indenture, as applicable, or as otherwise required hereby or deemed necessary or advisable by the Collateral Manager in accordance with the Collateral Management Agreement.

 

(b)               The Issuer shall notify S&P and Fitch within 10 Business Days after it has received notice from any Noteholder or the Issuer of any material breach of any Transaction Document, following any applicable cure period for such breach.

 

Section 7.8            Negative Covenants. (a) The Issuer will not, from and after the Closing Date:

 

(i)                 sell, transfer, exchange or otherwise dispose of, or pledge, mortgage, hypothecate or otherwise encumber (or permit such to occur or suffer such to exist), any part of the Assets, except as expressly permitted by this Indenture and the Collateral Management Agreement;

 

(ii)              claim any credit on, make any deduction from, or dispute the enforceability of payment of the principal or interest payable (or any other amount) in respect of the Notes (other than amounts withheld or deducted in accordance with the Code or any applicable laws of any other applicable jurisdiction);

 

(iii)            (A) incur or assume or guarantee any indebtedness, other than the Notes, this Indenture and the transactions contemplated hereby or (B)(1) issue any additional class of Notes except in accordance with Sections 2.13 and 3.2 or (2) issue any additional limited liability company interests, except in accordance with the Issuer’s limited liability company agreement, other than in connection with a Refinancing;

 

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(iv)             (A) permit the validity or effectiveness of this Indenture or any Grant hereunder to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to this Indenture or the Notes except as may be permitted hereby or by the Collateral Management Agreement, (B) except as permitted by this Indenture, permit any lien, charge, adverse claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden any part of the Assets, any interest therein or the proceeds thereof, or (C) except as permitted by this Indenture, take any action that would permit the lien of this Indenture not to constitute a valid first priority security interest in the Assets;

 

(v)               amend the Collateral Management Agreement except pursuant to the terms thereof and Article XV of this Indenture;

 

(vi)             dissolve or liquidate in whole or in part, except as permitted hereunder or required by applicable law;

 

(vii)          pay any distributions other than in accordance with the Priority of Payments;

 

(viii)        permit the formation of any subsidiaries;

 

(ix)             conduct business under any name other than its own;

 

(x)               have any employees (other than its managers to the extent they are employees);

 

(xi)             sell, transfer, exchange or otherwise dispose of Assets, or enter into an agreement or commitment to do so or enter into or engage in any business with respect to any part of the Assets, except as expressly permitted by both this Indenture and the Collateral Management Agreement;

 

(xii)          fail to maintain an Independent Manager under the Issuer’s limited liability company agreement; and

 

(xiii)        elect, or take any other action, to be treated as an association taxable as a corporation for U.S. federal income tax purposes.

 

(b)               The Issuer will not invest any of its assets in “securities” as such term is defined in the 1940 Act, and will keep all of its assets in Cash.

 

(c)               The Issuer shall not be party to any agreements without including customary “non-petition” and “limited recourse” provisions therein (and shall not amend or eliminate such provisions in any agreement to which it is party), except for any agreements related to the purchase and sale of any Assets which contain customary (as determined by the Collateral Manager in its sole discretion) purchase or sale terms or which are documented using customary (as determined by the Collateral Manager in its sole discretion) loan trading documentation.

 

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(d)               Notwithstanding anything contained herein to the contrary, the Issuer may not acquire any of the Secured Notes; provided that this Section 7.8(d) shall not be deemed to limit an optional or mandatory redemption pursuant to the terms of this Indenture or the purchase of Secured Notes pursuant to Section 9.7 hereof.

 

(e)               The Issuer shall not acquire or hold any Collateral Obligation or Eligible Investment that is a debt obligation in bearer form unless the Collateral Obligation or Eligible Investment is not required to be in registered form under Section 163(f)(2)(A) of the Code.

 

Section 7.9            Statement as to Compliance. On or before September in each calendar year commencing in 2019, or immediately if there has been a Default under this Indenture and prior to the issuance of any Additional Notes pursuant to Section 2.13, the Issuer shall deliver to the Trustee (to be forwarded by the Trustee to the Collateral Manager, the Collateral Administrator, each Noteholder making a written request therefor and each Rating Agency) an Officer’s certificate of the Issuer that, having made reasonable inquiries of the Collateral Manager, and to the best of the knowledge, information and belief of the Issuer, there did not exist, as at a date not more than five days prior to the date of the certificate, nor had there existed at any time prior thereto since the date of the last certificate (if any), any Default hereunder or, if such Default did then exist or had existed, specifying the same and the nature and status thereof, including actions undertaken to remedy the same, and that the Issuer has complied with all of its obligations under this Indenture or, if such is not the case, specifying those obligations with which it has not complied.

 

Section 7.10        Issuer May Consolidate, etc., Only on Certain Terms. The Issuer (the “Merging Entity”) shall not consolidate or merge with or into any other Person or transfer or convey all or substantially all of its assets to any Person, unless permitted by United States and Delaware law and unless:

 

(a)               the Merging Entity shall be the surviving entity, or the Person (if other than the Merging Entity) formed by such consolidation or into which the Merging Entity is merged or to which all or substantially all of the assets of the Merging Entity are transferred (the “Successor Entity”) (A) if the Merging Entity is the Issuer, shall be a company organized and existing under the laws of the State of Delaware or such other jurisdiction approved by a Majority of the Controlling Class; provided that no such approval shall be required in connection with any such transaction undertaken solely to effect a change in the jurisdiction of formation pursuant to Section 7.4, and (B) shall expressly assume, by an indenture supplemental hereto and an omnibus assumption agreement, executed and delivered to the Trustee, each Holder, the Collateral Manager and the Collateral Administrator, the due and punctual payment of the principal of and interest on all Secured Notes, the payments of the Subordinated Notes and the performance and observance of every covenant of this Indenture and of each other Transaction Document on its part to be performed or observed, all as provided herein or therein, as applicable;

 

(b)               each Rating Agency shall have been notified in writing of such consolidation or merger and the Trustee shall have received written confirmation from each Rating Agency that its then-current ratings issued with respect to the Secured Notes then rated by each Rating Agency will not be reduced or withdrawn as a result of the consummation of such transaction;

 

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(c)               if the Merging Entity is not the Successor Entity, the Successor Entity shall have agreed with the Trustee (i) to observe the same legal requirements for the recognition of such formed or surviving entity as a legal entity separate and apart from any of its Affiliates as are applicable to the Merging Entity with respect to its Affiliates and (ii) not to consolidate or merge with or into any other Person or transfer or convey the Assets or all or substantially all of its assets to any other Person except in accordance with the provisions of this Section 7.10;

 

(d)               if the Merging Entity is not the Successor Entity, the Successor Entity shall have delivered to the Trustee and each Rating Agency an Officer’s certificate and an Opinion of Counsel each stating that such Person is duly organized, validly existing and in good standing in the jurisdiction in which such Person is organized; that such Person has sufficient power and authority to assume the obligations set forth in sub-section (a) above and to execute and deliver an indenture supplemental hereto for the purpose of assuming such obligations; that such Person has duly authorized the execution, delivery and performance of a supplemental indenture hereto for the purpose of assuming such obligations and that such supplemental indenture is a valid, legal and binding obligation of such Person, enforceable in accordance with its terms, subject only to bankruptcy, reorganization, insolvency, moratorium and other laws affecting the enforcement of creditors’ rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); if the Merging Entity is the Issuer, that, immediately following the event which causes such Successor Entity to become the successor to the Issuer, (i) such Successor Entity has title, free and clear of any lien, security interest or charge, other than the lien and security interest of this Indenture and any other Permitted Liens, to the Assets securing all of the Secured Notes and (ii) the Trustee continues to have a valid perfected first priority security interest in the Assets securing all of the Secured Notes; and in each case as to such other matters as the Trustee or any Noteholder may reasonably require; provided that nothing in this clause shall imply or impose a duty on the Trustee to require such other documents;

 

(e)               immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(f)                the Merging Entity shall have notified each Rating Agency of such consolidation, merger, transfer or conveyance and shall have delivered to the Trustee and each Noteholder an Officer’s certificate and an Opinion of Counsel each stating that such consolidation, merger, transfer or conveyance and such supplemental indenture comply with this Article VII and that all conditions precedent in this Article VII relating to such transaction have been complied with;

 

(g)               the Merging Entity shall have delivered to the Trustee an Opinion of Counsel stating that after giving effect to such transaction, the Issuer (or, if applicable, the Successor Entity) (i) will not be required to register as an investment company under the 1940 Act and (ii) will not be treated as an association or a publicly traded partnership, in each case, that is taxable as a corporation for U.S. federal income tax purposes or otherwise subject to U.S. federal income tax on a net basis;

 

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(h)               after giving effect to such transaction, the outstanding stock of the Merging Entity (or, if applicable, the Successor Entity) will not be beneficially owned within the meaning of the 1940 Act by any U.S. Person; and

 

(i)                 the fees, costs and expenses of the Trustee (including any reasonable legal fees and expenses) associated with the matters addressed in this Section 7.10 shall have been paid by the Merging Entity (or, if applicable, the Successor Entity) or otherwise provided for to the satisfaction of the Trustee.

 

Section 7.11        Successor Substituted. Upon any consolidation or merger, or transfer or conveyance of all or substantially all of the assets of the Issuer in accordance with Section 7.10 in which the Merging Entity is not the surviving entity, the Successor Entity shall succeed to, and be substituted for, and may exercise every right and power of, the Merging Entity under this Indenture with the same effect as if such Person had been named as the Issuer herein. In the event of any such consolidation, merger, transfer or conveyance, the Person named as the “Issuer” in the first paragraph of this Indenture or any successor which shall theretofore have become such in the manner prescribed in this Article VII may be dissolved, wound up and liquidated at any time thereafter, and such Person thereafter shall be released from its liabilities as obligor and maker on all the Notes and from its obligations under this Indenture and the other Transaction Documents to which it is a party.

 

Section 7.12        No Other Business. The Issuer shall not have any employees (other than its directors to the extent they are employees) and shall not engage in any business or activity other than issuing, selling, paying and redeeming the Notes and any Additional Notes issued pursuant to this Indenture, acquiring, holding, selling, exchanging, redeeming and pledging, solely for its own account, the Assets and other incidental activities thereto, including entering into the Transaction Documents to which it is a party. The Issuer may amend, or permit the amendment of, its certificate of formation and its limited liability company agreement only if such amendment would satisfy the Global Rating Agency Condition.

 

Section 7.13        [Reserved].

 

Section 7.14        Annual Rating Review. (a) So long as any of the Secured Notes of any Class remain Outstanding, on or before December 31 in each year commencing in 2019, the Issuer shall obtain and pay for an annual review of the rating of each such Class of Secured Notes from each Rating Agency, as applicable. The Issuer shall promptly notify the Trustee and the Collateral Manager in writing (and the Trustee shall promptly provide the Holders with a copy of such notice) if at any time the then-current rating of any such Class of Secured Notes has been, or is known will be, changed or withdrawn.

 

(b)               The Issuer shall obtain and pay for an annual review of (i) any Collateral Obligation which has an S&P Rating derived as set forth in clause (iii)(b) of the definition of the term “S&P Rating” and (ii) to the extent that Fitch is rating any Notes then outstanding, any middle market loan that has a Fitch Rating determined pursuant to clause (e) under the heading “Fitch Rating” in Schedule 7.

 

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Section 7.15        Reporting. At any time when the Issuer is not subject to Section 13 or 15(d) of the Exchange Act and are not exempt from reporting pursuant to Rule 12g3 - 2(b) under the Exchange Act, upon the request of a Holder or beneficial owner of a Note, the Issuer shall promptly furnish or cause to be furnished Rule 144A Information to such Holder or beneficial owner, to a prospective purchaser of such Note designated by such Holder or beneficial owner, or to the Trustee for delivery upon an Issuer Order to such Holder or beneficial owner or a prospective purchaser designated by such Holder or beneficial owner, as the case may be, in order to permit compliance by such Holder or beneficial owner with Rule 144A under the Securities Act in connection with the resale of such Note. “Rule 144A Information” shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).

 

Section 7.16        Calculation Agent. (a) The Issuer hereby agrees that for so long as any Secured Notes remain Outstanding there will at all times be an agent appointed (which does not control or is not controlled or under common control with the Issuer or its Affiliates or the Collateral Manager or its Affiliates) to calculate LIBOR in respect of each Interest Accrual Period (or, in the case of the first Interest Accrual Period commencing on the Closing Date) in accordance with the terms of Exhibit C hereto (the “Calculation Agent”). The Issuer hereby appoints the Collateral Administrator as Calculation Agent. The Calculation Agent may be removed by the Issuer or the Collateral Manager, on behalf of the Issuer, as described below in clause (b) of this Section 7.16, at any time. If the Calculation Agent is unable or unwilling to act as such or is removed by the Issuer or the Collateral Manager, on behalf of the Issuer, in respect of any Interest Accrual Period, the Issuer or the Collateral Manager, on behalf of the Issuer, will promptly appoint a replacement Calculation Agent which does not control or is not controlled by or under common control with the Issuer or its Affiliates or the Collateral Manager or its Affiliates. The Calculation Agent may not resign its duties or be removed without a successor having been duly appointed.

 

(b)               The Calculation Agent shall be required to agree (and the Collateral Administrator as Calculation Agent does hereby agree) that, as soon as possible after 11:00 a.m. London time on each Interest Determination Date, but in no event later than 11:00 a.m. New York time on the London Banking Day immediately following each Interest Determination Date, the Calculation Agent will calculate the Interest Rate applicable to each Class of Floating Rate Notes during the related Interest Accrual Period (or portion thereof) and the Note Interest Amount (in each case, rounded to the nearest cent, with half a cent being rounded upward) payable on the related Payment Date in respect of such Class of Floating Rate Notes in respect of the related Interest Accrual Period. At such time, the Calculation Agent will communicate such rates and amounts to the Issuer, the Trustee, each Paying Agent, the Collateral Manager, Euroclear and Clearstream. The Calculation Agent will also specify to the Issuer the quotations upon which the foregoing rates and amounts are based, and in any event the Calculation Agent shall notify the Issuer before 5:00 p.m. (New York time) on every Interest Determination Date if it has not determined and is not in the process of determining any such Interest Rate or Note Interest Amount together with its reasons therefor. The Calculation Agent’s determination of the foregoing rates and amounts for any Interest Accrual Period will (or portion thereof) (in the absence of manifest error) be final and binding upon all parties. The Calculation Agent and the Trustee shall have no responsibility or liability for the selection of an alternative base rate (including an Alternative Rate) or determination thereof, or any liability for any failure or delay in performing its duties hereunder as a result of the unavailability of a reference rate as described herein.

 

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Section 7.17        Certain Tax Matters. (a) For so long as the Subordinated Notes and any other interest that is treated as equity in the Issuer is held by a single owner for U.S. federal income tax purposes, the Issuer shall treat itself as disregarded as separate from such owner for such purposes, and in all our situations the Issuer shall treat itself as a partnership (other than a publicly traded partnership), and each Holder or beneficial owner of a Subordinated Note (or any interest therein) or any other interest that is treated as equity in the Issuer for U.S. federal income tax purposes (each such Note or interest, a “Partnership Interest”, and each such Holder or beneficial owner, a “Partner”) shall not take or permit any action that is inconsistent with such treatment. Sections 7.17(i), (j), (k) and (l) will apply only for so long as the Issuer is treated as a partnership for U.S. federal income tax purposes.

 

 

(b)               The Issuer shall treat (i) the Secured Notes as indebtedness of the Issuer for U.S. federal, state and local income and franchise tax purposes, except as otherwise required by law and (ii) the Subordinated Notes as equity in the Issuer for U.S. federal, state and local income and franchise tax purposes.

 

(c)               The Issuer shall file, or cause to be filed, any tax returns, including information tax returns, required by any governmental authority, and the Paying Agent shall be authorized to file any information tax returns as required by any governmental authority.

 

(d)               If the Issuer has purchased an interest and the Issuer is aware that such interest is a “reportable transaction” within the meaning of Section 6011 of the Code, and a Holder of a Subordinated Note (or any other Note that is required to be treated as equity for U.S. federal income tax purposes) requests in writing information about any such transactions in which the Issuer is an investor, the Issuer shall provide, or cause its Independent accountants to provide, such information it has reasonably available that is required to be obtained by such Holder under the Code as soon as practicable after such request.

 

(e)               Notwithstanding anything herein to the contrary, the Collateral Manager, the Issuer, the Trustee, the Collateral Administrator, the Initial Purchaser, the Retention Provider, the Holders and beneficial owners of the Notes and each employee, representative or other agent of those Persons, may disclose to any and all Persons, without limitation of any kind, the U.S. tax treatment and tax structure of the transactions contemplated by this Indenture and all materials of any kind, including opinions or other tax analyses, that are provided to those Persons. This authorization to disclose the U.S. tax treatment and tax structure does not permit disclosure of information identifying the Collateral Manager, the Issuer, the Trustee, the Collateral Administrator, the Initial Purchaser, each Retention Provider or any other party to the transactions contemplated by this Indenture, the Offering or the pricing (except to the extent such information is relevant to U.S. tax structure or tax treatment of such transactions).

 

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(f)                Upon the Issuer’s receipt of a request of a Holder of a Secured Note or written request of a Person certifying that it is an owner of a beneficial interest in a Secured Note (including, in each case, Holders and beneficial owners of any Additional Notes issued hereunder) for the information described in Treasury Regulations Section 1.1275-3(b)(1)(i) that is applicable to such Note, the Issuer will cause its Independent certified public accountants to provide promptly to the Trustee and such requesting Holder or owner of a beneficial interest in such a Note all of such information. Any additional issuance of Notes shall be accomplished in a manner that will allow the Independent certified public accountants of the Issuer to accurately calculate original issue discount income to holders of the Additional Notes. Upon request by the Independent accountants, the Trustee shall provide to the Independent accountants information reasonably available to it as reasonably requested by the Independent accountants to comply with this Section 7.17, including information contained in the Register.

 

(g)               If required to prevent the withholding and imposition of United States income tax on payments made to the Issuer, the Issuer shall deliver or cause to be delivered an IRS Form W-9 or applicable successor form certifying as to the United States Tax Person status of the Issuer (or, if applicable, the United States Tax Person status of the person from whom the Issuer is disregarded as separate for U.S. federal income tax purposes) to the issuer or obligor of or counterparty with respect to an Asset at the time such Asset is purchased or entered into by the Issuer and thereafter prior to the obsolescence or expiration of such form.

 

(h)               [Reserved.]

 

(i)                 If so requested by a Majority of the Subordinated Notes, and if such Holders agree to reimburse the Issuer for all costs associated with such election, the Issuer is authorized to make (or hire accountants to make) an election under Section 754 of the Code.

 

(j)                 (i) The Tax Matters Partner shall establish and maintain or cause to be established and maintained on the books and records of the Issuer an individual capital account for each Partner in accordance with Section 704(b) of the Code and Treasury Regulations Section 1.704-1(b)(2)(iv).

 

(i)                 For capital account purposes, all items of income, gain, loss and deduction shall be allocated among the Partners in a manner such that, if the Issuer were dissolved, its affairs wound up, its assets sold for their respective “book values” (within the meaning of Treasury Regulations Section 1.704-1(b)(2)(iv)) and its liabilities satisfied in full (except that nonrecourse liabilities with respect to an asset shall be satisfied only to the extent that such nonrecourse liabilities do not exceed the book value of such asset) and its assets distributed to the Partners in accordance with their respective capital account balances immediately after making such allocation, such distributions would, as nearly as possible, be equal to the distributions that would be made pursuant to the provisions of this Indenture. Any special allocations provided for in Section 7.17(j)(iv)-(vii) shall be taken into account for capital account purposes. For U.S. federal, state and local income tax purposes, items of income, gain, loss, deduction and credit shall be allocated to the Partners in accordance with the allocations of the corresponding items for capital account purposes under this Section 7.17(j), except that items with respect to which there is a difference between tax and book basis will be allocated in accordance with Section 704(c) of the Code and Treasury Regulations Section 1.704-1(b)(4)(i).

 

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(ii)              The provisions of this Section 7.17(j) relating to the maintenance of capital accounts are intended to comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such regulations. The Tax Matters Partner shall be authorized to make appropriate amendments to the allocations of items pursuant to this Section 7.17(j) if necessary in order to comply with Section 704 of the Code or the appropriate provisions of Treasury Regulations.

 

(iii)            Notwithstanding any other provision set forth in this Section 7.17(j), no item of deduction or loss shall be allocated to a Partner to the extent the allocation would cause a negative balance in the Partner’s capital account (after taking into account the adjustments, allocations and distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) that exceeds the amount that such Partner would be required to reimburse the Issuer pursuant to this Indenture or under applicable law. In the event some but not all of the Partners would have such excess capital account deficits as a consequence of such an allocation of loss or deduction, the limitation set forth in this Section 7.17(j)(iv) shall be applied on a Partner by Partner basis so as to allocate the maximum permissible deduction or loss to each such Partner under Treasury Regulations Section 1.704-1(b)(2)(ii)(d). In the event any loss or deduction is specially allocated to a Partner pursuant to either of the two preceding sentences, an equal amount of income of the Issuer shall be specially allocated to such Partner prior to any allocation pursuant to Section 7.17(j)(ii).

 

(iv)             In the event any Partner unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6), items of Issuer income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate as quickly as possible any deficit balance in its capital account in excess of that permitted under Section 7.17(j)(iv) created by such adjustments, allocations or distributions. Any special allocations of items of income or gain pursuant to this Section 7.17(j)(v) shall be taken into account in computing subsequent allocations pursuant to this Section 7.17(j)(v) so that the net amount of any items so allocated and all other items allocated to each Partner pursuant to this Section 7.17(j)(v) shall, to the extent possible, be equal to the net amount that would have been allocated to each such Partner pursuant to the provisions of this Section 7.17(j) if such unexpected adjustments, allocations or distributions had not occurred.

 

(v)               In the event the Issuer incurs any nonrecourse liabilities, income and gain shall be allocated in accordance with the “minimum gain chargeback” provisions of Treasury Regulations Sections 1.704-1(b)(4)(iv) and 1.704-2.

 

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(vi)             The capital accounts of the Partners shall be adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to reflect the fair market value of Issuer property whenever a Partnership Interest is relinquished to the Issuer, whenever an additional Person becomes a Partner as permitted under this Indenture, upon any termination of the Issuer within the meaning of Section 708 of the Code, and when the Issuer is liquidated as permitted under this Indenture, and shall be adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(e) in the case of a distribution of any property (other than cash).

 

(k)               The Initial Subordinated Noteholder will be the initial “partnership representative” (as defined in Section 6223 of the Code, after amendment by P.L. 114-74) (the “Tax Matters Partner”) and may designate the Tax Matters Partner from time to time from among any willing Holder of Subordinated Notes (including itself and any of its Affiliates) with respect to any taxable year of the Issuer during which the Initial Subordinated Noteholder or any of its Affiliates holds or has held any Subordinated Notes (and if such designee is not eligible under the Code to be the Tax Matters Partner, it shall be the agent and attorney-in-fact of the Tax Matters Partner); provided, that during any other period or if the Initial Subordinated Noteholder declines to so designate a Tax Matters Partner, the Issuer (after consultation with the Collateral Manager) shall designate the Tax Matters Partner from among any Holder of Subordinated Notes (excluding the Initial Subordinated Noteholder and its Affiliates) (and if such designee is not eligible under the Code to be the Tax Matters Partner, it shall be the agent and attorney-in-fact of the Tax Matters Partner). The Tax Matters Partner (or, if applicable, its agent and attorney-in- fact) shall sign the Issuer’s tax returns and is authorized to make tax elections on behalf of the Issuer in its reasonable discretion, to determine the amount and characterization of any allocations or tax items described in this Section 7.17 in its reasonable discretion, and to take all actions and do such things as required or as it shall deem appropriate under the Code, at the Issuer’s sole expense, including representing the Issuer before taxing authorities and courts in tax matters affecting the Issuer and the Partners. Any action taken by the Tax Matters Partner in connection with audits of the Issuer under the Code will, to the extent permitted by law, be binding upon the Partners. Each such Partner agrees that it will treat any Issuer item on such Partner’s income tax returns consistently with the treatment of the item on the Issuer’s tax return and that such Partner will not independently act with respect to tax audits or tax litigation affecting the Issuer, unless previously authorized to do so in writing by the Tax Matters Partner (or, if applicable, its agent and attorney-in-fact), which authorization may be withheld in the complete discretion of the Tax Matters Partner (or, if applicable, its agent and attorney-in fact). The Issuer will, to the fullest extent permitted by law, reimburse and indemnify the Tax Matters Partner and any agent and attorney-in-fact of such Tax Matters Partner in connection with any expenses reasonably incurred in connection with its performance of its duties as or on behalf of the Tax Matters Partner. For the avoidance of doubt, any indemnity or reimbursement provided pursuant to the immediately foregoing sentence shall be treated as an Administrative Expense pursuant to the definition thereof.

 

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(l)                 For taxable years beginning in 2018, the Tax Matters Partner shall be the “partnership representative” for purposes of Section 6223 of the Code, as amended by the Bipartisan Budget Act of 2015 (the “Partnership Representative”) (or, if not eligible to be the Partnership Representative, as agent-in-fact of the Partnership Representative). If the IRS, in connection with an audit governed by the tax audit rules that apply to partnerships for taxable years beginning in 2018 that are contemplated by the Bipartisan Budget Act of 2015 (the “Partnership Tax Audit Rules”), proposes an adjustment greater than $25,000 in the amount of any item of income, gain, loss, deduction or credit of the Issuer, or any Partner’s distributive share thereof, and such adjustment results in an “imputed underpayment” as described in Section 6225(b) of the Code, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder or successor provisions (a “Covered Audit Adjustment”), the Partnership Representative will use commercially reasonable efforts (taking into account whether the Partnership Representative has received any needed information on a timely basis from the Partners), to apply the alternative method provided by Section 6226 of the Code, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder or successor provisions (the “Alternative Method”). In the event the proposed adjustment is equal to or less than $25,000, the Partnership Representative may in its sole discretion elect to have the Issuer pay such adjustment. To the extent that the Partnership Representative does not (or is unable to) elect the Alternative Method with respect to a Covered Audit Adjustment and such Covered Audit Adjustment is material as to the Issuer (determined in the Partnership Representative’s sole discretion), the Partnership Representative shall use commercially reasonable efforts to (i) to the extent not economically or administratively burdensome or onerous, make reasonable modifications available under Sections 6225(c)(3), (4) and (5) of the Code, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder or successor provisions, to the extent that such modifications are available (taking into account whether the Partnership Representative has received any needed information on a timely basis from the Partners) and would reduce any taxes payable by the Issuer with respect to the Covered Audit Adjustment, and (ii) if reasonably requested by a Partner, provide to such Partner available information allowing such Partner to file an amended U.S. federal income tax return, as described in Section 6225(c)(2) of the Code, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder or successor provisions, to the extent that such amended return and payment of any related U.S. federal income taxes would reduce any taxes payable by the Issuer with respect to the Covered Audit Adjustment (after taking into account any modifications described in clause (i)). Similar procedures shall be followed in connection with any state or local income tax audit governed by the Partnership Tax Audit Rules. Any U.S. federal income taxes (and any related interest and penalties) paid by the Issuer (or any diminution in distributable proceeds resulting from an adjustment under Partnership Tax Audit Rules) may be allocated in the reasonable discretion of the Partnership Representative to those Partners to whom such amounts are specifically attributable (whether as a result of their status, actions, inactions or otherwise), as determined in the reasonable discretion of the Partnership Representative. The Partnership Representative shall not elect or cause any election to be made to apply the Partnership Tax Audit Rules to the Issuer prior to the generally applicable effective date of such legislation, unless the Partnership Representative, in good faith, reasonably determines that such an election would be in the best interests of the Issuer and all Holders of the Notes. Each Partner hereby agrees to take any and all actions, and to furnish any and all information, requested by the Partnership Representative to permit the Issuer to minimize any tax liability that would otherwise be imposed on the Issuer under Section 6225 of the Code, or any successor provision, including (if requested by the Partnership Representative) by (i) filing amended tax returns to take into account any adjustment to the amount of any item of income, gain, loss, deduction, or credit of the Partner, or of any Person’s distributive share thereof, and (ii) providing the Issuer with any information necessary for the Issuer to (x) establish the amount of any tax liability resulting from any such adjustment and (y) elect (in accordance with Section 6226 of the Code, or any successor provision) for each Partner to take any such adjustment into account directly. Each Partner acknowledges and agrees that it will be liable for all taxes and related interest, additional amounts and penalties and other liabilities including reasonable administrative costs resulting from or otherwise attributable to the Partner’s allocable share (determined with respect to the applicable adjustment period) of the tax items affected by any applicable audit adjustment.

 

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Section 7.18        Effective Date; Purchase of Additional Collateral Obligations. (a) The Issuer will use commercially reasonable efforts to purchase, on or before the Effective Date, Collateral Obligations (i) such that the Target Initial Par Condition is satisfied and (ii) that satisfy, as of the Effective Date, the Concentration Limitations, the Collateral Quality Tests and the Coverage Tests.

 

(b)               During the period from the Closing Date to and including the Effective Date, the Issuer will use the following funds to purchase additional Collateral Obligations in the following order: (i) to pay for the principal portion of any Collateral Obligation, first, any amounts on deposit in the Ramp-Up Account, and second, any Principal Proceeds on deposit in the Collection Account and (ii) to pay for accrued interest on any such Collateral Obligation, first, any amounts on deposit in the Ramp-Up Account and second, any Principal Proceeds on deposit in the Collection Account. In addition, the Issuer will use commercially reasonable efforts to acquire such Collateral Obligations that will satisfy, on the Effective Date, the Concentration Limitations, the Collateral Quality Tests and each Overcollateralization Ratio Test.

 

(c)               Within 30 calendar days after the Effective Date (but in any event, prior to the Determination Date relating to the first Payment Date), the Issuer shall provide, or (at the Issuer’s expense) cause the Collateral Manager to provide, the following documents:

 

(i)                to each Rating Agency (in the case of delivery to S&P, via email to CDOEffectiveDatePortfolios@spglobal.com, and in the case of delivery to Fitch, via email to cdo.surveillance@fitchratings.com), a report identifying Collateral Obligations and a Microsoft Excel file (“Excel Default Model Input File”) that provides all of the inputs required to determine whether the S&P CDO Monitor Test has been satisfied and the Collateral Manager shall provide a Microsoft Excel file including, at a minimum, the following data with respect to each Collateral Obligation: LoanX identification number, CUSIP number (if any), name of Obligor, coupon, spread (if applicable), LIBOR floor (if any), legal final maturity date, average life, outstanding principal balance, Principal Balance, identification as a Cov-Lite Loan or otherwise, identification as a First-Lien Last-Out Loan or otherwise, settlement date, the purchase price with respect to any Collateral Obligation the purchase of which has not settled, S&P Industry Classification and S&P Recovery Rate, and requesting that S&P reaffirm its Initial Ratings of the Secured Notes;

 

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(ii)           to the Trustee and each Rating Agency (in the case of delivery to S&P, via email to CDOEffectiveDatePortfolios@spglobal.com, and in the case of delivery to Fitch, via email to cdo.surveillance@fitchratings.com) a report, prepared by the Collateral Administrator (the “Effective Date Report”), (A) setting forth the issuer, principal balance, coupon/spread, Stated Maturity, S&P Rating and country of Domicile with respect to each Collateral Obligation as of the Effective Date and (B) calculating as of the Effective Date the level of compliance with, or satisfaction or non-satisfaction of (1) each Overcollateralization Ratio Test, (2) the Collateral Quality Tests (excluding the S&P CDO Monitor Test), (3) the Concentration Limitations and (4) the Target Initial Par Condition;

 

(iii)             to the Trustee and the Collateral Manager, (A) an Accountants’ Report comparing, as of the Effective Date, the issuer, Principal Balance, coupon/spread, stated maturity, S&P Rating and country of Domicile with respect to each Collateral Obligation by reference to such sources as shall be specified therein (such report, the “Accountants’ Effective Date Comparison AUP Report”) and (B) an Accountants’ Report performing agreed upon procedures as of the Effective Date including recalculating and comparing the following items in the Effective Date Report: (1) each Overcollateralization Ratio Test, the Collateral Quality Tests (excluding the S&P CDO Monitor Test) and the Concentration Limitations, and (2) whether the Target Initial Par Condition is satisfied (such report, the “Accountants’ Effective Date Recalculation AUP Report” and together with the Accountants’ Effective Date Comparison AUP Report, the “Accountants’ Effective Date AUP Reports”), with both Accountants’ Effective Date AUP Reports containing a statement specifying the procedures undertaken by them to review data and computations relating to such Accountants’ Effective Date AUP Reports; and

 

(iv)             to the Trustee and each Rating Agency (in the case of delivery to S&P, via email to CDOEffectiveDatePortfolios@spglobal.com, and in the case of delivery to Fitch, via email to cdo.surveillance@fitchratings.com) an Officer’s certificate of the Issuer (the “Effective Date Certificate”) certifying as to the level of compliance with, or satisfaction or non-satisfaction of, (1) each Overcollateralization Ratio Test, (2) the Collateral Quality Tests (excluding the S&P CDO Monitor Test), (3) the Concentration Limitations, and (4) the Target Initial Par Condition, in each case, as of the Effective Date.

 

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If (v) the Issuer or the Collateral Manager, as the case may be, provides the foregoing Accountants’ Effective Date AUP Reports to the Trustee with the results of the items set forth in subclause (iii)(B) above, and such results do not indicate any failure of any such tested item, (w) the Issuer delivers the Effective Date Certificate to the Trustee and causes the Collateral Administrator to make available to the Rating Agencies (i) a report identifying the Collateral Obligations and (ii) the Effective Date Report, (x) the Collateral Manager certifies to S&P (which may be in the form of an e-mail) that as of the Effective Date the S&P CDO Monitor Test is satisfied (testing as though an S&P CDO Formula Election Period were in effect and taking into account the S&P CDO Monitor Non-Model Adjustments), (y) the Collateral Manager provides to S&P an electronic copy of the Current Portfolio used to generate the passing test result and (z) the Collateral Manager certifies that the Closing Date Participation Condition is satisfied, a written confirmation from S&P of its Initial Ratings of the Secured Notes shall be deemed to have been provided (the “Effective Date Condition”). For the avoidance of doubt, the Effective Date Certificate and the Effective Date Report shall not include or refer to the Accountants’ Effective Date AUP Reports. In accordance with SEC Release No. 34-72936, Form 15-E, only in its complete and unedited form which includes the Accountants’ Effective Date Comparison AUP Report as an attachment, will be provided by the Independent accountants to the Issuer and Information Agent who will post such Form 15-E on the 17g-5 website. Copies of the Accountants’ Effective Date Recalculation AUP Report or any other agreed upon procedures report provided by the Independent accountants to the Issuer will not be provided to any other party including the Rating Agencies or posted on the 17g-5 website (other than as provided in any access letter between such Person and the accountants).

 

(d)               If, by the Determination Date relating to the first Payment Date (unless the Effective Date Condition is satisfied) S&P has not provided written confirmation of its Initial Ratings of the Secured Notes then the Collateral Manager, on behalf of the Issuer, shall instruct the Trustee in writing to transfer amounts from the Interest Collection Subaccount to the Principal Collection Subaccount (and with such funds the Issuer shall purchase additional Collateral Obligations) in an amount sufficient to obtain from S&P a confirmation of its Initial Ratings of the Secured Notes (provided that the amount of such transfer would not result in default in the payment of interest with respect to the Class A Notes or the Class B Notes); provided that, in the alternative, the Collateral Manager on behalf of the Issuer may take such other action, including but not limited to, a Special Redemption and/or transferring amounts from the Interest Collection Subaccount to the Principal Collection Subaccount as Principal Proceeds (for use in a Special Redemption), sufficient to obtain from S&P a confirmation of its Initial Ratings of the Secured Notes.

 

(e)               The failure of the Issuer to satisfy the requirements of this Section 7.18 will not constitute an Event of Default unless such failure constitutes an Event of Default under Section 5.1(d) hereof and the Issuer, or the Collateral Manager acting on behalf of the Issuer, has acted in bad faith. Of the proceeds of the issuance of the Notes which are not applied to pay for the purchase of Collateral Obligations acquired by the Issuer on the Closing Date an amount equal to U.S.$11,359,703.08 will be deposited in the Ramp-Up Account on the Closing Date. At the direction of the Issuer (or the Collateral Manager on behalf of the Issuer), the Trustee shall apply amounts held in the Ramp-Up Account to purchase additional Collateral Obligations from the Closing Date to and including the Effective Date as described in clause (b) above. If on the Effective Date, any amounts on deposit in the Ramp-Up Account have not been applied to purchase Collateral Obligations, such amounts shall be applied as described in Section 10.3(c).

 

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(f)                Weighted Average S&P Recovery Rate. The Collateral Manager may, at any time after the Closing Date upon at least 5 Business Days’ prior written notice to S&P, the Trustee and the Collateral Administrator, elect to utilize the S&P CDO Monitor in determining compliance with the S&P CDO Monitor Test (the effective date specified by the Collateral Manager for such election, the “S&P CDO Monitor Election Date”). On or prior to the later of (x) the S&P CDO Monitor Election Date and (y) the Effective Date, the Collateral Manager shall elect the Weighted Average S&P Recovery Rate that shall apply on and after such date to the Collateral Obligations for purposes of determining compliance with the Minimum Weighted Average S&P Recovery Rate Test, and the Collateral Manager will so notify the Trustee and the Collateral Administrator. Thereafter, at any time during any S&P CDO Monitor Election Period on written notice to the Trustee, the Collateral Administrator and S&P, the Collateral Manager may elect a different Weighted Average S&P Recovery Rate to apply to the Collateral Obligations; provided, that if (i) the Collateral Obligations are currently in compliance with the Weighted Average S&P Recovery Rate case then applicable to the Collateral Obligations but the Collateral Obligations would not be in compliance with the Weighted Average S&P Recovery Rate case to which the Collateral Manager desires to change, then such changed case shall not apply or (ii) the Collateral Obligations are not currently in compliance with the Weighted Average S&P Recovery Rate case then applicable to the Collateral Obligations and would not be in compliance with any other Weighted Average S&P Recovery Rate case, the Weighted Average S&P Recovery Rate to apply to the Collateral Obligations shall be the lowest Weighted Average S&P Recovery Rate in Section 2 of Schedule 4. If the Collateral Manager does not notify the Trustee and the Collateral Administrator that it will alter the Weighted Average S&P Recovery Rate in the manner set forth above, the Weighted Average S&P Recovery Rate chosen as of the S&P CDO Monitor Election Date or the Effective Date, as applicable, shall continue to apply.

 

Section 7.19        Representations Relating to Security Interests in the Assets. (a) The Issuer hereby represents and warrants that, as of the Closing Date (which representations and warranties shall survive the execution of this Indenture and be deemed to be repeated on each date on which an Asset is Granted to the Trustee hereunder):

 

(i)               The Issuer owns each Asset free and clear of any lien, claim or encumbrance of any Person, other than such as are created under, or permitted by, this Indenture and any other Permitted Liens.

 

(ii)              Other than the security interest Granted to the Trustee pursuant to this Indenture, except as permitted by this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Assets. The Issuer has not authorized the filing of and is not aware of any Financing Statements against the Issuer that include a description of collateral covering the Assets other than any Financing Statement relating to the security interest granted to the Trustee hereunder or that has been terminated; the Issuer is not aware of any judgment, PBGC liens or tax lien filings against the Issuer.

 

(iii)             All Assets constitute Cash, accounts (as defined in Section 9-102(a)(2) of the UCC), Instruments, general intangibles (as defined in Section 9-102(a)(42) of the UCC), uncertificated securities (as defined in Section 8-102(a)(18) of the UCC), Certificated Securities or security entitlements to financial assets resulting from the crediting of financial assets to a “securities account” (as defined in Section 8-501(a) of the UCC).

 

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(iv)             All Accounts constitute “securities accounts” under Section 8-501(a) of the UCC.

 

(v)              This Indenture creates a valid and continuing security interest (as defined in Section 1 - 201(37) of the UCC) in such Assets in favor of the Trustee, for the benefit and security of the Secured Parties, which security interest is prior to all other liens, claims and encumbrances (except as permitted otherwise herein), and is enforceable as such against creditors of and purchasers from the Issuer.

 

(b)               The Issuer hereby represents and warrants that, as of the Closing Date (which representations and warranties shall survive the execution of this Indenture and be deemed to be repeated on each date on which an Asset is Granted to the Trustee hereunder), with respect to Assets that constitute Instruments:

 

(i)               Either (x) the Issuer has caused or will have caused, within ten days after the Closing Date, the filing of all appropriate Financing Statements in the proper office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Instruments granted to the Trustee, for the benefit and security of the Secured Parties or (y) (A) all original executed copies of each promissory note or mortgage note that constitutes or evidences the Instruments have been delivered to the Trustee or the Issuer has received written acknowledgement from a custodian that such custodian is holding the mortgage notes or promissory notes that constitute evidence of the Instruments solely on behalf of the Trustee and for the benefit of the Secured Parties and (B) none of the Instruments that constitute or evidence the Assets has any marks or notations indicating that they are pledged, assigned or otherwise conveyed to any Person other than the Trustee, for the benefit of the Secured Parties.

 

(ii)              The Issuer has received all consents and approvals required by the terms of the Assets to the pledge hereunder to the Trustee of its interest and rights in the Assets.

 

(c)               The Issuer hereby represents and warrants that, as of the Closing Date (which representations and warranties shall survive the execution of this Indenture and be deemed to be repeated on each date on which an Asset is Granted to the Trustee hereunder), with respect to the Assets that constitute Security Entitlements:

 

(i)               All of such Assets have been and will have been credited to one of the Accounts which are securities accounts within the meaning of Section 8-501(a) of the UCC. The Securities Intermediary for each Account has agreed to treat all assets credited to such Accounts as “financial assets” within the meaning of Section 8-102(a)(9) the UCC.

 

(ii)              The Issuer has received all consents and approvals required by the terms of the Assets to the pledge hereunder to the Trustee of its interest and rights in the Assets.

 

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(iii)             (x) The Issuer has caused or will have caused, within ten days after the Closing Date, the filing of all appropriate Financing Statements in the proper office in the appropriate jurisdictions under applicable law in order to perfect the security interest granted to the Trustee, for the benefit and security of the Secured Parties, hereunder and (y) (A) the Issuer has delivered to the Trustee a fully executed Securities Account Control Agreement pursuant to which the Custodian has agreed to comply with all instructions originated by the Trustee relating to the Accounts without further consent by the Issuer or (B) the Issuer has taken all steps necessary to cause the Custodian to identify in its records the Trustee as the Person having a security entitlement against the Custodian in each of the Accounts.

 

(iv)             The Accounts are not in the name of any Person other than the Issuer or the Trustee. The Issuer has not consented to the Custodian to comply with the entitlement order (as defined in Section 8-102(a)(8) of the UCC) of any Person other than the Trustee (and the Issuer prior to a notice of exclusive control being provided by the Trustee).

 

(d)               The Issuer hereby represents and warrants that, as of the Closing Date (which representations and warranties shall survive the execution of this Indenture and be deemed to be repeated on each date on which an Asset is Granted to the Trustee hereunder), with respect to Assets that constitute general intangibles:

 

(i)                 The Issuer has caused or will have caused, within ten days after the Closing Date, the filing of all appropriate Financing Statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Assets granted to the Trustee, for the benefit and security of the Secured Parties, hereunder.

 

(ii)              The Issuer has received, or will receive, all consents and approvals required by the terms of the Assets to the pledge hereunder to the Trustee of its interest and rights in the Assets.

 

(e)               The Issuer agrees to notify the Collateral Manager and each Rating Agency promptly if it becomes aware of the breach of any of the representations and warranties contained in this Section 7.19 and shall not, without satisfaction of the S&P Rating Condition, waive any of the representations and warranties in this Section 7.19 or any breach thereof.

 

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ARTICLE VIII

Supplemental Indentures

 

Section 8.1            Supplemental Indentures Without Consent of Holders of Notes. (a) Without the consent of the Holders of any Notes (except as may be expressly required below) but with the written consent of the Collateral Manager, at any time and from time to time subject to Section 8.3 and without an Opinion of Counsel being provided to the Issuer or the Trustee as to whether any Class of Notes would be materially and adversely affected thereby (except as may be expressly required below), the Issuer and the Trustee may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

 

(i)               to evidence the succession of another Person to the Issuer and the assumption by any such successor Person of the covenants of the Issuer herein and in the Notes;

 

(ii)              to add to the covenants of the Issuer or the Trustee for the benefit of the Secured Parties, or to surrender any right or power herein conferred upon the Issuer;

 

(iii)             to convey, transfer, assign, mortgage or pledge any property to or with the Trustee or add to the conditions, limitations or restrictions on the authorized amount, terms and purposes of the issue, authentication and delivery of the Notes;

 

(iv)             to evidence and provide for the acceptance of appointment hereunder by a successor Trustee and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Sections 6.9, 6.10 and 6.12 hereof;

 

(v)              to correct or amplify the description of any property at any time subject to the lien of this Indenture, or to better assure, convey and confirm unto the Trustee any property subject or required to be subjected to the lien of this Indenture (including, without limitation, any and all actions necessary or desirable as a result of changes in law or regulations, whether pursuant to Section 7.5 or otherwise) or to subject to the lien of this Indenture any additional property;

 

(vi)             to modify the restrictions on and procedures for resales and other transfers of Notes to reflect any changes in ERISA or other applicable law or regulation (or the interpretation thereof) or to enable the Issuer to rely upon any exemption from registration under the Securities Act or the 1940 Act or otherwise comply with any applicable securities law;

 

(vii)            to remove restrictions on resale and transfer of Notes to the extent not required under clause (vi) above;

 

(viii)           to make such changes (including the removal and appointment of any listing agent) as shall be necessary or advisable in order for the Secured Notes to be or remain listed on an exchange, including Euronext Dublin;

 

(ix)             to correct or supplement any inconsistent or defective provisions herein, to cure any ambiguity, omission or errors herein; provided that, notwithstanding anything herein to the contrary and without regard to any other consent requirement specified herein, any supplemental indenture to be entered into pursuant to this clause (ix) may also provide for any corrective measures or ancillary amendments to the Indenture to give effect to such supplemental indenture as if it had been effective as of the Closing Date;

 

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(x)               to conform the provisions of this Indenture to the Offering Circular; provided that, notwithstanding anything herein to the contrary and without regard to any other consent requirement specified herein, any supplemental indenture to be entered into pursuant to this clause (x) may also provide for any corrective measures or ancillary amendments to the Indenture to give effect to such supplemental indenture as if it had been effective as of the Closing Date;

 

(xi)             to take any action necessary, advisable, or helpful to prevent the Issuer, the Trustee or the holders of any Notes from being subject to (or to otherwise reduce) withholding or other taxes, fees or assessments;

 

(xii)            (A) with the consent or at the direction of a Supermajority of the Subordinated Notes (and, in the case of an additional issuance of Secured Notes (other than in connection with a Risk Retention Issuance), a Majority of the Controlling Class), to permit the Issuer to issue Additional Notes of any one or more existing Classes of Notes; or (B) with the consent or at the direction of a Majority of the Subordinated Notes to permit the Issuer (1) to issue a replacement loan or securities or other indebtedness in connection with a Refinancing, including any modification necessary to (I) reflect the Refinancing of fixed rate Notes with floating rate Notes or vice versa, (II) establish a non-call period and, if applicable, prohibit future Refinancing and Re-Pricing of any class of refinancing obligations or (III) in the case of a Refinancing of all Classes of Secured Notes (a) modify the Weighted Average Life Test or (b) extend the Reinvestment Period, and to make such other changes as shall be necessary to facilitate a Refinancing or (2) to make such changes as shall be necessary to facilitate the Issuer to effect a Re-Pricing;

 

(xiii)            to modify the procedures herein relating to compliance with Rule 17g-5 of the Exchange Act;

 

(xiv)           to accommodate the issuance of the Notes in book-entry form through the facilities of the depository or otherwise;

 

(xv)            to take any action necessary or advisable to prevent the Issuer or the pool of Assets from being required to register under the 1940 Act, or to avoid any requirement that the Collateral Manager or any Affiliate consolidate the Issuer on its financial statements for financial reporting purposes (provided that no Holders are materially adversely affected thereby);

 

(xvi)           to reduce the permitted minimum denomination of the Secured Notes;

 

(xvii)          to modify Section 3.3 or Section 7.19 to conform with applicable law;

 

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(xviii)         to evidence any waiver or elimination by any Rating Agency of any requirement or condition of such Rating Agency set forth herein;

 

(xix)            to conform to ratings criteria and other guidelines (including, without limitation, any alternative methodology published by either of the Rating Agencies) relating to collateral debt obligations in general published by either of the Rating Agencies;

 

(xx)             to modify any defined term in Section 1.1 or any Schedule to this Indenture that begins with or includes the word “Fitch” or “S&P” (other than the defined terms “Global Rating Agency Condition” and “S&P Rating Condition”);

 

(xxi)            to change the name of the Issuer in connection with the change in name or identity of the Collateral Manager or as otherwise required pursuant to a contractual obligation or to avoid the use of a trade name or trademark in respect of which the Issuer does not have a license;

 

(xxii)           to amend, modify or otherwise accommodate changes to this Indenture to comply with any rule or regulation enacted by regulatory agencies of the United States federal government, Relevant Member State of the European Economic Area, stock exchange authority, listing agent, transfer agent or additional registrar after the Closing Date that are applicable to the Notes; provided that, other than in connection with an amendment solely to comply with the U.S. Risk Retention Rules to permit a Refinancing, if a Majority of any Class of Notes notifies the Trustee in accordance with this Indenture that such supplemental indenture materially and adversely affects such Holders, the Trustee shall not execute any such supplemental indenture without the consent of a Majority of such Class of Notes;

 

(xxiii)          to amend, modify or otherwise change the provisions of this Indenture so that (A) the Issuer is not a “covered fund” under the Volcker Rule, (B) the Secured Notes are not considered to constitute “ownership interests” under the Volcker Rule or (C) ownership of the Secured Notes will otherwise be exempt from the Volcker Rule; provided that the consent to such supplemental indenture has been obtained from a Supermajority of the Section 13 Banking Entities (voting as a single class);

 

(xxiv)         to permit the Issuer to enter into any additional agreements not expressly prohibited by this Indenture as well as any amendment, modification or waiver thereof if the Issuer determines that such additional agreement, amendment, modification or waiver would not, upon or after becoming effective, materially and adversely affect the rights or interests of holders of any Class of Notes; provided that (A) any such additional agreement shall include customary limited recourse and non-petition provisions; (B) the consent to such supplemental indenture has been obtained from a Majority of the Controlling Class and (C) the Trustee receives an opinion of counsel with respect to whether the interests of holders of any Class of Notes would be materially and adversely affected (which opinion may be supported as to factual (including financial and capital markets) matters by any relevant certificates and other documents necessary or advisable in the judgment of counsel delivering the opinion);

 

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(xxv)          to modify (A) the Collateral Quality Tests or the definitions related thereto, (B) any of the Investment Criteria, (C) the requirements regarding the Issuer (or the Collateral Manager on the Issuer’s behalf) voting in favor of a Maturity Amendment or (D) the Coverage Tests or the definitions related thereto or the calculation thereof, so long as (I) the Collateral Manager certifies that no Class of Secured Notes would be materially and adversely affected thereby and (II) a Majority of the Controlling Class consents to such modification;

 

(xxvi)         to modify any provision to facilitate an exchange of one obligation for another obligation of the same Obligor that has substantially identical terms except transfer restrictions, including to effect any serial designation relating to the exchange; provided that no such supplemental indenture shall be required to facilitate any exchange of one obligation for another in accordance with Article XII hereof;

 

(xxvii)         to modify or amend any component of the Concentration Limitations and the definitions related thereto which affect the calculation thereof so long as the Collateral Manager certifies that no Class of Secured Notes would be materially and adversely affected thereby, a Majority of the Controlling Class consents to such modification and the Global Rating Agency Condition is satisfied;

 

(xxviii)        to make any necessary or advisable changes to the Indenture in connection with the adoption of an Alternative Rate; or

 

(xxix)          to make any modification determined by the Collateral Manager necessary or advisable to comply with U.S. Risk Retention Rules, including (without limitation) in connection with a Refinancing, Optional Redemption, Re-Pricing, additional issuance of Notes or material amendment to any of the Transaction Documents; provided that a Majority of the Controlling Class has not objected to such modification within 15 Business Days of notice of such supplemental indenture.

 

The provisions regarding deemed consent described in the second paragraph in Section 8.2 below shall apply in the case of any supplemental indenture entered into in accordance with this Section 8.1 to the extent such supplemental indenture requires the consent of holders of any Class of Notes (other than the Class A-1 Notes).

 

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Section 8.2            Supplemental Indentures With Consent of Holders of Notes. Subject to the provisions of Section 8.1 and the provisions in this Section 8.2, with the consent (which consent may be deemed as set forth herein, except in the case of the Class A-1 Notes) of a Majority of the Secured Notes of each Class materially and adversely affected thereby, if any, and if the Subordinated Notes are materially and adversely affected thereby, a Majority of the Subordinated Notes, the Trustee and the Issuer, with the written consent of the Collateral Manager, may execute one or more supplemental indentures to add provisions to, or change in any manner or eliminate any provisions of, this Indenture or modify in any manner the rights of the Holders of the Notes of any Class under this Indenture; provided that without the consent (which consent may be deemed as set forth herein, except in the case of the Class A-1 Notes) of each Holder of each Outstanding Note of each Class materially and adversely affected thereby, no such supplemental indenture described above may:

 

(i)               change the Stated Maturity of the principal of or the due date of any installment of interest on any Secured Note, reduce the principal amount thereof or the rate of interest thereon, other than in connection with a Re-Pricing or in connection with the adoption of an Alternative Rate, or, except as otherwise expressly permitted by this Indenture, the Redemption Price with respect to any Note, or change the earliest date on which Notes of any Class may be redeemed, change the provisions of this Indenture relating to the application of proceeds of any Assets to the payment of principal of or interest on the Secured Notes or distributions on the Subordinated Notes or change any place where, or the coin or currency in which, Notes or the principal thereof or interest or any distribution thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the applicable Redemption Date);

 

(ii)              reduce the percentage of the Aggregate Outstanding Amount of Holders of each Class whose consent is required for the authorization of any such supplemental indenture or for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder or their consequences provided for herein;

 

(iii)             impair or adversely affect the Assets except as otherwise permitted herein;

 

(iv)             except as otherwise permitted by this Indenture, permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Assets or terminate such lien on any property at any time subject hereto or deprive the Holder of any Secured Note of the security afforded by the lien of this Indenture;

 

(v)               reduce the percentage of the Aggregate Outstanding Amount of Holders of any Class of Secured Notes whose consent is required to request the Trustee to preserve the Assets or rescind the Trustee’s election to preserve the Assets pursuant to Section 5.5 or to sell or liquidate the Assets pursuant to Section 5.4 or 5.5;

 

(vi)             modify any of the provisions of (x) this Section 8.2, except to increase the percentage of Outstanding Class A-1 Notes, Class A-2 Notes, Class B-1 Notes, Class B-2 Notes, Class C Notes, Class D Notes or Subordinated Notes the consent of the Holders of which is required for any such action or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Class A-1 Note Outstanding, Class A-2 Note Outstanding, Class B-1 Note Outstanding, Class B-2 Note Outstanding, Class C Note Outstanding, Class D Note Outstanding or Subordinated Note Outstanding and affected thereby or (y) Section 8.1 or Section 8.3;

 

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(vii)             modify the definition of the term “Outstanding” or the Priority of Payments set forth in Section 11.1(a); or

 

(viii)             modify any of the provisions of this Indenture in such a manner as to affect the calculation of the amount of any payment of interest or principal on any Secured Note or any amount available for distribution to the Subordinated Notes, or to affect the rights of the Holders of any Secured Notes to the benefit of any provisions for the redemption of such Secured Notes contained herein.

 

Notwithstanding anything herein to the contrary, and solely for purposes related to any holder consent required with respect to any proposed supplemental indenture pursuant to Sections 8.1 and 8.2, except in the case of the Class A-1 Notes, a holder shall be deemed to have provided consent to any amendment or modification undertaken pursuant to such section if (i) such holder affirmatively provides written consent or (ii) such holder fails to deliver a written objection (including via e-mail to the address provided in the notice of supplemental indenture) on or prior to 10 Business Days following notice by the Trustee of such supplemental indenture.

 

Notwithstanding any other provision relating to supplemental indentures herein, at any time after the expiration of the Non-Call Period, if any Class of Notes has been or contemporaneously with the effectiveness of any supplemental indenture will be paid in full in accordance with this Indenture as so supplemented or amended, the written consent of any Holder of any Note of such Class will not be required with respect to such supplemental indenture.

 

Section 8.3            Execution of Supplemental Indentures. (a) The Collateral Manager shall not be bound to follow any amendment or supplement to this Indenture unless it has consented thereto in accordance with this Article VIII. No amendment to this Indenture will be effective against the Collateral Administrator if such amendment would adversely affect the Collateral Administrator, including, without limitation, any amendment or supplement that would increase the duties or liabilities of, or adversely change the economic consequences to, the Collateral Administrator, unless the Collateral Administrator otherwise consents in writing.

 

(b)               Notwithstanding anything to the contrary in Section 8.3(g) below, in the case of any supplemental indenture described in Section 8.1(a)(viii), any supplemental indenture described in Section 8.1(a)(xii)(A) in relation to an additional issuance of Subordinated Notes only, any supplemental indenture described in Section 8.1(a)(xii)(B)(1) effecting a Refinancing or any supplemental indenture to which the Holders of each Outstanding Note of each Class have provided their consent, (i) such supplemental indenture shall not be subject to the satisfaction of the Global Rating Agency Condition, (ii) except in the case of a supplemental indenture described in Section 8.1(a)(xii)(B)(1) effecting a Refinancing, the Trustee shall not be required to provide notice of such supplemental indenture to any Rating Agency and (iii) the Trustee shall not be required to request written confirmation from any Rating Agency that the Global Rating Agency Condition has been satisfied. Notwithstanding the foregoing, the Trustee shall subsequently provide to S&P a copy of any supplemental indenture described in the immediately preceding sentence.

 

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(c)               Notwithstanding anything herein to the contrary, no supplemental indenture, or other modification or amendment of the Indenture, may become effective without the consent of the holders of each Note of each Outstanding Class unless such supplemental indenture or other modification or amendment would not, in the reasonable judgment of the Issuer in consultation with legal counsel experienced in such matters, as certified by the Issuer to the Trustee (upon which certification the Trustee may conclusively rely), (i) result in the Issuer being treated as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purpose or otherwise subject to U.S. federal income tax on a net basis or (ii) have a material adverse effect on the U.S. tax treatment of the Issuer or the U.S. tax consequences to the holder of any Class of Notes outstanding at the time of such supplemental indenture or other modification or amendment thereto.

 

(d)               The Trustee may conclusively rely on an Opinion of Counsel (which may be supported as to factual (including financial and capital markets) matters by any relevant certificates and other documents necessary or advisable in the judgment of counsel delivering the opinion) or a Responsible Officer’s certificate of the Collateral Manager as to whether the interests of any holder of Notes would be materially and adversely affected by the modifications set forth in any supplemental indenture, it being expressly understood and agreed that the Trustee shall have no obligation to make any determination as to the satisfaction of the requirements related to any supplemental indenture which may form the basis of such Opinion of Counsel or such Responsible Officer’s certificate; provided that if a Majority of the holders of any Class of Notes have provided written notice to the Trustee at least one Business Day prior to the execution of such supplemental indenture that such Class would be materially and adversely affected thereby, the Trustee shall not be entitled to rely on an opinion of counsel or a Responsible Officer’s certificate of the Collateral Manager as to whether or not the Holders of such Class would be materially and adversely affected by such supplemental indenture and shall not enter into such supplemental indenture without the consent of a Majority (or Supermajority or each Holder, as applicable) of such Class. Such determination by such Class as to whether the interests of any Holder have been materially and adversely affected shall be conclusive and binding on all present and future Holders. The Trustee shall not be liable for any determination made in good faith and in reliance upon an Opinion of Counsel or such a Responsible Officer’s certificate delivered to the Trustee as described herein.

 

(e)               The Trustee shall join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.

 

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(f)                In executing or accepting the additional trusts created by any supplemental indenture permitted by this Article VIII or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent thereto have been satisfied. The Trustee shall not be liable for any reliance made in good faith upon such an Opinion of Counsel. Such determination shall, in each case, be conclusive and binding on all present and future Holders and beneficial owners.

 

(g)               At the cost of the Issuer, for so long as any Notes shall remain Outstanding, not later than 10 days prior to the execution of any proposed supplemental indenture pursuant to Section 8.1 and not later than 7 days prior to the execution of any proposed supplemental indenture pursuant to Section 8.2, the Trustee shall deliver to the Collateral Manager, the Collateral Administrator and the Noteholders a copy of such proposed supplemental indenture; provided that, for any party entitled to receive notice, this provision will be deemed satisfied (1) upon the written waiver of such party to receipt of such notice and (2) in the case of the holders, the simultaneous payment in full of the Notes held by such holders pursuant to the proposed supplemental indenture. It shall not be necessary for the Holders of the requisite Notes to approve the particular form of any proposed supplemental indenture, but it shall be sufficient, if the consent of any holder to such proposed supplemental indenture is required, that such holder shall approve the substance thereof. Except as otherwise provided in Section 8.1, if any Class of Secured Notes is then Outstanding and is rated by a Rating Agency, the Trustee shall enter into any such supplemental indenture only if, as a result of such supplemental indenture, the Global Rating Agency Condition is satisfied. At the cost of the Issuer, for so long as any Class of Secured Notes shall remain Outstanding and such Class is rated by a Rating Agency, the Trustee shall provide to such Rating Agency a copy of any proposed supplemental indenture at least 7 days prior to the execution thereof by the Trustee (unless such period is waived by the applicable Rating Agency). Following such deliveries by the Trustee, if any changes are made to such proposed supplemental indenture other than to correct typographical errors or to adjust formatting, then at the cost of the Issuer, for so long as any Notes shall remain Outstanding, not later than 3 days prior to the execution of such proposed supplemental indenture (provided that the execution of such proposed supplemental indenture shall not in any case occur earlier than the date 10 days or 7 days, as applicable, after the initial distribution of such proposed supplemental indenture pursuant to the first sentence of this Section 8.3(g)), the Trustee shall deliver to the Collateral Manager, the Collateral Administrator, the Noteholders and the Rating Agencies a copy of such supplemental indenture as revised, indicating the changes that were made. Any failure of the Trustee to publish or deliver such notices, or any defect therein, shall not in any way impair or affect the validity of any such supplemental indenture. In the case of a supplemental indenture to be entered into pursuant to Section 8.1(a)(xii)(B), the foregoing notice periods shall not apply and a copy of the proposed supplemental indenture shall be included in the notice of Optional Redemption given to each holder of Secured Notes under Section 9.2; and, upon execution of the supplemental indenture, at the cost of the Issuer, a copy thereof shall be delivered to each Rating Agency and each Holder of Notes.

 

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(h)               It shall not be necessary for any Act of the Holders to approve the particular form of any proposed supplemental indenture, but it shall be sufficient, if the consent of any Holders to such proposed supplemental indenture is required, that such Act shall approve the substance thereof.

 

(i)                 At any time during or after the Reinvestment Period, at the written direction of any Holder or Holders of Subordinated Notes, substantially in the form of Exhibit F (solely for Contributions of Cash or Eligible Investments), but without any amendment to the Indenture, satisfaction of the Global Rating Agency Condition or the consent of any other holder of Notes (i) such Holder may make a Contribution of Cash, Eligible Investments or Collateral Obligations or (ii) solely with respect to Holders of Certificated Subordinated Notes, such Holder may designate (prior to the Determination Date) all or a specified portion of amounts that would otherwise be distributed on such Payment Date to such Holder or Holders of Subordinated Notes be retained by the Trustee in the Supplemental Reserve Account as a Contribution and be available for reinvestment in additional Collateral Obligations and other Permitted Uses as directed by the applicable Contributor, so long as the Collateral Manager consents to such Permitted Use(s) (or, if no direction is given by the Contributor, at the Collateral Manager’s reasonable discretion).

 

(j)                 Notwithstanding anything herein to the contrary, without the prior written consent of a Supermajority of the Section 13 Banking Entities (voting as a single class), no supplemental indenture, or other modification or amendment of this Indenture shall modify any of (i) the definitions of “Assets,” “Concentration Limitations,” “Eligible Investments,” “Participation Interest,” or “Section 13 Banking Entity,” or (ii) the criteria required to enter into a hedge agreement.

 

(k)               Unless the Trustee and the Issuer are notified within 10 Business Days after notice by the Trustee to the holders of a proposed supplemental indenture by a Majority of any Class from whom consent is not being requested (other than the Class A-1 Notes) that the holders of such Class giving such notice believe that they will be materially and adversely affected by the proposed supplemental indenture, the interests of such Class (other than the Class A-1 Notes) will be deemed for all purposes to not be materially and adversely affected by such proposed supplemental indenture.

 

Section 8.4            Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article VIII, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes theretofore and thereafter authenticated and delivered hereunder shall be bound thereby.

 

Section 8.5            Reference in Notes to Supplemental Indentures. Notes authenticated and delivered as part of a transfer, exchange or replacement pursuant to Article II of Notes originally issued hereunder after the execution of any supplemental indenture pursuant to this Article VIII may, and if required by the Issuer shall, bear a notice as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Notes, so modified as to conform in the opinion of the Issuer to any such supplemental indenture, may be prepared and executed by the Issuer and authenticated and delivered by the Trustee in exchange for Outstanding Notes.

 

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Section 8.6            Hedge Agreements. The Issuer and the Trustee shall not enter into any supplemental indenture that permits the Issuer to enter into a hedge agreement unless the Global Rating Agency Condition is satisfied with respect thereto and the Issuer obtains (a) a certification from the Collateral Manager that (i) the written terms of the derivative directly relate to the Collateral Obligations and the Notes and (ii) such derivative reduces the interest rate and/or foreign exchange risks related to the Collateral Obligations and the Notes, (b) written advice of counsel that such hedge agreement will not cause any Person to be required to register as a “commodity pool operator” (within the meaning of the Commodity Exchange Act) with the Commodity Futures Trading Commission in connection with the Issuer and (c) the consent of a Majority of the Controlling Class. The Issuer shall provide Fitch with written notice of any supplemental indenture that permits the Issuer to enter into a hedge agreement, and the Issuer shall only enter into such hedge agreement with a counterparty that has the minimum ratings required by Fitch at the time the Issuer enters into such hedge agreement, unless Fitch provides written confirmation that such counterparty is not required to have such minimum ratings.

 

ARTICLE IX

Redemption Of Notes

 

Section 9.1            Mandatory Redemption. If a Coverage Test is not met on any Determination Date on which such Coverage Test is applicable, the Issuer shall apply available amounts in the Payment Account to make payments on the Secured Notes pursuant to the Priority of Payments.

 

Section 9.2            Optional Redemption. (a) The Secured Notes shall be redeemable by the Issuer at the written direction of a Majority of the Subordinated Notes (and in the case of a Refinancing, with the consent of the Collateral Manager and the U.S. Retention Provider) as follows: (i) the Secured Notes shall be redeemed in whole in order of seniority (with respect to all Classes of Secured Notes) but not in part on any Business Day after the end of the Non-Call Period from Sale Proceeds, Contributions of Cash and/or Refinancing Proceeds or (ii) the Secured Notes shall be redeemed in part by Class from Refinancing Proceeds, Contributions of Cash and/or Partial Refinancing Interest Proceeds on any Business Day after the end of the Non-Call Period as long as the Class of Secured Notes to be redeemed represents not less than the entire Class of such Secured Notes. In connection with any such redemption, the Secured Notes shall be redeemed at the applicable Redemption Price and a Majority of Subordinated Notes must provide the above described written direction (and the Collateral Manager the above described consent in the case of a Refinancing) to the Issuer and the Trustee not later than 10 days (or such shorter period of time as the Trustee and the Collateral Manager find reasonably acceptable) prior to the Business Day on which such redemption is to be made; provided that all Secured Notes to be redeemed must be redeemed simultaneously.

 

(b)               Upon receipt of a notice of any redemption of Secured Notes in whole pursuant to Section 9.2(a)(i), the Collateral Manager in its sole discretion shall direct the sale (and the manner thereof) of all or part of the Collateral Obligations and other Assets such that the proceeds from such sale and all other funds available for such purpose in the Collection Account and the Payment Account will be at least sufficient to pay the Redemption Price of the Secured Notes to be redeemed and to pay all Administrative Expenses (regardless of the Administrative Expense Cap) and Aggregate Collateral Management Fees due and payable under the Priority of Payments. If such proceeds of such sale and all other funds available for such purpose in the Collection Account and the Payment Account would not be sufficient to redeem all Secured Notes and to pay such fees and expenses, the Secured Notes may not be redeemed. The Collateral Manager, in its sole discretion, may effect the sale of all or any part of the Collateral Obligations or other Assets through the direct sale of such Collateral Obligations or other Assets or by participation, merger or other arrangement.

 

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(c)               The Subordinated Notes may be redeemed, for the relevant Redemption Price, on any Business Day on or after the redemption (including in connection with a Refinancing of all Classes of Secured Notes) or repayment of all of the Secured Notes, at the written direction of a Majority of the Subordinated Notes delivered to the Trustee and the Collateral Manager on behalf of the Issuer at least five Business Days prior to the designated Business Day on which the Subordinated Notes are to be redeemed (which direction may be given in connection with a direction to redeem the Secured Notes or at any time after the Secured Notes have been redeemed or repaid in full).

 

(d)               In addition to (or in lieu of) a sale of Collateral Obligations and/or Eligible Investments in the manner provided in Section 9.2(b), the Secured Notes may be redeemed on any Business Day after the expiration of the Non-Call Period in whole from Refinancing Proceeds, Contributions of Cash and/or Sale Proceeds or in part by Class from Refinancing Proceeds, Contributions of Cash and/or Partial Refinancing Interest Proceeds as provided in Section 9.2(a)(ii) by a Refinancing (such securities, the “Replacement Notes”); provided that the terms of such Refinancing and any financial institutions acting as lenders thereunder or purchasers thereof must be acceptable to the Collateral Manager and a Majority of the Subordinated Notes and such Refinancing otherwise satisfies the conditions described below.

 

(e)               In the case of a Refinancing upon a redemption of the Secured Notes in whole but not in part pursuant to Section 9.2(a)(i), such Refinancing will be effective only if (i) the Refinancing Proceeds, any amounts in the Supplemental Reserve Account, all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that are otherwise payable pursuant to Section 11.1(a)(i)(P), all Sale Proceeds, if any, from the sale of Collateral Obligations and Eligible Investments in accordance with the procedures set forth herein, Contributions of Cash and all other available funds will be at least sufficient to redeem simultaneously the Secured Notes then required to be redeemed, in whole but not in part (subject to any election to receive less than 100% of Redemption Price as noted below), and to pay all accrued and unpaid Administrative Expenses (regardless of the Administrative Expense Cap), including, without limitation, the reasonable fees, costs, charges and expenses incurred by the Trustee and the Collateral Administrator (including reasonable attorneys’ fees and expenses) in connection with such Refinancing, (ii) the Refinancing Proceeds, any amounts in the Supplemental Reserve Account, all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that is otherwise payable pursuant to Section 11.1(a)(i)(P), all Sale Proceeds, if any, Contributions of Cash and other available funds are used (to the extent necessary) to make such redemption, (iii) the agreements relating to the Refinancing contain limited recourse and non-petition provisions equivalent (mutatis mutandis) to those contained in Section 13.1(b) and Section 2.7(i) and (iv) the Collateral Manager and the U.S. Retention Provider each consents to such Refinancing.

 

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(f)                In the case of a Refinancing upon a redemption of the Secured Notes in part by Class pursuant to Section 9.2(a)(ii), such Refinancing will be effective only if: (i) notice is provided to S&P and Fitch, (ii) the Refinancing Proceeds, the Partial Refinancing Interest Proceeds, Contributions of Cash, any amounts in the Supplemental Reserve Account and all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that are otherwise payable pursuant to Section 11.1(a)(i)(P) will be at least sufficient to pay in full the aggregate Redemption Price of the entire Class or Classes of Secured Notes subject to Refinancing, (iii) the Refinancing Proceeds, the Partial Refinancing Interest Proceeds, Contributions of Cash, any amounts in the Supplemental Reserve Account and all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that is otherwise payable pursuant to Section 11.1(a)(i)(P) are used (to the extent necessary) to make such redemption, (iv) the agreements relating to the Refinancing contain limited recourse and non-petition provisions equivalent (mutatis mutandis) to those contained in Section 13.1(b) and Section 2.7(i), (v) the aggregate principal amount of any obligations providing the Refinancing is equal to the aggregate principal amount of the Secured Notes being redeemed with the proceeds of such obligations, (vi) the stated maturity of each class of obligations providing the Refinancing is the same as the corresponding Stated Maturity of each Class of Secured Notes being refinanced; provided that, the stated maturity of a class of obligations providing the Refinancing may be later (but in no case earlier) than the corresponding Stated Maturity of a Class of Notes being refinanced if the Global Rating Agency Condition is satisfied with respect to each Class of Secured Notes not subject to the Refinancing, (vii) the reasonable fees, costs, charges and expenses incurred in connection with such Refinancing have been paid or will be adequately provided for from the Refinancing Proceeds (except for expenses owed to Persons that the Collateral Manager informs the Trustee will be paid solely as Administrative Expenses payable in accordance with this Indenture; provided that any such fees and expenses due to the Trustee and determined by the Collateral Manager to be paid in accordance with the Priority of Payments shall not be subject to the Administrative Expense Cap), (viii) the Refinancing Rate Condition is satisfied, (ix) the obligations providing the Refinancing are subject to the Priority of Payments and do not rank higher in priority pursuant to the Priority of Payments than the Class of Secured Notes being refinanced, (x) the voting rights, consent rights, redemption rights and all other rights of the obligations providing the Refinancing are the same as the rights of the corresponding Class of Secured Notes being refinanced (except that, at the Issuer’s election, the non-call period with respect to the obligations providing the Refinancing may be extended or decreased as it applies to a subsequent Refinancing or redemption of any such class), (xi) the Collateral Manager and the U.S. Retention Provider each consents to such Refinancing, (xii) the Issuer has received written advice from Dechert LLP or an opinion of counsel of nationally recognized standing that (A) such Refinancing will not result in the Issuer being treated as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes and (B) such Refinancing will not result in the Issuer being subject to U.S. federal income tax on a net basis and (xiii) the Issuer (or the Collateral Manager on behalf of the Issuer) has provided an Officer’s certificate to the Trustee certifying that the conditions to such Refinancing have been satisfied.

 

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(g)               The Holders of the Subordinated Notes will not have any cause of action against the Issuer, the Collateral Manager, the Collateral Administrator or the Trustee for any failure to obtain a Refinancing. If a Refinancing is obtained meeting the requirements specified above as certified by the Collateral Manager, the Issuer and the Trustee (at the direction of the Issuer) shall amend this Indenture to the extent necessary to reflect the terms of the Refinancing and no further consent for such amendments shall be required from the Holders of Notes other than a Majority of the Subordinated Notes directing the redemption. The Trustee shall not be obligated to enter into any amendment that, in its view, adversely affects its duties, obligations, liabilities or protections hereunder, and the Trustee shall be entitled to conclusively rely upon an Opinion of Counsel as to matters of law (which may be supported as to factual (including financial and capital markets) matters by any relevant certificates and other documents necessary or advisable in the judgment of counsel delivering such Opinion of Counsel) provided by the Issuer to the effect that such amendment meets the requirements specified above and is permitted under this Indenture (except that such officer or counsel shall have no obligation to certify or opine as to the sufficiency of the Refinancing Proceeds, or the sufficiency of the Accountants’ Report).

 

(h)               In the event of any redemption pursuant to this Section 9.2, the Issuer shall, at least 10 days (in the case of an Optional Redemption of the Secured Notes) (or such shorter period of time as the Trustee and the Collateral Manager find reasonably acceptable) or 5 Business Days (in the case of an Optional Redemption of the Subordinated Notes) (or such shorter period of time as the Trustee and the Collateral Manager find reasonably acceptable) prior to the Redemption Date, notify the Trustee in writing of such Redemption Date, the applicable Record Date, the principal amount of Notes to be redeemed on such Redemption Date and the applicable Redemption Price (which Redemption Price shall be the Redemption Price to be paid in the event no Redemption Distribution Date occurs and which may be decreased as a result of payments on Redemption Distribution Dates to the extent that such payment reduces the amount of interest that accrues on one or more Classes of Notes); provided that failure to effect any Optional Redemption which is withdrawn by the Issuer in accordance with this Indenture or with respect to which a Refinancing fails to occur shall not constitute an Event of Default.

 

(i)                 In connection with any Optional Redemption of the Secured Notes in whole, Holders of 100% of the Aggregate Outstanding Amount of any Class of Secured Notes may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Secured Notes.

 

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(j)                 In connection with an Optional Redemption of all Classes of Secured Notes, a Majority of the Subordinated Notes may direct the Issuer (who shall give written notice to the Trustee no less than 4 Business Days prior to such date) to distribute amounts on deposit in the Collection Account to pay a portion of the Redemption Price pursuant to the Priority of Payments on one or more Business Days prior to the Redemption Date (any such date a “Redemption Distribution Date”). The Collateral Manager may elect to distribute Interest Proceeds, Principal Proceeds or both on such Redemption Distribution Date pursuant to the applicable Priority of Payments. To the extent the Collateral Manager does not elect to distribute amounts pursuant to Section 11.1(a)(i), holders of Notes shall not be entitled to receive any amounts on account of accrued and unpaid interest on such date.

 

Section 9.3            Tax Redemption. (a) The Notes shall be redeemed in whole but not in part on any Business Day (any such redemption, a “Tax Redemption”) at their applicable Redemption Price at the written direction (delivered to the Trustee) of (x) a Majority of any Affected Class or (y) a Majority of the Subordinated Notes, in either case following the occurrence and continuation of a Tax Event.

 

(b)               In connection with any Tax Redemption, Holders of 100% of the Aggregate Outstanding Amount of any Class of Secured Notes may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Secured Notes.

 

(c)               Upon its receipt of such written direction directing a Tax Redemption, the Trustee shall promptly notify the Collateral Manager, the Holders and each Rating Agency thereof.

 

(d)               If an Officer of the Collateral Manager obtains actual knowledge of the occurrence of a Tax Event, the Collateral Manager shall promptly notify the Issuer, the Collateral Administrator and the Trustee thereof, and upon receipt of such notice the Trustee shall promptly notify the Holders of the Notes and each Rating Agency thereof

 

Section 9.4            Redemption Procedures. (a) In the event of any redemption pursuant to Section 9.2, the written direction of the Holders of the Subordinated Notes (and in the case of a Refinancing, the consent of the Collateral Manager and the U.S. Retention Provider) required thereby shall be provided to the Issuer, the Trustee and the Collateral Manager not later than 10 days (or such shorter period of time as the Trustee and the Collateral Manager find reasonably acceptable) prior to the Business Day on which such redemption is to be made (which date shall be designated in such notice). In the event of any redemption pursuant to Section 9.2 or 9.3, a notice of redemption shall be given by the Trustee by overnight delivery service (or through the applicable procedures of DTC), postage prepaid, mailed not later than 4 Business Days prior to the applicable Redemption Date, to each Holder of Notes, at such Holder’s address in the Register.

 

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(b)               All notices of redemption delivered pursuant to Section 9.4(a) shall state:

 

(i)                 the applicable Redemption Date;

 

(ii)              the Redemption Price of the Notes to be redeemed;

 

(iii)            all of the Secured Notes that are to be redeemed are to be redeemed in full and that interest on such Secured Notes shall cease to accrue on the Business Day specified in the notice;

 

(iv)             the place or places where Notes are to be surrendered for payment of the Redemption Price, which shall be the office or agency of the Issuer to be maintained as provided in Section 7.2; and

 

(v)               if all Secured Notes are being redeemed, whether the Subordinated Notes are to be redeemed in full on such Redemption Date and, if so, the place or places where the Subordinated Notes are to be surrendered for payment of the Redemption Price, which shall be the office or agency of the Issuer to be maintained as provided in Section 7.2.

 

(c)               The Issuer may withdraw any such notice of redemption delivered pursuant to Section 9.2 up to the Business Day prior to the proposed Redemption Date by written notice to the Trustee. The Issuer shall provide Fitch notice of any withdrawal.

 

(d)               Notice of redemption pursuant to Section 9.2 or 9.3 shall be given by the Issuer or, upon an Issuer Order, by the Trustee in the name and at the expense of the Issuer. Failure to give notice of redemption, or any defect therein, to any Holder of any Note selected for redemption shall not impair or affect the validity of the redemption of any other Notes.

 

(e)               Unless Refinancing Proceeds are being used to redeem the Secured Notes in whole or in part, in the event of any redemption pursuant to Section 9.2 or 9.3, no Secured Notes may be optionally redeemed unless (i) at least five Business Days before the scheduled Redemption Date the Collateral Manager shall have furnished to the Trustee evidence, in a form reasonably satisfactory to the Trustee (which may be in the form of a certificate of a Responsible Officer of the Collateral Manager), that the Collateral Manager on behalf of the Issuer has entered into a binding agreement or agreements with a financial or other institution or institutions whose short-term unsecured debt obligations (other than such obligations whose rating is based on the credit of a Person other than such institution) are rated, or guaranteed by a Person whose short-term unsecured debt obligations are rated, at least “A-1” by S&P to purchase (directly or by participation, merger or other arrangement), not later than the Business Day immediately preceding the scheduled Redemption Date in immediately available funds, all or part of the Assets at a purchase price at least sufficient, together with the Eligible Investments maturing, redeemable or putable to the issuer thereof at par on or prior to the scheduled Redemption Date, to pay all Administrative Expenses (regardless of the Administrative Expense Cap) and Aggregate Collateral Management Fees payable in connection with such Optional Redemption or Tax Redemption, in each case, as applicable and in accordance with the Priority of Payments, and redeem the applicable Class of Notes on the scheduled Redemption Date (and after giving effect to payment on any applicable Redemption Distribution Dates) at the applicable Redemption Price (or, such other amount that the Holders of such Class have elected to receive, where Holders of such Class have elected to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class), or (ii) prior to selling any Collateral Obligations and/or Eligible Investments, the Collateral Manager shall certify to the Trustee that, in its judgment, the aggregate sum of (A) expected proceeds from the sale of Eligible Investments, and (B) the Market Value of each Collateral Obligation shall exceed the sum of (x) the aggregate Redemption Price (or in the case of any Class of Secured Notes, such other amount that the Holders of such Class have elected to receive, where Holders of such Class have elected to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class) of the applicable Class of Secured Notes and (y) all Administrative Expenses (regardless of the Administrative Expense Cap) and Aggregate Collateral Management Fees payable in connection with such Optional Redemption or Tax Redemption, in each case, as applicable and in accordance with the Priority of Payments (after giving effect to payments on any Redemption Distribution Date). Any certification delivered by the Collateral Manager pursuant to this Section 9.4(e) shall include (1) the prices of, and expected proceeds from, the sale (directly or by participation, merger or other arrangement) of any Collateral Obligations and/or Eligible Investments and (2) all calculations required by this Section 9.4(e). Any holder of Notes, the Collateral Manager or any of their Affiliates or accounts managed thereby or by their respective Affiliates shall have the right, subject to the same terms and conditions afforded to other bidders, to bid on Assets to be sold as part of an Optional Redemption or Tax Redemption.

 

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(f)                If a Class or Classes of Secured Notes is redeemed in connection with a Refinancing in part by Class, Refinancing Proceeds, together with Partial Refinancing Interest Proceeds, and/or Contributions of Cash, shall be used to pay the Redemption Price(s) of such Class or Classes of Secured Notes without regard to the Priority of Payments.

 

Section 9.5            Notes Payable on Redemption Date. (a) Notice of redemption pursuant to Section 9.4 having been given as aforesaid, the Notes to be redeemed shall, on the Redemption Date, subject to Section 9.4(e) and the Issuer’s right to withdraw any notice of redemption pursuant to Section 9.4(c), become due and payable at the Redemption Price therein specified, and from and after the Redemption Date (unless the Issuer shall default in the payment of the Redemption Price and accrued interest) all such Notes that are Secured Notes shall cease to bear interest on the Redemption Date. Upon final payment on a Note to be so redeemed, the Holder shall present and surrender such Note at the place specified in the notice of redemption on or prior to such Redemption Date; provided that if there is delivered to the Issuer and the Trustee such security or indemnity as may be required by them to save such party harmless and an undertaking thereafter to surrender such Note, then, in the absence of notice to the Issuer or the Trustee that the applicable Note has been acquired by a protected purchaser, such final payment shall be made without presentation or surrender. Payments of interest on Secured Notes so to be redeemed which are payable on or prior to the Redemption Date shall be payable to the Holders of such Secured Notes, or one or more predecessor Notes, registered as such at the close of business on the relevant Record Date according to the terms and provisions of Section 2.7(e).

 

(b)               If any Secured Note called for redemption shall not be paid upon surrender thereof for redemption, the principal thereof shall, until paid, bear interest from the Redemption Date at the applicable Interest Rate for each successive Interest Accrual Period such Secured Note remains Outstanding; provided that the reason for such non-payment is not the fault of such Noteholder.

 

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Section 9.6            Special Redemption. Principal payments on the Secured Notes shall be made in part in accordance with the Priority of Payments on any Payment Date (i) during the Reinvestment Period, if the Collateral Manager at its sole discretion notifies the Trustee at least five Business Days prior to the applicable Special Redemption Date that it has been unable, for a period of at least 20 consecutive Business Days, to identify additional Collateral Obligations that are deemed appropriate by the Collateral Manager in its sole discretion and which would satisfy the Investment Criteria in sufficient amounts to permit the investment or reinvestment of all or a portion of the funds then in the Collection Account that are to be invested in additional Collateral Obligations or (ii) after the Effective Date unless the Effective Date Condition is satisfied, if the Collateral Manager notifies the Trustee that a redemption is required pursuant to Section 7.18 in order to obtain from S&P written confirmation of its Initial Ratings of the Secured Notes (in each case, a “Special Redemption”). On the first Payment Date (and all subsequent Payment Dates) identified by the Collateral Manager for the Special Redemption (in the case of a Special Redemption described in clause (i) above) or Payment Date (and all subsequent Payment Dates) following the Collection Period in which such notice is given (in the case of a Special Redemption described in clause (ii) above) (any such initial date a “Special Redemption Date”), the amount in the Collection Account representing as applicable either (1) Principal Proceeds which the Collateral Manager has determined cannot be reinvested in additional Collateral Obligations or (2) Interest Proceeds and Principal Proceeds available therefor in accordance with the Priority of Payments on each Payment Date until the Issuer obtains confirmation from S&P of its Initial Ratings of the Secured Notes (such amount, a “Special Redemption Amount”) will be available to be applied in accordance with the Priority of Payments. Notice of payments pursuant to this Section 9.6 shall be given not less than (x) in the case of a Special Redemption described in clause (i) above, three Business Days prior to the applicable Special Redemption Date and (y) in the case of a Special Redemption described in clause (ii) above, one Business Day prior to the Special Redemption Date, in each case by facsimile, email transmission or first class mail, postage prepaid, to each Holder of Secured Notes affected thereby at such Holder’s facsimile number, email address or mailing address in the Register and to each Rating Agency.

 

Section 9.7            Issuer Purchases of Secured Notes. Notwithstanding anything to the contrary in this Indenture, the Issuer may conduct purchases of the Secured Notes, in whole or in part, in accordance with, and subject to, the terms and conditions of this Section 9.7. Notwithstanding the provisions of Section 10.2 (or any other terms hereof to the contrary), amounts in the Principal Collection Subaccount and/or the Supplemental Reserve Account may be disbursed for purchases of Secured Notes in accordance with the provisions described in this Section 9.7. Upon written instruction by the Issuer, the Trustee shall cancel any such purchased Secured Notes surrendered to it or, in the case of any Global Secured Notes, the Trustee shall decrease the aggregate outstanding principal amount of such Global Secured Notes in its records by the full par amount of the purchased Secured Notes, and instruct DTC or its nominee, as the case may be, to conform its records. In connection with any such cancellation of an interest in a Global Secured Note, the Issuer (or other beneficial owner of such interest) shall reasonably cooperate with the Trustee in connection with such cancellation, including without limitation, surrendering such interest and providing any necessary instructions to DTC. The cancellation (and/or decrease, as applicable) of any such surrendered Secured Notes shall be taken into account for purposes of all relevant calculations thereafter made pursuant to the terms of this Indenture.

 

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No purchases of the Secured Notes by the Issuer may occur unless each of the following conditions is satisfied:

 

(i)                 such purchases of Secured Notes shall occur in the following sequential order of priority: first, the Class A-1 Notes, until the Class A-1 Notes are retired in full; second, the Class A-2 Notes, until the Class A-2 Notes are retired in full; third, the Class B-1 Notes and the Class B-2 Notes, pro rata, based on Aggregate Outstanding Amounts, until the Class B-1 Notes and the Class B-2 Notes are retired in full; fourth, the Class C Notes until the Class C Notes are retired in full; and fifth, the Class D Notes until the Class D Notes are retired in full;

 

(ii)              (A) each such purchase of Secured Notes of any Class shall be made pursuant to an offer made to all Holders and beneficial owners of the Secured Notes of such Class, by notice to such Holders and beneficial owners, which notice shall specify the purchase price (as a percentage of par) at which such purchase will be effected, the maximum amount of Principal Proceeds that will be used to effect such purchase and the length of the period during which such offer will be open for acceptance, (B) each such Holder or beneficial owner of a Secured Note shall have the right, but not the obligation, to accept such offer in accordance with its terms and (C) if the aggregate outstanding principal amount of Notes of the relevant Class held by the Holders or beneficial owners who accept such offer exceeds the amount of Principal Proceeds specified in such offer, a portion of the Notes of each accepting Holder and beneficial owner shall be purchased (subject to the minimum denominations and the applicable procedures of DTC) pro rata based on the respective principal amount held by each such Holder or beneficial owner;

 

(iii)            each such purchase shall be effected only at prices discounted from par;

 

(iv)             each such purchase of Secured Notes shall occur during the Reinvestment Period and shall be effected with Principal Proceeds;

 

(v)               each Coverage Test is satisfied immediately prior to each such purchase and will be satisfied, maintained or improved after giving effect to such purchase;

 

(vi)             to the extent that Sale Proceeds are used to consummate any such purchase, either (I) each requirement or test, as the case may be, of the Concentration Limitations and the Collateral Quality Tests (except the S&P CDO Monitor Test) will be satisfied after giving effect to such purchase or (II) if any such requirement or test was not satisfied immediately prior to such sale, such requirement or test will be maintained or improved after giving effect to such purchase;

 

(vii)          no Event of Default shall have occurred and be continuing;

 

(viii)        each such purchase will otherwise be conducted in accordance with applicable law;

 

(ix)             the Trustee shall have received an Officer’s certificate of the Collateral Manager to the effect that the conditions in the foregoing clauses (i) through (viii) have been satisfied; and

 

(x)               notice of each such purchase shall be provided to the Rating Agencies.

  

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Any Secured Notes to be purchased shall be surrendered to the Trustee for cancellation in accordance with Section 2.9. Upon receipt of the Officer’s certificate described in preceding sub-clause (ix), the Trustee shall disburse any available amount in the Principal Collection Subaccount on any Business Day pursuant to Issuer instruction (or the Collateral Manager acting on behalf of the Issuer), which instruction shall identify that such disbursement is for the purchase of Secured Notes pursuant to and in accordance with this Section 9.7.

 

Section 9.8            Optional Re-Pricing. On any Business Day after the Non-Call Period, at the direction of a Majority of the Subordinated Notes and with the consent of the Collateral Manager and the U.S. Retention Provider, the Issuer shall reduce the spread over LIBOR or the fixed Interest Rate, as applicable, with respect to any Class of Secured Notes, other than the Class A-1 Notes (such reduction with respect to any such Class of Notes, a “Re-Pricing” and any Class of Secured Notes to be subject to a Re-Pricing, a “Re-Priced Class”); provided that the Issuer shall not effect any Re-Pricing unless each condition specified below is satisfied with respect thereto. For the avoidance of doubt, no terms of any Secured Notes other than the Interest Rate applicable thereto may be modified or supplemented in connection with a Re-Pricing. In connection with any Re-Pricing, the Issuer may engage a broker-dealer (the “Re-Pricing Intermediary”) upon the recommendation and subject to the approval of a Majority of the Subordinated Notes and such Re-Pricing Intermediary shall assist the Issuer in effecting the Re-Pricing.

 

At least 20 days (or such shorter period reasonably acceptable to the Trustee and the Collateral Manager) prior to the Business Day fixed by a Majority of the Subordinated Notes for any proposed Re-Pricing (the “Re-Pricing Date”), the Issuer (or the Re-Pricing Intermediary on behalf of the Issuer) shall deliver a notice in writing (with a copy to the Collateral Manager, the Trustee and each Rating Agency) to each Holder of the proposed Re-Priced Class, which notice shall:

 

(a)               specify the proposed Re-Pricing Date and the revised spread over LIBOR or the fixed Interest Rate, as applicable, to be applied with respect to such Class (the “Re-Pricing Rate”);

 

(b)               request each Holder of the Re-Priced Class to approve the proposed Re-Pricing; and

 

(c)               specify the price at which Notes of any Holder of the Re-Priced Class which does not approve the Re-Pricing may be sold and transferred pursuant to the following paragraph, which, for purposes of such Re-Pricing, shall be the Redemption Price after giving effect on a pro forma basis to all payments to be made pursuant to the Priority of Payments on the Re-Pricing Date.

 

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In the event any Holders of the Re-Priced Class do not deliver written consent to the proposed Re-Pricing on or before the date that is not more than 5 Business Days after such notice, the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, shall deliver written notice thereof to the consenting Holders of the Re-Priced Class, specifying the aggregate principal amount of the Notes of the Re-Priced Class held by such non-consenting Holders, and shall request each such consenting Holder provide written notice to the Issuer, the Trustee, the Collateral Manager and the Re-Pricing Intermediary if such Holder would like to purchase all or any portion of the Notes of the Re-Priced Class held by the non-consenting Holders (each such notice, an “Exercise Notice”) within five Business Days after receipt of such notice (subject to the minimum denomination and applicable procedures of DTC). In the event the Issuer shall receive Exercise Notices with respect to more than the aggregate principal amount of the Notes of the Re-Priced Class held by non-consenting Holders, the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, shall cause the sale and transfer of such Notes, without further notice to the non-consenting Holders thereof (for settlement on the Re-Pricing Date) to the Holders delivering Exercise Notices with respect thereto, pro rata based on the aggregate principal amount of the Notes such Holders indicated an interest in purchasing pursuant to their Exercise Notices (subject to the minimum denomination and applicable procedures of DTC). In the event the Issuer shall receive Exercise Notices with respect to less than the aggregate principal amount of the Notes of the Re-Priced Class held by non-consenting Holders, the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer (subject to the minimum denomination and applicable procedures of DTC), shall cause the sale and transfer of such Notes, without further notice to the non-consenting Holders thereof, for settlement on the Re-Pricing Date to the Holders delivering Exercise Notices with respect thereto, and any excess Notes of the Re-Priced Class held by non-consenting Holders shall be sold (for settlement on the Re-Pricing Date) to a transferee designated by the Re-Pricing Intermediary on behalf of the Issuer. All sales of Notes to be effected pursuant to this paragraph shall be made at a price equal to the aggregate principal amount of such Notes together with any accrued and unpaid interest thereon, including any Deferred Interest and any accrued and unpaid interest on such Deferred Interest, in each case after giving effect on a pro forma basis to all payments to be made pursuant to the Priority of Payments on the Re-Pricing Date, and shall be effected only if the related Re-Pricing is effected in accordance with the provisions of this Indenture described in this Section 9.8. The Holder of each Secured Note, by its acceptance of an interest in the Secured Notes, agrees to sell and transfer its Secured Notes in accordance with the provisions of this Indenture described in this Section 9.8 and agrees to cooperate with the Issuer, the Re-Pricing Intermediary and the Trustee to effect such sales and transfers. The Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, shall deliver written notice to the Trustee and the Collateral Manager not later than five Business Days prior to the proposed Re-Pricing Date confirming that the Issuer has received written commitments to purchase all Notes of the Re-Priced Class held by non-consenting Holders. For the avoidance of doubt, such Re-Pricing will apply to all the Notes of the Re-Priced Class, including the Notes of the Re-Priced Class held by non-consenting Holders.

 

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The Issuer shall not effect any proposed Re-Pricing unless: (i) with the consent of the Majority of the Subordinated Notes, the Collateral Manager and the U.S. Retention Provider, the Issuer and the Trustee shall have entered into a supplemental indenture dated as of the Re-Pricing Date solely to decrease the spread over LIBOR or the fixed Interest Rate, as applicable, with respect to the Re-Priced Class; (ii) the Issuer (or the Re-Pricing Intermediary on behalf of the Issuer) confirms in writing that all Notes of the Re-Priced Class held by non-consenting Holders have been sold and transferred pursuant to clause (c) above; (iii) each Rating Agency shall have been notified of such Re-Pricing; (iv) all expenses of the Issuer and the Trustee (including the fees of the Re-Pricing Intermediary and fees of counsel) incurred in connection with the Re-Pricing shall not exceed the amount of Interest Proceeds available after taking into account all amounts required to be paid pursuant to the Priority of Payments on the subsequent Payment Date prior to distributions to the Holders of the Subordinated Notes, unless such expenses shall have been paid (including from proceeds of the additional issuance of Subordinated Notes) or shall be adequately provided for by an entity other than the Issuer; and (v) the Issuer has received written advice from Dechert LLP or an opinion of counsel of nationally recognized standing that (A) such Re-Pricing will not result in the Issuer being treated as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes and (B) such Re-Pricing will not result in the Issuer being subject to U.S. federal income tax on a net basis.

 

If notice has been received by the Trustee from the Collateral Manager pursuant to this Indenture, notice of a Re-Pricing shall be given by the Trustee by first class mail, postage prepaid, mailed not less than three Business Days prior to the proposed Re-Pricing Date, to each Holder of Notes of the Re-Priced Class at the address in the Register (with a copy to the Collateral Manager), specifying the applicable Re-Pricing Date and Re-Pricing Rate. Notice of Re-Pricing shall be given by the Trustee at the expense of the Issuer. Failure to give a notice of Re-Pricing, or any defect therein, to any Holder of any Re-Priced Class shall not impair or affect the validity of the Re-Pricing or give rise to any claim based upon such failure or defect. Any notice of a Re-Pricing may be withdrawn by a Majority of the Subordinated Notes on or prior to the Business Day prior to the scheduled Re-Pricing Date by written notice to the Issuer, the Trustee, and the Collateral Manager for any reason. Upon receipt of such notice of withdrawal, the Trustee shall send such notice to the Holders of Notes and each Rating Agency.

 

The Issuer shall direct the Trustee to segregate payments and take other reasonable steps to effect the Re-Pricing and the Trustee shall have the authority to take such actions as may be directed by the Issuer or the Collateral Manager as the Issuer (or the Re-Pricing Intermediary on behalf of the Issuer) or Collateral Manager shall deem necessary or desirable to effect a Re-Pricing. In order to give effect to the Re-Pricing, the Issuer shall, to the extent necessary, obtain and assign a separate CUSIP or CUSIPs to the Notes of each Class held by such consenting or non-consenting Holder(s). The Trustee shall be entitled to receive, and shall be fully protected in relying upon an Opinion of Counsel stating that the Re-Pricing is authorized or permitted by this Indenture and that all conditions precedent thereto have been complied with. The Trustee may request and rely on an Issuer Order providing direction and any additional information requested by the Trustee in order to effect a Re-Pricing.

 

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Section 9.9            Clean-Up Call Redemption.

 

(a)               At the written direction of either a Majority of the Subordinated Notes or the Collateral Manager in its sole discretion (which direction shall be given so as to be received by the Issuer, the Trustee, each Rating Agency and, in the case of such direction delivered by a Majority of the Subordinated Notes, the Collateral Manager not later than 30 days prior to the proposed Redemption Date specified in such direction), the Secured Notes will be subject to redemption by the Issuer, in whole but not in part (a “Clean-Up Call Redemption”), at the Redemption Price therefor, on any Business Day after the Non-Call Period if the Collateral Principal Amount is less than 20.0% of the Target Initial Par Amount.

 

(b)               Upon receipt of notice directing the Issuer to effect a Clean-Up Call Redemption and subject to any transfer restriction, the Issuer (or, at the written direction and expense of the Issuer, the Trustee on behalf of the Issuer) will offer to the Collateral Manager, the holders of the Subordinated Notes and any other Person identified by the Issuer or the Collateral Manager the right to bid to purchase the Collateral Obligations at a price not less than the Clean-Up Call Purchase Price. Any Clean-Up Call Redemption is subject to (i) the sale of the Collateral Obligations by the Issuer to the highest bidder therefor (it being understood that any such sale of Collateral Obligations may consist of multiple transactions in which Collateral Obligations are sold in groups or on an individual basis, or any combination of the two, or as an entire pool, as determined by the Collateral Manager) on or prior to the third Business Day immediately preceding the related Redemption Date, for a purchase price in cash (the “Clean-Up Call Purchase Price”) payable prior to or on the Redemption Date at least equal to the greater of (1) the sum of (a) the sum of the Redemption Price of the Secured Notes, plus (b) the aggregate of all other amounts owing by the Issuer on the date of such redemption that are payable in accordance with the Priority of Payments prior to distributions in respect of the Subordinated Notes, minus (c) all other Assets available for application in accordance with the Priority of Payments on the Redemption Date and (2) the Market Value of such Assets being purchased, and (ii) the receipt by the Trustee from the Collateral Manager, prior to such purchase, of certification from the Collateral Manager that the sum so received satisfies clause (i). Upon receipt by the Trustee of the certification referred to in the preceding sentence, the Trustee (pursuant to written direction from, and at the expense of, the Issuer) and the Issuer shall take all actions necessary to sell, assign and transfer the Assets to the applicable holder of Subordinated Notes, the Collateral Manager or such other Person upon payment in immediately available funds of the Clean-Up Call Purchase Price. The Trustee shall deposit such payment into the applicable sub-account of the Collection Account in accordance with the instructions of the Collateral Manager.

 

(c)               Upon receipt from a Majority of the Subordinated Notes or the Collateral Manager of a direction in writing to effect a Clean-Up Call Redemption, the Issuer shall set the related Redemption Date (as specified in the direction delivered pursuant to clause (a) above) and the Record Date for any redemption pursuant to this Section 9.9 and give written notice thereof to the Trustee (which shall forward such notice to the Holders), the Collateral Administrator, the Collateral Manager and each Rating Agency not later than 15 Business Days prior to the proposed Redemption Date.

 

(d)               Any notice of Clean-Up Call Redemption may be withdrawn by the Issuer up to two Business Days prior to the related scheduled Redemption Date by written notice to the Trustee, each Rating Agency and the Collateral Manager only if amounts equal to the Clean-Up Call Purchase Price are not received in full in immediately available funds by the third Business Day immediately preceding such Redemption Date. Notice of any such withdrawal of a notice of Clean-Up Call Redemption shall be given by the Trustee at the expense of the Issuer to each Holder of Notes to be redeemed at such Holder’s address in the Register, by overnight courier guaranteeing next day delivery not later than the second Business Day prior to the related scheduled Redemption Date.

 

(e)               On the Redemption Date related to any Clean-Up Call Redemption, the Clean-Up Call Purchase Price shall be distributed pursuant to the Priority of Payments.

 

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ARTICLE X

Accounts, Accountings And Releases

 

Section 10.1        Collection of Money. (a) Except as otherwise expressly provided herein, the Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all Money and other property payable to or receivable by the Trustee pursuant to this Indenture, including all payments due on the Assets, in accordance with the terms and conditions of such Assets. The Trustee shall segregate and hold all such Money and property received by it in trust for the Holders of the Notes and shall apply it as provided herein. Each Account shall be established and maintained (I) with a federal or state-chartered depository institution (x) rated at least “A” and “A-1” by S&P (or at least “A+” by S&P if such institution has no short-term rating) and (y) which has a short-term credit rating of at least “F1” or a long term credit rating of at least “A” by Fitch or (II) in segregated trust accounts with the corporate trust department of a federal or state-chartered deposit institution rated at least “BBB+” by S&P and which has a short-term credit rating of at least “F1” or a long-term credit rating of at least “A” by Fitch and is subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulation Section 9.10(b). Such institution shall have a combined capital and surplus of at least U.S.$200,000,000. All Cash deposited in the Accounts shall be invested only in Eligible Investments or Collateral Obligations in accordance with the terms of this Indenture. To avoid the consolidation of the Assets of the Issuer with the general assets of the Bank under any circumstances, the Trustee shall comply, and shall cause the Custodian to comply, with all law applicable to it as a national bank with trust powers holding segregated trust assets in a fiduciary capacity.

 

(b)               If any institution described in Section 10.1(a) above falls below the requirements specified in Section 10.1(a)(I) or (II), the assets held in such Account shall be moved by the Issuer within 30 calendar days to another institution that has ratings that satisfy such requirements.

 

Section 10.2        Collection Account. (a) In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Closing Date, cause the Trustee to establish at the Custodian two segregated trust subaccounts, one of which will be designated the “Interest Collection Subaccount” and one of which will be designated the “Principal Collection Subaccount” (and which together will comprise the Collection Account), each held in the name of the Issuer subject to the lien of the Trustee, for the benefit of the Secured Parties and each of which shall be maintained with the Custodian in accordance with the Securities Account Control Agreement. The Trustee shall from time to time deposit into the Interest Collection Subaccount, in addition to the deposits required pursuant to Section 10.6(a), immediately upon receipt thereof or upon transfer from the Payment Account, all Interest Proceeds (unless simultaneously reinvested in additional Collateral Obligations in accordance with Article XII or in Eligible Investments). The Trustee shall deposit immediately upon receipt thereof or upon transfer from the Expense Reserve Account or Revolver Funding Account all other amounts remitted to the Collection Account into the Principal Collection Subaccount, including in addition to the deposits required pursuant to Section 10.6(a), (i) any funds designated as Principal Proceeds by the Collateral Manager in accordance with this Indenture and (ii) all other Principal Proceeds (unless simultaneously reinvested in additional Collateral Obligations in accordance with Article XII or in Eligible Investments). The Issuer may, but under no circumstances shall be required to, deposit from time to time into the Collection Account, in addition to any amount required hereunder to be deposited therein, such Monies received from external sources for the benefit of the Secured Parties or the Issuer (other than payments on or in respect of the Collateral Obligations, Eligible Investments or other existing Assets) as the Issuer deems, in its sole discretion, to be advisable and to designate them as Interest Proceeds or Principal Proceeds. All Monies deposited from time to time in the Collection Account pursuant to this Indenture shall be held by the Trustee as part of the Assets and shall be applied to the purposes herein provided. Subject to Section 10.2(d), amounts in the Collection Account shall be reinvested pursuant to Section 10.6(a).

 

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(b)              The Trustee, within one Business Day after receipt of any distribution or other proceeds in respect of the Assets which are not Cash, shall so notify the Issuer and the Issuer (or the Collateral Manager on behalf of the Issuer) shall use its commercially reasonable efforts to, within five Business Days after receipt of such notice from the Trustee (or as soon as practicable thereafter), sell such distribution or other proceeds for Cash in an arm’s length transaction and deposit the proceeds thereof in the Collection Account; provided that the Issuer (i) need not sell such distributions or other proceeds if it delivers an Issuer Order or an Officer’s certificate to the Trustee certifying that such distributions or other proceeds constitute Collateral Obligations, Equity Securities or Eligible Investments or (ii) may otherwise retain such distribution or other proceeds for up to two years from the date of receipt thereof if it delivers an Officer’s certificate to the Trustee certifying that (x) it will sell such distribution within such two-year period and (y) retaining such distribution is not otherwise prohibited by this Indenture.

 

(c)               At any time when reinvestment is permitted pursuant to Article XII, the Collateral Manager on behalf of the Issuer may by Issuer Order direct the Trustee to, and upon receipt of such Issuer Order the Trustee shall, withdraw funds on deposit in the Principal Collection Subaccount representing Principal Proceeds (together with any Principal Financed Accrued Interest) and reinvest (or invest, in the case of funds referred to in Section 7.18) such funds in additional Collateral Obligations, in each case in accordance with the requirements of Article XII and such Issuer Order and the purchase price for such Collateral Obligations (including accrued interest and other accrued amounts for such additional Collateral Obligations) may be paid on or following the settlement thereof as directed in an Issuer Order. At any time, the Collateral Manager on behalf of the Issuer may by Issuer Order direct the Trustee to, and upon receipt of such Issuer Order the Trustee shall, withdraw funds on deposit in the Principal Collection Subaccount representing Principal Proceeds and deposit such funds in the Revolver Funding Account to meet funding requirements on Delayed Drawdown Collateral Obligations or Revolving Collateral Obligations.

  

(d)               The Collateral Manager on behalf of the Issuer may by Issuer Order direct the Trustee to, and upon receipt of such Issuer Order the Trustee shall, pay from amounts on deposit in the Collection Account on any Business Day during any Interest Accrual Period (i) any amount required to exercise a warrant or right to acquire loan assets or securities held in the Assets in accordance with such Issuer Order; provided that, so long as any Notes Outstanding are rated by S&P and (solely with respect to the Class A-1 Notes) Fitch, (A) if such payment is made from Interest Proceeds, in the reasonable judgment of the Collateral Manager, such payment will not cause an Event of Default due to a default in the payment, when due and payable, of any interest on any Class A Note or any Class B Note, (B) if such payment is made from Principal Proceeds to acquire securities, unless such Principal Proceeds were designated as such pursuant to a Contribution, (x) the aggregate amount of all payments made pursuant to this clause (i) shall not exceed 5.0% of the Target Initial Par Amount after giving effect to such payment and (y) the Adjusted Collateral Principal Amount is greater than or equal to the Reinvestment Target Par Balance after giving effect to such payment and (C) notice thereof is provided to each Rating Agency, (ii) any amount required to make customary protective advances or provide customary indemnities to the agent of the Collateral Obligation (for which the Issuer may receive a participation interest or other right of repayment) as may be required by the Issuer as a lender under the Underlying Instruments; and (iii) from Interest Proceeds only, any Administrative Expenses (such payments to be counted against the Administrative Expense Cap for the applicable period and to be subject to the order of priority as stated in the definition of Administrative Expenses); provided that the aggregate Administrative Expenses paid pursuant to this Section 10.2(d) during any Collection Period shall not exceed the Administrative Expense Cap for the related Payment Date; provided further that the Trustee shall be entitled (but not required) without liability on its part, to refrain from making any such payment of an Administrative Expense pursuant to this Section 10.2 on any day other than a Payment Date if, in its reasonable determination, the payment of such amount is likely to leave insufficient funds available to pay in full each of the items described in Section 11.1(a)(i)(A) as reasonably anticipated to be or become due and payable on the next Payment Date, taking into account the Administrative Expense Cap.

 

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(e)               The Trustee shall transfer to the Payment Account, from the Collection Account for application pursuant to Section 11.1(a), on the Business Day immediately preceding each Payment Date and on any Redemption Date or Redemption Distribution Date and, in the case of proceeds received in connection with a Refinancing of the Secured Notes in whole, on the date of receipt thereof, the amount set forth to be so transferred in the Distribution Report for such Payment Date or the Redemption Distribution Direction for such Redemption Distribution Date.

 

(f)                The Collateral Manager on behalf of the Issuer may by Issuer Order direct the Trustee to, and upon receipt of such Issuer Order the Trustee shall, (i) transfer from amounts on deposit in the Interest Collection Subaccount to the Principal Collection Subaccount, amounts necessary for application pursuant to Section 7.18(d) and/or (ii) apply amounts in the Principal Collection Subaccount to the purchase of Secured Notes pursuant to Section 9.7.

 

(g)               In connection with a Refinancing in part by Class of one or more Classes of Secured Notes, the Collateral Manager on behalf of the Issuer may direct the Trustee to apply Partial Refinancing Interest Proceeds from the Interest Collection Subaccount on the date of a Refinancing of one or more Classes of Secured Notes to the payment of the Redemption Price(s) of the Class or Classes of Secured Notes subject to Refinancing without regard to the Priority of Payments.

 

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Section 10.3        Transaction Accounts.

 

(a)               Payment Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Closing Date, cause the Trustee to establish at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer subject to the lien of the Trustee, for the benefit of the Secured Parties, which shall be designated as the Payment Account, which shall be maintained with the Custodian in accordance with the Securities Account Control Agreement. Except as provided in Section 11.1(a), the only permitted withdrawal from or application of funds on deposit in, or otherwise to the credit of, the Payment Account shall be to pay amounts due and payable on the Notes in accordance with their terms and the provisions of this Indenture and, upon Issuer Order, to pay Administrative Expenses, fees and other amounts due and owing to the Collateral Manager under the Collateral Management Agreement and other amounts specified herein, each in accordance with the Priority of Payments. The Issuer shall not have any legal, equitable or beneficial interest in the Payment Account other than in accordance with this Indenture (including the Priority of Payments) and the Securities Account Control Agreement. Amounts in the Payment Account shall remain uninvested.

 

(b)               Custodial Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Closing Date, cause the Trustee to establish at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer subject to the lien of the Trustee, for the benefit of the Secured Parties, which shall be designated as the Custodial Account, which shall be maintained with the Custodian in accordance with the Securities Account Control Agreement. All Collateral Obligations shall be credited to the Custodial Account. The only permitted withdrawals from the Custodial Account shall be in accordance with the provisions of this Indenture. The Trustee agrees to give the Issuer immediate notice if (to the actual knowledge of a Trust Officer of the Trustee) the Custodial Account or any assets or securities on deposit therein, or otherwise to the credit of the Custodial Account, shall become subject to any writ, order, judgment, warrant of attachment, execution or similar process. The Issuer shall not have any legal, equitable or beneficial interest in the Custodial Account other than in accordance with this Indenture and the Priority of Payments. Amounts in the Custodial Account shall remain uninvested.

 

(c)               Ramp-Up Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Closing Date, cause the Trustee to establish at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer subject to the lien of the Trustee, for the benefit of the Secured Parties, which shall be designated as the Ramp-Up Account, which shall be maintained with the Custodian in accordance with the Securities Account Control Agreement. The Issuer shall direct the Trustee to deposit $11,359,703.08 to the Ramp-Up Account on the Closing Date. In connection with any purchase of an additional Collateral Obligation, the Trustee will apply amounts held in the Ramp-Up Account as provided by Section 7.18(b). On the Effective Date or upon the occurrence of an Event of Default (and excluding any proceeds that will be used to settle binding commitments entered into prior to such date), the Trustee will deposit any remaining amounts in the Ramp-Up Account into the Principal Collection Subaccount as Principal Proceeds. Any income earned on amounts deposited in the Ramp-Up Account will be deposited in the Interest Collection Subaccount as Interest Proceeds.

 

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(d)               Expense Reserve Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Closing Date, cause the Trustee to establish at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer subject to the lien of the Trustee, for the benefit of the Secured Parties, which shall be designated as the Expense Reserve Account, which shall be maintained with the Custodian in accordance with the Securities Account Control Agreement. The Issuer shall direct the Trustee to deposit $1,200,000 to the Expense Reserve Account. On any Business Day from the Closing Date to and including the Determination Date relating to the first Payment Date, the Trustee shall apply funds from the Expense Reserve Account, as directed by the Collateral Manager, to pay expenses of the Issuer incurred in connection with establishment of the Issuer, the structuring and consummation of the Offering and the issuance of the Notes or to the Collection Account as Interest Proceeds or Principal Proceeds. By the Determination Date relating to the first Payment Date, all funds in the Expense Reserve Account (after deducting any expenses paid on such Determination Date) will be deposited in the Collection Account as Interest Proceeds or Principal Proceeds, as designated by the Collateral Manager, and the Expense Reserve Account will be closed. Any income earned on amounts deposited in the Expense Reserve Account will be deposited in the Interest Collection Subaccount as Interest Proceeds as it is received.

 

(e)               Supplemental Reserve Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Closing Date, cause the Trustee to establish at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer subject to the lien of the Trustee, for the benefit of the Secured Parties, which shall be designated as the “Supplemental Reserve Account,” which shall be held by the Custodian in accordance with the Securities Account Control Agreement. Contributions of Cash or Eligible Investments, any amounts in connection with an additional issuance of Subordinated Notes only and amounts designated for deposit into the Supplemental Reserve Account pursuant to Section 11.1(a)(i)(L) will be deposited into the Supplemental Reserve Account and transferred to the Collection Account at the written direction of the Collateral Manager to the Trustee for a Permitted Use designated by the applicable Contributor or the Collateral Manager, as applicable, in such written direction.

  

(f)                [Reserved.]

 

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Section 10.4        The Revolver Funding Account. Upon the purchase or acquisition of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation identified by written notice to the Trustee, funds in an amount equal to the undrawn portion of such obligation shall be withdrawn at the direction of the Collateral Manager from the Principal Collection Subaccount and deposited by the Trustee in a single, segregated trust account established (in accordance with this Indenture and the Securities Account Control Agreement) at the Custodian and held in the name of the Issuer subject to the lien of the Trustee, for the benefit of the Secured Parties (the “Revolver Funding Account”). Upon initial purchase or acquisition of any such obligations, funds deposited in the Revolver Funding Account in respect of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation will be treated as part of the purchase price therefor. Amounts on deposit in the Revolver Funding Account will be invested in overnight funds that are Eligible Investments selected by the Collateral Manager pursuant to Section 10.6 and earnings from all such investments will be deposited in the Interest Collection Subaccount as Interest Proceeds.

 

The Issuer shall, at all times maintain sufficient funds on deposit in the Revolver Funding Account such that the sum of the amount of funds on deposit in the Revolver Funding Account shall be at least equal to the sum of the unfunded funding obligations under all such Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations then included in the Assets. Funds shall be deposited in the Revolver Funding Account upon the purchase of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation and upon the receipt by the Issuer of any Principal Proceeds with respect to a Revolving Collateral Obligation as directed by the Collateral Manager on behalf of the Issuer. In the event of any shortfall in the Revolver Funding Account, the Collateral Manager (on behalf of the Issuer) may direct the Trustee to, and the Trustee thereafter shall, transfer funds in an amount equal to such shortfall from the Principal Collection Subaccount to the Revolver Funding Account.

 

Any funds in the Revolver Funding Account (other than earnings from Eligible Investments therein) will be treated as Principal Proceeds and will be available at the direction of the Collateral Manager solely to cover any drawdowns on the Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations; provided that any excess of (A) the amounts on deposit in the Revolver Funding Account over (B) the sum of the unfunded funding obligations under all Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations that are included in the Assets (which excess may occur for any reason, including upon (i) the sale or maturity of a Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation, (ii) the occurrence of an event of default with respect to any such Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation or (iii) any other event or circumstance which results in the irrevocable reduction of the undrawn commitments under such Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation) may be transferred by the Trustee (at the written direction of the Collateral Manager on behalf of the Issuer) from time to time as Principal Proceeds to the Principal Collection Subaccount.

 

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Section 10.5        Ownership of the Accounts. For the avoidance of doubt, the Accounts (including income, if any, earned on the investments of funds in such account) will be owned by the Issuer, for federal income tax purposes. The Issuer is required to provide to the Trustee (i) an IRS Form W-9 or appropriate IRS Form W-8 no later than the Closing Date, and (ii) any additional IRS forms (or updated versions of any previously submitted IRS forms) or other documentation upon the reasonable request of the Trustee as may be necessary (i) to reduce or eliminate the imposition of U.S. withholding taxes and (ii) to permit the Trustee to fulfill its tax reporting obligations under applicable law with respect to the Accounts or any amounts paid to the Issuer. If any IRS form or other documentation previously delivered becomes inaccurate in any respect, the Issuer shall timely provide to the Trustee accurately updated and complete versions of such IRS forms or other documentation. The Bank, both in its individual capacity and in its capacity as Trustee, shall have no liability to the Issuer or any other person in connection with any tax withholding amounts paid or withheld from the Accounts pursuant to applicable law arising from the Issuer’s failure to timely provide an accurate, correct and complete IRS Form W-9, an appropriate IRS Form W-8 or such other documentation contemplated under this paragraph. For the avoidance of doubt, no funds shall be invested with respect to such Accounts absent the Trustee having first received (i) the requisite written investment direction with respect to the investment of such funds, and (ii) the IRS forms and other documentation required by this paragraph.

 

Section 10.6        Reinvestment of Funds in Accounts; Reports by Trustee. (a) By Issuer Order (which may be in the form of standing instructions), the Issuer (or the Collateral Manager on behalf of the Issuer) shall at all times direct the Trustee to, and, upon receipt of such Issuer Order, the Trustee shall, invest all funds on deposit in the Collection Account, the Ramp-Up Account, the Revolver Funding Account, the Expense Reserve Account and the Supplemental Reserve Account, as so directed in Eligible Investments having stated maturities no later than the Business Day preceding the next Payment Date (or such shorter maturities expressly provided herein). If prior to the occurrence of an Event of Default, the Issuer shall not have given any such investment directions, the Trustee shall seek instructions from the Collateral Manager within three Business Days after transfer of any funds to such accounts. If the Trustee does not thereafter receive written instructions from the Collateral Manager within five Business Days after transfer of such funds to such accounts, it shall invest and reinvest the funds held in such accounts, as fully as practicable, in the Standby Directed Investment. If after the occurrence of an Event of Default, the Issuer shall not have given such investment directions to the Trustee for three consecutive days, the Trustee shall invest and reinvest such Cash as fully as practicable in the Standby Directed Investment. Except to the extent expressly provided otherwise herein, all interest and other income from such investments shall be deposited in the Interest Collection Subaccount, any gain realized from such investments shall be credited to the Principal Collection Subaccount upon receipt, and any loss resulting from such investments shall be charged to the Principal Collection Subaccount. The Trustee shall not in any way be held liable by reason of any insufficiency of such accounts which results from any loss relating to any such investment; provided that nothing herein shall relieve the Bank of (i) its obligations or liabilities under any security or obligation issued by the Bank or any Affiliate thereof or (ii) liability for any loss resulting from gross negligence, willful misconduct or fraud on the part of the Bank or any Affiliate thereof.

 

(b)               The Trustee agrees to give the Issuer immediate notice if any Account or any funds on deposit in any Account, or otherwise to the credit of an Account, shall become subject to any writ, order, judgment, warrant of attachment, execution or similar process.

 

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(c)               The Trustee shall supply, in a timely fashion, to the Issuer, each Rating Agency and the Collateral Manager any information regularly maintained by the Trustee that the Issuer, the Rating Agencies or the Collateral Manager may from time to time reasonably request with respect to the Assets, the Accounts and the other Assets and provide any other requested information reasonably available to the Trustee by reason of its acting as Trustee hereunder and required to be provided by Section 10.7 or to permit the Collateral Manager to perform its obligations under the Collateral Management Agreement or the Issuer’s obligations hereunder that have been delegated to the Collateral Manager. The Trustee shall promptly forward to the Collateral Manager copies of notices and other writings received by it from the obligor or issuer of any Asset or from any Clearing Agency with respect to any Asset which notices or writings advise the holders of such Asset of any rights that the holders might have with respect thereto (including, without limitation, requests to vote with respect to amendments or waivers and notices of prepayments and redemptions) as well as all periodic financial reports received from such obligor or issuer and Clearing Agencies with respect to such issuer.

 

Section 10.7        Accountings.

 

(a)               Monthly. Not later than the 20th calendar day (or, if such day is not a Business Day, on the next succeeding Business Day) of each calendar month (other than January, April, July and October in each year) and commencing in February 2019, the Issuer shall compile and make available (or cause to be compiled and made available) to each Rating Agency, the Trustee, the Collateral Manager, the Initial Purchaser, any Holder shown on the Register of a Note and any beneficial owner of a Note who has delivered a Beneficial Ownership Certificate to the Trustee a monthly report on a settlement date basis (except as otherwise expressly provided in this Indenture) (each such report a “Monthly Report”). As used herein, the “Monthly Report Determination Date” with respect to any calendar month will be the tenth Business Day prior to the 20th calendar day of such calendar month. The Monthly Report for a calendar month shall contain the following information with respect to the Collateral Obligations and Eligible Investments included in the Assets, and shall be determined as of the Monthly Report Determination Date for such calendar month:

 

(i)               Aggregate Principal Balance of Collateral Obligations, the aggregate outstanding principal balance of Collateral Obligations, the aggregate unfunded commitments of the Collateral Obligations, any capitalized interest on the Collateral Obligations and Eligible Investments representing Principal Proceeds.

 

(ii)              Adjusted Collateral Principal Amount of Collateral Obligations.

 

(iii)            Collateral Principal Amount of Collateral Obligations.

 

(iv)             A list of Collateral Obligations, including, with respect to each such Collateral Obligation, the following information:

 

(A)             The obligor thereon (including the issuer ticker, if any);

 

(B)              The CUSIP, LoanX-ID (if any) or security identifier thereof;

 

(C)              The Principal Balance thereof, the outstanding principal balance thereof (in each case, other than any accrued interest that was purchased with Principal Proceeds (but excluding any capitalized interest)) and any unfunded commitment pertaining thereto;

 

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(D)             The percentage of the aggregate Collateral Principal Amount represented by such Collateral Obligation;

 

(E)              (x) The related interest rate or spread (in the case of a LIBOR Floor Obligation, calculated both with and without regard to the applicable specified “floor” rate per annum), (y) if such Collateral Obligation is a LIBOR Floor Obligation, the related LIBOR floor and (z) the identity of any Collateral Obligation that is not a LIBOR Floor Obligation and for which interest is calculated with respect to any index other than LIBOR;

 

(F)              The stated maturity thereof;

 

(G)             The related S&P Industry Classification;

 

(H)             The S&P Rating;

 

(I)               The Fitch Rating;

 

(J)               The country of Domicile;

 

(K)             An indication as to whether each such Collateral Obligation is (1) a Senior Secured Loan, (2) a Second Lien Loan, (3) a Defaulted Obligation, (4) a Delayed Drawdown Collateral Obligation, (5) a Revolving Collateral Obligation, (6) a Participation Interest (indicating the related Selling Institution, if applicable, and its ratings by each Rating Agency), (7) a Permitted Deferrable Obligation, (8) a Fixed Rate Obligation, (9) a Current Pay Obligation, (10) a DIP Collateral Obligation, (11) a Discount Obligation, (12) a Discount Obligation purchased in the manner described in clause (y) of the proviso to the definition “Discount Obligation”, (13) a Cov-Lite Loan, (14) a First-Lien Last-Out Loan, (15) a Long-Dated Obligation or (16) a Broadly Syndicated Loan or, if not a Broadly Syndicated Loan, a Middle Market Loan;

 

(L)              With respect to each Collateral Obligation that is a Discount Obligation purchased in the manner described in clause (y) of the proviso to the definition “Discount Obligation”;

 

(I)                the identity of the Collateral Obligation (including whether such Collateral Obligation was classified as a Discount Obligation at the time of its original purchase) the proceeds of whose sale are used to purchase the purchased Collateral Obligation;

 

(II)              the purchase price (as a percentage of par) of the purchased Collateral Obligation and the sale price (as a percentage of par) of the Collateral Obligation the proceeds of whose sale are used to purchase the purchased Collateral Obligation; and

 

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(III)           the Aggregate Principal Balance of Collateral Obligations that have been excluded from the definition of “Discount Obligation” and relevant calculations indicating whether such amount is in compliance with the limitations described in clauses (z)(A) and (z)(B) of the proviso to the definition of “Discount Obligation.”

 

(M)            The Principal Balance of each Cov-Lite Loan and the Aggregate Principal Balance of all Cov-Lite Loans;

 

(N)             The Fitch Recovery Rate;

 

(O)             The S&P Recovery Rate; and

 

(P)              The date of the credit estimate of such Collateral Obligation.

 

(v)               If the Monthly Report Determination Date occurs on or after the Effective Date and prior to the last day of the Reinvestment Period, for each of the limitations and tests specified in the definitions of Concentration Limitations and Collateral Quality Tests, (1) the result (including, during any S&P CDO Formula Election Period, calculation of each of the S&P CDO Monitor Benchmarks), (2) the related minimum or maximum test level and (3) a determination as to whether such result satisfies the related test.

 

(vi)             The calculation of each of the following:

 

(A)             Each Interest Coverage Ratio (and setting forth the percentage required to satisfy each Interest Coverage Test);

 

(B)              Each Overcollateralization Ratio (and setting forth the percentage required to satisfy each Overcollateralization Ratio Test);

 

(C)              The Weighted Average Coupon; and

 

(D)             The Weighted Average Floating Spread.

 

(vii)          The calculation specified in Section 5.1(g).

 

(viii)        For each Account, a schedule showing the beginning balance, each credit or debit specifying the nature, source and amount, and the ending balance.

 

(ix)             A schedule showing for each of the following the beginning balance, the amount of Interest Proceeds received from the date of determination of the immediately preceding Monthly Report, and the ending balance for the current Measurement Date:

 

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(A)             Interest Proceeds from Collateral Obligations; and

 

(B)              Interest Proceeds from Eligible Investments.

 

(x)            Purchases, payments, and sales:

 

(A)             The identity, Principal Balance and outstanding principal balance (in each case other than any accrued interest that was purchased with Principal Proceeds (but excluding any capitalized interest)), unfunded commitment (if any), capitalized interest (if any), Principal Proceeds and Interest Proceeds received, and date for each Collateral Obligation that was released for sale or disposition pursuant to Section 12.1 since the last Monthly Report Determination Date and whether such Collateral Obligation was a Credit Risk Obligation or a Credit Improved Obligation, and whether the sale of such Collateral Obligation was a discretionary sale and; and

 

(B)              The identity, Principal Balance and outstanding principal balance (in each case other than any accrued interest that was purchased with Principal Proceeds (but excluding any capitalized interest)), unfunded commitment (if any), capitalized interest (if any) and Principal Proceeds and Interest Proceeds expended to acquire each Collateral Obligation acquired pursuant to Section 12.2 since the last Monthly Report Determination Date.

 

(xi)           The identity of each Defaulted Obligation, the Fitch Collateral Value, S&P Collateral Value and Market Value of each such Defaulted Obligation and date of default thereof.

 

(xii)          The identity of each Collateral Obligation with an S&P Rating of “CCC+” or below and/or the Fitch Rating of “CCC+” or below and the Market Value of each such Collateral Obligation.

 

(xiii)         The identity of each Deferring Obligation, the Fitch Collateral Value, S&P Collateral Value and Market Value of each Deferring Obligation, and the date on which interest was last paid in full in Cash thereon.

 

(xiv)        The identity of each Current Pay Obligation, the Market Value of each such Current Pay Obligation, and the percentage of the Collateral Principal Amount comprised of Current Pay Obligations.

 

(xv)          The Aggregate Principal Balance, measured cumulatively from the Closing Date onward, of all Collateral Obligations that would have been acquired through a Distressed Exchange but for the operation of the proviso in the definition of “Distressed Exchange”, all as reported to the Trustee by the Collateral Manager.

 

(xvi)         Calculation of the S&P Equivalent Weighted Average Rating Factor.

 

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(xvii)       The percentage of the Collateral Principal Amount comprised of Broadly Syndicated Loans (which percentage shall be reflected on the summary page of the Monthly Report).

 

(xviii)       A copy of the notice provided by the Collateral Manager pursuant to Section 12.2(f) hereof setting forth the details of any Trading Plan (including, the proposed amendments and/or proposed investments identified by the Collateral Manager for acquisition or entry, as applicable, as part of such Trading Plan (which details shall be reported on a dedicated page of the Monthly Report)) and the occurrence of the event, if any, described in clause (y) of the proviso to Section 12.2(f).

 

(xix)         Based solely on the confirmation given by the Issuer, or the Collateral Manager on behalf of the Issuer, to the Collateral Administrator and the Trustee (for the benefit of the Holders), on which the Collateral Administrator and the Trustee may conclusively rely, a statement as to whether the E.U. Retention Provider has confirmed it is in compliance with the requirements set forth in paragraph 1 of the E.U. Risk Retention Letter.

 

(xx)          The S&P Equivalent Weighted Average Rating Factor and S&P Equivalent Diversity Score.

 

(xxi)         For each Account, (i) the name of the financial institution that holds such Account; and (ii) the applicable ratings by S&P and Fitch required under Section 10.1(a) for such institution.

 

(xxii)        Such other information as any Rating Agency or the Collateral Manager may reasonably request.

 

For each instance in which the Market Value is reported pursuant to the foregoing, the Monthly Report shall also indicate the manner in which such Market Value was determined and the source(s) (if applicable) used in such determination, as provided by the Collateral Manager.

 

Upon receipt of each Monthly Report, the Trustee shall (a) if the relevant Monthly Report Determination Date occurred on or prior to the last day of the Reinvestment Period, notify the Issuer (who shall notify S&P) if such Monthly Report indicates that the S&P CDO Monitor Test has not been satisfied as of the relevant Measurement Date and (b) compare the information contained in such Monthly Report to the information contained in its records with respect to the Assets and shall, within three Business Days after receipt of such Monthly Report, notify the Issuer, the Collateral Administrator, the Rating Agencies and the Collateral Manager if the information contained in the Monthly Report does not conform to the information maintained by the Trustee with respect to the Assets. If any discrepancy exists, the Collateral Administrator and the Issuer, or the Collateral Manager on behalf of the Issuer, shall attempt to resolve the discrepancy. If such discrepancy cannot be promptly resolved, the Trustee shall within ten (10) Business Days notify the Collateral Manager who shall, on behalf of the Issuer, request that the Independent accountants appointed by the Issuer pursuant to Section 10.9 perform agreed upon procedures on such Monthly Report and the Trustee’s records to determine the cause of such discrepancy. If such review reveals an error in the Monthly Report or the Trustee’s records, the Monthly Report or the Trustee’s records shall be revised accordingly and, as so revised, shall be utilized in making all calculations pursuant to this Indenture and notice of any error in the Monthly Report shall be sent as soon as practicable by the Issuer to all recipients of such report which may be accomplished by making a notation of such error in the subsequent Monthly Report.

 

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(b)           Payment Date Accounting. The Issuer shall render an accounting (each a “Distribution Report”), determined as of the close of business on each Determination Date preceding a Payment Date, and shall make available such Distribution Report to the Trustee, the Collateral Manager, the Initial Purchaser, each Rating Agency, any Holder shown on the Register of a Note and any beneficial owner of a Note who has delivered a Beneficial Ownership Certificate to the Trustee not later than the Business Day preceding the related Payment Date. The Distribution Report shall contain the following information:

 

(i)             the information required to be in the Monthly Report pursuant to Section 10.7(a), provided that such Payment Date is not also a Re-Pricing Date or Redemption Date for an Optional Redemption, Tax Redemption, Clean-Up Call Redemption or Refinancing in each case in whole but not in part;

 

(ii)            (a) the Aggregate Outstanding Amount of the Secured Notes of each Class at the beginning of the Interest Accrual Period and such amount as a percentage of the original Aggregate Outstanding Amount of the Secured Notes of such Class, (b) the amount of principal payments to be made on the Secured Notes of each Class on the next Payment Date, the amount of any Deferred Interest on the Class C Notes and the Class D Notes and the Aggregate Outstanding Amount of the Secured Notes of each Class after giving effect to the principal payments, if any, on the next Payment Date and such amount as a percentage of the original Aggregate Outstanding Amount of the Secured Notes of such Class and (c) the Aggregate Outstanding Amount of the Subordinated Notes at the beginning of the Interest Accrual Period and such amount as a percentage of the original Aggregate Outstanding Amount of the Subordinated Notes, the amount of payments, if any, to be made on the Subordinated Notes on the next Payment Date, and the Aggregate Outstanding Amount of the Subordinated Notes after giving effect to such payments, if any, on the next Payment Date and such amount as a percentage of the original Aggregate Outstanding Amount of the Subordinated Notes;

 

(iii)           the Interest Rate and accrued interest for each applicable Class of Secured Notes for such Payment Date;

 

(iv)           the amounts payable pursuant to each clause of Section 11.1(a)(i) and each clause of Section 11.1(a)(ii) or each clause of Section 11.1(a)(iii), as applicable, on the related Payment Date;

 

(v)            for the Collection Account:

 

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(A)             the Balance on deposit in the Collection Account at the end of the related Collection Period (or, with respect to the Interest Collection Subaccount, the next Business Day);

 

(B)              the amounts payable from the Collection Account to the Payment Account, in order to make payments pursuant to Section 11.1(a)(i) and Section 11.1(a)(ii) on the next Payment Date (net of amounts which the Collateral Manager intends to re-invest in additional Collateral Obligations pursuant to Article XII); and

 

(C)              the Balance remaining in the Collection Account immediately after all payments and deposits to be made on such Payment Date; and

 

(vi)           [reserved];

 

(vii)          such other information as the Collateral Manager may reasonably request.

 

Each Distribution Report shall constitute instructions to the Trustee to withdraw funds from the Payment Account and pay or transfer such amounts set forth in such Distribution Report in the manner specified and in accordance with the priorities established in Section 11.1 and Article XIII.

 

(c)           Interest Rate Notice. The Issuer (or the Collateral Administrator on behalf of the Issuer) shall include in the Monthly Report a notice setting forth the Interest Rate for each Class of Secured Notes for the Interest Accrual Period preceding the next Payment Date.

 

(d)           Failure to Provide Accounting. If the Trustee shall not have received any accounting provided for in this Section 10.7 on the first Business Day after the date on which such accounting is due to the Trustee, the Trustee shall notify the Collateral Manager who shall use all reasonable efforts to obtain such accounting by the applicable Payment Date. To the extent the Collateral Manager is required to provide any information or reports pursuant to this Section 10.7 as a result of the failure of the Issuer to provide such information or reports, the Collateral Manager shall be entitled to retain an Independent certified public accountant in connection therewith and the reasonable costs incurred by the Collateral Manager for such Independent certified public accountant shall be paid by the Issuer.

 

(e)            Required Content of Certain Reports. Each Monthly Report and each Distribution Report sent to any Holder or beneficial owner of an interest in a Note shall contain, or be accompanied by, the following notices:

 

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The Notes may be beneficially owned only by Persons that (a) in the case of the Secured Notes (i) are Qualified Purchasers that are not U.S. persons (within the meaning of Regulation S under the United States Securities Act of 1933, as amended) and are purchasing their beneficial interest in an offshore transaction (as defined in Regulation S) or (ii) are (x) Qualified Institutional Buyers, (y) Institutional Accredited Investors or (z) Accredited Investors and (A) Qualified Purchasers (in the case of (x) and (y) above) or Knowledgeable Employees with respect to the Issuer or the Collateral Manager (with respect to (z) above) or (B) corporations, partnerships, limited liability companies or other entities (other than trusts) each shareholder, partner, member or other equity owner of which is either a Qualified Purchaser affiliated with the Collateral Manager and/or a Knowledgeable Employee with respect to the Issuer or the Collateral Manager or (b) in the case of the Subordinated Notes, are (x) Qualified Institutional Buyers, (y) Institutional Accredited Investors or (z) Accredited Investors and either (A) Qualified Purchasers (in the case of (x) and (y) above) or Knowledgeable Employees with respect to the Issuer or the Collateral Manager (in the case of (z) above) or (B) corporations, partnerships, limited liability companies or other entities (other than trusts) each shareholder, partner, member or other equity owner of which is either a Qualified Purchaser affiliated with the Collateral Manager and/or a Knowledgeable Employee with respect to the Issuer or Collateral Manager and (c) in the case of clauses (a) and (b), can make the representations set forth in Section 2.5 of this Indenture or the appropriate Exhibit to this Indenture. The Issuer has the right to compel any beneficial owner of an interest in Rule 144A Global Secured Notes that does not meet the qualifications set forth in the preceding sentence to sell its interest in such Notes, or may sell such interest on behalf of such owner, pursuant to Section 2.11.

 

Each holder receiving this report agrees to keep all non-public information herein confidential and not to use such information for any purpose other than its evaluation of its investment in the Notes; provided that any holder may provide such information on a confidential basis to any prospective purchaser of such holder’s Notes that is permitted by the terms of this Indenture to acquire such holder’s Notes and that agrees to keep such information confidential in accordance with the terms of this Indenture.

 

(f)            Initial Purchaser Information. The Issuer and the Initial Purchaser, or any successor to the Initial Purchaser, may post the information contained in a Monthly Report or Distribution Report to a password-protected internet site accessible only to the Holders of the Notes and to the Collateral Manager.

 

(g)           Distribution of Reports. The Trustee will make the Monthly Report, the Distribution Report, any Redemption Distribution Direction and any notices or communications required to be delivered to the Holders in accordance with this Indenture available via its internet website. The Trustee’s internet website shall initially be located at https://gctinvestorreporting.bnymellon.com/Home.jsp. The Trustee shall have the right to change the way such statements are distributed in order to make such distribution more convenient and/or more accessible to the above parties and the Trustee shall provide timely and adequate notification to all above parties regarding any such changes. As a condition to access to the Trustee’s internet website, the Trustee may require registration and the acceptance of a disclaimer. The Trustee shall be entitled to rely on but shall not be responsible for the content or accuracy of any information provided in the Monthly Report and the Distribution Report which the Trustee disseminates in accordance with this Indenture and may affix thereto any disclaimer it deems appropriate in its reasonable discretion.

 

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(h)           In the event that the Trustee receives instructions to effect a securities transaction as contemplated in 12 CFR 12.1, the Issuer acknowledges that, upon its written request and at no additional cost, it has the right to receive notification from the Trustee after the completion of such transaction as contemplated in 12 CFR 12.4(a) or (b), the Issuer agrees that, absent a specific request, such notification shall not be provided by the Trustee hereof and, in lieu of such notifications, the Trustee shall make available each Monthly Report and Distribution Report in the manner required by this Indenture.

 

(i)            The Trustee is authorized to make available to Intex Solutions, Inc. each Monthly Report and Distribution Report.

 

(j)            “Fair Value” Report. The Issuer authorizes and directs the Trustee to make available to Holders via the Trustee’s internet website any “fair value” report provided to the Trustee by the Issuer for posting in connection with the U.S. Risk Retention Rules and provided to the Trustee for posting to the website. Notwithstanding anything herein to the contrary, it is understood and agreed that the Trustee (i) has not participated in the preparation of any such report or the information contained therein and (ii) is not responsible for, and is not making any representation concerning, the accuracy or completeness of such report or the information contained therein, including, without limitation, in respect of the fair value of any Notes identified therein or any assumptions, discount factors or other variables used to determine any such fair value.

 

(k)           Redemption Distribution Direction. The Issuer shall render an accounting (each a “Redemption Distribution Direction”), determined as of the close of business on each Determination Date preceding a Redemption Distribution Date, and shall make available such Redemption Distribution Direction available to the Collateral Manager and the Trustee setting forth the amounts payable pursuant to each applicable clause of Section 11.1(a)(i) and Section 11.1(a)(ii), as applicable, on the related Redemption Distribution Date. Each Redemption Distribution Direction shall constitute instructions to the Trustee to withdraw funds from the Payment Account and pay or transfer such amounts set forth in such Redemption Distribution Direction in the manner specified and in accordance with the priorities established in Section 11.1 and Article XIII. No Redemption Distribution Direction will be required to be reviewed by the Independent accountants appointed pursuant to this Indenture.

 

Section 10.8          Release of Assets. (a) Subject to Article XII, the Issuer may, by Issuer Order executed by an Officer of the Collateral Manager, delivered to the Trustee at least one Business Day prior to the settlement date for any sale of an Asset certifying that the sale of such Asset is being made in accordance with Section 12.1 hereof and such sale complies with all applicable requirements of Section 12.1 (which certification shall be deemed to be made upon delivery of such Issuer Order or trade continuation in respect of such sale) (provided that if an Enforcement Event has occurred and is continuing, neither the Issuer nor the Collateral Manager (on behalf of the Issuer) may direct the Trustee to release or cause to be released such Asset from the lien of this Indenture pursuant to a sale under Section 12.1(e), Section 12.1(f) or Section 12.1(g) unless the sale of such Asset is permitted pursuant to Section 12.3(c)), direct the Trustee to release or cause to be released such Asset from the lien of this Indenture and, upon receipt of such Issuer Order, the Trustee shall deliver any such Asset, if in physical form, duly endorsed to the broker or purchaser designated in such Issuer Order or, if such Asset is a Clearing Corporation Security, cause an appropriate transfer thereof to be made, in each case against receipt of the sales price therefor as specified by the Collateral Manager in such Issuer Order; provided that the Trustee may deliver any such Asset in physical form for examination in accordance with industry custom.

 

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(b)           Subject to the terms of this Indenture, the Trustee shall upon an Issuer Order (i) deliver any Asset, and release or cause to be released such Asset from the lien of this Indenture, which is set for any mandatory call or redemption or payment in full to the appropriate payor or paying agent, as applicable, on or before the date set for such call, redemption or payment, in each case against receipt of the call or redemption price or payment in full thereof and (ii) provide notice thereof to the Collateral Manager.

 

(c)           Upon receiving actual notice of any Offer or any request for a waiver, direction, consent, amendment or other modification or action with respect to any Asset, the Trustee on behalf of the Issuer shall notify the Collateral Manager of any Asset that is subject to a tender offer, voluntary redemption, exchange offer, conversion or other similar action (an “Offer”) or such request. Unless the Notes have been accelerated following an Event of Default, the Collateral Manager may, by Issuer Order, direct (x) the Trustee to accept or participate in or decline or refuse to participate in such Offer and, in the case of acceptance or participation, to release from the lien of this Indenture such Asset in accordance with the terms of the Offer against receipt of payment therefor, or (y) the Issuer or the Trustee to agree to or otherwise act with respect to such consent, direction, waiver, amendment, modification or action; provided that in the absence of any such direction, the Trustee shall not respond or react to such Offer or request.

 

(d)           As provided in Section 10.2(a), the Trustee shall deposit any proceeds received by it from the disposition or replacement of an Asset in the applicable subaccount of the Collection Account, unless simultaneously applied to the purchase of additional Collateral Obligations or Eligible Investments as permitted under and in accordance with the requirements of this Article X and Article XII.

 

(e)           The Trustee shall, upon receipt of an Issuer Order at such time as there are no Secured Notes Outstanding and all obligations of the Issuer hereunder have been satisfied, release any remaining Assets from the lien of this Indenture.

 

(f)            Any security, Collateral Obligation or amounts that are released pursuant to Section 10.8(a), (b) or (c) shall be released from the lien of this Indenture.

 

(g)           Any amounts paid from the Payment Account to the Holders of the Subordinated Notes in accordance with the Priority of Payments shall be released from the lien of this Indenture.

 

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Section 10.9          Reports by Independent Accountants. (a) At the Closing Date, the Issuer shall appoint one or more firms of Independent certified public accountants of recognized international reputation for purposes of reviewing and delivering the reports or certificates of such accountants required by this Indenture, which may be the firm of Independent certified public accountants that performs accounting services for the Issuer or the Collateral Manager. The Issuer may remove any firm of Independent certified public accountants at any time without the consent of any Holder of Notes. Upon any resignation by such firm or removal of such firm by the Issuer, the Issuer (or the Collateral Manager on behalf of the Issuer) shall promptly appoint by Issuer Order delivered to the Trustee and each Rating Agency a successor thereto that shall also be a firm of Independent certified public accountants of recognized international reputation, which may be a firm of Independent certified public accountants that performs accounting services for the Issuer or the Collateral Manager. If the Issuer shall fail to appoint a successor to a firm of Independent certified public accountants which has resigned within 30 days after such resignation, the Issuer shall promptly notify the Trustee of such failure in writing. If the Issuer shall not have appointed a successor within ten days thereafter, the Trustee shall promptly notify the Collateral Manager, who shall appoint a successor firm of Independent certified public accountants of recognized international reputation. The fees of such Independent certified public accountants and its successor shall be payable by the Issuer. In the event such firm requires the Trustee and/or the Collateral Administrator to agree to the procedures performed by such firm, the Issuer hereby directs the Trustee and/or the Collateral Administrator to so agree, which acknowledgment or agreement may include, among other things, (i) acknowledgment of the responsibility for the sufficiency of the procedures to be performed by the Independent accountants for its purposes, (ii) releases by the Trustee (on behalf of itself and the Holders) of claims against the Independent accountants and acknowledgement of other limitations of liability in favor of the Independent accountants and (iii) restrictions or prohibitions on the disclosure of information or documents provided to it by such firm of Independent accountants (including to the Holders). It is understood and agreed that the Trustee and/or the Collateral Administrator will deliver such letter of agreement in conclusive reliance on the foregoing direction of the Issuer, and neither the Trustee nor the Collateral Administrator shall make any inquiry or investigation as to, and shall have no obligation in respect of, the sufficiency, validity or correctness of such procedures. The Trustee and the Collateral Administrator shall not be required to make any such agreements that adversely affect the Bank in its individual capacity.

 

(b)           On or before December 31 of each year commencing in 2019, the Issuer shall cause to be delivered to the Trustee, the Collateral Manager and each Holder of the Notes upon written request therefor and subject to the execution of an agreement with the Independent certified public accountants, a report from a firm of Independent certified public accountants for each Distribution Report occurring in January and July of each year (i) indicating that such firm has performed agreed-upon procedures to recalculate certain of the calculations within those Distribution Reports (excluding the S&P CDO Monitor Test) have been performed in accordance with the applicable provisions of this Indenture and (ii) listing the Aggregate Principal Balance of the Assets and the Aggregate Principal Balance of the Collateral Obligations securing the Secured Notes as of the relevant Determination Dates; provided that in the event of a conflict between such firm of Independent certified public accountants and the Issuer with respect to any matter in this Section 10.9, the determination by such firm of Independent public accountants shall be conclusive.

 

(c)            Upon the written request of the Trustee, or any Holder of a Subordinated Note (and subject to the execution of an agreement with the firm of Independent certified public accountants), the Issuer will cause the firm of Independent certified public accountants appointed pursuant to Section 10.9(a) to provide any Holder of Subordinated Notes with all of the information required to be provided by the Issuer or pursuant to Section 7.17 or assist the Issuer in the preparation thereof.

 

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Section 10.10        Reports to the Rating Agencies and Additional Recipients. In addition to the information and reports specifically required to be provided to each Rating Agency pursuant to the terms of this Indenture, the Issuer shall provide each Rating Agency with all information or reports delivered to the Trustee hereunder (with the exception of any accountants’ reports or any Accountants’ Report) and such additional information as either Rating Agency may from time to time reasonably request (including notification to the Rating Agencies of any modification of any loan document relating to a DIP Collateral Obligation or any release of collateral thereunder not permitted by such loan documentation but excluding any accountants’ reports or any Accountants’ Report). With respect to credit estimates, the Issuer shall provide notification to S&P of any material modification that would result in substantial changes to the terms of any loan document relating to a Collateral Obligation or any release of collateral thereunder not permitted by such loan documentation if the Collateral Manager reasonably determines that such notice is required in accordance with S&P’s publication on credit estimates titled “What Are Credit Estimates And How Do They Differ From Ratings?” dated April 2011 (as the same may be amended or updated from time to time); provided that the Issuer (or the Collateral Manager on behalf of the Issuer) shall also provide Fitch with a copy of any amendment documenting any such material modification. Within 10 Business Days after the Effective Date, together with each Monthly Report and on each Payment Date, the Issuer shall provide to the Rating Agencies, via e-mail in accordance with Section 14.3(a), a Microsoft Excel file of the Excel Default Model Input File and, with respect to each Collateral Obligation, the name of each obligor or issuer thereof, the CUSIP number thereof (if applicable) and the Priority Category thereof. In accordance with SEC Release No. 34-72936, Form 15-E, only in its complete and unedited form which includes the Accountants’ Effective Date Comparison AUP Report as an attachment, will be provided by the Independent accountants to the Issuer and the Information Agent who will post such Form 15-E, except for the redaction of any sensitive information by the Issuer, on the 17g-5 website. Copies of the Accountants’ Effective Date Recalculation AUP Report or any other agreed-upon procedures report provided by the Independent accountants to the Issuer will not be provided to any other party including the Rating Agencies or posted on the 17g-5 website (other than as provided in any access letter between such Person and the accountants).

 

Section 10.11        Procedures Relating to the Establishment of Accounts Controlled by the Trustee. Notwithstanding anything else contained herein, the Trustee agrees that with respect to each of the Accounts, it will cause each Securities Intermediary establishing such accounts to enter into a securities account control agreement and, if the Securities Intermediary is the Bank, shall cause the Bank to comply with the provisions of such securities account control agreement. The Trustee shall have the right to open such subaccounts of any such account as it deems necessary or appropriate for convenience of administration.

 

Section 10.12         Section 3(c)(7) Procedures. For so long as any Notes are Outstanding, the Issuer shall do the following:

 

(a)            Notification. Each Monthly Report sent or caused to be sent by the Issuer to the Noteholders will include a notice to the following effect:

 

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       “The Investment Company Act of 1940, as amended (the “1940 Act”), requires that all holders of the outstanding securities of the Issuer that are U.S. persons (as defined in Regulation S) be “Qualified Purchasers” (“Qualified Purchasers”) as defined in Section 2(a)(51)(A) of the 1940 Act and related rules. Under the rules, the Issuer must have a “reasonable belief” that all holders of its outstanding securities that are “U.S. persons” (as defined in Regulation S), including transferees, are Qualified Purchasers. Consequently, all sales and resales of the Notes in the United States or to “U.S. persons” (as defined in Regulation S) must be made solely to purchasers that are Qualified Purchasers. Each purchaser of a Secured Note in the United States who is a “U.S. person” (as defined in Regulation S) (such Note a “Restricted Secured Note”) will be deemed (or required, as the case may be) to represent at the time of purchase that: (i) the purchaser is a Qualified Purchaser who is either (x) an institutional accredited investor (“IAI”) within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”) or (y) a qualified institutional buyer as defined in Rule 144A under the Securities Act (“QIB”); (ii) the purchaser is acting for its own account or the account of another Qualified Purchaser and QIB/IAI (as applicable); (iii) the purchaser is not formed for the purpose of investing in the Issuer; (iv) the purchaser, and each account for which it is purchasing, will hold and transfer at least the minimum denominations of the Notes specified herein; (v) the purchaser understands that the Issuer may receive a list of participants holding positions in securities from one or more book-entry depositories; and (vi) the purchaser will provide written notice of the foregoing, and of any applicable restrictions on transfer, to any subsequent transferees. The Restricted Secured Notes may only be transferred to another Qualified Purchaser and QIB/IAI (as applicable) and all subsequent transferees are deemed to have made representations (i) through (vi) above. Each purchaser of a Subordinated Note in the United States who is a “U.S. person” (as defined in Regulation S) (such Note a “Restricted Subordinated Note”) will be required to represent at the time of purchase that: (a) the purchaser is a Qualified Purchaser who is either (x) an accredited investor (“AI”) within the meaning of Rule 501 under the Securities Act or (y) a QIB; (b) the purchaser is acting for its own account or the account of another Qualified Purchaser and QIB/AI (as applicable); (c) the purchaser is not formed for the purpose of investing in the Issuer; (d) the purchaser, and each account for which it is purchasing, will hold and transfer at least the minimum denominations of the Notes specified herein; (e) the purchaser understands that the Issuer may receive a list of participants holding positions in securities from one or more book-entry depositories; and (f) the purchaser will provide written notice of the foregoing, and of any applicable restrictions on transfer, to any subsequent transferees. The Restricted Subordinated Notes may only be transferred to another Qualified Purchaser and QIB/AI (as applicable) and all subsequent transferees are deemed to have made representations (a) through (f) above.”

 

“The Issuer directs that the recipient of this notice, and any recipient of a copy of this notice, provide a copy to any Person having an interest in this Note as indicated on the books of DTC or on the books of a participant in DTC or on the books of an indirect participant for which such participant in DTC acts as agent.”

 

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“The Indenture provides that if, notwithstanding the restrictions on transfer contained therein, the Issuer determines that any holder of, or beneficial owner of an interest in a Restricted Secured Note or a Restricted Subordinated Note is a “U.S. person” (as defined in Regulation S) who is determined not to have been a Qualified Purchaser at the time of acquisition of such Restricted Secured Note or Restricted Subordinated Note, as applicable, or beneficial interest therein, the Issuer may require, by notice to such Holder or beneficial owner, that such Holder or beneficial owner sell all of its right, title and interest to such Restricted Secured Note or a Restricted Subordinated Note, as applicable, (or any interest therein) to a Person that is either (x) in the case of the Secured Notes, not a “U.S. person” (as defined in Regulation S) or (y) a Qualified Purchaser who is either an IAI (or, in the case of the Subordinated Notes, another AI) or a QIB (as applicable), with such sale to be effected within 30 days after notice of such sale requirement is given. If such holder or beneficial owner fails to effect the transfer required within such 30-day period, (i) the Issuer or the Collateral Manager acting for the Issuer, without further notice to such holder, shall and is hereby irrevocably authorized by such holder or beneficial owner, to cause its Restricted Secured Note or Restricted Subordinated Note, as applicable, or beneficial interest therein to be transferred in a commercially reasonable sale (conducted by the Collateral Manager in accordance with Article 9 of the UCC as in effect in the State of New York as applied to securities that are sold on a recognized market or that may decline speedily in value) to a Person that certifies to the Trustee, the Issuer and the Collateral Manager, in connection with such transfer, that such Person meets the qualifications set forth in clauses (x) and (y) above and (ii) pending such transfer, no further payments will be made in respect of such Restricted Secured Note or Restricted Subordinated Note, as applicable, or beneficial interest therein held by such holder or beneficial owner.”

 

(b)           DTC Actions. The Issuer will direct DTC to take the following steps in connection with the Global Secured Notes:

 

(i)            The Issuer will direct DTC to include the marker “3c7” in the DTC 20-character security descriptor and the 48-character additional descriptor for the Global Secured Notes in order to indicate that sales are limited to Qualified Purchasers.

 

(ii)           The Issuer will direct DTC to cause each physical deliver order ticket that is delivered by DTC to purchasers to contain the 20-character security descriptor. The Issuer will direct DTC to cause each deliver order ticket that is delivered by DTC to purchasers in electronic form to contain a “3c7” indicator and a related user manual for participants. Such user manual will contain a description of the relevant restrictions imposed by Section 3(c)(7).

 

(iii)          On or prior to the Closing Date, the Issuer will instruct DTC to send a Section 3(c)(7) Notice to all DTC participants in connection with the offering of the Global Secured Notes.

 

(iv)          In addition to the obligations of the Registrar set forth in Section 2.5, the Issuer will from time to time (upon the request of the Trustee) make a request to DTC to deliver to the Issuer a list of all DTC participants holding an interest in the Global Secured Notes.

 

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(v)           The Issuer will cause each CUSIP number obtained for a Global Note to have a fixed field containing “3c7” and “144A” indicators, as applicable, attached to such CUSIP number.

 

(c)           Bloomberg Screens, Etc. The Issuer will from time to time request all third-party vendors to include on screens maintained by such vendors appropriate legends regarding Rule 144A and Section 3(c)(7) under the 1940 Act restrictions on the Global Secured Notes. Without limiting the foregoing, the Initial Purchaser will request that each third-party vendor include the following legends on each screen containing information about the Notes:

 

(i)            Bloomberg.

 

(A)             “Iss’d Under 144A/3c7”, to be stated in the “Note Box” on the bottom of the “Security Display” page describing the Global Secured Notes;

 

(B)              a flashing red indicator stating “See Other Available Information” located on the “Security Display” page;

 

(C)              a link to an “Additional Security Information” page on such indicator stating that the Global Secured Notes are being offered in reliance on the exception from registration under Rule 144A of the Securities Act of 1933 to Persons that are both (i) “Qualified Institutional Buyers” as defined in Rule 144A under the Securities Act and (ii) “Qualified Purchasers” as defined under Section 2(a)(51) of the 1940 Act, as amended; and

 

(D)              a statement on the “Disclaimer” page for the Global Secured Notes that the Notes will not be and have not been registered under the Securities Act of 1933, as amended, that the Issuer has not been registered under the 1940 Act, as amended, and that the Global Secured Notes may only be offered or sold in accordance with Section 3(c)(7) of the 1940 Act, as amended.

 

(ii)           Reuters.

 

(A)             a “144A – 3c7” notation included in the security name field at the top of the Reuters Instrument Code screen;

 

(B)              a “144A3c7Disclaimer” indicator appearing on the right side of the Reuters Instrument Code screen; and

 

(C)              a link from such “144A3c7Disclaimer” indicator to a disclaimer screen containing the following language: “These Notes may be sold or transferred only to Persons who are both (i) Qualified Institutional Buyers, as defined in Rule 144A under the Securities Act, and (ii) Qualified Purchasers, as defined under Section 3(c)(7) under the U.S. Investment Company Act of 1940.”

 

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Section 10.13        No Further Reporting Following the Redemption of the Secured Notes. Notwithstanding any other provision of this Indenture to the contrary, except with respect to (i) Section 4.1 or the satisfaction and discharge of this Indenture and (ii) if at such time 100% of the Aggregate Outstanding Amount of the Subordinated Notes are not owned by the BDC, the Retention Provider or any Affiliate thereof, Article VIII, from and after the date on which no Secured Notes are deemed or considered Outstanding, all requirements herein that the Issuer, Collateral Manager or Trustee deliver or cause to be delivered any reports, compliance certificates or opinions to any party shall be deemed deleted and have no further force or effect.

 

ARTICLE XI

Application Of Monies

 

Section 11.1         Disbursements of Monies from Payment Account. (a) Notwithstanding any other provision herein, but subject to the other sub-sections of this Section 11.1 and to Section 13.1, on each Payment Date and, if elected by the Collateral Manager, on each Redemption Distribution Date, the Trustee shall disburse amounts transferred from the Collection Account to the Payment Account pursuant to Section 10.2 in accordance with the following priorities (the “Priority of Payments”); provided that, unless an Enforcement Event has occurred and is continuing, (x) amounts transferred from the Interest Collection Subaccount shall be applied solely in accordance with Section 11.1(a)(i); and (y) amounts transferred from the Principal Collection Subaccount shall be applied solely in accordance with Section 11.1(a)(ii).

 

(i)             On each Payment Date other than any Stated Maturity, unless an Enforcement Event has occurred and is continuing and, if elected by the Collateral Manager, on each Redemption Distribution Date, Interest Proceeds on deposit in the Collection Account, to the extent received on or before the related Determination Date (or if such Determination Date is not a Business Day, the next succeeding Business Day) and that are transferred into the Payment Account, shall be applied in the following order of priority:

 

(A)             to the payment of (1) first, taxes and governmental fees owing by the Issuer and (2) second, the accrued and unpaid Administrative Expenses, in the priority stated in the definition thereof, up to the Administrative Expense Cap (except as otherwise expressly provided in connection with any Optional Redemption or Tax Redemption);

 

(B)              to the payment to the Collateral Manager of (i) any accrued and unpaid Collateral Management Fee due on such Payment Date (including any interest accrued on any Collateral Management Fee Shortfall Amount) minus the amount of any Current Deferred Management Fee, if any, and (ii) any Cumulative Deferred Management Fee requested to be paid at the option of the Collateral Manager; provided that Interest Proceeds shall only be used to make payments with respect to the Cumulative Deferred Management Fee pursuant to this clause (B) to the extent such Interest Proceeds are not needed to pay the amounts referred to in any of clauses (C) through (L) below (on a pro forma basis after giving effect to such proposed payment of the Cumulative Deferred Management Fee);

 

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(C)              to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class A-1 Notes;

 

(D)             to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class A-2 Notes;

 

(E)              to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class B-1 Notes and the Class B-2 Notes allocated in proportion to the amounts of accrued and unpaid interest payable on each such Class;

 

(F)              if either of the Class A/B Coverage Tests is not satisfied on the related Determination Date, to make payments in accordance with the Note Payment Sequence to the extent necessary to cause all Class A/B Coverage Tests that are applicable on such Payment Date to be satisfied on a pro forma basis after giving effect to all payments pursuant to this clause (F);

 

(G)             to the payment of accrued and unpaid interest on the Class C Notes (excluding Deferred Interest but including interest thereon);

 

(H)             if either of the Class C Coverage Tests is not satisfied on the related Determination Date, to make payments in accordance with the Note Payment Sequence to the extent necessary to cause all Class C Coverage Tests that are applicable on such Payment Date to be satisfied on a pro forma basis after giving effect to all payments pursuant to this clause (H);

 

(I)               to the payment of any Deferred Interest on the Class C Notes;

 

(J)               to the payment of accrued and unpaid interest on the Class D Notes (excluding Deferred Interest but including interest thereon);

 

(K)             if either of the Class D Coverage Tests is not satisfied on the related Determination Date, to make payments in accordance with the Note Payment Sequence to the extent necessary to cause all Class D Coverage Tests that are applicable on such Payment Date to be satisfied on a pro forma basis after giving effect to all payments pursuant to this clause (K);

 

(L)              to the payment of any Deferred Interest on the Class D Notes;

 

(M)            if, with respect to any Payment Date following the Effective Date S&P has not yet confirmed its Initial Ratings of the Secured Notes and the Effective Date Condition is not satisfied, amounts available for distribution pursuant to this clause (M) shall be used for application in accordance with the Note Payment Sequence on such Payment Date in an amount sufficient to obtain from S&P confirmation of its Initial Ratings of the Secured Notes;

 

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(N)             to the payment of (1) first, any Administrative Expenses not paid pursuant to clause (A)(2) above due to the limitation contained therein (in the same manner and order of priority stated therein) and (2) second, any Cumulative Deferred Management Fee not paid pursuant to clause (B)(ii) above due to the limitations contained therein (in the same manner and order of priority stated therein);

 

(O)             during the Reinvestment Period, at the direction of the Collateral Manager, to the Supplemental Reserve Account; and

 

(P)              any remaining Interest Proceeds to be paid to the Holders of the Subordinated Notes.

 

(ii)              On each Payment Date other than any Stated Maturity, unless an Enforcement Event has occurred and is continuing and, if elected by the Collateral Manager, on each Redemption Distribution Date, Principal Proceeds on deposit in the Collection Account that are received on or before the related Determination Date (or if such Determination Date is not a Business Day, the next succeeding Business Day) and that are transferred to the Payment Account (which will not include (i) amounts required to meet funding requirements with respect to Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations that are deposited in the Revolver Funding Account or (ii) during the Reinvestment Period, Principal Proceeds that have previously been reinvested in Collateral Obligations or Principal Proceeds which the Issuer has entered into any commitment to reinvest in Collateral Obligations) shall be applied in the following order of priority:

 

(A)             to pay the amounts referred to in clauses (A) through (E) of Section 11.1(a)(i) (and in the same manner and order of priority stated therein), but only to the extent not paid in full thereunder; provided that Principal Proceeds shall only be used to make payments with respect to the Cumulative Deferred Management Fee pursuant to Section 11.1(a)(i)(B) to the extent such Principal Proceeds are not needed to pay the amounts referred to in clause (B) below;

 

(B)              to pay the amounts referred to in clause (F) of Section 11.1(a)(i), but only to the extent not paid in full thereunder and to the extent necessary to cause the Coverage Tests that are applicable on such Payment Date with respect to the Class A Notes and the Class B Notes to be met as of the related Determination Date on a pro forma basis after giving effect to any payments made through this clause (B);

 

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(C)              to pay the amounts referred to in clause (G) of Section 11.1(a)(i) (and in the same manner and order of priority stated therein) to the extent not paid in full thereunder, only to the extent that the Class C Notes are the Controlling Class;

 

(D)              to pay the amounts referred to in clause (H) of Section 11.1(a)(i), but only to the extent not paid in full thereunder and to the extent necessary to cause the Coverage Tests that are applicable on such Payment Date with respect to the Class C Notes to be met as of the related Determination Date;

 

(E)              to pay the amounts referred to in clause (I) of Section 11.1(a)(i) (and in the same manner and order of priority stated therein) to the extent not paid in full thereunder, only to the extent that the Class C Notes are the Controlling Class;

 

(F)              to pay the amounts referred to in clause (J) of Section 11.1(a)(i) (and in the same manner and order of priority stated therein) to the extent not paid in full thereunder, only to the extent that the Class D Notes are the Controlling Class;

 

(G)              to pay the amounts referred to in clause (K) of Section 11.1(a)(i), but only to the extent not paid in full thereunder and to the extent necessary to cause the Coverage Tests that are applicable on such Payment Date with respect to the Class D Notes to be met as of the related Determination Date;

 

(H)             to pay the amounts referred to in clause (L) of Section 11.1(a)(i) (and in the same manner and order of priority stated therein) to the extent not paid in full thereunder, only to the extent that the Class D Notes are the Controlling Class;

 

(I)               if, with respect to any Payment Date following the Effective Date, S&P has not yet confirmed its Initial Ratings of the Secured Notes and the Effective Date Condition is not satisfied, amounts available for distribution pursuant to this clause (I) shall be used for application in accordance with the Note Payment Sequence on such Payment Date in an amount sufficient to obtain from S&P confirmation of its Initial Ratings of the Secured Notes;

 

(J)               if such Payment Date is a Redemption Date (other than a Special Redemption Date) or a Redemption Distribution Date, to make payments in accordance with the Note Payment Sequence;

 

(K)             if such Payment Date is a Special Redemption Date occurring in connection with a Special Redemption described in clause (i) of the first sentence of Section 9.6, to make payments in the amount of the Special Redemption Amount at the election of the Collateral Manager, in accordance with the Note Payment Sequence;

 

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(L)              during the Reinvestment Period, at the discretion of the Collateral Manager either (x) to the Collection Account as Principal Proceeds to invest in Eligible Investments (pending the purchase of additional Collateral Obligations) and/or to purchase additional Collateral Obligations or (y) if the reinvestment of such Principal Proceeds would, in the sole determination of the Collateral Manager, cause (or would be likely to cause) an E.U. Retention Deficiency, to make payments in accordance with the Note Payment Sequence in an amount determined by the Collateral Manager in its sole discretion (and for the avoidance of doubt such payment shall not result in a termination of the Reinvestment Period);

 

(M)            after the Reinvestment Period, to make payments in accordance with the Note Payment Sequence;

 

(N)             after the Reinvestment Period, to pay the amounts referred to in clause (N) of Section 11.1(a)(i) only to the extent not already paid (in the same manner and order of priority stated therein); and

 

(O)             any remaining proceeds to be paid to the Holders of the Subordinated Notes.

 

On any Stated Maturity, the Trustee shall pay the net proceeds from the liquidation of the Assets and all available Cash, but only after the payment of (or establishment of a reserve for) all Administrative Expenses (in the same manner and order of priority stated in the definition thereof), Aggregate Collateral Management Fees, and interest and principal on the Secured Notes, to the Holders of the Subordinated Notes in final payment of such Subordinated Notes (such payments to be made in accordance with the priority set forth in Section 11.1(a)(iii)).

 

For the avoidance of doubt, to the extent that on any Redemption Distribution Date the Collateral Manager does not direct any payments to be made pursuant to Section 11.1(a)(i), no payments will be required to be made pursuant to Section 11.1(a)(ii)(A)-(G).

 

(iii)          Notwithstanding the provisions of the foregoing Sections 11.1(a)(i) and 11.1(a)(ii) (other than the last paragraph thereof), on (x) the Stated Maturity of the Notes, (y) on a Redemption Date occurring with respect to a Failed Optional Redemption, or (z) if the maturity of the Secured Notes has been accelerated following an Event of Default and has not been rescinded in accordance with the terms herein (clause (z), an “Enforcement Event”), pursuant to Section 5.7, proceeds in respect of the Assets will be applied in the following order of priority:

 

(A)             to the payment of (1) first, taxes and governmental fees owing by the Issuer and (2) second, the accrued and unpaid Administrative Expenses, in the priority stated in the definition thereof, up to the Administrative Expense Cap (provided that if a liquidation of the Assets has commenced, the Administrative Expense Cap shall not apply);

 

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(B)              to the payment of the Aggregate Collateral Management Fees due and payable (including any accrued and unpaid interest thereon) to the Collateral Manager until such amount has been paid in full, other than any Cumulative Deferred Management Fee, to the extent not already paid;

 

(C)              to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class A-1 Notes;

 

(D)             to the payment of principal of the Class A-1 Notes, until the Class A-1 Notes have been paid in full;

 

(E)              to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class A-2 Notes;

 

(F)              to the payment of principal of the Class A-2 Notes, until the Class A-2 Notes have been paid in full;

 

(G)              to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class B-1 Notes and the Class B-2 Notes allocated in proportion to the amounts of accrued and unpaid interest payable on each such Class;

 

(H)             to the payment of principal of the Class B-1 Notes and the Class B-2 Notes, pro rata based on their respective Aggregate Outstanding Amounts, until the Class B Notes have been paid in full;

 

(I)               to the payment of accrued and unpaid interest (excluding Deferred Interest but including interest on Deferred Interest) on the Class C Notes;

 

(J)               to the payment of any Deferred Interest on the Class C Notes;

 

(K)             to the payment of principal of the Class C Notes, until the Class C Notes have been paid in full;

 

(L)              to the payment of accrued and unpaid interest (excluding Deferred Interest but including interest on Deferred Interest) on the Class D Notes;

 

(M)            to the payment of any Deferred Interest on the Class D Notes;

 

(N)             to the payment of principal of the Class D Notes until the Class D Notes have been paid in full;

 

(O)             to the payment of (in the same manner and order of priority stated therein) any Administrative Expenses not paid pursuant to clause (A)(2) above due to the limitation contained therein;

 

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(P)              any Cumulative Deferred Management Fee to the extent not already paid; and

 

(Q)             to pay the balance to the Holders of the Subordinated Notes.

 

If any declaration of acceleration has been rescinded in accordance with the provisions herein, proceeds in respect of the Assets will be applied in accordance with Section 11.1(a)(i) or (ii), as applicable.

 

(b)           If on any Payment Date the amount available in the Payment Account is insufficient to make the full amount of the disbursements required by the Distribution Report, the Trustee shall make the disbursements called for in the order and according to the priority set forth under Section 11.1(a) above, subject to Section 13.1, to the extent funds are available therefor.

 

(c)           In connection with the application of funds to pay Administrative Expenses of the Issuer in accordance with Section 11.1(a)(i), Section 11.1(a)(ii) and Section 11.1(a)(iii), the Trustee shall remit such funds, to the extent available (and subject to the order of priority set forth in the definition of “Administrative Expenses”), as directed and designated in an Issuer Order (which may be in the form of standing instructions, including standing instructions to pay Administrative Expenses in such amounts and to such entities as indicated in the Distribution Report in respect of such Payment Date) delivered to the Trustee no later than the Business Day prior to each Payment Date.

 

(d)           The Collateral Manager may, in its sole discretion, elect to irrevocably waive payment of any or all of any Collateral Management Fee otherwise due on any Payment Date by notice to the Issuer, the Collateral Administrator and the Trustee no later than the Determination Date immediately prior to such Payment Date in accordance with the terms of Section 8(b) of the Collateral Management Agreement. Any such Collateral Management Fee, once waived, shall not thereafter become due and payable and any claim of the Collateral Manager therein shall be extinguished.

 

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(e)            At any time during or after the Reinvestment Period, any Holder of Subordinated Notes may (i) make a Contribution of Cash, Eligible Investments or Collateral Obligations or (ii) solely in the case of Certificated Subordinated Notes, in accordance with Section 8.3(i), designate any portion of Interest Proceeds or Principal Proceeds that would otherwise be distributed on its Subordinated Notes in accordance with Section 11.1(a)(i)(P) or Section 11.1(a)(ii)(O), to be a contribution to the Issuer (a “Contribution” and each such Person, a “Contributor”); provided that a Notice of Contribution in the form of Exhibit F (solely for Contributions of Cash or Eligible Investments) is provided. The Collateral Manager, on behalf of the Issuer, may accept or reject any Contribution in its sole discretion and shall notify the Trustee and the Collateral Administrator of any such acceptance. Each accepted Contribution of Cash or Eligible Investments shall be deposited into the Supplemental Reserve Account and may be withdrawn at the written direction of the Collateral Manager. Contributions of Cash or Eligible Investments may only be used for a Permitted Use or Permitted Uses as directed by the applicable Contributor at the time such Contribution is made, so long as the Collateral Manager consents to such Permitted Use(s) (or, if no direction is given by the Contributor, at the Collateral Manager’s reasonable discretion). No Contribution of Cash or Eligible Investments or portion thereof will be returned to any applicable holder of Subordinated Notes at any time. For administrative convenience any Contributions or transfers of Cash, Eligible Investments or Collateral Obligations made through one or more intermediate related entities or Affiliates of the Initial Subordinated Noteholder may instead be made on a net basis directly into the Issuer, and by bypassing such intermediate related entity or Affiliate. The value received by the Issuer in Cash, Eligible Investments and/or in the form of Collateral Obligations will not be affected by the elimination of such intermediate steps. In the case of any such payment made to the Issuer in the form of a combination of Cash and Collateral Obligations, the Cash portion of such payment shall be an amount equal to the total payment required to be made to the Issuer reduced by an amount equal to the fair market value as determined by the Collateral Manager as of the date of Contribution of the Collateral Obligations and Eligible Investments Contributed or transferred to the Issuer in respect of such payment. For the avoidance of doubt, any acquisition of a Collateral Obligation by the Issuer pursuant to an “in-kind” Contribution from any holder of Subordinated Notes shall be subject to satisfaction of the Investment Criteria in connection therewith.

 

(f)            Notwithstanding any other provision of this Indenture to the contrary, from and after the date on which no Secured Notes are deemed or considered to be Outstanding, (i) by 12:00 PM New York time, upon three Business Days prior notice to the Trustee, the Collateral Manager may designate any Business Day as a “Payment Date” for purposes of this Section 11.1 and distribute any Interest Proceeds or Principal Proceeds in accordance with the Priority of Payments and (ii) no further Monthly Reports or Distribution Reports shall be required to be prepared.

 

ARTICLE XII

SALE OF COLLATERAL OBLIGATIONS;
PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS

 

Section 12.1          Sales of Collateral Obligations. Subject to the satisfaction of the conditions specified in Section 12.3, the Collateral Manager on behalf of the Issuer may (except as otherwise specified in this Section 12.1) direct the Trustee to sell and the Trustee shall sell on behalf of the Issuer in the manner directed by the Collateral Manager any Collateral Obligation or Equity Security if, as certified by the Collateral Manager (which certification shall be deemed to be provided upon delivery of an Issuer Order or trade confirmation in respect of such sale), such sale meets the requirements of any one of paragraphs (a) through (l) of this Section 12.1 (subject in each case to any applicable requirement of disposition under Section 12.1(h) and provided that if an Enforcement Event has occurred and is continuing, the Collateral Manager may not direct the Trustee to sell any Collateral Obligation or Equity Security pursuant to Section 12.1(e), Section 12.1(f) or Section 12.1(g)), except as authorized by Section 12.1(h). For purposes of this Section 12.1, the Sale Proceeds of a Collateral Obligation sold by the Issuer shall include any Principal Financed Accrued Interest received in respect of such sale.

 

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(a)              Credit Risk Obligations. The Collateral Manager may direct the Trustee to sell any Credit Risk Obligation at any time without restriction.

 

(b)              Credit Improved Obligations. The Collateral Manager may direct the Trustee to sell any Credit Improved Obligation at any time without restriction.

 

(c)               Defaulted Obligations. The Collateral Manager may direct the Trustee to sell any Defaulted Obligation at any time without restriction.

 

(d)              Equity Securities. The Collateral Manager may direct the Trustee to sell any Equity Security at any time without restriction and shall use its commercially reasonable efforts to effect the sale of any Equity Security, regardless of price within 45 days after receipt, if such Equity Security constitutes Margin Stock, unless such sale is prohibited by applicable law, in which case such Equity Security shall be sold as soon as such sale is permitted by applicable law.

 

(e)               Optional Redemption. After the Issuer has notified the Trustee of an Optional Redemption of the Notes in accordance with Section 9.2, if necessary to effect such Optional Redemption, the Collateral Manager shall direct the Trustee to sell (which sale may be through participation or other arrangement) all or a portion of the Collateral Obligations if the requirements of Article IX (including the certification requirements of Section 9.4(e)(ii), if applicable) are satisfied. If any such sale is made through participations, the Issuer shall use reasonable efforts to cause such participations to be converted to assignments within six months after the sale.

 

(f)               Tax Redemption. After a Majority of an Affected Class or a Majority of the Subordinated Notes has directed (by a written direction delivered to the Trustee) a Tax Redemption, the Collateral Manager shall, if necessary to effect such Tax Redemption, direct the Trustee to sell (which sale may be through participation or other arrangement) of all or a portion of the Collateral Obligations if the requirements of Article IX (including the certification requirements of Section 9.4(e)(ii), if applicable) are satisfied. If any such sale is made through participations, the Issuer shall use reasonable efforts to cause such participations to be converted to assignments within six months after the sale.

 

(g)              Discretionary Sales. During the Reinvestment Period, the Collateral Manager may direct the Trustee to sell any Collateral Obligation at any time other than during a Restricted Trading Period if, commencing with the first calendar year after the Closing Date, total sales pursuant to this Section 12.1(g) (measured by the par amount of all Collateral Obligations disposed of) during the preceding 12-month period do not exceed 30% of the Collateral Principal Amount (measured as of the first day of such 12-month period); provided that for purposes of determining the percentage of Collateral Obligations sold pursuant to this Section 12.1(g) during any such period, the amount of Collateral Obligations so sold shall be reduced to the extent of any purchases of (or irrevocable commitments to purchase) Collateral Obligations of the same Obligor (which are pari passu or senior to such sold Collateral Obligations) occurring within 45 Business Days of such sale, so long as any such sale pursuant to this Section 12.1(g) of a Collateral Obligation was entered into with the intention of purchasing such Collateral Obligations of the same Obligor.

 

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(h)               Mandatory Sales. The Collateral Manager on behalf of the Issuer shall use its commercially reasonable efforts to effect the sale of any Collateral Obligation that (i) no longer meets the criteria described in clause (ix) of the definition of “Collateral Obligation”, within 18 months after the failure of such Collateral Obligation to meet any such criteria and (ii) no longer meets the criteria described in clause (viii) of the definition of “Collateral Obligation” within 45 days after the failure of such Collateral Obligation to meet either such criteria.

 

(i)                Unsaleable Assets. After the Reinvestment Period:

 

(i)               Notwithstanding any other restriction in this Section 12.1, at the direction of the Collateral Manager, the Trustee, at the expense of the Issuer, shall conduct an auction of Unsaleable Assets in accordance with the procedures described in clause (ii). The Trustee may retain an agent to perform the obligations set forth in this Section 12.1(i).

 

(ii)              Promptly after receipt of written notice from the Collateral Manager of an auction of Unsaleable Assets, the Trustee will forward a notice in the Issuer’s name (prepared by the Collateral Manager) to the Holders and each Rating Agency, setting forth in reasonable detail a description of each Unsaleable Asset and the following auction procedures:

 

(A)            Any Holder may submit a written bid to purchase one or more Unsaleable Assets no later than the date specified in the auction notice (which shall be at least 15 Business Days after the date of such notice).

 

(B)              Each bid must include an offer to purchase for a specified amount of cash on a proposed settlement date no later than 20 Business Days after the date of the auction notice.

 

(C)             If no Holder submits such a bid, unless delivery in kind is not legally or commercially practicable and subject to any transfer restrictions (including minimum denominations), the Trustee shall provide notice thereof to each Holder and offer to deliver (at no cost to the Trustee or Holder) a pro rata portion of each unsold Unsaleable Asset to the Holders of the Class with the highest priority that provide delivery instructions to the Trustee on or before the date specified in such notice. To the extent that minimum denominations do not permit a pro rata distribution, the Trustee shall distribute the Unsaleable Assets on a pro rata basis to the extent possible and the Issuer or the Collateral Manager shall select by lottery the Holder to whom the remaining amount will be delivered. The Issuer and the Trustee (at the direction of the Issuer or the Collateral Manager on behalf of the Issuer) shall use commercially reasonable efforts to effect delivery of such interests.

 

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(D)            If no such Holder provides delivery instructions to the Trustee, the Trustee shall promptly notify the Collateral Manager and offer to deliver (at no cost to the Trustee) the Unsaleable Asset to the Collateral Manager. If the Collateral Manager declines such offer, the Collateral Manager (on behalf of the Issuer) shall direct action to dispose of the Unsaleable Asset, which may be by donation to a charity, abandonment or other means, and the Trustee (at no expense to the Trustee) shall take such action as so directed.

 

(E)              The Trustee shall have no duty, obligation or responsibility with respect to the sale of any Unsaleable Asset other than upon the instruction of the Collateral Manager.

 

(j)               The Collateral Manager may direct the Trustee at any time without restriction to sell any Collateral Obligation that (i) has a Material Covenant Default or (ii) becomes subject to a proposed Maturity Amendment that fails to satisfy the criteria required hereunder to allow the Issuer (or the Collateral Manager on the Issuer’s behalf) to vote in favor of such Maturity Amendment.

 

(k)              After the Collateral Manager has notified the Issuer and the Trustee of a Clean-Up Call Redemption in accordance with Section ‎9.9, the Collateral Obligations may be sold in accordance with the provisions of Section ‎9.9 without regard to the limitations in this Section ‎12.1 by directing the Trustee to effect such sale; provided that the Sale Proceeds therefrom are used for the purposes specified in Section ‎9.9 (and applied pursuant to the Priority of Payments).

 

(l)               Required Sales. In the event that the Collateral Manager and the Issuer receive an Opinion of Counsel of national reputation experienced in such matters that the Issuer’s ownership of any specific “Asset” would cause the Issuer to be unable to comply with the loan securitization exclusion from the definition of “covered fund” under the Volcker Rule, then the Collateral Manager, on behalf of the Issuer, will be required to take commercially reasonable efforts to sell such “Asset” and will not purchase or otherwise receive any additional “Asset” of the type identified in such Opinion of Counsel.

 

Section 12.2        Purchase of Additional Collateral Obligations. On any date during the Reinvestment Period, the Collateral Manager on behalf of the Issuer may, subject to the other requirements in this Indenture, direct the Trustee to invest Principal Proceeds, proceeds of Additional Notes issued pursuant to Sections 2.13 and 3.2, amounts on deposit in the Supplemental Reserve Account and Principal Financed Accrued Interest, and the Trustee shall invest such Principal Proceeds and other amounts in accordance with such direction. After the Reinvestment Period, the Collateral Manager shall not direct the Trustee to invest any amounts on behalf of the Issuer; provided that cash on deposit on any Account (other than the Payment Account) may be invested in Eligible Investments following the Reinvestment Period. During the Reinvestment Period, such proceeds may be used to purchase additional Collateral Obligations subject to the requirement that each of the following criteria (such criteria, collectively, the “Investment Criteria”) is satisfied as of the date the Collateral Manager commits on behalf of the Issuer to make such purchase, in each case as determined by the Collateral Manager after giving effect to such purchase and all other sales or purchases previously or simultaneously committed to; provided that the criteria set forth in clauses (b) and (c) below need only be satisfied with respect to purchases of Collateral Obligations occurring on or after the Effective Date.

 

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(a)              such obligation is a Collateral Obligation;

 

(b)              either (A) each requirement or test, as the case may be, of the Concentration Limitations and the Collateral Quality Tests (except, in the case of an additional Collateral Obligation purchased with the proceeds from the sale of a Credit Risk Obligation, a Defaulted Obligation or an Equity Security, the S&P CDO Monitor Test) will be satisfied or (B) if any such requirement or test was not satisfied immediately prior to such investment, such requirement or test will be maintained or improved after giving effect to the investment;

 

(c)              each Coverage Test will be satisfied, or if not satisfied, such Coverage Test will be maintained or improved;

 

(d)             (i) in the case of an additional Collateral Obligation purchased with the proceeds from the sale of a Credit Risk Obligation or a Defaulted Obligation, either (A) the aggregate outstanding principal balance of all additional Collateral Obligations purchased with the proceeds from such sale will at least equal the Sale Proceeds from such sale or (B) the Reinvestment Balance Criteria will be satisfied, (ii) in the case of the use of Sale Proceeds of Credit Improved Obligations, either (A) the aggregate outstanding principal balance of all Collateral Obligations purchased with such Sale Proceeds will be greater than or equal to the Investment Criteria Adjusted Balance of the disposed Collateral Obligations, (B) after giving effect to such purchase, the Adjusted Collateral Principal Amount will be maintained or increased (when compared to the Adjusted Collateral Principal Amount immediately prior to such sale) or (C) after giving effect to such reinvestment of such Sale Proceeds, the Adjusted Collateral Principal Amount will be greater than (or equal to) the Reinvestment Target Par Balance and (iii) in the case of any other purchase of additional Collateral Obligations purchased with the proceeds from the sale of any other Collateral Obligation, the Collateral Manager shall use commercially reasonable efforts to ensure that after giving effect to such purchase, the Reinvestment Balance Criteria will be satisfied; and

 

(e)              the date on which the Issuer (or the Collateral Manager on behalf of the Issuer) commits to purchase such Collateral Obligation occurs during the Reinvestment Period.

 

If the Issuer has entered into a written trade ticket or other written binding commitment to purchase a Collateral Obligation during the Reinvestment Period which purchase is not scheduled to settle prior to the end of the Reinvestment Period (such Collateral Obligation, a “Post-Reinvestment Period Settlement Obligation”), such Post-Reinvestment Period Settlement Obligation shall be treated as having been purchased by the Issuer prior to the end of the Reinvestment Period for purposes of the Investment Criteria, and Principal Proceeds received after the end of the Reinvestment Period may be applied to the payment of the purchase price of such Post-Reinvestment Period Settlement Obligation. Not later than the Business Day immediately preceding the end of the Reinvestment Period, the Collateral Manager shall deliver to the Trustee a schedule of Collateral Obligations purchased by the Issuer with respect to which purchases the trade date has occurred but the settlement date has not yet occurred and shall certify to the Trustee (which certification will be deemed to be made upon delivery of such schedule) that sufficient Principal Proceeds are available (including for this purpose, cash on deposit in the Principal Collection Subaccount as well as any Principal Proceeds that will be received by the Issuer from the sale of Collateral Obligations for which the trade date has already occurred but the settlement date has not yet occurred) to effect the settlement of such Collateral Obligations.

 

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(f)               Trading Plan Period. During the Reinvestment Period and for purposes of calculating compliance with the Investment Criteria, at the election of the Collateral Manager in its sole discretion, any proposed investment (whether a single Collateral Obligation or a group of Collateral Obligations) identified by the Collateral Manager as such at the time when compliance with the Investment Criteria is required to be calculated (a “Trading Plan”) may be evaluated after giving effect to all sales and reinvestments proposed to be entered into, in each case, within the ten Business Days following the date of determination of such compliance (such period, the “Trading Plan Period”); provided that (v) no Trading Plan may result in the purchase of Collateral Obligations having an Aggregate Principal Balance that exceeds 7.5% of the Collateral Principal Amount as of the first day of the Trading Plan Period, (w) no Trading Plan Period may include a Determination Date (x) no more than one Trading Plan may be in effect at any time during a Trading Plan Period and (y) if, on two occasions, the Investment Criteria are satisfied prospectively after giving effect to a Trading Plan but are not satisfied upon the expiry of the related Trading Plan Period, the Investment Criteria shall not at any time thereafter be evaluated by giving effect to a Trading Plan unless either (i) the Global Rating Agency Condition is satisfied with respect to such Trading Plan or (ii) a Majority of the Controlling Class waives the requirement that the Global Rating Agency Condition be satisfied with respect to such Trading Plan. Notice shall be provided to S&P upon failure of a Trading Plan pursuant to the foregoing clause (y). For the avoidance of doubt, following the satisfaction of the Global Rating Agency Condition or the waiver thereof pursuant to clause (y) of the proviso in the previous sentence, further satisfaction of the Global Rating Agency Condition shall only be required if, on two additional occasions, the Investment Criteria are satisfied prospectively after giving effect to a Trading Plan but are not satisfied upon the expiry of the related Trading Plan Period. The Collateral Manager shall provide prior written notice to each Rating Agency of any Trading Plan, which notice shall specify the proposed investments identified by the Collateral Manager for acquisition as part of such Trading Plan.

 

(g)              Certification by Collateral Manager. Not later than the Cut-Off Date for any Collateral Obligation purchased in accordance with this Section 12.2, the Collateral Manager shall deliver by e-mail or other electronic transmission to the Trustee and the Collateral Administrator an Officer’s certificate of the Collateral Manager certifying that such purchase complies with this Section 12.2 and Section 12.3 (which certification shall be deemed to be provided upon delivery of an Issuer Order or trade confirmation in respect of such purchase).

 

The Investment Criteria will not be required to be satisfied in connection with any commitment to purchase a Collateral Obligation which purchase is scheduled to settle following the Redemption Date in connection with a Refinancing of the Secured Notes in whole with respect to which notice of redemption has been given as set forth in Section 9.4 (and will instead be required to comply with the terms of this Indenture as amended in connection with such Refinancing).

 

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(h)              Investment in Eligible Investments. Cash on deposit in any Account (other than the Payment Account) may be invested at any time (including following the Reinvestment Period) in Eligible Investments in accordance with Article X.

 

(i)               Maturity Amendments. The Issuer (or the Collateral Manager on the Issuer’s behalf) may not vote in favor of a Maturity Amendment unless, as determined by the Collateral Manager:

 

(i)               (A) the Weighted Average Life Test will be satisfied after giving effect to such Maturity Amendment or (B) if the Weighted Average Life Test was not satisfied immediately prior to giving effect to such Maturity Amendment, the level of compliance with the Weighted Average Life Test will be improved or maintained after giving effect to such Maturity Amendment, in each case after giving effect to any Trading Plan in effect during the applicable Trading Plan Period and

 

(ii)              the following conditions are met: (A) the extended maturity date of such Collateral Obligation would not be later than the earliest Stated Maturity of the Secured Notes and (B) after giving effect to such Maturity Amendment, the aggregate principal balance of all Collateral Obligations that have been subject to Maturity Amendments will not exceed 5.0% of the Collateral Principal Amount.

 

Section 12.3        Conditions Applicable to All Sale and Purchase Transactions. (a) Any transaction effected under this Article XII or in connection with the acquisition or disposition of any Asset shall be conducted on an arm’s length basis and, if effected with a Person Affiliated with the Collateral Manager (or with an account or portfolio for which the Collateral Manager or any of its Affiliates serves as investment adviser), shall be effected on terms no less favorable to the Issuer than would be the case if such Person were not so Affiliated; provided that in the case of any Collateral Obligation sold or otherwise transferred to a Person so Affiliated, the value thereof shall be the mid-point between the “bid” and “ask” prices to the extent such prices are obtained from a nationally recognized independent pricing service or, if unavailable or determined by the Collateral Manager to be unreliable, the fair market value of such Collateral Obligation as reasonably determined by the Collateral Manager (so long as the Collateral Manager is a Registered Investment Adviser) consistent with the Collateral Manager Standard, and such Affiliate shall acquire such Collateral Obligation for a price equal to the value so determined; provided further that an aggregate amount of Collateral Obligations not exceeding 15% of the Net Purchased Loan Balance may be sold or otherwise transferred to the Retention Provider pursuant to this Indenture at a price greater than the value determined pursuant to the immediately preceding proviso, but no greater than the Transfer Deposit Amount of any such Collateral Obligation (and to the extent such price exceeds the fair market value of any such Collateral Obligation, such excess shall be deemed to be a capital contribution from the Retention Provider to the Issuer); provided further that, the Trustee shall have no responsibility to oversee compliance with this paragraph by the other parties. Notwithstanding anything contained in this Article XII to the contrary, after the Closing Date, the Issuer shall not acquire any Collateral Obligation from an Affiliate of the Collateral Manager unless (i) such transfer is from the BDC pursuant to the Master Loan Sale Agreements, (ii) such transfer is from an Affiliate of the BDC or the Collateral Manager that is a bankruptcy-remote special purpose vehicle or (iii) such transfer is made in accordance with the first proviso of this paragraph and other terms that the Collateral Manager determines, based upon advice of counsel, would not adversely impact the conclusions set forth in the Opinion of Counsel relating to bankruptcy matters delivered by Dechert LLP, on the Closing Date.

 

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(b)               Upon any acquisition of a Collateral Obligation pursuant to this Article XII, all of the Issuer’s right, title and interest to the Asset or Assets shall be Granted to the Trustee pursuant to this Indenture, such Asset or Assets shall be Delivered to the Custodian, and, if applicable, the Custodian shall receive such Asset or Assets. The Trustee shall also receive, not later than the Cut-Off Date, an Officer’s certificate of the Issuer containing the statements set forth in a Delivery Certificate; provided that such requirement shall be satisfied, and such statements shall be deemed to have been made by the Issuer, in respect of such acquisition by the delivery to the Trustee of a trade ticket pursuant to Section 1.3(t).

 

(c)              Notwithstanding anything contained in this Article XII or Article V to the contrary, the Issuer shall have the right to effect any sale of any Asset or purchase of any Collateral Obligation (1) with the consent of Noteholders evidencing at least (i) with respect to purchases during the Reinvestment Period and sales during or after the Reinvestment Period, 75% of the Aggregate Outstanding Amount of each Class of Notes and (ii) with respect to purchases after the Reinvestment Period, 100% of the Aggregate Outstanding Amount of each Class of Notes and (2) of which each Rating Agency and the Trustee have been notified.

 

(d)              Notwithstanding anything contained in this Article XII or Article V to the contrary, upon the occurrence and during the continuance of an Enforcement Event, the Issuer shall not have the right to effect any sale of any Asset or purchase of any Collateral Obligation without the consent of a Majority of the Controlling Class.

 

ARTICLE XIII

Noteholders’ Relations

 

Section 13.1        Subordination. (a) Anything in this Indenture or the Notes to the contrary notwithstanding, the Holders of each Class of Notes that constitute a Junior Class agree for the benefit of the Holders of the Notes of each Priority Class with respect to such Junior Class that such Junior Class shall be subordinate and junior to the Notes of each such Priority Class to the extent and in the manner expressly set forth in the Priority of Payments. In the event one or more Holder(s) cause(s) the filing of a petition in bankruptcy against the Issuer prior to the expiration of the period set forth in clause (b) of this Section 13.1, any claim(s) that such Holder(s) have against the Issuer (including under all Notes of any Class held by such Holder(s)) or with respect to any Assets (including any proceeds thereof) shall, notwithstanding anything to the contrary in the Priority of Payments and notwithstanding any objection to, or rescission of, such filing, be fully subordinate in right of payment to the claims of each Holder (and each other secured creditor of the Issuer) that does not seek to cause any such filing, with such subordination being effective until all Notes (and each claim of each other secured creditor) held by each Holder of any Note that does not seek to cause any such filing are paid in full in accordance with the Priority of Payments set forth herein (after giving effect to such subordination). The foregoing sentence shall constitute a “subordination agreement” within the meaning of Section 510(a) of the U.S. Bankruptcy Code.

 

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(b)               The Holders of each Class of Notes and beneficial owners of each Class of Notes agree, for the benefit of all Holders of each Class of Notes and beneficial owners of each Class of Notes, not to cause the filing of a petition in bankruptcy, insolvency or a similar proceeding in the United States or any other jurisdiction against the Issuer until the payment in full of all Notes and the expiration of a period equal to one year and one day or, if longer, the applicable preference period then in effect plus one day, following such payment in full.

 

(c)              The Issuer shall timely file an answer and any other appropriate pleading objecting to (i) the institution of any Proceeding in bankruptcy, insolvency or other similar proceeding in the United States or any other jurisdiction to have the Issuer adjudicated as bankrupt or insolvent or (ii) the filing of any petition seeking relief, reorganization, arrangement, adjustment or composition of or in respect of the Issuer under applicable Bankruptcy Law or other applicable law.  The reasonable fees, costs, charges and expenses incurred by the Issuer (including reasonable attorneys’ fees and expenses) in connection with taking any such action shall be payable as “Administrative Expenses.”

 

Section 13.2        Standard of Conduct. In exercising any of its or their voting rights, rights to direct and consent or any other rights as a Holder under this Indenture, a Holder or Holders shall not have any obligation or duty to any Person or to consider or take into account the interests of any Person and shall not be liable to any Person for any action taken by it or them or at its or their direction or any failure by it or them to act or to direct that an action be taken, without regard to whether such action or inaction benefits or adversely affects any Holder, the Issuer, or any other Person, except for any liability to which such Holder may be subject to the extent the same results from such Holder’s taking or directing an action, or failing to take or direct an action, in bad faith or in violation of the express terms of this Indenture.

 

ARTICLE XIV

MISCELLANEOUS

 

Section 14.1        Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

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Any certificate or opinion of an Officer of the Issuer or the Collateral Manager may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel (provided that such counsel is a nationally or internationally recognized and reputable law firm, one or more of the partners of which are admitted to practice before the highest court of any State of the United States or the District of Columbia which law firm may, except as otherwise expressly provided herein, be counsel for the Issuer), unless such Officer knows, or should know, that the certificate or opinion or representations with respect to the matters upon which such certificate or opinion is based are erroneous. Any such certificate of an Officer of the Issuer or the Collateral Manager or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, the Issuer, the Collateral Manager or any other Person (on which the Trustee shall be entitled to rely), stating that the information with respect to such factual matters is in the possession of the Issuer, the Collateral Manager or such other Person, unless such Officer of the Issuer or the Collateral Manager or such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous. Any Opinion of Counsel may also be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Officer of the Collateral Manager or the Issuer, stating that the information with respect to such matters is in the possession of the Collateral Manager or the Issuer, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Whenever in this Indenture it is provided that the absence of the occurrence and continuation of a Default or Event of Default is a condition precedent to the taking of any action by the Trustee at the request or direction of the Issuer, then notwithstanding that the satisfaction of such condition is a condition precedent to the Issuer’s right to make such request or direction, the Trustee shall be protected in acting in accordance with such request or direction if it does not have knowledge of the occurrence and continuation of such Default or Event of Default as provided in Section 6.1(d).

 

The Bank (in any capacity under the Transaction Documents) agrees to accept and act upon instructions or directions pursuant to the Transaction Documents sent by unsecured email or facsimile transmission or other similar unsecured electronic methods; provided that any Person providing such instructions or directions shall provide to the Bank an incumbency certificate listing authorized persons designated to provide such instructions or directions, which incumbency certificate shall be amended whenever a person is added or deleted from the listing. If such person elects to give the Bank email or facsimile instructions (or instructions by a similar electronic method) and the Bank in its discretion elects to act upon such instructions, the Bank’s reasonable understanding of such instructions shall be deemed controlling. The Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Bank’s reliance upon and compliance with such instructions notwithstanding such instructions conflicting with or being inconsistent with a subsequent written instruction. Any Person providing such instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Bank, including without limitation the risk of the Bank acting on unauthorized instructions accompanied by an incumbency certificate, and the risk of interception and misuse by third parties. Any Person providing such instructions acknowledges and agrees that there may be more secure methods of transmitting such instructions than the method(s) selected by such Person and agrees that the security procedures (if any) to be followed in connection with such Person’s transmission of such instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances.

 

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Section 14.2        Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action or actions embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 14.2.

 

(b)               The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Trustee reasonably deems sufficient.

 

(c)              The principal amount or face amount, as the case may be, and registered numbers of Notes held by any Person, and the date of such Person’s holding the same, shall be proved by the Register or shall be provided by certification by such Holder.

 

(d)               Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder (and any transferee thereof) of such and of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

 

(e)               Notwithstanding anything herein to the contrary, a holder of a beneficial interest in a Global Note will have the right to receive access to reports on the Trustee’s website and will be entitled to exercise rights to vote, give consents and directions which holders of the related Class of Notes are entitled to give under this Indenture upon delivery of a beneficial ownership certificate in the form of Exhibit D (a “Beneficial Ownership Certificate”) to the Trustee which certifies (i) that such Person is a beneficial owner of an interest in a Global Note, (ii) the amount and Class of Notes so owned, and (iii) that such Person will notify the Trustee when it sells all or a portion of its beneficial interest in such Class of Notes. A separate Beneficial Ownership Certificate must be delivered each time any such vote, consent or direction is given; provided that, nothing shall prevent the Trustee from requesting additional information and documentation with respect to any such beneficial owner; provided further that the Trustee shall be entitled to conclusively rely on the accuracy and the currency of each Beneficial Ownership Certificate and shall not be required to obtain any further information in this regard.

 

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Section 14.3        Notices, etc., to Trustee, the Issuer, the Collateral Manager, the Initial Purchaser, the Collateral Administrator, the Paying Agent and each Rating Agency. (a) Any request, demand, authorization, direction, instruction, order, notice, consent, waiver or Act of Noteholders or other documents or communication provided or permitted by this Indenture to be made upon, given, e-mailed or furnished to, or filed with:

 

(i)              the Trustee shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to and mailed, by certified mail, return receipt requested, hand delivered, sent by overnight courier service guaranteeing next day delivery, by electronic mail, or by facsimile in legible form, to the Trustee addressed to it at its applicable Corporate Trust Office, or at any other address previously furnished in writing to the other parties hereto by the Trustee, and executed by a Responsible Officer of the entity sending such request, demand, authorization, direction, instruction, order, notice, consent, waiver or other document; provided that any demand, authorization, direction, instruction, order, notice, consent, waiver or other document sent to The Bank of New York Mellon Trust Company, National Association (in any capacity hereunder) will be deemed effective only upon receipt thereof by The Bank of New York Mellon Trust Company, National Association;

 

(ii)             the Issuer shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Issuer addressed to it at c/o Puglisi & Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19711 or at any other address previously furnished in writing to the other parties hereto by the Issuer, with a copy to the Collateral Manager at its address below;

 

(iii)            the Initial Purchaser shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by telecopy in legible form, addressed to Wells Fargo Securities, LLC, Duke Energy Center, 550 South Tryon Street, 5th Floor, MAC D1086-051, Charlotte, North Carolina 28202, facsimile no. (704) 715-0067, Attention: Mary Katherine DuBose, or at any other address previously furnished in writing to the Issuer and the Trustee by the Initial Purchaser;

 

(iv)            the Collateral Administrator shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Collateral Administrator addressed to it at the Corporate Trust Office or at any other address previously furnished in writing to the other parties hereto;

 

(v)             the Collateral Manager shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Collateral Manager addressed to it at 666 Fifth Avenue, 18th Floor, New York, New York 10103, or at any other address previously furnished in writing to the parties hereto;

 

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(vi)             the Rating Agencies shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service to each Rating Agency addressed to it at, in the case of Fitch, by email to cdo.surveillance@fitchratings.com, and in the case of S&P, Standard & Poor’s, 55 Water Street, 41st Floor, New York, New York 10041-0003 or by facsimile in legible form to facsimile no.: (212) 438-2655, Attention: Structured Credit – CDO Surveillance or by electronic copy to CDO_Surveillance@spglobal.com; provided that (x) in respect of any application for a credit estimate by S&P in respect of a Collateral Obligation, Information must be submitted to creditestimates@spglobal.com, (y) in respect of any document or notice sent to S&P pursuant to Section 7.18(c), such document or notice must be submitted to CDOEffectiveDatePortfolios@spglobal.com and (z) in respect of any request to S&P relating to the S&P CDO Monitor, such request must be submitted to CDOMonitor@spglobal.com; and

 

(b)               If any provision herein calls for any notice or document to be delivered simultaneously to the Trustee and any other Person, the Trustee’s receipt of such notice or document shall entitle the Trustee to assume that such notice or document was delivered to such other Person or entity unless otherwise expressly specified herein.

 

(c)               Notwithstanding any provision to the contrary contained herein or in any agreement or document related thereto, any report, statement or other information required to be provided by the Issuer or the Trustee may be provided by providing access to a website containing such information.

 

Section 14.4        Notices to Holders; Waiver. Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any event,

 

(a)              such notice shall be sufficiently given to Holders if in writing and mailed, first class postage prepaid, or by overnight delivery service (or, in the case of Holders of Global Secured Notes, e-mailed to DTC), to each Holder affected by such event, at the address of such Holder as it appears in the Register, not earlier than the earliest date and not later than the latest date prescribed for the giving of such notice; and

 

(b)               such notice shall be in the English language.

 

Such notices will be deemed to have been given on the date of such mailing.

 

Notwithstanding clause (a) above, a Holder may give the Trustee a written notice that it is requesting that notices to it be given by electronic mail or by facsimile transmissions and stating the electronic mail address or facsimile number for such transmission. Thereafter, the Trustee shall give notices to such Holder by electronic mail or facsimile transmission, as so requested; provided that if such notice also requests that notices be given by mail, then such notice shall also be given by mail in accordance with clause (a) above. Notices for Holders may also be posted to the Trustee’s internet website.

 

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Subject to the requirements of Section 14.15, the Trustee will deliver to the Holders any information or notice relating to this Indenture requested to be so delivered by at least 25% of the Holders of any Class of Notes (by Aggregate Outstanding Amount), at the expense of the Issuer; provided that the Trustee may decline to send any such notice that it reasonably determines to be contrary to (i) any of the terms of this Indenture, (ii) any duty or obligation that the Trustee may have hereunder or (iii) applicable law. The Trustee may require the requesting Holders to comply with its standard verification policies in order to confirm Noteholder status.

 

Neither the failure to mail any notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. In case by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity or by reason of any other cause it shall be impracticable to give such notice by mail of any event to Holders when such notice is required to be given pursuant to any provision of this Indenture, then such notification to Holders as shall be made with the approval of the Trustee shall constitute a sufficient notification to such Holders for every purpose hereunder.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

Section 14.5        Effect of Headings and Table of Contents. The Article and Section headings herein (including those used in cross-references herein) and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 14.6        Successors and Assigns. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not.

 

Section 14.7        Severability. If any term, provision, covenant or condition of this Indenture or the Notes, or the application thereof to any party hereto or any circumstance, is held to be unenforceable, invalid or illegal (in whole or in part) for any reason (in any relevant jurisdiction), the remaining terms, provisions, covenants and conditions of this Indenture or the Notes, modified by the deletion of the unenforceable, invalid or illegal portion (in any relevant jurisdiction), will continue in full force and effect, and such unenforceability, invalidity, or illegality will not otherwise affect the enforceability, validity or legality of the remaining terms, provisions, covenants and conditions of this Indenture or the Notes, as the case may be, so long as this Indenture or the Notes, as the case may be, as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the deletion of such portion of this Indenture or the Notes, as the case may be, will not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.

 

Section 14.8        Benefits of Indenture. Except as otherwise expressly set forth in this Indenture, nothing herein or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Collateral Manager, the Collateral Administrator, the Holders of the Notes and (to the extent provided herein) the other Secured Parties any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

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Section 14.9     Legal Holidays. If the date of any Payment Date, Redemption Date or Stated Maturity shall not be a Business Day, then notwithstanding any other provision of the Notes or this Indenture, payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of any such Payment Date, Redemption Date or Stated Maturity date.

 

Section 14.10    Governing Law. This Indenture shall be construed in accordance with, and this Indenture and any matters arising out of or relating in any way whatsoever to this Indenture (whether in contract, tort or otherwise), shall be governed by, the law of the State of New York.

 

Section 14.11    Submission to Jurisdiction. With respect to any suit, action or proceedings relating to this Indenture or any matter between the parties arising under or in connection with this Indenture (“Proceedings”), each party irrevocably: (i) submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan and the United States District Court for the Southern District of New York, and any appellate court from any thereof; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing herein precludes any of the parties from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

 

Section 14.12    Waiver of Jury Trial. EACH OF THE ISSUER, THE HOLDERS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby (i) certifies that no representative, agent or attorney of the other has represented, expressly or otherwise, that the other would not, in the event of a Proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it has been induced to enter into this Indenture by, among other things, the mutual waivers and certifications in this paragraph.

 

Section 14.13    Counterparts. This Indenture (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by e-mail (.pdf) or facsimile transmission), each of which will be deemed an original, and all of which together constitute one and the same instrument. Delivery of an executed counterpart signature page of this Indenture by e-mail (.pdf) or facsimile shall be effective as delivery of a manually executed counterpart of this Indenture.

 

Section 14.14    Acts of Issuer. Any report, information, communication, request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or performed by the Issuer shall be effective if given or performed by the Issuer or by the Collateral Manager on the Issuer’s behalf.

 

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The Issuer agrees to coordinate with the Collateral Manager with respect to any communication to a Rating Agency and to comply with the provisions of this Section 14.14 and Section 14.16, unless otherwise agreed to in writing by the Collateral Manager.

 

Section 14.15    Confidential Information. (a) The Trustee, the Collateral Administrator and each Holder or beneficial owner of Notes will maintain the confidentiality of all Confidential Information in accordance with procedures adopted by such Person in good faith to protect Confidential Information of third parties delivered to such Person; provided that such Person may deliver or disclose Confidential Information to: (i) such Person’s directors, trustees, officers, employees, agents, attorneys and affiliates who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 14.15 and to the extent such disclosure is reasonably required for the administration of this Indenture, the matters contemplated hereby or the investment represented by the Notes; (ii) such Person’s legal advisors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 14.15 and to the extent such disclosure is reasonably required for the administration of this Indenture, the matters contemplated hereby or the investment represented by the Notes; (iii) any other Holder or beneficial owner of Notes, or any of the other parties to this Indenture, the Collateral Management Agreement or the Collateral Administration Agreement; (iv) except for Specified Obligor Information, any Person of the type that would be, to such Person’s knowledge, permitted to acquire Notes in accordance with the requirements of Section 2.5 hereof to which such Person sells or offers to sell any such Note or any part thereof; (v) except for Specified Obligor Information, any other Person from which such former Person offers to purchase any security of the Issuer; (vi) any federal or state or other regulatory, governmental or judicial authority having jurisdiction over such Person; (vii) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about the investment portfolio of such Person, reinsurers and liquidity and credit providers that agree to hold confidential the Confidential Information substantially in accordance with this Section 14.15; (viii)  Fitch or S&P (subject to Section 14.16); (ix) any other Person with the consent of the Issuer and the Collateral Manager; or (x) any other Person to which such delivery or disclosure may be necessary or appropriate (A) to effect compliance with any law, rule, regulation or order applicable to such Person, (B) in response to any subpoena or other legal process (unless prohibited by applicable law, rule, order or decree or other requirement having the force of law), (C) in connection with any litigation to which such Person is a party (unless prohibited by applicable law, rule, order or decree or other requirement having the force of law), (D) if an Event of Default has occurred and is continuing, to the extent such Person may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under the Notes or this Indenture or (E) in the Trustee’s or Collateral Administrator’s performance of its obligations under this Indenture, the Collateral Administration Agreement or other transaction document related thereto; and provided that delivery to the Holders or beneficial owners of Notes or to the accountants by the Trustee or the Collateral Administrator of any report of information required by the terms of this Indenture to be provided to Holders or beneficial owners of Notes or to the accountants shall not be a violation of this Section 14.15. Each Holder or beneficial owner of Notes will, by its acceptance of its Note, be deemed to have agreed, except as set forth in clauses (vi), (vii) and (x) above, that it shall use the Confidential Information for the sole purpose of making an investment in the Notes or administering its investment in the Notes; and that the Trustee and the Collateral Administrator shall neither be required nor authorized to disclose to Holders or beneficial owners of Notes any Confidential Information in violation of this Section 14.15. In the event of any required disclosure of the Confidential Information by such Holder or beneficial owner, such Holder or beneficial owner will, by its acceptance of its Note, be deemed to have agreed to use reasonable efforts to protect the confidentiality of the Confidential Information. Each Holder or beneficial owner of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 14.15 (subject to Section 7.17(e)).

 

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(b)               For the purposes of this Section 14.15, (A) “Confidential Information” means information delivered to the Trustee, the Collateral Administrator or any Holder or beneficial owner of Notes by or on behalf of the Issuer in connection with and relating to the transactions contemplated by or otherwise pursuant to this Indenture (including, without limitation, information relating to Obligors); provided that such term does not include information that: (i) was publicly known or otherwise known to the Trustee, the Collateral Administrator or such Holder or beneficial owner prior to the time of such disclosure; (ii) subsequently becomes publicly known through no act or omission by the Trustee, the Collateral Administrator, any Holder or beneficial owner of Notes or any Person acting on behalf of the Trustee, the Collateral Administrator or any Holder or beneficial owner of Notes; (iii) otherwise is known or becomes known to the Trustee, the Collateral Administrator or any Holder or beneficial owner of Notes other than (x) through disclosure by the Issuer or (y) to the knowledge of the Trustee, the Collateral Administrator, a Holder or a beneficial owner of Notes, as the case may be, in each case after reasonable inquiry, as a result of the breach of a fiduciary duty to the Issuer or a contractual duty to the Issuer; or (iv) is allowed to be treated as non-confidential by consent of the Issuer; and (B) “Specified Obligor Information” means Confidential Information relating to Obligors that is not otherwise included in the Monthly Reports or Distribution Reports.

 

(c)               Notwithstanding the foregoing, the Trustee and the Collateral Administrator may disclose Confidential Information to the extent disclosure thereof may be required by law or by any regulatory or governmental authority and the Trustee and the Collateral Administrator may disclose on a confidential basis any Confidential Information to its agents, attorneys and auditors in connection with the performance of its responsibilities hereunder.

 

Section 14.16       Liability of Issuer. Communications with the Rating Agencies. If the Issuer shall receive any written or oral communication from any Rating Agency (or any of their respective officers, directors or employees) with respect to the transactions contemplated hereby or under the Transaction Documents or in any way relating to the Notes, the Issuer agrees to refrain from communicating with such Rating Agency and to promptly (and, in any event, within one Business Day) notify the Collateral Manager of such communication. The Issuer agrees that in no event shall it engage in any oral or written communication with respect to the transactions contemplated hereby or under the Transaction Documents or in any way relating to the Notes with any Rating Agency (or any of their respective officers, directors or employees) without the participation of the Collateral Manager, unless otherwise agreed to in writing by the Collateral Manager. For the avoidance of doubt, nothing in this Section 14.16 shall prohibit the Trustee from making available on its internet website the Monthly Reports, Distribution Reports and other notices or documentation relating to the Notes or this Indenture. For the avoidance of doubt, the Accountants’ Reports or reports prepared by the Independent accountants pursuant to this Indenture (or information received, orally or in writing, about the contents of such reports) shall not be disclosed or distributed to the Rating Agencies. In accordance with SEC Release No. 34-72936, Form 15-E, only in its complete and unedited form which includes the Accountants’ Effective Date Comparison AUP Report as an attachment, will be provided by the Independent accountants to the Issuer who will post such Form 15-E on the 17g-5 website.

 

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Section 14.17    Notices to S&P; Rule 17g-5 Procedures. (a) To enable the Rating Agencies to comply with their obligations under Rule 17g-5, the Issuer shall post on a password-protected internet website, at the same time such information is provided to the Rating Agencies, all information (which shall not include any Effective Date Report, Accountants’ Report or report prepared by the Independent accountants pursuant to this Indenture) the Issuer provides to the Rating Agencies for the purposes of determining the initial credit rating of the Notes or undertaking credit rating surveillance of the Notes. In the case of information provided for the purposes of undertaking credit rating surveillance of the Notes, such information shall be posted on a password protected internet website in accordance with the procedures set forth in Section 14.17(b).

 

(b)              To the extent that a Rating Agency makes an inquiry or initiates communications with the Issuer, the Collateral Manager, the Collateral Administrator or the Trustee that is relevant to such Rating Agency’s credit rating surveillance of the Secured Notes, all responses to such inquiries or communications from such Rating Agency shall be formulated in writing by the responding party or its representative or advisor and shall be provided to the Information Agent who shall promptly forward such written response to the Issuer’s Website in accordance with the procedures set forth in Section 14.17(d) and the Collateral Administration Agreement and such responding party or its representative or advisor may provide such response to such Rating Agency and to the extent that any of the Issuer, the Collateral Manager, the Collateral Administrator or the Trustee is required to provide any information to, or communicate with, any Rating Agency in accordance with its obligations under this Indenture or the Collateral Management Agreement, the Issuer, the Collateral Manager, the Collateral Administrator or the Trustee, as applicable (or their respective representatives or advisors), shall provide such information or communication to the Information Agent by e-mail at GCICCLOII@bnymellon.com, which the Information Agent shall promptly forward to the Issuer’s Website in accordance with the procedures set forth in Section 14.17(d) and the Collateral Administration Agreement.

 

(c)              Subject to Section 14.16 hereof, the Issuer, the Collateral Manager, the Collateral Administrator and the Trustee (and their respective representatives and advisors) shall be permitted (but shall not be required) to orally communicate with the Rating Agencies regarding any Collateral Obligation or the Notes; provided, that such party summarizes the information provided to the Rating Agencies in such communication and provides the Information Agent with such summary in accordance with the procedures set forth in this Section 14.17 and the Collateral Administration Agreement within one Business Day of such communication taking place. The Information Agent shall forward such summary to the Issuer’s Website in accordance with the procedures set forth in Section 14.17(d).

 

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(d)               All information to be made available to the Rating Agencies pursuant to this Section 14.17 shall be forwarded by the Information Agent for posting on the Issuer’s Website pursuant to the Collateral Administration Agreement. Information will be posted on the same Business Day of receipt provided that such information is received by 12:00 p.m. (Eastern time) or, if received after 12:00 p.m. (Eastern time), on the next Business Day. The Information Agent shall have no obligation or duty to verify, confirm or otherwise determine whether the information being delivered is accurate, complete, conforms to the transaction or otherwise is or is not anything other than what it purports to be. In the event that any information is delivered or posted in error, the Issuer may remove it from the Issuer’s Website. None of the Trustee, the Collateral Manager, the Collateral Administrator and the Information Agent shall have obtained or shall be deemed to have obtained actual knowledge of any information solely due to receipt and posting to the Issuer’s Website. Access to the Issuer’s Website will be provided by the Issuer to (A) any NRSRO (other than the Rating Agencies) upon receipt by the Issuer and the Information Agent of an NRSRO Certification in the form of Exhibit E hereto (which may be submitted electronically via the Issuer’s Website) and (B) the Rating Agencies, without submission of an NRSRO Certification.

 

(e)                None of the Issuer, the Trustee, or the Collateral Manager shall be responsible or liable for any delays caused by the failure of the Information Agent to forward the applicable response to the Issuer’s Website.

 

(f)               Notwithstanding the requirements of this Section 14.17, neither the Trustee nor the Collateral Administrator shall have any obligation to engage in, or respond to, any inquiry or oral communications from any Rating Agency. Neither the Trustee nor the Collateral Administrator shall be responsible for maintaining the Issuer’s Website, posting information on the Issuer’s Website or assuring that the Issuer’s Website complies with the requirements of this Indenture, Rule 17g-5, or any other law or regulation. In no event shall the Trustee, the Information Agent or the Collateral Administrator be deemed to make any representation as to the content of the Issuer’s Website (other than with respect to the Information Agent, to the extent such content was prepared by the Information Agent) or with respect to compliance by the Issuer’s Website with this Indenture, Rule 17g-5 or any other law or regulation.

 

(g)              In connection with providing access to the Issuer’s Website, the Issuer may require registration and the acceptance of a disclaimer. The Information Agent shall not be liable for the dissemination of information in accordance with the terms of this Indenture and the Collateral Administration Agreement and makes no representations or warranties as to the accuracy or completeness of such information being made available, and assumes no responsibility for such information. The Information Agent shall not be liable for its failure to make any information available to the Rating Agencies or NRSROs unless such information was delivered to the Information Agent at the email address set forth herein, with a subject heading of “GCIC CLO II LLC” and sufficient detail to indicate that such information is required to be posted on the Issuer’s Website.

 

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(h)               Notwithstanding anything therein to the contrary, the maintenance by the Trustee of the website described in Section 10.7(g) shall not be deemed as compliance by or on behalf of the Issuer with Rule 17g-5 or other law or regulation related thereto.

 

(i)                 Notwithstanding anything to the contrary in this Indenture (including, without limitation, Section 5.1), any failure by the Issuer or any other Person to comply with the provisions of this Section 14.17 shall not constitute an Event of Default or breach of this Indenture, the Collateral Management Agreement or any other agreement, and the Holders and the holders of any beneficial interests in the Notes shall have no rights with respect thereto or under this Section 14.17. This Section 14.17 may be amended or modified by agreement of the Collateral Manager, the Issuer, the Trustee, the Information Agent and the Rating Agencies, without the consent of any Noteholders or any other Person.

 

(j)                 In accordance with SEC Release No. 34-72936, Form 15-E, only in its complete and unedited form, will be provided by the Independent accountants to the Issuer who will post such Form 15-E on the 17g-5 website.

 

Section 14.18    Proceedings. Each purchaser, beneficial owner and subsequent transferee of a Note will be deemed by its purchase to acknowledge and agree as follows: (i) (a) the express terms of this Indenture govern the rights of the Noteholders to direct the commencement of a Proceeding against any person, (b) this Indenture contains limitations on the rights of the Noteholders to direct the commencement of any such Proceeding, and (c) each Noteholder shall comply with such express terms if it seeks to direct the commencement of any such Proceeding; (ii) there are no implied rights under this Indenture to direct the commencement of any such Proceeding; and (iii) notwithstanding any provision of this Indenture, or any provision of the Notes, or of the Collateral Administration Agreement or of any other agreement, the Issuer shall be under no duty or obligation of any kind to the Noteholders, or any of them, to institute any legal or other proceedings of any kind, against any person or entity, including, without limitation, the Trustee, the Collateral Manager, the Collateral Administrator or the Calculation Agent.

 

 

 

ARTICLE XV

Assignment Of Certain Agreements

 

Section 15.1        Assignment of Collateral Management Agreement. (a) The Issuer hereby acknowledges that its Grant pursuant to the first Granting Clause hereof includes all of the Issuer’s estate, right, title and interest in, to and under the Collateral Management Agreement, including (i) the right to give all notices, consents and releases thereunder, (ii) the right to give all notices of termination and to take any legal action upon the breach of an obligation of the Collateral Manager thereunder, including the commencement, conduct and consummation of proceedings at law or in equity, (iii) the right to receive all notices, accountings, consents, releases and statements thereunder and (iv) the right to do any and all other things whatsoever that the Issuer is or may be entitled to do thereunder; provided that notwithstanding anything herein to the contrary, the Trustee shall not have the authority to exercise any of the rights set forth in (i) through (iv) above or that may otherwise arise as a result of the Grant until the occurrence of an Event of Default hereunder and such authority shall terminate at such time, if any, as such Event of Default is cured or waived. From and after the occurrence and continuance of an Event of Default, the Collateral Manager shall continue to perform and be bound by the provisions of the Collateral Management Agreement and this Indenture applicable thereto.

 

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(b)             The assignment made hereby is executed as collateral security, and the execution and delivery hereby shall not in any way impair or diminish the obligations of the Issuer under the provisions of the Collateral Management Agreement, nor shall any of the obligations contained in the Collateral Management Agreement be imposed on the Trustee at any time, including following the resignation or removal of the Collateral Manager.

 

(c)              Upon the retirement of the Notes, the payment of all amounts required to be paid pursuant to the Priority of Payments and the release of the Assets from the lien of this Indenture, this assignment and all rights herein assigned to the Trustee for the benefit of the Noteholders shall cease and terminate and all the estate, right, title and interest of the Trustee in, to and under the Collateral Management Agreement shall revert to the Issuer and no further instrument or act shall be necessary to evidence such termination and reversion.

 

(d)               The Issuer represents that, as of the date hereof, the Issuer has not executed any other assignment of the Collateral Management Agreement.

 

(e)               The Issuer agrees that this assignment is irrevocable, and that it will not take any action which is inconsistent with this assignment or make any other assignment inconsistent herewith. The Issuer will, from time to time, execute all instruments of further assurance and all such supplemental instruments with respect to this assignment as may be necessary to continue and maintain the effectiveness of such assignment.

 

(f)                The Issuer hereby agrees, and hereby undertakes to obtain the agreement and consent of the Collateral Manager in the Collateral Management Agreement, to the following:

 

(i)               The Collateral Manager shall consent to the provisions of this assignment and agree to perform any provisions of this Indenture applicable to the Collateral Manager subject to the terms (including the Collateral Manager Standard) of the Collateral Management Agreement.

 

(ii)              The Collateral Manager shall acknowledge that the Issuer is assigning all of its right, title and interest in, to and under the Collateral Management Agreement to the Trustee as representative of the Noteholders and the Collateral Manager shall agree that all of the representations, covenants and agreements made by the Collateral Manager in the Collateral Management Agreement are also for the benefit of the Trustee.

 

(iii)            The Collateral Manager shall deliver to the Trustee copies of all notices, statements, communications and instruments delivered or required to be delivered by the Collateral Manager to the Issuer pursuant to the Collateral Management Agreement.

 

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(iv)              Except as otherwise set forth herein and therein (including pursuant to Section 8 of the Collateral Management Agreement), the Collateral Manager shall continue to serve as Collateral Manager under the Collateral Management Agreement notwithstanding that the Collateral Manager shall not have received amounts due it under the Collateral Management Agreement because sufficient funds were not then available hereunder to pay such amounts in accordance with the Priority of Payments set forth under Section 11.1. The Collateral Manager agrees not to cause the filing of a petition in bankruptcy against the Issuer for the nonpayment of the fees or other amounts payable by the Issuer to the Collateral Manager under the Collateral Management Agreement until the payment in full of all Notes issued under this Indenture and the expiration of a period equal to one year and a day, or, if longer, the applicable preference period and one day, following such payment. Nothing in this Section 15.1 shall preclude, or be deemed to stop, the Collateral Manager (i) from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily filed or commenced by the Issuer or (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Collateral Manager, or (ii) from commencing against the Issuer or any of its properties any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceeding.

 

(v)               Except with respect to transactions contemplated by Section 5 of the Collateral Management Agreement, if the Collateral Manager determines that it or any of its Affiliates has a conflict of interest between the Holder of any Note and any other account or portfolio for which the Collateral Manager or any of its Affiliates is serving as investment adviser which relates to any action to be taken with respect to any Asset, then the Collateral Manager will give written notice briefly describing such conflict and the action it proposes to take to the Trustee, who shall promptly forward such notice to the relevant Holder. The provisions of this clause (vi) shall not apply to any transaction permitted by the terms of the Collateral Management Agreement.

 

(vi)             On each Measurement Date on which the S&P CDO Monitor Test is used, the Collateral Manager on behalf of the Issuer will measure compliance under such test.

 

(g)           The Issuer and the Trustee agree that the Collateral Manager shall be a third party beneficiary of this Indenture, and shall be entitled to rely upon and enforce such provisions of this Indenture to the same extent as if it were a party hereto.

 

(h)           Upon a Trust Officer of the Trustee receiving written notice from the Collateral Manager that an event constituting “Cause” as defined in the Collateral Management Agreement has occurred, the Trustee shall, not later than two Business Days thereafter, forward such notice to the Noteholders (as their names appear in the Register).

 

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[Signature Pages Follow]

 

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IN WITNESS WHEREOF, we have set our hands as of the day and year first written above.

 

  GCIC CLO II LLC, as Issuer
   
  By: Golub Capital Investment Corporation, its designated manager
   
  By:
    Name:
    Title:

 

 

 

 

 

 

The Bank of New York Mellon

Trust Company, NATIONAL

ASSOCIATION,

  as Trustee
   
  By:  
    Name:
    Title:

 

 

 

 

Schedule 1

 

List of Collateral Obligations

 

S-1-1

 

 

Schedule 2

S&P Industry Classifications

 

Asset Type
Code 		Description
1020000 Energy Equipment and Services
1030000 Oil, Gas and Consumable Fuels
1033403 Mortgage Real Estate Investment Trusts (REITs)
2020000 Chemicals
2030000 Construction Materials
2040000 Containers and Packaging
2050000 Metals and Mining
2060000 Paper and Forest Products
3020000 Aerospace and Defense
3030000 Building Products
3040000 Construction & Engineering
3050000 Electrical Equipment
3060000 Industrial Conglomerates
3070000 Machinery
3080000 Trading Companies and Distributors
3110000 Commercial Services and Supplies
3210000 Air Freight and Logistics
3220000 Airlines
3230000 Marine
3240000 Road and Rail
3250000 Transportation Infrastructure
4011000 Auto Components
4020000 Automobiles
4110000 Household Durables
4120000 Leisure Products
4130000 Textiles, Apparel and Luxury Goods
4210000 Hotels, Restaurants and Leisure
4300001 Entertainment
4300002 Interactive Media and Services
4310000 Media
4410000 Distributors
4420000 Internet and Catalog Retail
4430000 Multiline Retail
4440000 Specialty Retail
5020000 Food and Staples Retailing

 

S-2-1

 

 

Asset Type
Code 		Description
5110000 Beverages
5120000 Food Products
5130000 Tobacco
5210000 Household Products
5220000 Personal Products
6020000 Healthcare Equipment and Supplies
6030000 Healthcare Providers and Services
6110000 Biotechnology
6120000 Pharmaceuticals
7011000 Banks
7020000 Thrifts and Mortgage Finance
7110000 Diversified Financial Services
7120000 Consumer Finance
7130000 Capital Markets
7210000 Insurance
7310000 Real Estate Management and Development
7311000 Equity Real Estate Investment Trusts (REITs)
8030000 IT Services
8040000 Software
8110000 Communications Equipment
8120000 Technology Hardware, Storage and Peripherals
8130000 Electronic Equipment, Instruments and Components
8210000 Semiconductors and Semiconductor Equipment
9020000 Diversified Telecommunication Services
9030000 Wireless Telecommunication Services
9520000 Electric Utilities
9530000 Gas Utilities
9540000 Multi-Utilities
9550000 Water Utilities
9551701 Diversified Consumer Services
9551702 Independent Power and Renewable Electricity Producers
9551727 Life Sciences Tools & Services
9551729 Health Care Technology
9612010 Professional Services
1000-1099 Reserved

 

S-2-2

 

 

PROJECT FINANCE
Asset Type Description
PF1 Project finance:  Industrial equipment
PF2 Project finance:  Leisure and gaming
PF3 Project finance:  Natural resources and mining
PF4 Project finance:  Oil and gas
PF5 Project finance:  Power
PF6 Project finance:  Public finance and real estate
PF7 Project finance:  Telecommunications
PF8 Project finance: Transport
PF1000-PF1099 Reserved

 

S-2-3

 

 

Schedule 3

 

Moody’s Rating Definitions

 

For purposes of this Schedule 3 and this Indenture, the terms “Assigned Moody’s Rating” and “CFR” mean:

 

Assigned Moody’s Rating

 

The monitored publicly available rating or the estimated rating expressly assigned to a debt obligation (or facility) by Moody’s that addresses the full amount of the principal and interest promised.

 

CFR

 

With respect to an obligor of a Collateral Obligation, if such obligor has a corporate family rating by Moody’s, then such corporate family rating; provided that if such obligor does not have a corporate family rating by Moody’s but any entity in the obligor’s corporate family does have a corporate family rating, then the CFR is such corporate family rating.

 

For purposes of this Indenture, the terms Moody’s Default Probability Rating, Moody’s Rating and Moody’s Derived Rating, have the meanings under the respective headings below.

 

With respect to any Collateral Obligation as of any date of determination, the rating determined in accordance with the following methodology:

 

MOODY’S DEFAULT PROBABILITY RATING

 

(i)           With respect to a Collateral Obligation, if the obligor of such Collateral Obligation has a CFR, then such CFR;

 

(ii)          With respect to a Collateral Obligation if not determined pursuant to clause (i) above, if the obligor of such Collateral Obligation has one or more senior unsecured obligations with an Assigned Moody’s Rating, then the Assigned Moody’s Rating on any such obligation as selected by the Collateral Manager in its sole discretion;

 

(iii)         With respect to a Collateral Obligation if not determined pursuant to clauses (i) or (ii) above, if the obligor of such Collateral Obligation has one or more senior secured obligations with an Assigned Moody’s Rating, then the Moody’s rating that is one subcategory lower than the Assigned Moody’s Rating on any such senior secured obligation as selected by the Collateral Manager in its sole discretion;

 

(iv)         With respect to a Collateral Obligation if not determined pursuant to clauses (i), (ii) or (iii) above, if a rating estimate has been assigned to such Collateral Obligation by Moody’s upon the request of the Issuer, the Collateral Manager or an Affiliate of the Collateral Manager, then the Moody’s Default Probability Rating is such rating estimate (subject to any applicable rating estimate adjustment) as long as such rating estimate or a renewal for such rating estimate has been issued or provided by Moody’s in each case within the 15 month period preceding the date on which the Moody’s Default Probability Rating is being determined; provided that if such rating estimate has been issued or provided by Moody’s for a period (x) longer than 12 months but not beyond 15 months, the Moody’s Default Probability Rating will be one subcategory lower than such rating estimate and (y) beyond 15 months, the Moody’s Default Probability Rating will be deemed to be “Caa3”;

 

S-3-1

 

 

(v)          With respect to any DIP Collateral Obligation, the Moody’s Default Probability Rating of such Collateral Obligation shall be the rating which is one subcategory below the Assigned Moody’s Rating of such DIP Collateral Obligation;

 

(vi)         With respect to a Collateral Obligation if not determined pursuant to any of clauses (i) through (v) above and at the election of the Collateral Manager, the Moody’s Derived Rating; and

 

(vii)        With respect to a Collateral Obligation if not determined pursuant to any of clauses (i) through (vi) above, the Collateral Obligation will be deemed to have a Moody’s Default Probability Rating of “Caa3.”

 

MOODY’S RATING

 

(i)           With respect to a Collateral Obligation that is a Senior Secured Loan:

 

(A)              if such Collateral Obligation has an Assigned Moody’s Rating, such Assigned Moody’s Rating;

 

(B)              if such Collateral Obligation does not have an Assigned Moody’s Rating but the obligor of such Collateral Obligation has a CFR, then the Moody’s rating that is one subcategory higher than such CFR;

 

(C)              if neither clause (A) nor (B) above apply, if such Collateral Obligation does not have an Assigned Moody’s Rating but the obligor of such Collateral Obligation has one or more senior unsecured obligations with an Assigned Moody’s Rating, then the Moody’s rating that is two subcategories higher than the Assigned Moody’s Rating on any such obligation as selected by the Collateral Manager in its sole discretion;

 

(D)              if none of clauses (A) through (C) above apply, at the election of the Collateral Manager, the Moody’s Derived Rating; and

 

(E)              if none of clauses (A) through (D) above apply, the Collateral Obligation will be deemed to have a Moody’s Rating of “Caa3”; and

 

(ii)          With respect to a Collateral Obligation other than a Senior Secured Loan:

 

(A)              if such Collateral Obligation has an Assigned Moody’s Rating, such Assigned Moody’s Rating;

 

S-3-2

 

 

(B)              if such Collateral Obligation does not have an Assigned Moody’s Rating but the obligor of such Collateral Obligation has one or more senior unsecured obligations with an Assigned Moody’s Rating, then the Assigned Moody’s Rating on any such obligation as selected by the Collateral Manager in its sole discretion;

 

(C)              if neither clause (A) nor (B) above apply, if such Collateral Obligation does not have an Assigned Moody’s Rating but the obligor of such Collateral Obligation has a CFR, then the Moody’s rating that is one subcategory lower than such CFR;

 

(D)              if none of clauses (A), (B) or (C) above apply, if such Collateral Obligation does not have an Assigned Moody’s Rating but the obligor of such Collateral Obligation has one or more subordinated debt obligations with an Assigned Moody’s Rating, then the Moody’s rating that is one subcategory higher than the Assigned Moody’s Rating on any such obligation as selected by the Collateral Manager in its sole discretion;

 

(E)              if none of clauses (A) through (D) above apply, at the election of the Collateral Manager, the Moody’s Derived Rating; and

 

(F)              if none of clauses (A) through (E) above apply, the Collateral Obligation will be deemed to have a Moody’s Rating of “Caa3.”

 

MOODY’S DERIVED RATING

 

With respect to a Collateral Obligation whose Moody’s Rating or Moody’s Default Probability Rating cannot otherwise be determined pursuant to the definitions thereof, such Moody’s Rating or Moody’s Default Probability Rating shall be determined as set forth below:

 

(i)            By using one of the methods provided below:

 

(A)             if such Collateral Obligation is rated by S&P, then the Moody’s Rating and Moody’s Default Probability Rating (as applicable) of such Collateral Obligation will be determined, at the election of the Collateral Manager, in accordance with the methodology set forth in the following table below:

 

S-3-3

 

 

Type of Collateral
Obligation 		  S&P Rating (Public
and Monitored) 		  Collateral
Obligation Rated
by S&P 		  Number of
Subcategories
Relative to
Moody’s
Equivalent of
S&P Rating
Not Structured Finance Obligation   ³“BBB-”   Not a Loan or Participation Interest in Loan   -1
Not Structured Finance Obligation   £“BB+”   Not a Loan or Participation Interest in Loan   -2
Not Structured Finance Obligation       Loan or Participation Interest in Loan   -2

 

 

(B)              if such Collateral Obligation is not rated by S&P but another security or obligation of the obligor has a public and monitored rating by S&P (a “parallel security”), then the rating of such parallel security will at the election of the Collateral Manager be determined in accordance with the table set forth in subclause (i)(A) above, and the Moody’s Derived Rating for purposes of the definitions of Moody’s Rating and Moody’s Default Probability Rating (as applicable) of such Collateral Obligation will be determined in accordance with the methodology set forth in the following table (for such purposes treating the parallel security as if it were rated by Moody’s at the rating determined pursuant to this subclause (i)(B)):

 

Obligation Category of Rated

Obligation

 

Rating of Rated

Obligation

 

Number of Subcategories

Relative to Rated

Obligation Rating

Senior secured obligation   greater than or equal to B2   -1
Senior secured obligation   less than B2   -2
Subordinated obligation   greater than or equal to B3   +1
Subordinated obligation   less than B3   0

 

or

 

(C)              if such Collateral Obligation is a DIP Collateral Obligation, no Moody’s Derived Rating may be determined based on a rating by S&P or any other rating agency.

 

(ii)          If not determined pursuant to clause (i) above and such Collateral Obligation is not rated by Moody’s or S&P and no other security or obligation of the issuer of such Collateral Obligation is rated by Moody’s or S&P, and if Moody’s has been requested by the Issuer, the Collateral Manager or the issuer of such Collateral Obligation to assign a rating or rating estimate with respect to such Collateral Obligation but such rating or rating estimate has not been received, pending receipt of such rating or rating estimate, the Moody’s Derived Rating of such Collateral Obligation for purposes of the definitions of Moody’s Rating or Moody’s Default Probability Rating shall be (A) “B3” if the Collateral Manager certifies to the Trustee and the Collateral Administrator that the Collateral Manager believes that such rating or rating estimate shall be at least “B3” and if the Aggregate Principal Balance of Collateral Obligations determined pursuant to this clause (ii)(A) and clause (i) above does not exceed 5% of the Collateral Principal Amount or (B) otherwise, “Caa3.”

 

S-3-4

 

 

For purposes of the definitions of “Moody’s Default Probability Rating”, “Moody’s Derived Rating” and “Moody’s Rating”, any credit estimate assigned by Moody’s shall expire one year from the date such estimate was issued; provided that, for purposes of any calculation under this Indenture, if Moody’s fails to renew for any reason a credit estimate for a previously acquired Collateral Obligation thereunder on or before such one-year anniversary (which may be extended at Moody’s option to the extent the annual audited financial statements for the Obligor have not yet been received), after the Issuer or the Collateral Manager on the Issuer’s behalf has submitted to Moody’s all information that the Issuer or the Collateral Manager believed in good faith was required to provide such renewal, (1) the Issuer for a period of 60 days will continue using the previous credit estimate assigned by Moody’s with respect to such Collateral Obligation until such time as Moody’s renews the credit estimate for such Collateral Obligation and (2) after 60 days but before Moody’s renews the credit estimate for such Collateral Obligation, the Collateral Obligation will be deemed to have a Moody’s rating of “Caa3.”

 

S-3-5

 

 

Schedule 4

 

S&P RECOVERY RATE TABLES

 

1.       

 

(a)            (i) If a Collateral Obligation has an S&P Recovery Rating, the S&P Recovery Rate for such Collateral Obligation shall be determined as follows (taking into account, for any Collateral Obligation with an S&P Recovery Rating of “1” through “6”, the recovery range indicated in the S&P published report therefor):

 

S&P
Recovery
Rating
of a
Collateral
Obligation 		    Recovery
Estimate
(%)* from
S&P
published
reports** 		    Initial Liability Rating  
            “AAA”     “AA”     “A”     “BBB”     “BB”     “B” and below  
  1+       100       75.00 %     85.00 %     88.00 %     90.00 %     92.00 %     95.00 %
  1       95       70.00 %     80.00 %     84.00 %     87.50 %     91.00 %     95.00 %
  1       90       65.00 %     75.00 %     80.00 %     85.00 %     90.00 %     95.00 %
  2       85       62.50 %     72.50 %     77.50 %     83.00 %     88.00 %     92.00 %
  2       80       60.00 %     70.00 %     75.00 %     81.00 %     86.00 %     89.00 %
  2       75       55.00 %     65.00 %     70.50 %     77.00 %     82.50 %     84.00 %
  2       70       50.00 %     60.00 %     66.00 %     73.00 %     79.00 %     79.00 %
  3       65       45.00 %     55.00 %     61.00 %     68.00 %     73.00 %     74.00 %
  3       60       40.00 %     50.00 %     56.00 %     63.00 %     67.00 %     69.00 %
  3       55       35.00 %     45.00 %     51.00 %     58.00 %     63.00 %     64.00 %
  3       50       30.00 %     40.00 %     46.00 %     53.00 %     59.00 %     59.00 %
  4       45       28.50 %     37.50 %     44.00 %     49.50 %     53.50 %     54.00 %
  4       40       27.00 %     35.00 %     42.00 %     46.00 %     48.00 %     49.00 %
  4       35       23.50 %     30.50 %     37.50 %     42.50 %     43.50 %     44.00 %
  4       30       20.00 %     26.00 %     33.00 %     39.00 %     39.00 %     39.00 %
  5       25       17.50 %     23.00 %     28.50 %     32.50 %     33.50 %     34.00 %
  5       20       15.00 %     20.00 %     24.00 %     26.00 %     28.00 %     29.00 %
  5       15       10.00 %     15.00 %     19.50 %     22.50 %     23.50 %     24.00 %
  5       10       5.00 %     10.00 %     15.00 %     19.00 %     19.00 %     19.00 %
  6       5       3.50 %     7.00 %     10.50 %     13.50 %     14.00 %     14.00 %
  6       0       2.00 %     4.00 %     6.00 %     8.00 %     9.00 %     9.00 %
                  Recovery rate

 

*       The recovery estimate from S&P’s published reports for a given loan is rounded down to the nearest 5%.

 

**     If a recovery estimate is not available from S&P’s published reports for a given loan with an S&P Recovery Rating of ‘1’ through ‘6’, the lower estimate for the applicable recovery rating will be assumed.

 

(ii)              If (x) a Collateral Obligation does not have an S&P Recovery Rating and such Collateral Obligation is a senior unsecured loan or second lien loan and (y) the issuer of such Collateral Obligation has issued another debt instrument that is outstanding and senior to such Collateral Obligation (a “Senior Secured Debt Instrument”)  that has an S&P Recovery Rating, the S&P Recovery Rate for such Collateral Obligation shall be determined as follows:

 

S-4-1

 

 

For Collateral Obligations Domiciled in Group A 

 

S&P Recovery
Rating
of the Senior Secured
Debt Instrument 		  Initial Liability Rating  
    “AAA”     “AA”     “A”     “BBB”     “BB”     “B” and below  
1+     18 %     20 %     23 %     26 %     29 %     31 %
1     18 %     20 %     23 %     26 %     29 %     31 %
2     18 %     20 %     23 %     26 %     29 %     31 %
3     12 %     15 %     18 %     21 %     22 %     23 %
4     5 %     8 %     11 %     13 %     14 %     15 %
5     2 %     4 %     6 %     8 %     9 %     10 %
6     - %     - %     - %     - %     - %     - %
      Recovery rate

 

For Collateral Obligations Domiciled in Group B

 

S&P Recovery
Rating
of the Senior Secured
Debt Instrument 		  Initial Liability Rating  
    “AAA”     “AA”     “A”     “BBB”     “BB”     “B” and below  
1+     13 %     16 %     18 %     21 %     23 %     25 %
1     13 %     16 %     18 %     21 %     23 %     25 %
2     13 %     16 %     18 %     21 %     23 %     25 %
3     8 %     11 %     13 %     15 %     16 %     17 %
4     5 %     5 %     5 %     5 %     5 %     5 %
5     2 %     2 %     2 %     2 %     2 %     2 %
6     - %     - %     - %     - %     - %     - %
      Recovery rate

 

For Collateral Obligations Domiciled in Group C

 

S&P Recovery
Rating
of the Senior Secured
Debt Instrument 		  Initial Liability Rating  
    “AAA”     “AA”     “A”     “BBB”     “BB”     “B” and below  
1+     10 %     12 %     14 %     16 %     18 %     20 %
1     10 %     12 %     14 %     16 %     18 %     20 %
2     10 %     12 %     14 %     16 %     18 %     20 %
3     5 %     7 %     9 %     10 %     11 %     12 %
4     2 %     2 %     2 %     2 %     2 %     2 %
5     - %     - %     - %     - %     - %     - %
6     - %     - %     - %     - %     - %     - %
      Recovery rate  

 

S-4-2

 

 

(iii)            If (x) a Collateral Obligation does not have an S&P Recovery Rating and such Collateral Obligation is a subordinated loan or subordinated bond and (y) the issuer of such Collateral Obligation has issued a Senior Secured Debt Instrument that has an S&P Recovery Rating, the S&P Recovery Rate for such Collateral Obligation shall be determined as follows:

 

For Collateral Obligations Domiciled in Groups A and B

 

S&P Recovery
Rating
of the Senior Secured
Debt Instrument 		  Initial Liability Rating  
    “AAA”     “AA”     “A”     “BBB”     “BB”     “B” and below  
  1+     8 %     8 %     8 %     8 %     8 %     8 %
  1     8 %     8 %     8 %     8 %     8 %     8 %
  2     8 %     8 %     8 %     8 %     8 %     8 %
  3     5 %     5 %     5 %     5 %     5 %     5 %
  4     2 %     2 %     2 %     2 %     2 %     2 %
  5     - %     - %     - %     - %     - %     - %
  6     - %     - %     - %     - %     - %     - %
        Recovery rate  

 

For Collateral Obligations Domiciled in Group C

 

S&P Recovery
Rating
of the Senior Secured
Debt Instrument 		  Initial Liability Rating  
    “AAA”     “AA”     “A”     “BBB”     “BB”     “B” and below  
1+     5 %     5 %     5 %     5 %     5 %     5 %
1     5 %     5 %     5 %     5 %     5 %     5 %
2     5 %     5 %     5 %     5 %     5 %     5 %
3     2 %     2 %     2 %     2 %     2 %     2 %
4     - %     - %     - %     - %     - %     - %
5     - %     - %     - %     - %     - %     - %
6     - %     - %     - %     - %     - %     - %
      Recovery rate

 

S-4-3

 

 

(b)           If a recovery rate cannot be determined using clause (a), the recovery rate shall be determined using the following table.

 

Recovery rates for Obligors Domiciled in Group A, B or C:

 

Priority Category   Initial Liability Rating  
    “AAA”     “AA”     “A”     “BBB”     “BB”     “B” and “CCC”  
Senior Secured Loans (other than First-Lien Last-Out Loans)
Group A     50 %     55 %     59 %     63 %     75 %     79 %
Group B     39 %     42 %     46 %     49 %     60 %     63 %
Group C     17 %     19 %     27 %     29 %     31 %     34 %
Senior Secured Loans (Cov-Lite Loans), Senior Secured Bonds
Group A     41 %     46 %     49 %     53 %     63 %     67 %
Group B     32 %     35 %     39 %     41 %     50 %     53 %
Group C     17 %     19 %     27 %     29 %     31 %     34 %
Second Lien Loans, First-Lien Last-Out Loans, Unsecured Loans, Cov-Lite Loans*, Senior Unsecured Bonds
Group A     18 %     20 %     23 %     26 %     29 %     31 %
Group B     13 %     16 %     18 %     21 %     23 %     25 %
Group C     10 %     12 %     14 %     16 %     18 %     20 %
Subordinated Loans, Subordinated Bonds
Group A     8 %     8 %     8 %     8 %     8 %     8 %
Group B     8 %     8 %     8 %     8 %     8 %     8 %
Group C     5 %     5 %     5 %     5 %     5 %     5 %
      Recovery rate

 

Group A: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Japan, Luxembourg, The Netherlands, Norway, Poland, Portugal, Singapore, Spain, Sweden, Switzerland, U.K. and United States of America

 

Group B: Brazil, Dubai International Finance Centre, Greece, Italy, Mexico, South Africa, Turkey and United Arab Emirates

 

Group C: India, Indonesia, Kazakhstan, Russia, Ukraine and Vietnam

 

Notwithstanding the foregoing, for purposes of determining the S&P Recovery Rate of a Collateral Obligation that is a Senior Secured Loan (including any Cov-Lite Loan) secured solely or primarily by common stock or other equity interests, such Collateral Obligation shall be deemed to be an Unsecured Loan.

 

* Solely for the purpose of determining the S&P Recovery Rate for such loan, the Aggregate Principal Balance of all First-Lien Last-Out Loans, Unsecured Loans and Second Lien Loans that, in the aggregate, represent up to 15% of the Collateral Principal Amount shall have the S&P Recovery Rate specified for First-Lien Last-Out Loans, Unsecured Loans and Second Lien Loans in the table above and the Aggregate Principal Balance of all First-Lien Last-Out Loans, Unsecured Loans and Second Lien Loans in excess of 15% of the Collateral Principal Amount shall have the S&P Recovery Rate specified for Subordinated Loans in the table above.

 

S-4-4

 

 

 

 

2.       S&P CDO Monitor

 

Liability
Rating 		  “AAA”   “AA”   “A”   “BBB-”   “BB”
Weighted     35.00     40.00     45.00     50.00     55.00
Average S&P     35.10     40.10     45.10     50.10     55.10
Recovery Rate     35.20     40.20     45.20     50.20     55.20
      35.30     40.30     45.30     50.30     55.30
      35.40     40.40     45.40     50.40     55.40
      35.50     40.50     45.50     50.50     55.50
      35.60     40.60     45.60     50.60     55.60
      35.70     40.70     45.70     50.70     55.70
      35.80     40.80     45.80     50.80     55.80
      35.90     40.90     45.90     50.90     55.90
      36.00     41.00     46.00     51.00     56.00
      36.10     41.10     46.10     51.10     56.10
      36.20     41.20     46.20     51.20     56.20
      36.30     41.30     46.30     51.30     56.30
      36.40     41.40     46.40     51.40     56.40
      36.50     41.50     46.50     51.50     56.50
      36.60     41.60     46.60     51.60     56.60
      36.70     41.70     46.70     51.70     56.70
      36.80     41.80     46.80     51.80     56.80
      36.90     41.90     46.90     51.90     56.90
      37.00     42.00     47.00     52.00     57.00
      37.10     42.10     47.10     52.10     57.10
      37.20     42.20     47.20     52.20     57.20
      37.30     42.30     47.30     52.30     57.30
      37.40     42.40     47.40     52.40     57.40
      37.50     42.50     47.50     52.50     57.50
      37.60     42.60     47.60     52.60     57.60
      37.70     42.70     47.70     52.70     57.70
      37.80     42.80     47.80     52.80     57.80
      37.90     42.90     47.90     52.90     57.90
      38.00     43.00     48.00     53.00     58.00
      38.10     43.10     48.10     53.10     58.10
      38.20     43.20     48.20     53.20     58.20
      38.30     43.30     48.30     53.30     58.30
      38.40     43.40     48.40     53.40     58.40
      38.50     43.50     48.50     53.50     58.50
      38.60     43.60     48.60     53.60     58.60
      38.70     43.70     48.70     53.70     58.70
      38.80     43.80     48.80     53.80     58.80
      38.90     43.90     48.90     53.90     58.90
      39.00     44.00     49.00     54.00     59.00
      39.10     44.10     49.10     54.10     59.10
      39.20     44.20     49.20     54.20     59.20
      39.30     44.30     49.30     54.30     59.30
      39.40     44.40     49.40     54.40     59.40
      39.50     44.50     49.50     54.50     59.50
      39.60     44.60     49.60     54.60     59.60
      39.70     44.70     49.70     54.70     59.70
      39.80     44.80     49.80     54.80     59.80
      39.90     44.90     49.90     54.90     59.90
      40.00     45.00     50.00     55.00     60.00
      40.10     45.10     50.10     55.10     60.10
      40.20     45.20     50.20     55.20     60.20
      40.30     45.30     50.30     55.30     60.30
      40.40     45.40     50.40     55.40     60.40
      40.50     45.50     50.50     55.50     60.50

 

S-4-5 

 

 

Liability
Rating 		  “AAA”   “AA”   “A”   “BBB-”   “BB”
      40.60     45.60     50.60     55.60     60.60
      40.70     45.70     50.70     55.70     60.70
      40.80     45.80     50.80     55.80     60.80
      40.90     45.90     50.90     55.90     60.90
      41.00     46.00     51.00     56.00     61.00
      41.10     46.10     51.10     56.10     61.10
      41.20     46.20     51.20     56.20     61.20
      41.30     46.30     51.30     56.30     61.30
      41.40     46.40     51.40     56.40     61.40
      41.50     46.50     51.50     56.50     61.50
      41.60     46.60     51.60     56.60     61.60
      41.70     46.70     51.70     56.70     61.70
      41.80     46.80     51.80     56.80     61.80
      41.90     46.90     51.90     56.90     61.90
      42.00     47.00     52.00     57.00     62.00
      42.10     47.10     52.10     57.10     62.10
      42.20     47.20     52.20     57.20     62.20
      42.30     47.30     52.30     57.30     62.30
      42.40     47.40     52.40     57.40     62.40
      42.50     47.50     52.50     57.50     62.50
      42.60     47.60     52.60     57.60     62.60
      42.70     47.70     52.70     57.70     62.70
      42.80     47.80     52.80     57.80     62.80
      42.90     47.90     52.90     57.90     62.90
      43.00     48.00     53.00     58.00     63.00
      43.10     48.10     53.10     58.10     63.10
      43.20     48.20     53.20     58.20     63.20
      43.30     48.30     53.30     58.30     63.30
      43.40     48.40     53.40     58.40     63.40
      43.50     48.50     53.50     58.50     63.50
      43.60     48.60     53.60     58.60     63.60
      43.70     48.70     53.70     58.70     63.70
      43.80     48.80     53.80     58.80     63.80
      43.90     48.90     53.90     58.90     63.90
      44.00     49.00     54.00     59.00     64.00
      44.10     49.10     54.10     59.10     64.10
      44.20     49.20     54.20     59.20     64.20
      44.30     49.30     54.30     59.30     64.30
      44.40     49.40     54.40     59.40     64.40
      44.50     49.50     54.50     59.50     64.50
      44.60     49.60     54.60     59.60     64.60
      44.70     49.70     54.70     59.70     64.70
      44.80     49.80     54.80     59.80     64.80
      44.90     49.90     54.90     59.90     64.90
      45.00     50.00     55.00     60.00     65.00
      45.10     50.10     55.10     60.10     65.10
      45.20     50.20     55.20     60.20     65.20
      45.30     50.30     55.30     60.30     65.30
      45.40     50.40     55.40     60.40     65.40
      45.50     50.50     55.50     60.50     65.50
      45.60     50.60     55.60     60.60     65.60
      45.70     50.70     55.70     60.70     65.70
      45.80     50.80     55.80     60.80     65.80
      45.90     50.90     55.90     60.90     65.90
      46.00     51.00     56.00     61.00     66.00
      46.10     51.10     56.10     61.10     66.10
      46.20     51.20     56.20     61.20     66.20
      46.30     51.30     56.30     61.30     66.30

 

S-4-6 

 

 

Liability
Rating 		  “AAA”   “AA”   “A”   “BBB-”   “BB”
      46.40     51.40     56.40     61.40     66.40
      46.50     51.50     56.50     61.50     66.50
      46.60     51.60     56.60     61.60     66.60
      46.70     51.70     56.70     61.70     66.70
      46.80     51.80     56.80     61.80     66.80
      46.90     51.90     56.90     61.90     66.90
      47.00     52.00     57.00     62.00     67.00
      47.10     52.10     57.10     62.10     67.10
      47.20     52.20     57.20     62.20     67.20
      47.30     52.30     57.30     62.30     67.30
      47.40     52.40     57.40     62.40     67.40
      47.50     52.50     57.50     62.50     67.50
      47.60     52.60     57.60     62.60     67.60
      47.70     52.70     57.70     62.70     67.70
      47.80     52.80     57.80     62.80     67.80
      47.90     52.90     57.90     62.90     67.90
      48.00     53.00     58.00     63.00     68.00
      48.10     53.10     58.10     63.10     68.10
      48.20     53.20     58.20     63.20     68.20
      48.30     53.30     58.30     63.30     68.30
      48.40     53.40     58.40     63.40     68.40
      48.50     53.50     58.50     63.50     68.50
      48.60     53.60     58.60     63.60     68.60
      48.70     53.70     58.70     63.70     68.70
      48.80     53.80     58.80     63.80     68.80
      48.90     53.90     58.90     63.90     68.90
      49.00     54.00     59.00     64.00     69.00
      49.10     54.10     59.10     64.10     69.10
      49.20     54.20     59.20     64.20     69.20
      49.30     54.30     59.30     64.30     69.30
      49.40     54.40     59.40     64.40     69.40
      49.50     54.50     59.50     64.50     69.50
      49.60     54.60     59.60     64.60     69.60
      49.70     54.70     59.70     64.70     69.70
      49.80     54.80     59.80     64.80     69.80
      49.90     54.90     59.90     64.90     69.90
      50.00     55.00     60.00     65.00     70.00
            55.10     60.10     65.10     70.10
            55.20     60.20     65.20     70.20
            55.30     60.30     65.30     70.30
            55.40     60.40     65.40     70.40
            55.50     60.50     65.50     70.50
            55.60     60.60     65.60     70.60
            55.70     60.70     65.70     70.70
            55.80     60.80     65.80     70.80
            55.90     60.90     65.90     70.90
            56.00     61.00     66.00     71.00
            56.10     61.10     66.10     71.10
            56.20     61.20     66.20     71.20
            56.30     61.30     66.30     71.30
            56.40     61.40     66.40     71.40
            56.50     61.50     66.50     71.50
            56.60     61.60     66.60     71.60
            56.70     61.70     66.70     71.70
            56.80     61.80     66.80     71.80
            56.90     61.90     66.90     71.90
            57.00     62.00     67.00     72.00
            57.10     62.10     67.10     72.10

 

S-4-7 

 

 

Liability
Rating 		  “AAA”   “AA”   “A”   “BBB-”   “BB”
            57.20     62.20     67.20     72.20
            57.30     62.30     67.30     72.30
            57.40     62.40     67.40     72.40
            57.50     62.50     67.50     72.50
            57.60     62.60     67.60     72.60
            57.70     62.70     67.70     72.70
            57.80     62.80     67.80     72.80
            57.90     62.90     67.90     72.90
            58.00     63.00     68.00     73.00
            58.10     63.10     68.10     73.10
            58.20     63.20     68.20     73.20
            58.30     63.30     68.30     73.30
            58.40     63.40     68.40     73.40
            58.50     63.50     68.50     73.50
            58.60     63.60     68.60     73.60
            58.70     63.70     68.70     73.70
            58.80     63.80     68.80     73.80
            58.90     63.90     68.90     73.90
            59.00     64.00     69.00     74.00
            59.10     64.10     69.10     74.10
            59.20     64.20     69.20     74.20
            59.30     64.30     69.30     74.30
            59.40     64.40     69.40     74.40
            59.50     64.50     69.50     74.50
            59.60     64.60     69.60     74.60
            59.70     64.70     69.70     74.70
            59.80     64.80     69.80     74.80
            59.90     64.90     69.90     74.90
            60.00     65.00     70.00     75.00

 

For purposes of calculating the Collateral Quality Tests, DIP Collateral Obligations will be treated as having an S&P Recovery Rate equal to the S&P Recovery Rate for Senior Secured Loan.

 

The applicable weighted average spread will be the spread between 2.50% and 7.00% (in increments of .01%) without exceeding the Weighted Average Floating Spread (determined for purposes of this definition as if all Discount Obligations instead constituted Collateral Obligations that are not Discount Obligations) as of such Measurement Date.

 

S-4-8 

 

 

 

3.       S&P Default Rate.

 

    S&P Rating  
Maturity
(years) 		  “AAA”     “AA+”     “AA”     “AA-”     “A+”     “A”     “A-”     “BBB+”     “BBB”     “BBB-”  
0     0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000  
1     0.00003249168014       0.00008324133473       0.00017658665685       0.00049442537636       0.00100435283385       0.00198335724928       0.00305284013092       0.00403669389141       0.00461619431140       0.00524293676951  
2     0.00015699160323       0.00036996201042       0.00073622429264       0.00139938458667       0.00257399573659       0.00452472002175       0.00667328704185       0.00892888699405       0.01091718533602       0.01445988981952  
3     0.00041483816094       0.00091325396687       0.00172278071294       0.00276840924859       0.00474538444138       0.00770505273372       0.01100045166236       0.01484174712870       0.01895695617364       0.02702053897092  
4     0.00084783735367       0.00176280787635       0.00317752719845       0.00464897370222       0.00755268739144       0.01158808027690       0.01613532092160       0.02186031844418       0.02867799361424       0.04229668376188  
5     0.00149745582951       0.00296441043902       0.00513748509964       0.00708173062555       0.01102407117753       0.01621845931443       0.02213969353901       0.03000396020915       0.03994693333519       0.05969442574039  
6     0.00240402335808       0.00455938301677       0.00763414909529       0.01009969303017       0.01517930050335       0.02162162838004       0.02903924108898       0.03924150737171       0.05258484100533       0.07867653829083  
7     0.00360598844688       0.00658408410672       0.01069265583311       0.01372767418503       0.02002861319041       0.02780489164645       0.03682872062425       0.04950544130466       0.06639096774184       0.09877441995809  
8     0.00513925203265       0.00906952567554       0.01433135028927       0.01798206028262       0.02557255249779       0.03475933634592       0.04547803679069       0.06070419602795       0.08116014268566       0.11959163544802  
9     0.00703659581067       0.01204112355275       0.01856168027847       0.02287090497830       0.03180245322497       0.04246223104848       0.05493831311597       0.07273225514177       0.09669462876962       0.14080159863536  
10     0.00932721558018       0.01551858575581       0.02338835025976       0.02839429962031       0.03870134053607       0.05087961844696       0.06514747149521       0.08547803540196       0.11281151957447       0.16214168796922  
11     0.01203636450979       0.01951593238045       0.02880967203295       0.03454495951708       0.04624506060805       0.05996888869754       0.07603506151831       0.09882975172219       0.12934675905433       0.18340556287277  
12     0.01518510638111       0.02404163416342       0.03481805774334       0.04130896444852       0.05440351149008       0.06968118682835       0.08752624592744       0.11267955488484       0.14615674128289       0.20443491679272  
13     0.01879017477837       0.02909885294571       0.04140060854110       0.04866659574161       0.06314188127197       0.07996356467179       0.09954495300396       0.12692626165773       0.16311827279155       0.22511145500583  
14     0.02286393094556       0.03468576536752       0.04853975984763       0.05659321964303       0.07242183059306       0.09076083242049       0.11201626713245       0.14147698429601       0.18012750134259       0.24534954734253  
15     0.02741441064319       0.04079595071314       0.05621395127849       0.06506017556120       0.08220257939344       0.10201709768991       0.12486815855274       0.15624793193058       0.19709825519910       0.26508976972438  
16     0.03244544875941       0.04741882448743       0.06439829575802       0.07403563681456       0.09244187501892       0.11367700243875       0.13803266284923       0.17116461299395       0.21396010509223       0.28429339437018  
17     0.03795686957738       0.05454010071015       0.07306522817054       0.08348542006155       0.10309683146543       0.12568668220692       0.15144661780260       0.18616162353298       0.23065635817821       0.30293779563441  
18     0.04394473036551       0.06214226778788       0.08218511899319       0.09337372717552       0.11412463860794       0.13799447984096       0.16505205534227       0.20118216540699       0.24714211642608       0.32101268824753  
19     0.05040160622073       0.07020506494637       0.09172684273858       0.10366380975952       0.12548314646638       0.15055144894628       0.17879633320753       0.21617740303414       0.26338247665982       0.33851709269878  
20     0.05731690474411       0.07870594841153       0.10165829471868       0.11431855172602       0.13713133355595       0.16331168219788       0.19263207693491       0.23110573813940       0.27935091127019       0.35545691796023  
21     0.06467720005315       0.08762053868981       0.11194685266377       0.12530096944489       0.14902967068053       0.17623249751025       0.20651698936614       0.24593205864939       0.29502784323211       0.37184305725693  
22     0.07246657674287       0.09692304233146       0.12255978214336       0.13657463200185       0.16114039259518       0.18927451178181       0.22041357278348       0.26062699982603       0.31039941302623       0.38768990320407  
23     0.08066697561510       0.10658664340514       0.13346458660563       0.14810400624971       0.17342769013874       0.20240162811085       0.23428879835930       0.27516624211807       0.32545642561659       0.40301420123877  
24     0.08925853423660       0.11658386153875       0.14462930424521       0.15985473272686       0.18585783500387       0.21558095845599       0.24811374891951       0.28952986021038       0.34019346068715       0.41783417301371  
25     0.09821991660962       0.12688687477491       0.15602275489727       0.17179383930879       0.19839924848505       0.22878269995493       0.26186325396763       0.30370173060440       0.35460812735415       0.43216885327770  
26     0.10752862740247       0.13746780665156       0.16761474080616       0.18388989978303       0.21102252449299       0.24197997968242       0.27551553032431       0.31766900011297       0.36870044445001       0.44603759426533  
27     0.11716130726647       0.14829897785967       0.17937620549285       0.19611314451375       0.22370041596552       0.25514867959937       0.28905183739534       0.33142161435353       0.38247232845686       0.45945970060372  
28     0.12709400674022       0.15935312356895       0.19127935510379       0.20843553008938       0.23640779262780       0.26826725084491       0.30245615277997       0.34495190323981       0.39592717273876       0.47245416525357  
29     0.13730243710320       0.17060357806895       0.20329774661513       0.22083077440588       0.24912157691632       0.28131652434167       0.31571487147424       0.35825421926124       0.40906950354635       0.48503948316705  
30     0.14776219728465       0.18202442877234       0.21540634713369       0.23327436309552       0.26182066381869       0.29427952288898       0.32881653013776       0.37132462374109       0.42190470013462       0.49723352433811  
      Default Rate  

 

S-4-9

 

 

    S&P Rating  
Maturity
(years) 		  “BB+”     “BB”     “BB-”     “B+”     “B”     “B-”     “CCC+”     “CCC”     “CCC-”  
0     0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000       0.00000000000000  
1     0.01051626951540       0.02109451063219       0.02600238218261       0.03221175349449       0.07848052027128       0.10882127346154       0.15688600485092       0.20494983870945       0.25301274610780  
2     0.02499656454519       0.04644347602378       0.05872070298984       0.07597534275765       0.14781993688588       0.20010197918490       0.28039819269931       0.34622676009875       0.40104827389528  
3     0.04296728984267       0.07475880167357       0.09536299437344       0.12379110105596       0.20934989256384       0.27616831728107       0.37429808873546       0.44486182623555       0.49823180926143  
4     0.06375706489973       0.10488372919304       0.13369966912307       0.17163869422120       0.26396576049049       0.33956728434721       0.44585490662468       0.51602827454518       0.56644893859712  
5     0.08664543568793       0.13586821436722       0.17214556293531       0.21748448101304       0.31246336178428       0.39272129824310       0.50135334884654       0.56922984826034       0.61661406997870  
6     0.11095356236080       0.16697806761620       0.20966482949668       0.26041061250789       0.35559617193298       0.43770644618830       0.54540770782673       0.61035699119403       0.65491579211460  
7     0.13609032486632       0.19767400297576       0.24563596164635       0.30011114045302       0.39406428304708       0.47619999931623       0.58122985959186       0.64312999141532       0.68512299997909  
8     0.16156889823197       0.22757944125466       0.27972842394960       0.33660307587399       0.42849804714584       0.50951512801740       0.61102368657078       0.66995611089592       0.70963159373549  
9     0.18700580837749       0.25644677999303       0.31180555451716       0.37006268488077       0.45945037340867       0.53866495002890       0.63630625959677       0.69243071475508       0.73001158997065  
10     0.21211084035732       0.28412675027236       0.34185383793706       0.40073439438302       0.48739741129612       0.56442783804416       0.65813447581021       0.71163564980709       0.74731800853184  
11     0.23667314094497       0.31054264263660       0.36993387616211       0.42888152616124       0.51274446097825       0.58740339226248       0.67725700377843       0.72832114376329       0.76227639665042  
12     0.26054665876636       0.33566967587371       0.39614763984459       0.45476089725285       0.53583430552170       0.60805677528899       0.69421439889161       0.74301912258474       0.77539705473005  
13     0.28363659558653       0.35951905665999       0.42061729215497       0.47861083876451       0.55695611742152       0.62675242871282       0.70940493338196       0.75611514630921       0.78704696564217  
14     0.30588762208959       0.38212599668453       0.44347194216901       0.50064658739768       0.57635391124606       0.64377917518522       0.72312812694716       0.76789484926254       0.79749592477526  
15     0.32727407180692       0.40354090885716       0.46483968141201       0.52105958011379       0.59423406584219       0.65936872217181       0.73561381419564       0.77857439457102       0.80694660997118  
16     0.34779203545341       0.42382307208110       0.48484305663441       0.54001868607450       0.61077176721927       0.67370926400653       0.74704179108008       0.78832075169049       0.81555448782805  
17     0.36745314020415       0.44303616519638       0.50359672594052       0.55767228363735       0.62611639818625       0.68695550071172       0.75755527500643       0.79726540401237       0.82344119393145  
18     0.38627975067186       0.46124518847755       0.52120646691784       0.57415059395658       0.64039598203907       0.69923605651349       0.76727026109433       0.80551375832039       0.83070366542031  
19     0.40430132963573       0.47851439829326       0.53776899540229       0.58956796989869       0.65372081561665       0.71065901445795       0.77628212466144       0.81315170523112       0.83742047206234  
20     0.42155172182601       0.49490597076921       0.55337224854383       0.60402499985314       0.66618642723567       0.72131608316220       0.78467035300329       0.82025026616334       0.84365627512204  
21     0.43806715861018       0.51047918266808       0.56809591468229       0.61761037378072       0.67787598227180       0.73128576554444       0.79250198989996       0.82686893791883       0.84946501826992  
22     0.45388481719360       0.52528995390171       0.58201207638061       0.63040250473015       0.68886224172514       0.74063579446157       0.79983418248194       0.83305813869936       0.85489224805959  
23     0.46904180090904       0.53939063874386       0.59518588675300       0.64247092133036       0.69920916125231       0.74942502551257       0.80671609361297       0.83886102557309       0.85997682859142  
24     0.48357443564838       0.55282998463208       0.60767623324921       0.65387745604166       0.70897320184886       0.75770492428590       0.81319035960797       0.84431486609666       0.86475222861870  
25     0.49751780111272       0.56565320087529       0.61953636423910       0.66467725632041       0.71820440936178       0.76552074772016       0.81929421763250       0.84945208922783       0.86924750263494  
26     0.51090543460914       0.57790209665155       0.63081446667744       0.67491964477911       0.72694730840340       0.77291249247078       0.82506038981922       0.85430110229233       0.87348804983309  
27     0.52376916018026       0.58961526000669       0.64155419082782       0.68464885182201       0.73524164682987       0.77991566402222       0.83051778577124       0.85888693491442       0.87749620956371  
28     0.53613900757325       0.60082825839927       0.65179512243902       0.69390464113840       0.74312301943161       0.78656190650205       0.83569206768834       0.86323175320733       0.88129173477942  
29     0.54804319456997       0.61157384762435       0.66157320515020       0.70272284536398       0.75062339353433       0.79287952316911       0.84060611023618       0.86735527538576       0.88489217319288  
30     0.55950815306984       0.62188218039284       0.67092111705074       0.71113582641990       0.75777155452562       0.79889391025997       0.84528037876516       0.87127511150820       0.88831317771650  
      Default Rate

  

S-4-10

 

 

  

Schedule 5

 

[Reserved]

 

S-5-1 

 

 

Schedule 6

 

S&P EQUIVALENT DIVERSITY SCORE CALCULATION

 

The S&P Equivalent Diversity Score is calculated as follows:

 

(a)               An “Issuer Par Amount” is calculated for each issuer of a Collateral Obligation, and is equal to the Aggregate Principal Balance of all Collateral Obligations issued by that issuer and all affiliates.

 

(b)               An “Average Par Amount” is calculated by summing the Issuer Par Amounts for all issuers, and dividing by the number of issuers.

 

(c)               An “Equivalent Unit Score” is calculated for each issuer, and is equal to the lesser of (x) one and (y) the Issuer Par Amount for such issuer divided by the Average Par Amount.

 

(d)               An “Aggregate Industry Equivalent Unit Score” is then calculated for each of the S&P’s industry classification groups, shown on Schedule 2, and is equal to the sum of the Equivalent Unit Scores for each issuer in such industry classification group.

 

(e)               An “Industry Diversity Score” is then established for each S&P industry classification group, shown on Schedule 2, by reference to the following table for the related Aggregate Industry Equivalent Unit Score; provided that if any Aggregate Industry Equivalent Unit Score falls between any two such scores, the applicable Industry Diversity Score will be the lower of the two Industry Diversity Scores:

 

Aggregate           Aggregate           Aggregate           Aggregate        
Industry     Industry     Industry     Industry     Industry     Industry     Industry     Industry  
Equivalent     Diversity     Equivalent     Diversity     Equivalent     Diversity     Equivalent     Diversity  
Unit Score     Score     Unit Score     Score     Unit Score     Score     Unit Score     Score  
  0.0000       0.0000       5.0500       2.7000       10.1500       4.0200       15.2500       4.5300  
  0.0500       0.1000       5.1500       2.7333       10.2500       4.0300       15.3500       4.5400  
  0.1500       0.2000       5.2500       2.7667       10.3500       4.0400       15.4500       4.5500  
  0.2500       0.3000       5.3500       2.8000       10.4500       4.0500       15.5500       4.5600  
  0.3500       0.4000       5.4500       2.8333       10.5500       4.0600       15.6500       4.5700  
  0.4500       0.5000       5.5500       2.8667       10.6500       4.0700       15.7500       4.5800  
  0.5500       0.6000       5.6500       2.9000       10.7500       4.0800       15.8500       4.5900  
  0.6500       0.7000       5.7500       2.9333       10.8500       4.0900       15.9500       4.6000  
  0.7500       0.8000       5.8500       2.9667       10.9500       4.1000       16.0500       4.6100  
  0.8500       0.9000       5.9500       3.0000       11.0500       4.1100       16.1500       4.6200  
  0.9500       1.0000       6.0500       3.0250       11.1500       4.1200       16.2500       4.6300  
  1.0500       1.0500       6.1500       3.0500       11.2500       4.1300       16.3500       4.6400  
  1.1500       1.1000       6.2500       3.0750       11.3500       4.1400       16.4500       4.6500  
  1.2500       1.1500       6.3500       3.1000       11.4500       4.1500       16.5500       4.6600  
  1.3500       1.2000       6.4500       3.1250       11.5500       4.1600       16.6500       4.6700  
  1.4500       1.2500       6.5500       3.1500       11.6500       4.1700       16.7500       4.6800  
  1.5500       1.3000       6.6500       3.1750       11.7500       4.1800       16.8500       4.6900  
  1.6500       1.3500       6.7500       3.2000       11.8500       4.1900       16.9500       4.7000  
  1.7500       1.4000       6.8500       3.2250       11.9500       4.2000       17.0500       4.7100  
  1.8500       1.4500       6.9500       3.2500       12.0500       4.2100       17.1500       4.7200  

 

S-6-1 

 

 

Aggregate           Aggregate           Aggregate           Aggregate        
Industry     Industry     Industry     Industry     Industry     Industry     Industry     Industry  
Equivalent     Diversity     Equivalent     Diversity     Equivalent     Diversity     Equivalent     Diversity  
Unit Score     Score     Unit Score     Score     Unit Score     Score     Unit Score     Score  
  1.9500       1.5000       7.0500       3.2750       12.1500       4.2200       17.2500       4.7300  
  2.0500       1.5500       7.1500       3.3000       12.2500       4.2300       17.3500       4.7400  
  2.1500       1.6000       7.2500       3.3250       12.3500       4.2400       17.4500       4.7500  
  2.2500       1.6500       7.3500       3.3500       12.4500       4.2500       17.5500       4.7600  
  2.3500       1.7000       7.4500       3.3750       12.5500       4.2600       17.6500       4.7700  
  2.4500       1.7500       7.5500       3.4000       12.6500       4.2700       17.7500       4.7800  
  2.5500       1.8000       7.6500       3.4250       12.7500       4.2800       17.8500       4.7900  
  2.6500       1.8500       7.7500       3.4500       12.8500       4.2900       17.9500       4.8000  
  2.7500       1.9000       7.8500       3.4750       12.9500       4.3000       18.0500       4.8100  
  2.8500       1.9500       7.9500       3.5000       13.0500       4.3100       18.1500       4.8200  
  2.9500       2.0000       8.0500       3.5250       13.1500       4.3200       18.2500       4.8300  
  3.0500       2.0333       8.1500       3.5500       13.2500       4.3300       18.3500       4.8400  
  3.1500       2.0667       8.2500       3.5750       13.3500       4.3400       18.4500       4.8500  
  3.2500       2.1000       8.3500       3.6000       13.4500       4.3500       18.5500       4.8600  
  3.3500       2.1333       8.4500       3.6250       13.5500       4.3600       18.6500       4.8700  
  3.4500       2.1667       8.5500       3.6500       13.6500       4.3700       18.7500       4.8800  
  3.5500       2.2000       8.6500       3.6750       13.7500       4.3800       18.8500       4.8900  
  3.6500       2.2333       8.7500       3.7000       13.8500       4.3900       18.9500       4.9000  
  3.7500       2.2667       8.8500       3.7250       13.9500       4.4000       19.0500       4.9100  
  3.8500       2.3000       8.9500       3.7500       14.0500       4.4100       19.1500       4.9200  
  3.9500       2.3333       9.0500       3.7750       14.1500       4.4200       19.2500       4.9300  
  4.0500       2.3667       9.1500       3.8000       14.2500       4.4300       19.3500       4.9400  
  4.1500       2.4000       9.2500       3.8250       14.3500       4.4400       19.4500       4.9500  
  4.2500       2.4333       9.3500       3.8500       14.4500       4.4500       19.5500       4.9600  
  4.3500       2.4667       9.4500       3.8750       14.5500       4.4600       19.6500       4.9700  
  4.4500       2.5000       9.5500       3.9000       14.6500       4.4700       19.7500       4.9800  
  4.5500       2.5333       9.6500       3.9250       14.7500       4.4800       19.8500       4.9900  
  4.6500       2.5667       9.7500       3.9500       14.8500       4.4900       19.9500       5.0000  
  4.7500       2.6000       9.8500       3.9750       14.9500       4.5000                  
  4.8500       2.6333       9.9500       4.0000       15.0500       4.5100                  
  4.9500       2.6667       10.0500       4.0100       15.1500       4.5200                  

 

(f)                The S&P Equivalent Diversity Score is then calculated by summing each of the Industry Diversity Scores for each S&P’s industry classification group shown on Schedule 2.

 

(g)               For purposes of calculating the S&P Equivalent Diversity Score, affiliated issuers in the same Industry are deemed to be a single issuer except as otherwise agreed to by S&P.

 

S-6-2 

 

 

Schedule 7

FITCH RATING DEFINITIONS

 

“Fitch Rating” means, with respect to any Collateral Obligation, as of any date of determination, the rating determined in accordance with the following methodology:

 

(a)               if Fitch has issued an issuer default rating or an assigned credit opinion with respect to the issuer of such Collateral Obligation, or the guarantor which unconditionally and irrevocably guarantees such Collateral Obligation, then the Fitch Rating will be such issuer default rating (regardless of whether there is a published rating by Fitch on the Collateral Obligations of such Obligor held by the Issuer) or assigned credit opinion;

 

(b)               if Fitch has not issued an issuer default rating with respect to the issuer or guarantor of such Collateral Obligation but Fitch has issued an outstanding long term financial strength rating with respect to such Obligor, the Fitch Rating of such Collateral Obligation will be one sub category below such rating;

 

(c)               if a Fitch Rating cannot be determined pursuant to clause (a) or (b), but

 

(i)               Fitch has issued a senior unsecured rating on any obligation or security of the issuer of such Collateral Obligation, then the Fitch Rating of such Collateral Obligation will equal such rating; or

 

(ii)               Fitch has not issued a senior unsecured rating on any obligation or security of the issuer of such Collateral Obligation but Fitch has issued a senior rating, senior secured rating or a subordinated secured rating on any obligation or security of the issuer of such Collateral Obligation, then the Fitch Rating of such Collateral Obligation will (x) equal such rating if such rating is “BBB-” or higher and (y) be one sub category below such rating if such rating is “BB+” or lower, or

 

(iii)               Fitch has not issued a senior unsecured rating or a senior rating, senior secured rating or a subordinated secured rating on any obligation or security of the issuer of such Collateral Obligation but Fitch has issued a subordinated, junior subordinated or senior subordinated rating on any obligation or security of the issuer of such Collateral Obligation, then the Fitch Rating of such Collateral Obligation will be (x) one sub category above such rating if such rating is “B+” or higher and (y) two sub categories above such rating if such rating is “B” or lower;

 

(d)               if a Fitch Rating cannot be determined pursuant to clause (a), (b) or (c) and

 

(i)               Moody’s has issued a publicly available corporate family rating for the issuer of such Collateral Obligation, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be the Fitch equivalent of such Moody’s rating;

 

(ii)               Moody’s has not issued a publicly available corporate family rating for the issuer of such Collateral Obligation but has issued a publicly available long term issuer rating for such issuer, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be the Fitch equivalent of such Moody’s rating;

 

S-7-1

 

 

(iii)               Moody’s has not issued a publicly available corporate family rating for the issuer of such Collateral Obligation but Moody’s has issued a publicly available outstanding insurance financial strength rating for such issuer, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be one sub category below the Fitch equivalent of such Moody’s rating;

 

(iv)               Moody’s has not issued a publicly available corporate family rating for the issuer of such Collateral Obligation but has issued publicly available outstanding corporate issue ratings for such issuer, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be (x) if such corporate issue rating relates to senior unsecured obligations of such issuer, the Fitch equivalent of the Moody’s rating for such issue, if there is no such corporate issue ratings relating to senior unsecured obligations of the issuer then (y) if such corporate issue rating relates to senior, senior secured or subordinated secured obligations of such issuer, (1) one sub category below the Fitch equivalent of such Moody’s rating if such obligations are rated “Ba1” or above or “Ca” by Moody’s or (2) two sub categories below the Fitch equivalent of such Moody’s rating if such obligations are rated “Ba2” or below but above “Ca” by Moody’s, or if there is no such publicly available corporate issue rating relating to senior unsecured, senior, senior secured or subordinated secured obligations of the issuer then (z) if such corporate issue rating relates to subordinated, junior subordinated or senior subordinated obligations of such issuer, (1) one sub category above the Fitch equivalent of such Moody’s rating if such obligations are rated “B1” or above by Moody’s or (2) two sub categories above the Fitch equivalent of such Moody’s rating if such obligations are rated “B2” or below by Moody’s;

 

(v)               S&P has issued a publicly available issuer credit rating for the issuer of such Collateral Obligation, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be the Fitch equivalent of such S&P rating;

 

(vi)               S&P has not issued a publicly available issuer credit rating for the issuer of such Collateral Obligation but S&P has issued a publicly available outstanding insurance financial strength rating for such issuer, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be one sub category below the Fitch equivalent of such S&P rating;

 

(vii)               S&P has not issued a publicly available issuer credit rating for the issuer of such Collateral Obligation but has issued publicly available outstanding corporate issue ratings for such issuer, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be (x) if such corporate issue rating relates to senior unsecured obligations of such issuer, the Fitch equivalent of the S&P rating for such issue, if there is no such corporate issue ratings relating to senior unsecured obligations of the issuer then (y) if such corporate issue rating relates to senior, senior secured or subordinated secured obligations of such issuer, (1) the Fitch equivalent of such S&P rating if such obligations are rated “BBB-” or above by S&P or (2) one sub category below the Fitch equivalent of such S&P rating if such obligations are rated “BB+” or below by S&P, or if there is no such publicly available corporate issue rating relating to senior unsecured, senior, senior secured or subordinated secured obligations of the issuer then (z) if such corporate issue rating relates to subordinated, junior subordinated or senior subordinated obligations of such issuer, (1) one sub category above the Fitch equivalent of such S&P rating if such obligations are rated “B+” or above by S&P or (2) two sub categories above the Fitch equivalent of such S&P rating if such obligations are rated “B” or below by S&P; and

 

S-7-2

 

 

(viii)               both Moody’s and S&P provide a public rating of the issuer of such Collateral Obligation or a corporate issue of such issuer, then the Fitch Rating will be the lowest of the Fitch Ratings determined pursuant to any of the subclauses of this clause (d); and

 

(e)               if a rating cannot be determined pursuant to clauses (a) through (d) then, (i) at the discretion of the Collateral Manager, the Fitch Rating may be based on a credit opinion provided by Fitch, and in connection therewith, the Issuer, the Collateral Manager on behalf of the Issuer or the Obligor of such Collateral Obligation will, prior to or within thirty (30) days after the acquisition of such Collateral Obligation, apply to Fitch for a credit opinion (which shall be the Fitch Rating of such Collateral Obligation) and a recovery rating with respect to such Collateral Obligation; provided that, until the receipt from Fitch of such credit opinion, such Collateral Obligation will have a Fitch Rating of (x) “B-” if the Collateral Manager certifies to the Trustee that it believes that the credit opinion will be at least equal to such rating, or (y) otherwise, the rating specified as applicable thereto by Fitch pending receipt of such credit opinion; provided further that, such credit opinion shall expire 12 months after the acquisition of such Collateral Obligation, following which such Collateral Obligation shall have a Fitch Rating of “CCC” unless, during such 12-month period, the Issuer applies for renewal thereof in accordance with Section 7.14(b), in which case such credit opinion will continue to be the Fitch Rating of such Collateral Obligation until Fitch has confirmed or revised such credit opinion, upon which such confirmed or revised credit opinion will be the Fitch Rating of such Collateral Obligation; or (ii) the Issuer may assign a Fitch Rating of “CCC” or lower to such Collateral Obligation which is not in default;

 

provided that, (x) on the Closing Date, if any rating described above is (i) on rating watch negative or negative credit watch, the rating will be the Fitch Rating as determined above adjusted down by one subcategory, or (ii) on outlook negative, the rating will be the Fitch Rating as determined above, and (y) after the Closing Date, if any rating described above is (i) on rating watch negative or negative credit watch, the rating will be the Fitch Rating as determined above adjusted down by one subcategory, or (ii) on outlook negative, the rating will not be adjusted; provided further that, the Fitch Rating may be updated by Fitch from time to time as indicated in the “CLOs and Corporate CDOs Rating Criteria” report issued by Fitch and available at www.fitchratings.com. For the avoidance of doubt, the Fitch Rating takes into account adjustments for assets that are on rating watch negative or negative credit watch, as well as negative outlook prior to determining the issue rating or in the determination of the lower of the Moody’s and S&P rating public ratings.

 

S-7-3

 

 

Fitch Equivalent Ratings

 

Fitch Rating   Moody’s rating   S&P rating
AAA   Aaa   AAA
AA+   Aa1   AA+
AA   Aa2   AA
AA-   Aa3   AA-
A+   A1   A+
A   A2   A
A-   A3   A-
BBB+   Baa1   BBB+
BBB   Baa2   BBB
BBB-   Baa3   BBB-
BB+   Ba1   BB+
BB   Ba2   BB
BB-   Ba3   BB-
B+   B1   B+
B   B2   B
B-   B3   B-
CCC+   Caa1   CCC+
CCC   Caa2   CCC
CCC-   Caa3   CCC-
CC   Ca   CC
C   C   C

 

Fitch IDR Equivalency Map from Corporate Ratings

 

Rating Type   Rating Agency(s)   Issue Rating   Mapping Rule  
Corporate Family Rating LT Issuer Rating   Moody’s   NA     0  
Issuer Credit Rating   S&P   NA     0  
Senior unsecured   Fitch, Moody’s, S&P   Any     0  
Senior, Senior secured or Subordinated secured   Fitch, S&P   “BBB-” or above     0  
    Fitch, S&P   “BB+” or below     -1  
    Moody’s   “Ba1” or above     -1  
    Moody’s   “Ba2” or below     -2  
    Moody’s   “Ca”     -1  
Subordinated, Junior subordinated or Senior subordinated   Fitch, Moody’s, S&P   “B+”, “B1” or above     1  
    Fitch, Moody’s, S&P   “B”, “B2” or below     2  

 

S-7-4

 

 

The following steps are used to calculate the Fitch IDR equivalent ratings:

 

1 Public or private Fitch-issued IDR or Fitch credit opinions.

 

2 If Fitch has not issued an IDR, but has an outstanding Long-Term Financial Strength Rating, then the IDR equivalent is one rating lower.

 

3 If Fitch has not issued an IDR, but has outstanding corporate issue ratings, then the IDR equivalent is calculated using the mapping in the table above.

 

4 If Fitch does not rate the issuer or any associated issuance, then determine a Moody’s and S&P equivalent to Fitch’s IDR pursuant to steps 5 and 6.

 

5a A public Moody’s-issued Corporate Family Rating (CFR) is equivalent in definition terms to the Fitch IDR. If Moody’s has not issued a CFR, but has an outstanding LT issuer Rating, then this is equivalent to the Fitch IDR.

 

5b If Moody’s has not issued a CFR, but has an outstanding insurance financial strength rating, then the Fitch IDR equivalent is one rating lower.

 

5c If Moody’s has not issued a CFR, but has outstanding corporate issue ratings, then the Fitch IDR equivalent is calculated using the mapping in the table above.

 

6a A public S&P-issued Issuer Credit Rating (ICR) is equivalent in terms of definition to the Fitch IDR.

 

6b If S&P has not issued an ICR, but has an outstanding insurance financial strength rating, then the Fitch IDR equivalent is one rating lower.

 

6c If S&P has not issued an ICR, but has outstanding corporate issue ratings, then the Fitch IDR equivalent is calculated using the mapping in the table above.

 

7 If both Moody’s and S&P provide a public rating on the issuer or an issue, the lower of the two Fitch IDR equivalent ratings will be used in PCM. Otherwise the sole public Fitch IDR equivalent rating from Moody’s or S&P will be applied.

 

“Fitch Recovery Rate” means, with respect to a Collateral Obligation, the recovery rate determined in accordance with paragraphs (a) to (c) below or (in any case) such other recovery rate as Fitch may notify the Collateral Manager from time to time:

 

(a)               if such Collateral Obligation has a public Fitch recovery rating, or a recovery rating is assigned by Fitch in the context of provision by Fitch of a credit opinion to the Collateral Manager, the recovery rate corresponding to such recovery rating in the table below (unless a specific recovery rate (expressed as a percentage) is provided by Fitch in which case such recovery rate shall be used):

 

Fitch recovery rating   Fitch recovery rate %  
RR1     95  
RR2     80  

 

S-7-5

 

 

Fitch recovery rating   Fitch recovery rate %  
RR3     60  
RR4     40  
RR5     20  
RR6     5  

 

(b)               if such Collateral Obligation is a DIP Collateral Obligation and has neither a public Fitch recovery rating, nor a recovery rating assigned to it by Fitch in the context of provision by Fitch of a credit opinion, the Issuer or the Collateral Manager on behalf of the Issuer shall apply to Fitch for a Fitch recovery rating; provided that the Fitch recovery rating in respect of such DIP Collateral Obligation shall be considered to be “RR3” pending provision by Fitch of such Fitch recovery rating, and the recovery rate applicable to such DIP Collateral Obligation shall be the recovery rate corresponding to such Fitch recovery rating in the table above; and

 

(c)               if such Collateral Obligation has no public Fitch recovery rating and no recovery rating is assigned by Fitch in the context of provision by Fitch of a credit opinion to the Collateral Manager, the recovery rate applicable will be the rate determined in accordance with the table below, for purposes of which the Collateral Obligation will be categorized as “Strong Recovery” if it is a Senior Secured Loan, “Moderate Recovery” if it is a senior unsecured bond and otherwise “Weak Recovery,” and will fall into the country group corresponding to the country in which the Obligor thereof is Domiciled:

 

    Group 1     Group 2     Group 3  
Strong Recovery     80       70       35  
Moderate Recovery     45       45       25  
Weak Recovery     20       20       5  

 

 

Group 1: Australia, Bermuda, Canada, Cayman Islands, New Zealand, Puerto Rico, United States.

 

Group 2: Austria, Barbados, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Hong Kong, Iceland, Ireland, Israel, Italy, Japan, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Taiwan, United Kingdom.

 

Group 3: Albania, Argentina, Asia Others, Bahamas, Bosnia and Herzegovina, Brazil, Bulgaria, Chile, China, Colombia, Costa Rica, Croatia, Cyprus, Dominican Republic, Eastern Europe Others, Ecuador, Egypt, El Salvador, Greece, Guatemala, Hungary, India, Indonesia, Iran, Jamaica, Kazakhstan, Liberia, Macedonia, Malaysia, Malta, Marshall Islands, Mauritius, Mexico, Middle East and North Africa Others, Moldova, Morocco, Other Central America, Other South America, Other Sub Saharan Africa, Pakistan, Panama, Peru, Philippines, Qatar, Romania, Russia, Saudi Arabia, Serbia and Montenegro, South Africa, Thailand, Tunisia, Turkey, Ukraine, Uruguay, Venezuela, Vietnam.

 

S-7-6

 

 

Fitch Test Matrix

 

Subject to the provisions provided below, on or after the Effective Date, the Collateral Manager will have the option to elect which of the cases set forth in the matrix below (the “Fitch Test Matrix”) shall be applicable for purposes of the Maximum Fitch Rating Factor Test, the Minimum Weighted Average Fitch Recovery Rate Test and the Minimum Fitch Floating Spread Test. For any given case:

 

(a)               the applicable value for determining satisfaction of the Maximum Fitch Rating Factor Test will be the value set forth in the column header (or linear interpolation between two adjacent columns, as applicable) of the row-column combination in the Fitch Test Matrix selected by the Collateral Manager;

 

(b)               the applicable value for determining satisfaction of the Minimum Fitch Floating Spread Test will be the percentage set forth in the row header (or linear interpolation between two adjacent rows as applicable) of the row-column combination in the Fitch Test Matrix selected by the Collateral Manager; and

 

(c)               the applicable value for determining satisfaction of the Minimum Weighted Average Fitch Recovery Rate Test will be the value in the intersection cell (or linear interpolation between two adjacent rows and/or two adjacent columns, as applicable) of the row-column combination in the Fitch Test Matrix selected by the Collateral Manager in relation to (a) and (b) above.

 

On the Effective Date, the Collateral Manager will be required to elect which case shall apply initially by written notice to the Issuer and Fitch. Thereafter, on two Business Days’ notice to the Issuer and Fitch, the Collateral Manager may elect to have a different case apply, provided that the Maximum Fitch Rating Factor Test, the Minimum Weighted Average Fitch Recovery Rate Test and the Minimum Fitch Floating Spread Test applicable to the case to which the Collateral Manager desires to change are satisfied after giving effect to such change or, in the case of any tests that are not satisfied, the Issuer’s level of compliance with such tests is improved after giving effect to the application of the different case.

 

Minimum Fitch Floating     Maximum Fitch Weighted Average Rating Factor  
Spread     30     32     34     36     38     40     42     44     46     48     50  
  3.25 %     59.10 %     62.00 %     64.40 %     66.70 %     69.10 %     71.50 %     74.00 %     76.30 %     78.30 %     80.10 %     81.90 %
  3.35 %     58.45 %     61.35 %     63.85 %     66.20 %     68.60 %     71.00 %     73.45 %     75.75 %     77.90 %     79.75 %     81.55 %
  3.45 %     57.80 %     60.70 %     63.30 %     65.70 %     68.10 %     70.50 %     72.90 %     75.20 %     77.50 %     79.40 %     81.20 %
  3.55 %     57.15 %     60.10 %     62.80 %     65.20 %     67.55 %     70.00 %     72.35 %     74.75 %     77.05 %     79.00 %     80.80 %
  3.65 %     56.50 %     59.50 %     62.30 %     64.70 %     67.00 %     69.50 %     71.80 %     74.30 %     76.60 %     78.60 %     80.40 %
  3.75 %     55.80 %     58.85 %     61.65 %     64.15 %     66.50 %     69.00 %     71.35 %     73.80 %     76.10 %     78.20 %     80.00 %
  3.85 %     55.10 %     58.20 %     61.00 %     63.60 %     66.00 %     68.50 %     70.90 %     73.30 %     75.60 %     77.80 %     79.60 %
  3.95 %     54.40 %     57.55 %     60.45 %     63.10 %     65.50 %     67.90 %     70.35 %     72.70 %     75.10 %     77.35 %     79.20 %
  4.05 %     53.70 %     56.90 %     59.90 %     62.60 %     65.00 %     67.30 %     69.80 %     72.10 %     74.60 %     76.90 %     78.80 %
  4.15 %     53.05 %     56.25 %     59.25 %     62.05 %     64.45 %     66.80 %     69.25 %     71.60 %     74.05 %     76.40 %     78.40 %
  4.25 %     52.40 %     55.60 %     58.60 %     61.50 %     63.90 %     66.30 %     68.70 %     71.10 %     73.50 %     75.90 %     78.00 %
  4.35 %     51.70 %     54.90 %     58.00 %     60.90 %     63.40 %     65.80 %     68.15 %     70.55 %     72.95 %     75.40 %     77.65 %
  4.45 %     51.00 %     54.20 %     57.40 %     60.30 %     62.90 %     65.30 %     67.60 %     70.00 %     72.40 %     74.90 %     77.30 %
  4.55 %     50.30 %     53.55 %     56.75 %     59.65 %     62.40 %     64.80 %     67.10 %     69.55 %     72.00 %     74.45 %     76.85 %
  4.65 %     49.60 %     52.90 %     56.10 %     59.00 %     61.90 %     64.30 %     66.60 %     69.10 %     71.60 %     74.00 %     76.40 %
  4.75 %     48.95 %     52.25 %     55.50 %     58.45 %     61.35 %     63.85 %     66.20 %     68.65 %     71.10 %     73.50 %     75.95 %
  4.85 %     48.30 %     51.60 %     54.90 %     57.90 %     60.80 %     63.40 %     65.80 %     68.20 %     70.60 %     73.00 %     75.50 %

 

S-7-7

 

 

Minimum Fitch Floating     Maximum Fitch Weighted Average Rating Factor  
Spread     30     32     34     36     38     40     42     44     46     48     50  
  4.95 %     47.65 %     50.95 %     54.25 %     57.35 %     60.30 %     62.95 %     65.35 %     67.70 %     70.15 %     72.50 %     75.00 %
  5.05 %     47.00 %     50.30 %     53.60 %     56.80 %     59.80 %     62.50 %     64.90 %     67.20 %     69.70 %     72.00 %     74.50 %
  5.15 %     46.35 %     49.75 %     53.00 %     56.25 %     59.25 %     62.00 %     64.45 %     66.75 %     69.20 %     71.55 %     74.00 %
  5.25 %     45.70 %     49.20 %     52.40 %     55.70 %     58.70 %     61.50 %     64.00 %     66.30 %     68.70 %     71.10 %     73.50 %
  5.35 %     45.15 %     48.60 %     51.80 %     55.10 %     58.10 %     60.95 %     63.50 %     65.85 %     68.20 %     70.65 %     73.05 %
  5.45 %     44.60 %     48.00 %     51.20 %     54.50 %     57.50 %     60.40 %     63.00 %     65.40 %     67.70 %     70.20 %     72.60 %
  5.55 %     43.95 %     47.35 %     50.60 %     53.85 %     56.95 %     59.85 %     62.55 %     64.95 %     67.25 %     69.70 %     72.10 %
  5.65 %     43.30 %     46.70 %     50.00 %     53.20 %     56.40 %     59.30 %     62.10 %     64.50 %     66.80 %     69.20 %     71.60 %
  5.75 %     42.65 %     46.10 %     49.40 %     52.60 %     55.80 %     58.75 %     61.55 %     64.05 %     66.35 %     68.75 %     71.15 %
  5.85 %     42.00 %     45.50 %     48.80 %     52.00 %     55.20 %     58.20 %     61.00 %     63.60 %     65.90 %     68.30 %     70.70 %
  5.95 %     40.30 %     44.85 %     48.20 %     51.40 %     54.60 %     57.65 %     60.50 %     63.15 %     65.50 %     67.85 %     70.25 %
  6.05 %     38.60 %     44.20 %     47.60 %     50.80 %     54.00 %     57.10 %     60.00 %     62.70 %     65.10 %     67.40 %     69.80 %
  6.15 %     36.90 %     43.60 %     47.00 %     50.25 %     53.45 %     56.55 %     59.50 %     62.25 %     64.65 %     67.00 %     69.45 %
  6.25 %     35.20 %     43.00 %     46.40 %     49.70 %     52.90 %     56.00 %     59.00 %     61.80 %     64.20 %     66.60 %     69.10 %
Weighted Average Fitch Recovery Rate

 

S-7-8

 

 

 

Schedule 8

S&P REGION CLASSIFICATION TABLE

 

Region
Code

 

Region Name Country
Code 		Country Name
17 Africa: Eastern 253 Djibouti
17 Africa: Eastern 291 Eritrea
17 Africa: Eastern 251 Ethiopia
17 Africa: Eastern 254 Kenya
17 Africa: Eastern 252 Somalia
17 Africa: Eastern 249 Sudan
12 Africa: Southern 247 Ascension
12 Africa: Southern 267 Botswana
12 Africa: Southern 266 Lesotho
12 Africa: Southern 230 Mauritius
12 Africa: Southern 264 Namibia
12 Africa: Southern 248 Seychelles
12 Africa: Southern 27 South Africa
12 Africa: Southern 290 St. Helena
12 Africa: Southern 268 Swaziland
13 Africa: Sub-Saharan 244 Angola
13 Africa: Sub-Saharan 226 Burkina Faso
13 Africa: Sub-Saharan 257 Burundi
13 Africa: Sub-Saharan 225 Cote d’lvoire
13 Africa: Sub-Saharan 240 Equatorial Guinea
13 Africa: Sub-Saharan 241 Gabonese Republic
13 Africa: Sub-Saharan 220 Gambia
13 Africa: Sub-Saharan 233 Ghana
13 Africa: Sub-Saharan 224 Guinea
13 Africa: Sub-Saharan 245 Guinea-Bissau
13 Africa: Sub-Saharan 231 Liberia
13 Africa: Sub-Saharan 261 Madagascar
13 Africa: Sub-Saharan 265 Malawi
13 Africa: Sub-Saharan 223 Mali
13 Africa: Sub-Saharan 222 Mauritania
13 Africa: Sub-Saharan 258 Mozambique
13 Africa: Sub-Saharan 227 Niger
13 Africa: Sub-Saharan 234 Nigeria
13 Africa: Sub-Saharan 250 Rwanda
13 Africa: Sub-Saharan 239 Sao Tome & Principe
13 Africa: Sub-Saharan 221 Senegal
13 Africa: Sub-Saharan 232 Sierra Leone

 

S-8-1 

 

 

Region
Code

 

Region Name Country
Code 		Country Name
13 Africa: Sub-Saharan 255 Tanzania/Zanzibar
13 Africa: Sub-Saharan 228 Togo
13 Africa: Sub-Saharan 256 Uganda
13 Africa: Sub-Saharan 260 Zambia
13 Africa: Sub-Saharan 263 Zimbabwe
13 Africa: Sub-Saharan 229 Benin
13 Africa: Sub-Saharan 237 Cameroon
13 Africa: Sub-Saharan 238 Cape Verde Islands
13 Africa: Sub-Saharan 236 Central African Republic
13 Africa: Sub-Saharan 235 Chad
13 Africa: Sub-Saharan 269 Comoros
13 Africa: Sub-Saharan 242 Congo-Brazzaville
13 Africa: Sub-Saharan 243 Congo-Kinshasa
3 Americas: Andean 591 Bolivia
3 Americas: Andean 57 Colombia
3 Americas: Andean 593 Ecuador
3 Americas: Andean 51 Peru
3 Americas: Andean 58 Venezuela
4 Americas: Mercosur and Southern Cone 54 Argentina
4 Americas: Mercosur and Southern Cone 55 Brazil
4 Americas: Mercosur and Southern Cone 56 Chile
4 Americas: Mercosur and Southern Cone 595 Paraguay
4 Americas: Mercosur and Southern Cone 598 Uruguay
1 Americas: Mexico 52 Mexico
2 Americas: Other Central and Caribbean 1264 Anguilla
2 Americas: Other Central and Caribbean 1268 Antigua
2 Americas: Other Central and Caribbean 1242 Bahamas
2 Americas: Other Central and Caribbean 246 Barbados
2 Americas: Other Central and Caribbean 501 Belize
2 Americas: Other Central and Caribbean 441 Bermuda
2 Americas: Other Central and Caribbean 284 British Virgin Islands
2 Americas: Other Central and Caribbean 345 Cayman Islands
2 Americas: Other Central and Caribbean 506 Costa Rica
2 Americas: Other Central and Caribbean 809 Dominican Republic
2 Americas: Other Central and Caribbean 503 El Salvador
2 Americas: Other Central and Caribbean 473 Grenada

 

S-8-2 

 

 

Region
Code

 

Region Name Country
Code 		Country Name
2 Americas: Other Central and Caribbean 590 Guadeloupe
2 Americas: Other Central and Caribbean 502 Guatemala
2 Americas: Other Central and Caribbean 504 Honduras
2 Americas: Other Central and Caribbean 876 Jamaica
2 Americas: Other Central and Caribbean 596 Martinique
2 Americas: Other Central and Caribbean 505 Nicaragua
2 Americas: Other Central and Caribbean 507 Panama
2 Americas: Other Central and Caribbean 869 St. Kitts/Nevis
2 Americas: Other Central and Caribbean 758 St. Lucia
2 Americas: Other Central and Caribbean 784 St. Vincent & Grenadines
2 Americas: Other Central and Caribbean 597 Suriname
2 Americas: Other Central and Caribbean 868 Trinidad& Tobago
2 Americas: Other Central and Caribbean 649 Turks & Caicos
2 Americas: Other Central and Caribbean 297 Aruba
2 Americas: Other Central and Caribbean 53 Cuba
2 Americas: Other Central and Caribbean 599 Curacao
2 Americas: Other Central and Caribbean 767 Dominica
2 Americas: Other Central and Caribbean 594 French Guiana
2 Americas: Other Central and Caribbean 592 Guyana
2 Americas: Other Central and Caribbean 509 Haiti
2 Americas: Other Central and Caribbean 664 Montserrat
101 Americas: U.S. and Canada 2 Canada
101 Americas: U.S. and Canada 1 USA
7 Asia: China, Hong Kong, Taiwan 86 China
7 Asia: China, Hong Kong, Taiwan 852 Hong Kong
7 Asia: China, Hong Kong, Taiwan 886 Taiwan
5 Asia: India, Pakistan and Afghanistan 93 Afghanistan
5 Asia: India, Pakistan and Afghanistan 91 India
5 Asia: India, Pakistan and Afghanistan 92 Pakistan
6 Asia: Other South 880 Bangladesh
6 Asia: Other South 975 Bhutan
6 Asia: Other South 960 Maldives
6 Asia: Other South 977 Nepal
6 Asia: Other South 94 Sri Lanka
8 Asia: Southeast, Korea and Japan 673 Brunei
8 Asia: Southeast, Korea and Japan 855 Cambodia
8 Asia: Southeast, Korea and Japan 62 Indonesia
8 Asia: Southeast, Korea and Japan 81 Japan
8 Asia: Southeast, Korea and Japan 856 Laos
8 Asia: Southeast, Korea and Japan 60 Malaysia

 

S-8-3 

 

 

Region
Code

 

Region Name Country
Code 		Country Name
8 Asia: Southeast, Korea and Japan 95 Myanmar
8 Asia: Southeast, Korea and Japan 850 North Korea
8 Asia: Southeast, Korea and Japan 63 Philippines
8 Asia: Southeast, Korea and Japan 65 Singapore
8 Asia: Southeast, Korea and Japan 82 South Korea
8 Asia: Southeast, Korea and Japan 66 Thailand
8 Asia: Southeast, Korea and Japan 84 Vietnam
8 Asia: Southeast, Korea and Japan 670 East Timor
105 Asia-Pacific: Australia and New Zealand 61 Australia
105 Asia-Pacific: Australia and New Zealand 682 Cook Islands
105 Asia-Pacific: Australia and New Zealand 64 New Zealand
9 Asia-Pacific: Islands 679 Fiji
9 Asia-Pacific: Islands 689 French Polynesia
9 Asia-Pacific: Islands 686 Kiribati
9 Asia-Pacific: Islands 691 Micronesia
9 Asia-Pacific: Islands 674 Nauru
9 Asia-Pacific: Islands 687 New Caledonia
9 Asia-Pacific: Islands 680 Palau
9 Asia-Pacific: Islands 675 Papua New Guinea
9 Asia-Pacific: Islands 685 Samoa
9 Asia-Pacific: Islands 677 Solomon Islands
9 Asia-Pacific: Islands 676 Tonga
9 Asia-Pacific: Islands 688 Tuvalu
9 Asia-Pacific: Islands 678 Vanuatu
15 Europe: Central 420 Czech Republic
15 Europe: Central 372 Estonia
15 Europe: Central 36 Hungary
15 Europe: Central 371 Latvia
15 Europe: Central 370 Lithuania
15 Europe: Central 48 Poland
15 Europe: Central 421 Slovak Republic
16 Europe: Eastern 355 Albania
16 Europe: Eastern 387 Bosnia and Herzegovina
16 Europe: Eastern 359 Bulgaria
16 Europe: Eastern 385 Croatia
16 Europe: Eastern 383 Kosovo
16 Europe: Eastern 389 Macedonia

 

S-8-4 

 

 

Region
Code

 

Region Name Country
Code 		Country Name
16 Europe: Eastern 382 Montenegro
16 Europe: Eastern 40 Romania
16 Europe: Eastern 381 Serbia
16 Europe: Eastern 90 Turkey
14 Europe: Russia & CIS 374 Armenia
14 Europe: Russia & CIS 994 Azerbaijan
14 Europe: Russia & CIS 375 Belarus
14 Europe: Russia & CIS 995 Georgia
14 Europe: Russia & CIS 8 Kazakhstan
14 Europe: Russia & CIS 996 Kyrgyzstan
14 Europe: Russia & CIS 373 Moldova
14 Europe: Russia & CIS 976 Mongolia
14 Europe: Russia & CIS 7 Russia
14 Europe: Russia & CIS 992 Tajikistan
14 Europe: Russia & CIS 993 Turkmenistan
14 Europe: Russia & CIS 380 Ukraine
14 Europe: Russia & CIS 998 Uzbekistan
102 Europe: Western 376 Andorra
102 Europe: Western 43 Austria
102 Europe: Western 32 Belgium
102 Europe: Western 357 Cyprus
102 Europe: Western 45 Denmark
102 Europe: Western 358 Finland
102 Europe: Western 33 France
102 Europe: Western 49 Germany
102 Europe: Western 30 Greece
102 Europe: Western 354 Iceland
102 Europe: Western 353 Ireland
102 Europe: Western 101 Isle of Man
102 Europe: Western 39 Italy
102 Europe: Western 102 Liechtenstein
102 Europe: Western 352 Luxembourg
102 Europe: Western 356 Malta
102 Europe: Western 377 Monaco
102 Europe: Western 31 Netherlands
102 Europe: Western 47 Norway
102 Europe: Western 351 Portugal
102 Europe: Western 386 Slovenia
102 Europe: Western 34 Spain
102 Europe: Western 46 Sweden

 

S-8-5 

 

 

Region
Code

 

Region Name Country
Code 		Country Name
102 Europe: Western 41 Switzerland
102 Europe: Western 44 United Kingdom
10 Middle East: Gulf States 973 Bahrain
10 Middle East: Gulf States 98 Iran
10 Middle East: Gulf States 964 Iraq
10 Middle East: Gulf States 965 Kuwait
10 Middle East: Gulf States 968 Oman
10 Middle East: Gulf States 974 Qatar
10 Middle East: Gulf States 966 Saudi Arabia
10 Middle East: Gulf States 971 United Arab Emirates
10 Middle East: Gulf States 967 Yemen
11 Middle East: MENA 213 Algeria
11 Middle East: MENA 20 Egypt
11 Middle East: MENA 972 Israel
11 Middle East MENA 962 Jordan
11 Middle East: MENA 961 Lebanon
11 Middle East: MENA 212 Morocco
11 Middle East: MENA 970 Palestinian Settlements
11 Middle East: MENA 963 Syrian Arab Republic
11 Middle East: MENA 216 Tunisia
11 Middle East: MENA 1212 Western Sahara
11 Middle East: MENA 218 Libya

 

S-8-6 

 

 

Exhibit 10

 

EXECUTION VERSION

 

SIXTH AMENDMENT TO Loan and Servicing Agreement (this “Amendment”), dated as of January 15, 2021 (the “Amendment Date”), among Golub Capital BDC Funding II LLC, as borrower (the “Borrower”), Golub Capital BDC, Inc., as servicer (in such capacity, the “Servicer”) and as the originator (in such capacity, the “Originator”), Morgan Stanley Senior Funding, Inc., as administrative agent (the “Administrative Agent”), and Morgan Stanley Bank, N.A., as lender (the “Lender”).

 

WHEREAS, the Borrower, the Servicer, the Originator, the Administrative Agent and the Lender, are party to that certain Loan and Servicing Agreement, dated as of February 1, 2019 (as the same may be amended, modified or supplemented prior to the Amendment Date in accordance with the terms thereof, the “Loan and Servicing Agreement”), by and among the Borrower, the Servicer, the Originator, the Administrative Agent, each of the Lenders from time to time party thereto, each of the Securitization Subsidiaries from time to time party thereto and Wells Fargo Bank, National Association, as the collateral agent, the account bank and the collateral custodian, providing, among other things, for the making and the administration of the Advances by the Lenders to the Borrower; and

 

WHEREAS, the Borrower, the Lender, the Administrative Agent and the Servicer desire to amend certain provisions of the Loan and Servicing Agreement, in accordance with Section 12.01 thereof and subject to the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the foregoing premises 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, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.1.      Terms used but not defined herein have the respective meanings given to such terms in the Loan and Servicing Agreement.

 

ARTICLE II

 

Amendments

 

SECTION 2.1.      As of the Amendment Date, the Loan and Servicing Agreement is hereby amended as set forth on Appendix A hereto.

 

ARTICLE III

 

Representations and Warranties

 

SECTION 3.1.      The Borrower and the Servicer hereby represent and warrant to the Administrative Agent and the Lenders that, as of the Amendment Date, (i) no Unmatured Event of Default, Event of Default or Servicer Default has occurred and is continuing and (ii) the representations and warranties of the Borrower and the Servicer contained in the Loan and Servicing Agreement are true and correct in all material respects on and as of such day.

 

 

 

ARTICLE IV

 

Conditions Precedent

 

SECTION 4.1.      This Amendment shall become effective upon satisfaction of its execution and delivery by each party hereto.

 

ARTICLE V

 

Miscellaneous

 

SECTION 5.1.      Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

SECTION 5.2.      Severability Clause. In case any provision in this Amendment shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 5.3.      Ratification. Except as expressly amended hereby, the Loan and Servicing Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Amendment shall form a part of the Loan and Servicing Agreement for all purposes.

 

SECTION 5.4.      Counterparts. The parties hereto may sign one or more copies of this Amendment in counterparts, all of which together shall constitute one and the same agreement. Delivery of an executed signature page of this Amendment by email transmission shall be effective as delivery of a manually executed counterpart hereof.

 

SECTION 5.5.      Headings. The headings of the Articles and Sections in this Amendment are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

 

[Signature Pages Follow]

 

2

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the Amendment Date.

 

  BORROWER:
   
  GOLUB CAPITAL BDC FUNDING II LLC
   
  By: /s/ Ross A. Teune
    Name: Ross A. Teune
    Title: Chief Financial Officer

 

[Signature Page to Sixth Amendment to Loan and Servicing Agreement]

 

 

 

  SERVICER:
   
  GOLUB CAPITAL BDC, INC.
   
  By: /s/ Ross A. Teune
    Name: Ross A. Teune
    Title: Chief Financial Officer

 

[Signature Page to Sixth Amendment to Loan and Servicing Agreement]

 

 

 

  ORIGINATOR:
   
  GOLUB CAPITAL BDC, INC.
   
  By: /s/ Ross A. Teune
    Name: Ross A. Teune
    Title: Chief Financial Officer

 

[Signature Page to Sixth Amendment to Loan and Servicing Agreement]

 

 

 

  ADMINISTRATIVE AGENT:
   
  MORGAN STANLEY SENIOR FUNDING, INC.
   
  By: /s/ Matthieu Milgrom
    Name: Matthieu Milgrom
    Title: Authorized Signatory

 

[Signature Page to Sixth Amendment to Loan and Servicing Agreement]

 

 

 

  LENDER :
   
  MORGAN STANLEY BANK, N.A.
   
  By: /s/ Breno Brown-Leao
    Name: Breno Brown-Leao
    Title: Authorized Signatory

 

[Signature Page to Sixth Amendment to Loan and Servicing Agreement]

 

 

 

 

APPENDIX A

 

[Attached]

 

 

 

 

(Conformed through Amendment No. 56)

 

 

Up to U.S. $400,000,000

 

LOAN AND SERVICING AGREEMENT

 

Dated as of February 1, 2019

 

among

 

GOLUB CAPITAL BDC FUNDING II LLC,
as the Borrower

 

GOLUB CAPITAL BDC, INC.,
as the Originator and as the Servicer

 

MORGAN STANLEY SENIOR FUNDING, INC.,
as the Administrative Agent

 

EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO,
as the Lenders

 

EACH OF THE SECURITIZATION SUBSIDIARIES FROM TIME TO TIME PARTY
HERETO,

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as the Collateral Agent, Account Bank and Collateral Custodian

 

 

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01   Certain Defined Terms   2
Section 1.02   Other Terms   56
Section 1.03   Computation of Time Periods   56
Section 1.04   Interpretation   56
Section 1.05   Currency Conversion   58
Section 1.06   Computation of Covenants   58

 

ARTICLE II

 

THE FACILITY

 

Section 2.01   Advances   58
Section 2.02   Procedure for Advances   59
Section 2.03   Determination of Yield   61
Section 2.04   Remittance Procedures   61
Section 2.05   Instructions to the Collateral Agent and the Account Bank   65
Section 2.06   Borrowing Base Deficiency Payments   66
Section 2.07   Sale of Loan Assets; Affiliate Transactions   67
Section 2.08   Payments and Computations, Etc.   71
Section 2.09   Unused Fee   72
Section 2.10   Increased Costs; Capital Adequacy   72
Section 2.11   Taxes   74
Section 2.12   Grant of a Security Interest; Collateral Assignment of Agreements   78
Section 2.13   Evidence of Debt   80
Section 2.14   Release of Loan Assets   80
Section 2.15   Treatment of Amounts Received by any Loan Party   81
Section 2.16   Prepayment; Termination; Reduction   82
Section 2.17   Collections and Allocations   83
Section 2.18   Reinvestment of Principal Collections   85
Section 2.19   Defaulting Lenders   85
Section 2.20   Investment of Amounts on Deposit in Contribution Account   87
Section 2.21   Incremental Facilities   87

 

ARTICLE III

 

CONDITIONS PRECEDENT

 

Section 3.01   Conditions Precedent to Effectiveness   88
Section 3.02   Conditions Precedent to All Advances   89
Section 3.03   Advances Do Not Constitute a Waiver   92
Section 3.04   Conditions to Acquisition of Loan Assets   92

 

-i-

 

 

TABLE OF CONTENTS

(continued)

 

Page

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.01   Representations and Warranties of the Loan Parties   93
Section 4.02   Representations and Warranties of each Loan Party Relating to the Agreement and the Collateral   102
Section 4.03   Representations and Warranties of the Servicer   103
Section 4.04   Representations and Warranties of the Collateral Agent   107
Section 4.05   Representations and Warranties of the Collateral Custodian   108

 

ARTICLE V

 

GENERAL COVENANTS

 

Section 5.01   Affirmative Covenants of the Loan Parties   109
Section 5.02   Negative Covenants of the Loan Parties   116
Section 5.03   Affirmative Covenants of the Servicer   119
Section 5.04   Negative Covenants of the Servicer   123
Section 5.05   Affirmative Covenants of the Collateral Agent   125
Section 5.06   Negative Covenants of the Collateral Agent   125
Section 5.07   Affirmative Covenants of the Collateral Custodian   125
Section 5.08   Negative Covenants of the Collateral Custodian   125

 

ARTICLE VI

 

ADMINISTRATION AND SERVICING OF CONTRACTS

 

Section 6.01   Appointment and Designation of the Servicer   126
Section 6.02   Duties of the Servicer   128
Section 6.03   Authorization of the Servicer   130
Section 6.04   Collection of Payments; Accounts   130
Section 6.05   [Reserved]   132
Section 6.06   Servicer Compensation   132
Section 6.07   Payment of Certain Expenses by Servicer   132
Section 6.08   Reports to the Administrative Agent; Account Statements; Servicer Information   132
Section 6.09   Annual Statement as to Compliance   134
Section 6.10   Annual Independent Public Accountant's Servicing Reports   135
Section 6.11   Procedural Review of Loan Assets; Access to Servicer and Servicer's Records   135
Section 6.12   The Servicer Not to Resign   136

 

-ii-

 

 

TABLE OF CONTENTS

(continued)

 

Page

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

Section 7.01   Events of Default   136
Section 7.02   Additional Remedies of the Administrative Agent   140
Section 7.03   Option to Purchase Collateral   142

 

ARTICLE VIII

 

INDEMNIFICATION

 

Section 8.01   Indemnities by the Borrower   143
Section 8.02   Indemnities by Servicer   144
Section 8.03   Waiver of Certain Claims   145
Section 8.04   Legal Proceedings   145
Section 8.05   After-Tax Basis   146

 

ARTICLE IX

 

THE ADMINISTRATIVE AGENT

 

Section 9.01   The Administrative Agent   146

 

ARTICLE X

 

COLLATERAL AGENT

 

Section 10.01   Designation of Collateral Agent   150
Section 10.02   Duties of Collateral Agent   150
Section 10.03   Merger or Consolidation   153
Section 10.04   Collateral Agent Compensation   153
Section 10.05   Collateral Agent Removal   153
Section 10.06   Limitation on Liability   153
Section 10.07   Collateral Agent Resignation   156

 

ARTICLE XI

 

COLLATERAL CUSTODIAN

 

Section 11.01   Designation of Collateral Custodian   156
Section 11.02   Duties of Collateral Custodian   156
Section 11.03   Merger or Consolidation   159
Section 11.04   Collateral Custodian Compensation   160

 

-iii-

 

 

TABLE OF CONTENTS

(continued)

Page

 

Section 11.05   Collateral Custodian Removal   160
Section 11.06   Limitation on Liability   160
Section 11.07   Collateral Custodian Resignation   162
Section 11.08   Release of Documents   162
Section 11.09   Return of Required Loan Documents   163
Section 11.10   Access to Certain Documentation and Information Regarding the Collateral   163
Section 11.11   Bailment   163

 

ARTICLE XII

 

MISCELLANEOUS

 

Section 12.01   Amendments and Waivers   164
Section 12.02   Notices, Etc.   165
Section 12.03   No Waiver; Remedies   167
Section 12.04   Binding Effect; Assignability; Multiple Lenders   167
Section 12.05   Term of This Agreement   168
Section 12.06   GOVERNING LAW; JURY WAIVER   168
Section 12.07   Costs, Expenses and Taxes   170
Section 12.08   Further Assurances   170
Section 12.09   Recourse Against Certain Parties   171
Section 12.10   Execution in Counterparts; Severability; Integration   171
Section 12.11   Characterization of Conveyances Pursuant to each Purchase and Sale Agreement   172
Section 12.12   Confidentiality   173
Section 12.13   Waiver of Set Off   174
Section 12.14   Headings and Exhibits   174
Section 12.15   Ratable Payments   174
Section 12.16   Failure of any Loan Party or Servicer to Perform Certain Obligations   174
Section 12.17   Power of Attorney   175
Section 12.18   Delivery of Termination Statements, Releases, etc.   175
Section 12.19   Non-Petition   175

 

-iv-

 

 

LIST OF SCHEDULES, EXHIBITS AND ANNEXES

 

SCHEDULES

 

SCHEDULE I - Conditions Precedent Documents
SCHEDULE II - Eligibility Criteria
SCHEDULE III - Agreed-Upon Procedures for Independent Public Accountants
SCHEDULE IV - Loan Asset Schedule
SCHEDULE V - Industry Classification
SCHEDULE VI - Diversity Score
SCHEDULE VII - Existing Golub BDC CLOs

 

ANNEXES

 

ANNEX A - Commitments

 

EXHIBITS

 

EXHIBIT A - Form of Approval Notice
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C - Form of Disbursement Request
EXHIBIT D - Form of Notice of Borrowing
EXHIBIT E - Form of Notice of Reduction (Reduction of Advances Outstanding)
EXHIBIT F - Form of Notice of Termination/Permanent Reduction
EXHIBIT G - [Reserved]
EXHIBIT H - Form of Servicing Report
EXHIBIT I - Form of Servicer Certificate (Servicing Report)
EXHIBIT J - Form of Release of Required Loan Documents
EXHIBIT K - Form of Assignment and Acceptance
EXHIBIT L - Forms of U.S. Tax Compliance Certificates
EXHIBIT M Form of Joinder Supplement
EXHIBIT N Form of Securitization Subsidiary Joinder

 

-v-

 

 

 

This LOAN AND SERVICING AGREEMENT is made as of February 1, 2019, among:

 

(1)            GOLUB CAPITAL BDC FUNDING II LLC, a Delaware limited liability company, as the Borrower (as defined below);

 

(2)            GOLUB CAPITAL BDC, INC., a Delaware corporation, as the Originator (as defined below) and as the Servicer (as defined below);

 

(3)            EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO, as the Lenders (as defined below);

 

(4)            MORGAN STANLEY SENIOR FUNDING, INC., as the Administrative Agent (as defined below);

 

(5)            EACH OF THE SECURITIZATION SUBSIDIARIES FROM TIME TO TIME PARTY HERETO, as the Securitization Subsidiaries (as defined below); and

 

(6)            WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Collateral Agent (as defined below), the Account Bank (as defined below) and the Collateral Custodian (as defined below).

 

RECITALS

 

WHEREAS, the Borrower has requested that the Lenders make available to the Borrower a revolving loan facility in the maximum principal amount of up to the Facility Amount (as defined below), the proceeds of which shall be used by the Borrower to fund the purchase of certain Eligible Loan Assets (as defined below);

 

WHEREAS, the Borrower is willing to grant to the Collateral Agent, for the benefit of the Secured Parties (as defined below), a lien on and security interest in the Collateral (as defined below) to secure the payment in full of the Obligations (as defined below);

 

WHEREAS, the Lenders are willing to extend financing to the Borrower on the terms and conditions set forth herein;

 

WHEREAS, the Borrower also desires to retain the Servicer to perform certain servicing functions related to the Collateral on the terms and conditions set forth herein; and

 

WHEREAS, the Servicer desires to perform certain servicing functions related to the Collateral on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

 

 

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01   Certain Defined Terms.

 

(a)            Certain capitalized terms used throughout this Agreement are defined above or in this Section 1.01.

 

(b)            As used in this Agreement and the exhibits and schedules hereto (each of which is hereby incorporated herein and made a part hereof), the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

"1940 Act" means the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.

 

"Account Bank" means Wells Fargo Bank, National Association, in its capacity as the "Securities Intermediary" pursuant to the Control Agreement.

 

"Account Bank Expenses" means the expenses set forth in the Wells Fargo Fee Letter that are payable to the Account Bank and any other accrued and unpaid expenses (including reasonable and documented attorneys’ fees, costs and expenses) and indemnity amounts payable by the Borrower to the Account Bank under the Transaction Documents.

 

"Account Bank Fees" means the fees set forth in the Wells Fargo Fee Letter.

 

"Action" has the meaning assigned to that term in Section 8.04.

 

"Additional Amount" has the meaning assigned to that term in Section 2.11(a).

 

"Adjusted Borrowing Value" means, on any date of determination, (i) for any Eligible Loan Asset, an amount equal to the Assigned Value of such Eligible Loan Asset at such time, multiplied by the Outstanding Balance of such Eligible Loan Asset at such time and (ii) for any Loan Asset that is not an Eligible Loan Asset, zero.

 

"Administrative Agent" means Morgan Stanley Senior Funding, Inc., in its capacity as administrative agent for the Lenders, together with its successors and assigns, including any successor appointed pursuant to Article IX.

 

"Administrative Expense Cap" means, for any Payment Date, a per annum amount equal to $100,000.

 

"Administrative Expenses" means the following fees and expenses due or accrued with respect to any Payment Date, payable on a pro rata basis to: (a) the Collateral Agent, for payment of accrued Collateral Agent Fees and Collateral Agent Expenses, (b) the Collateral Custodian, for payment of accrued Collateral Custodian Fees and Collateral Custodian Expenses and (c) the Account Bank, for any Account Bank Fees and Account Bank Expenses.

 

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"Advance" means each loan advanced in each applicable Eligible Currency by the Lenders to the Borrower on an Advance Date pursuant to Article II.

 

"Advance Date" means, with respect to any Advance, the date on which funds are made available to the Borrower in accordance with Section 2.02.

 

"Advance Rate" means, with respect to an Eligible Loan Asset, as set forth in the Approval Notice for an Eligible Loan Asset, the percentage determined by the Administrative Agent in its sole discretion and communicated in writing to the Borrower, the Originator and the Servicer at the time such Eligible Loan Asset is approved by the Administrative Agent, subject to a maximum advance rate as set forth in the Advance Rate Matrix based on the applicable loan type of such Eligible Loan Asset, as set forth in the Approval Notice for an Eligible Loan Asset; provided that, the Advance Rate for any Subject Loan Asset will be reduced by 10% by the Administrative Agent on or after the date on which such Eligible Loan Asset initially becomes a Subject Loan Asset (in accordance with the definition thereof); provided further that the Borrower may request that the assigned Advance Rate of an Eligible Loan Asset be re-evaluated by the Administrative Agent at any time.

 

The Administrative Agent shall promptly notify the Servicer of any change effected by the Administrative Agent of the Advance Rate of any Loan Asset and neither the Borrower nor the Servicer shall have any obligation to make any calculations hereunder giving effect to such modified Advance Rate until the Servicer has received such notice.

 

“Advance Rate Matrix” means the following matrix:

 

Loan Type Maximum Advance Rate
Broadly Syndicated Loans 77.5%
First Lien Loans 75%
Recurring Revenue Loans 70%
Unitranche Loans for which the
Senior Leverage Ratio as of the
Cut-Off Date is less than 5.00 :
1.00 		70%
Unitranche Loans for which the
Senior Leverage Ratio as of the
Cut-Off Date is greater than or
equal to 5.00 : 1.00 and less than
5.50 : 1.00 		67.5%
Unitranche Loans for which the
Senior Leverage Ratio as of the
Cut-Off Date is greater than or
equal to 5.50 : 1.00 		65%
Second Lien Loans 50%
FLLO Loans (first pay debt * applicable
advance rate determined in
accordance with this definition
of “Advance Rate Matrix” as
though such first pay debt were
a Loan Asset) – first out debt /
last out debt

 

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"Advances Outstanding" means, on any date of determination, the sum of the aggregate principal amount in Dollars or the Dollar Equivalent, as determined by the Administrative Agent using the Spot Rate, of all Advances outstanding on such date, after giving effect to all repayments of Advances and the making of new Advances on such date; provided that the principal amounts of Advances Outstanding shall not be reduced by any Available Collections or other amounts if at any time such Available Collections or other amounts are rescinded or must be returned for any reason; provided, further, that for purposes of the determination of Yield and in connection with any reduction pursuant to Section 2.16 or any payments made in accordance with Section 2.04, “Advances Outstanding” shall refer only to Advances outstanding in the applicable Eligible Currency.

 

"Affected Party" has the meaning assigned to that term in Section 2.10(a).

 

"Affiliate" means, when used with respect to a Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person. For the purposes of this definition, "control," when used with respect to any specified Person, means the power to vote more than 50% of the voting securities of such Person or to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the term "controlled" has a correlative meaning to the foregoing; provided that the term Affiliate shall not include any Affiliate relationship which may exist solely as a result of direct or indirect ownership of, or control by, a common Financial Sponsor.

 

"Aggregate Adjusted Borrowing Value" means, as of any date of determination, (a) an amount equal to the sum of the Adjusted Borrowing Values of all Eligible Loan Assets included as part of the Collateral on such date, after giving effect to all Eligible Loan Assets added to and removed from the Collateral on such date minus (b) the Excess Concentration Amount.

 

“Aggregate Unfunded Exposure Amount” means, as of any date of determination, the sum of the Unfunded Exposure Amounts of all Delayed Draw Loan Assets included in the Collateral on such date.

 

"Agreement" means this Loan and Servicing Agreement.

 

"Alternative Rate" has the meaning assigned to that term in the definition of “LIBOR”.

 

"Amortization Period" means the period commencing on the Commitment Termination Date and ending on the Collection Date.

 

"Anti-Money Laundering Laws" has the meaning assigned to that term in Section 4.01(hh)(iii).

 

"Applicable Law" means for any Person, all existing laws, rules, regulations, to the extent applicable to such Person or its property or assets, all statutes, treaties, codes, ordinances, permits, certificates, orders, licenses of and published interpretations by any Governmental Authority applicable to such Person and applicable judgments, decrees, injunctions, writs, awards or orders of any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.

 

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"Applicable Margin" means, as of the Fifth Amendment Effective Date, (i) for each day during the Revolving Period, an amount equal to 2.45% per annum and (ii) during the Amortization Period, 2.95% per annum; provided that (x) after notice from the Administrative Agent to the Borrower following the occurrence and continuation of an Event of Default or after the automatic occurrence of the Facility Maturity Date pursuant to clause (c) of the definition thereof or (y) after the automatic occurrence of the Facility Maturity Date pursuant to clause (a) or clause (b) of the definition thereof, the Applicable Margin shall be increased by an additional 2.00% per annum.

 

"Approval Notice" means, with respect to any Eligible Loan Asset, the written notice, in substantially the form attached hereto as Exhibit A.

 

"Approved Valuation Firm" means each of (a) Duff & Phelps, LLC, (b) Murray, Devine & Co., Inc. and (c) any other nationally recognized accounting firm or valuation firm, in each case, approved by the Borrower and the Administrative Agent that, in each case, has agreed to confidentiality provisions acceptable to the Servicer; provided that, prior to the Closing Date, the Borrower and the Administrative Agent shall designate Murray, Devine & Co., Inc. as the initial Valuation Firm; provided, further, that, after the Closing Date, the Administrative Agent may remove Murray, Devine & Co., Inc. and designate a new Valuation Firm from among the previously agreed upon Approved Valuation Firms.

 

"ARRC" means the Alternative Reference Rates Committee of the Federal Reserve Bank of New York.

 

"Assigned Documents" has the meaning assigned to that term in Section 2.12(b).

 

"Assigned Value" means, as of any date of determination and expressed as a percentage of the Outstanding Balance of such Eligible Loan Asset, (i) with respect to each Eligible Loan Asset funded and/or originated by the Borrower, or funded and/or originated by the Originator or its Affiliates (other than the Borrower) within three (3) months of its sale or contribution to the Borrower, (a) if the funding or origination price was greater than or equal to 97% of par, the par amount thereof and (b) otherwise, the funding or origination price, as applicable, and (ii) for any other Eligible Loan Asset, the Assigned Value shall be the lowest of (a) the Purchase Price of such Eligible Loan Asset, (b) the Assigned Value assigned as of the applicable Cut-Off Date by the Administrative Agent in its sole discretion, and (c) the par amount of such Eligible Loan Asset. Following a Value Adjustment Event, the Assigned Value for any Eligible Loan Asset may (or in the case of clause (i) shall) be reduced by the Administrative Agent as set forth below:

 

(i)            if a Value Adjustment Event of the type described in clause (b), clause (c), clause (d) or clause (f) (solely with respect to a Material Modification described in clause (a) or clause (e) of the definition thereof) of the definition thereof with respect to such Loan Asset occurs, the Assigned Value of such Loan Asset will, automatically and without further action by the Administrative Agent, be zero; and

 

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(ii)           subject to clause (iii) below, upon the occurrence of a Value Adjustment Event (other than the type described in clause (b), clause (c), clause (d) or clause (f) (solely with respect to a Material Modification described in clause (a) or clause (e) of the definition thereof)), the then-current Assigned Value for such Eligible Loan Asset may be amended by the Administrative Agent in its sole discretion (at any time and from time to time); provided that, if the Value Adjustment Event occurred pursuant to clauses (a), (e) or (g) of the definition thereof, then the Assigned Value may no longer be adjusted by the Administrative Agent once the condition that triggered such Value Adjustment Event no longer exists;

 

(iii)          Specified Period.

 

(1)            If, during the Specified Period, one or more Value Adjustment Events pursuant to clause (a), clause (f) (solely with respect to a Material Modification described in clause (c) of the definition thereof that is effected during the Specified Period and in respect of interest payments otherwise due during the Specified Period) or clause (g), occurs with respect to any Subject Loan Asset (each, a “Qualifying Value Adjustment Event”), the Assigned Value of such Subject Loan Asset in effect at the time of the occurrence of such Qualifying Value Adjustment Event shall not be amended by the Administrative Agent solely during the Specified Period, subject to the requirements of this clause (iii);

 

(2)            After the expiration of the Specified Period, the Assigned Value of any Subject Loan Asset that was subject to one or more Qualifying Value Adjustment Events may be amended by the Administrative Agent in its sole discretion if such Qualifying Value Adjustment Event(s) remains in effect on the last day of the Specified Period (subject to clause (3) below). A Qualifying Value Adjustment Event shall be deemed to be in effect as of the last day of the Specified Period if (x) the applicable ratio(s) set forth in clause (a) of the definition of “Value Adjustment Event” remain decreased or increased (as applicable) beyond the stated percentages, (y) with respect to clause (f) of the definition of “Value Adjustment Event”, such Loan Asset previously modified as set forth in clause (c) of the definition of “Material Modification” has not resumed paying interest in cash at a rate at least equal to the rate in effect at the beginning of the Specified Period and is not required to, on the payment date following the first “interest accrual period” (as such term or any comparable term is defined in the related Underlying Instruments) after the end of the Specified Period, resume paying interest in cash at a rate at least equal to the rate in effect at the beginning of the Specified Period or (z) with respect to clause (g) of the definition of “Value Adjustment Event”, the related Obligor’s last quarter annualized Revenue is less than the minimum covenant (if any) specified in the Underlying Instrument; provided that, (i) on the last day of the Specified Period and (ii) on the day that a Loan Asset ceases to be a Subject Loan Asset pursuant to the last paragraph of the definition thereof, in each case, the Administrative Agent will determine and notify the Servicer of any amended Assigned Value with respect to such Subject Loan Asset on such date; and

 

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(3)            If the Borrower disagrees with the amended Assigned Value given to a Subject Loan Asset pursuant to clause (iii)(2) above, then the Borrower may dispute such Assigned Value pursuant to the procedures set forth in the last proviso of this definition;

 

provided that the Administrative Agent may continue to amend the Assigned Value for such Eligible Loan Asset only if the credit quality of such Eligible Loan Asset has continued to deteriorate (regardless of whether such deterioration is sufficient to trigger a Value Adjustment Event) in the reasonable determination of the Administrative Agent; provided, further, that, for the avoidance of doubt, the Administrative Agent may not amend any Assigned Value solely due to a decline in the Index; provided, further, that, the Borrower may request that the Assigned Value be re-evaluated by the Administrative Agent for any Eligible Loan Asset at any time; provided, further, that such Assigned Value may not increase above 100% of the Outstanding Balance of such Loan Asset; provided further that following any reduction to the Assigned Value of an Eligible Loan Asset, if the Borrower disagrees with the Administrative Agent’s determination of the Assigned Value of such Eligible Loan Asset, the Borrower may (at its expense) request a new valuation from a Valuation Firm chosen by the Administrative Agent to value such Eligible Loan Asset. If the value determined by such Valuation Firm is greater than the Administrative Agent’s determination of the Assigned Value, such Valuation Firm’s valuation shall become the Assigned Value of such Loan Asset until the occurrence (if any) of a subsequent Value Adjustment Event.

 

The Administrative Agent shall promptly notify the Servicer of any change effected by the Administrative Agent of the Assigned Value of any Loan Asset (including, for the avoidance of doubt, any change in the Assigned Value of a Loan Asset pursuant to clause (iii) above) and neither the Borrower nor the Servicer shall have any obligation to make any calculations hereunder giving effect to such lower Assigned Value until the Servicer has received such notice.

 

"Assignment and Acceptance" has the meaning assigned to that term in Section 12.04(a).

 

“AUD” means the lawful currency of Australia.

 

“AUD Advance” means an Advance denominated in AUD.

 

"Availability" means, as of any date of determination, an amount equal to the excess, if any, of (a) the Borrowing Base over (b) the Advances Outstanding on such day.

 

"Available Collections" means the sum of all Interest Collections and all Principal Collections received with respect to the Collateral; provided that, for the avoidance of doubt, "Available Collections" shall not include amounts on deposit in the Unfunded Exposure Account that do not represent proceeds of Permitted Investments.

 

"Bankruptcy Code" means Title 11, United States Code, 11 U.S.C. §§ 101 et seq., as amended from time to time.

 

"Bankruptcy Event" means an event that shall be deemed to have occurred with respect to a Person if either:

 

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(i)            a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or all or substantially all of its assets, or any similar action with respect to such Person under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding shall continue undismissed, or unstayed and in effect, for a period of sixty (60) consecutive days; or an order for relief in respect of such Person shall be entered in an involuntary case under the federal bankruptcy laws or other similar laws now or hereafter in effect; or

 

(ii)            such Person shall commence a voluntary case or other proceeding under any Bankruptcy Laws now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for such Person or all or substantially all of its assets, or shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors or members shall vote to implement any of the foregoing.

 

"Bankruptcy Laws" means the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

 

"Bankruptcy Proceeding" means any case, action or proceeding before any court or other Governmental Authority relating to any Bankruptcy Event.

 

"BBSW" means, for any day during a Remittance Period, with respect to any AUD Advance (or portion thereof), the rate per annum (carried out to the fifth decimal place) equal to the rate determined by the Administrative Agent to be the offered rate that appears on the Reuters Screen BBSW Page (or any applicable successor or substitute page) at approximately 11:00 a.m., Sydney time on such day, for deposits in AUD with a term equivalent to one month; provided that if such rate is not available at any such time for any reason, then “BBSW” with respect to any Advance shall be the rate at which AUD deposits of AUD5,000,000 and for a one-month maturity are offered by the principal Sydney office of any bank (which may be the Administrative Agent) reasonably selected by the Administrative Agent in immediately available funds on the basis of the discount amount at which the Administrative Agent is then offering to purchase AUD denominated bankers’ acceptances that have a comparable aggregate face amount to the Advances Outstanding in AUD at approximately 11:00 a.m., Sydney time, on the applicable day (or, if such day is not a Business Day, on the immediately preceding Business Day); provided further that, in the event that the rate as so determined above shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. BBSW shall always be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

“BDC Parent” means Golub Capital BDC, Inc., in its capacity as a holder of membership interests in the Borrower.

 

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“BDC Tax Distribution” means any distribution made by the Borrower (i) to allow BDC Parent to pay any unpaid Taxes then due and owing resulting from the income of the Borrower claimed on the tax reporting of BDC Parent or (ii) to the extent necessary to allow BDC Parent to make sufficient distributions to qualify as a regulated investment company under the Code and to otherwise minimize or eliminate federal or state income or excise taxes payable by BDC Parent in or with respect to any taxable year of BDC Parent (or any calendar year, as relevant).

 

"Beneficial Ownership Certification" means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.

 

"Beneficial Ownership Regulation" means 31 C.F.R. §1010.230.

 

"Benefit Plan Investor" means a "benefit plan investor" as defined in Department of Labor regulation 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA, and includes an employee benefit plan that is subject to the fiduciary responsibility provisions of Title I of ERISA, a plan that is subject to Section 4975 of the Code, and an entity the underlying assets of which are deemed to include plan assets.

 

"Borrower" means Golub Capital BDC Funding II LLC, a Delaware limited liability company, together with its permitted successors and assigns in such capacity.

 

"Borrower Certificate of Formation" means the Certificate of Formation of the Borrower, dated November 20, 2018.

 

“Borrower Collection Account” means the Collection Account established for the benefit of the Borrower (and not a Securitization Subsidiary thereof).

 

"Borrower Consent" means the resolutions of Golub Capital BDC, Inc., in its capacity as designated manager of the Borrower, dated November 27, 2018.

 

"Borrower LLC Agreement" means the amended and restated limited liability company agreement of the Borrower, dated February 1, 2019.

 

"Borrowing Base" means, as of any date of determination, an amount equal to the lowest of:

 

(i)            (a) the sum of the products of (x) the lower of (1) the Weighted Average Advance Rate for all Eligible Loan Assets as of such date and (2) the Maximum Portfolio Advance Rate as of such date, multiplied by (y) the Aggregate Adjusted Borrowing Value as of such date, plus (b) the amount on deposit in the Principal Collection Subaccount as of such date plus (c) the amount on deposit in the Unfunded Exposure Account (such amount not to exceed the Aggregate Unfunded Exposure Amount) minus (d) the Unfunded Exposure Equity Amount;

 

(ii)           (a) the Aggregate Adjusted Borrowing Value as of such date, minus (b) the Minimum Equity Amount, plus (c) the amount on deposit in the Principal Collection Subaccount as of such date, plus (d) the amount on deposit in the Unfunded Exposure Account (such amount not to exceed the Aggregate Unfunded Exposure Amount) minus (e) the Unfunded Exposure Equity Amount; or

 

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(iii)            the Facility Amount minus the Aggregate Unfunded Exposure Amount plus the amount on deposit in the Unfunded Exposure Account (such amount not to exceed the Aggregate Unfunded Exposure Amount).

 

provided that any Loan Asset which is owned by a Securitization Subsidiary which has closed a Securitization and has been released from all Liens created under the Transaction Documents shall not be included in the calculation of “Borrowing Base”.

 

"Borrowing Base Certificate" means a certificate prepared by the Borrower setting forth the calculation of the Borrowing Base as of the applicable date of determination, substantially in the form of Exhibit B hereto.

 

"Borrowing Base Deficiency" means, as of any date of determination, an amount equal to the positive difference, if any, of (i) the Advances Outstanding on such date over (ii) the Borrowing Base.

 

"Borrowing Base Deficiency Increase" has the meaning assigned to that term in Section 2.06(d).

 

"Breakage Fee" means, for Advances Outstanding which are repaid (in whole or in part) on any date other than a Payment Date, the breakage costs, if any, related to such repayment, based upon the assumption that the applicable Lender funded its loan commitment in the applicable London interbank offered rate or the euro interbank offered rate market and using any reasonable attribution or averaging methods which the Lender deems appropriate and practical, it hereby being understood that the amount of any loss, costs or expense payable by the Borrower to any Lender as Breakage Fee shall be determined in the respective Lender's reasonable discretion and shall be conclusive absent manifest or demonstrable error.

 

"Bridge Loan" means any loan that (a) is unsecured and incurred in connection with a merger, acquisition, consolidation or sale of all or substantially all of the assets of a person or similar transaction and (b) by its terms, is required to be repaid within one (1) year of the incurrence thereof with proceeds from additional borrowings or other refinancings.

 

"Broadly Syndicated Loan" means any First Lien Loan as of the related Cut-Off Date with (a) EBITDA of $75,000,000 or greater and (b) an observable quote with a bid depth of at least three (3) from LoanX Mark-It Partners or Loan Pricing Corporation or as otherwise designated by the Lender on a name-by-name basis.

 

"Business Day" means a day of the year other than (a) Saturday or aand Sunday orand (b) any other day on which commercial banks in (i) New York, New York or (ii) solely with respect to actions to be taken by the Collateral Agent in accordance with this Agreement, the city in which the offices of Collateral Agent are located are authorized or required by applicable law, regulation or executive order to close or on which banks are not open for dealings in deposits in the relevant currency in the London interbank market.

 

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“CAD” means the lawful currency of Canada.

 

“CAD Advance” means an Advance denominated in CAD.

 

"Capital Lease Obligations" means, with respect to any entity, the obligations of such entity to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such entity under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“Capital Stock” means any and all shares, interest, participations or other equivalents (however designated) of share capital of a corporation, any and all similar ownership interests in a Person (other than a corporation), and any and all warrants, rights or options to purchase any of the foregoing.

 

"Cash Interest Coverage Ratio" means, with respect to any Loan Asset (other than a Recurring Revenue Loan) for any period, the meaning of "Interest Coverage Ratio" or any comparable definition in the Underlying Instruments for such Loan Asset, and in the case that "Interest Coverage Ratio" or such comparable definition is not defined in such Underlying Instruments, the ratio of (a) EBITDA for the applicable test period, to (b) cash interest for the applicable test period, as calculated by the Servicer in accordance with the Servicing Standard using information from and calculations consistent with the relevant compliance statements and financial reporting packages provided by the relevant Obligor as per the requirements of the related Underlying Instruments.

 

“CDOR” means, for any day during a Remittance Period, with respect to any CAD Advance (or portion thereof), the rate per annum (carried out to the fifth decimal place) equal to the rate determined by the Administrative Agent to be the offered rate that appears on the Bloomberg Professional Service CDOR Page (or any applicable successor page) at approximately 11:00 a.m., Toronto time on such day for deposits in CADs with a term equivalent to one month; provided that if such rate is not available at any such time for any reason, then “CDOR” with respect to any Advance shall be the rate at which CAD deposits of CAD5,000,000 and for a one-month maturity are offered by the principal Toronto office of the Administrative Agent or the principal Toronto office of any bank reasonably selected by the Administrative Agent in immediately available funds on the basis of the discount amount at which the Administrative Agent is then offering to purchase CAD denominated bankers’ acceptances that have a comparable aggregate face amount to the Advances Outstanding in CAD at approximately 11:00 a.m., Toronto time, on the applicable day (or, if such day is not a Business Day, on the immediately preceding Business Day); provided further that, in the event that the rate as so determined above shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. CDOR shall always be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

"Change in Law" means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority, (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority or (d) any change in any generally accepted accounting principles or regulatory accounting principles and affecting the application of any law, rule, regulation or treaty referred to in clause (a) or (b) above.

 

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"Change of Control" means an event that shall be deemed to have occurred if any of the following occur:

 

(a)            with respect to the Borrower, Golub Capital BDC, Inc. at any time for any reason ceases to own, directly or indirectly, 100% of the issued and outstanding membership interests of the Borrower (as the same may be adjusted for any combination, recapitalization or reclassification into a greater or smaller number of shares or units), free and clear of all Liens, rights, options, warrants or other similar agreements or understandings;

 

(b)            the Management Agreement shall fail to be in full force and effect; and

 

(c)            the dissolution, termination or liquidation, in whole or in part, transfer or other disposition, in each case, of all or substantially all of the assets of the Borrower, the Originator or the Servicer, as applicable.

 

"Closing Date" means February 1, 2019.

 

"Closing Date Asset" means a Loan Asset owned by the Borrower (or which the Borrower has entered into a binding commitment to acquire) on the Closing Date.

 

"Code" means the Internal Revenue Code of 1986, as amended.

 

"Collateral" means, collectively, the Collateral Portfolio and each Securitization Subsidiary Collateral Portfolio.

 

"Collateral Agent" means Wells Fargo Bank, National Association, not in its individual capacity, but solely as collateral agent pursuant to the terms of this Agreement, together with its successor and assigns in such capacity.

 

"Collateral Agent Expenses" means the expenses set forth in the Wells Fargo Fee Letter and any other accrued and unpaid expenses (including attorneys' fees, costs and expenses) and indemnity amounts payable by the Borrower or any Securitization Subsidiary to the Collateral Agent under the Transaction Documents.

 

"Collateral Agent Fees" means the fees due to the Collateral Agent pursuant to the Wells Fargo Fee Letter.

 

"Collateral Agent Termination Notice" has the meaning assigned to that term in Section 10.05.

 

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"Collateral Custodian" means Wells Fargo Bank, National Association, not in its individual capacity, but solely as collateral custodian pursuant to the terms of this Agreement, together with its successors and assigns in such capacity.

 

"Collateral Custodian Expenses" means the expenses set forth in the Wells Fargo Fee Letter and any other accrued and unpaid expenses (including attorneys' fees, costs and expenses) and indemnity amounts payable by the Borrower or any Securitization Subsidiary to the Collateral Custodian under the Transaction Documents.

 

"Collateral Custodian Fees" means the fees due to the Collateral Custodian pursuant to the Wells Fargo Fee Letter.

 

"Collateral Custodian Termination Notice" has the meaning assigned to that term in Section 11.05.

 

"Collateral Portfolio" means all right, title, and interest (whether now owned or hereafter acquired or arising, and wherever located) of the Borrower in, to and under all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, contract rights, general intangibles, instruments, certificates of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, commercial tort claims, deposit accounts, inventory, investment property, letter-of-credit rights, software, supporting obligations, accessions, or other property of the Borrower, including, all right, title and interest of the Borrower in the following (in each case excluding the Retained Interest and the Excluded Amounts):

 

(i)            the Loan Assets, and all monies due or to become due in payment under such Loan Assets on and after the related Cut-Off Date, including, but not limited to, all Available Collections;

 

(ii)           the Related Assets with respect to the Loan Assets referred to in clause (i) above;

 

(iii)          the Controlled Accounts and all Permitted Investments purchased with funds on deposit in the Controlled Accounts;

 

(iv)          all of the Borrower’s ownership interests in each Securitization Subsidiary;

 

(v)           the Assigned Documents;

 

(vi)          each Purchase and Sale Agreement; and

 

(vii)         all income and Proceeds of the foregoing.

 

The “Collateral Portfolio” shall not include any Non-Levered Loan Asset, the Contribution Account or the funds on deposit therein.

 

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"Collection Account" means, collectively, (i) a trust account (account number at the Account Bank) entitled "Collection Account," in the name of the Borrower subject to the lien and control of the Collateral Agent for the benefit of the Secured Parties, and each subaccount that may be established from time to time, including the Interest Collection Subaccount and the Principal Collection Subaccount and (ii) each trust account at the Account Bank in the name of the Collateral Agent for the benefit of the applicable Securitization Subsidiary and under the sole dominion and control of the Collateral Agent for the benefit of the Secured Parties (it being understood, however, that the Servicer shall be able to request distributions and releases therefrom in accordance herewith); provided that the funds deposited therein (including any interest and earnings thereon) from time to time shall constitute the property and assets of the Borrower or the applicable Securitization Subsidiary, and the Borrower or the applicable Securitization Subsidiary shall be solely liable for any Taxes payable with respect to the Collection Account.

 

"Collection Date" means the date on which the aggregate outstanding principal amount of the Advances Outstanding have been repaid in full and all Yield and Fees and all other Obligations (other than unmatured contingent obligations, for which no claim has been made) have been paid in full, and the Borrower shall have no further right to request any additional Advances.

 

"Commitment" means, with respect to each Lender, (i) during the Revolving Period, the amount set forth opposite such Lender's name on Annex A hereto (as such amount may be revised from time to time) or the amount set forth as such Lender's "Commitment" on the Assignment and Acceptance relating to such Lender, as applicable, and (ii) during the Amortization Period, such Lender's Pro Rata Share of the aggregate Advances Outstanding, in each case, as such amount may be increased or reduced pursuant to Section 2.16.

 

"Commitment Termination Date" means the earliest to occur of (a) February 1, 2021 and (b) the Facility Maturity Date.

 

"Concentration Denominator" means the higher of (a) the Target Portfolio Amount and (b) an amount equal to the sum of the Adjusted Borrowing Values of all Eligible Loan Assets included as part of the Collateral on such date.

 

"Concentration Limitations" means, as of any date of determination, for the purposes of determining the Excess Concentration Amount and after giving effect to all additions and removals of Eligible Loan Assets on such date:

 

(a)            not more than 4.0% of the Concentration Denominator may consist of Eligible Loan Assets that are issued by a single Obligor and its Affiliates, except that:

 

(i)            up to 7.5% of the Concentration Denominator may consist of Eligible Loan Assets issued by each of the two (2) largest Obligors and their Affiliates (provided that such Eligible Loan Assets are First Lien Loans or Unitranche Loans); and

 

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(ii)            up to 5.0% of the Concentration Denominator may consist of Eligible Loan Assets issued by each of the next five (5) largest Obligors and their respective Affiliates;

 

(b)            not more than 12.0% of the Concentration Denominator may consist of Eligible Loan Assets that are issued by Obligors that belong to any single Industry Classification, except that:

 

(i)            up to 30.0% of the Concentration Denominator may consist of Eligible Loan Assets issued by Obligors that belong to the largest Industry Classification;

 

(ii)            up to 25.0% of the Concentration Denominator may consist of Eligible Loan Assets issued by Obligors that belong to the second largest Industry Classification; and

 

(iii)            up to 15.0% of the Concentration Denominator may consist of Eligible Loan Assets issued by Obligors that belong to the third largest Industry Classification;

 

(c)            not more than 5.0% of the Concentration Denominator may consist of Eligible Loan Assets that are Delayed Draw Loan Assets;

 

(d)            not more than 25.0% of the Concentration Denominator may consist of Eligible Loan Assets that are Cov-Lite Loan Assets that are (i) issued by an Obligor that has a most recently reported EBITDA as of the Cut-Off Date of greater than the lesser of $40,000,000 and an amount to be determined by the Administrative Agent in its sole discretion and reflected in the related Approval Notice on an asset-by-asset basis and (ii) not Broadly Syndicated Loans;

 

(e)            not more than 45.0% of the Concentration Denominator may consist of Eligible Loan Assets with a Total Leverage Ratio of greater than 6.50:1.00 as of the Cut-Off Date;

 

(f)            not more than 20.0% of the Concentration Denominator may consist of Eligible Loan Assets that are Recurring Revenue Loans;

 

(g)            not more than 5.0% of the Concentration Denominator may consist of Eligible Loan Assets that are PIK Loan Assets, including Eligible Loan Assets which become PIK Loan Assets as the result of a Material Modification (provided that such percentage limitation shall not include any Eligible Loan Asset that has become a PIK Loan Asset during the Specified Period, except to the extent such Loan Asset constitutes a PIK Loan Asset during an “interest accrual period” (as such term or any comparable term is defined in the related Underlying Instruments), that commences following the Specified Period);

 

(h)            not more than 25.0% of the Concentration Denominator may consist of Eligible Loan Assets that are denominated in an Eligible Currency other than Dollars; and

 

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(i)            not more than 25.0% of the Concentration Denominator may consist of Eligible Loan Assets that are domiciled in an Eligible Country other than the United States, except that:

 

(i)            Eligible Loan Assets that are domiciled in Canada or the United Kingdom may constitute up to 25.0% of the Concentration Denominator; and

 

(ii)            Eligible Loan Assets that are domiciled in an Eligible Country other than the United States, Canada or the United Kingdom may constitute up to 15.0% of the Concentration Denominator; and

 

(j)            not more than 10.0% of the Concentration Denominator may consist of Eligible Loan Assets that are FLLO Loans or Second Lien Loans;

 

(k)           not more than 5.0% of the Concentration Denominator may consist of Eligible Loan Assets that are fixed rate Loan Assets; and

 

(l)            not more than 15% of the Concentration Denominator may consist of Eligible Loan Assets other than Recurring Revenue Loans that are issued by an Obligor that has a most recently reported EBITDA as of the Cut-Off Date of less than $10,000,000.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

"Constituent Documents" means in respect of any Person, the certificate or articles of formation or organization, the limited liability company agreement, operating agreement, partnership agreement, joint venture agreement or other applicable agreement of formation or organization (or equivalent or comparable constituent documents) and other organizational documents and by-laws and any certificate of incorporation, certificate of formation, certificate of limited partnership and other agreement, similar instrument filed or made in connection with its formation or organization, in each case, as the same may be amended, modified, supplemented, restated or replaced from time to time in accordance with the terms thereof. For the avoidance of doubt, the "Constituent Documents" of the Borrower include, the Borrower Consent, the Borrower Certificate of Formation and the Borrower LLC Agreement.

 

“Contribution Account” means a trust account (account number at the Account Bank) in the name of the Borrower (which account may have subaccounts to receive collections in currencies other than Dollars).

 

"Control Agreement" means (i) that certain Securities Account Control Agreement, dated as of the Closing Date, among the Borrower, the Account Bank and the Collateral Agent, which agreement relates to the Controlled Accounts and the Contribution Account and (ii) each Securities Account Control Agreement among the applicable Securitization Subsidiary, the Account Bank and the Collateral Agent.

 

"Controlled Accounts" means the Collection Account, each Eligible Currency Account and the Unfunded Exposure Account.

 

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"Cov-Lite Loan Asset" means a Loan Asset that is not subject to any Maintenance Covenants; provided that a Loan Asset shall not constitute a Cov-Lite Loan Asset if the Underlying Instruments contain a cross-default or cross-acceleration provision to, or such Loan Asset is pari passu with another loan of the Obligor that requires the Obligor to comply with one or more Maintenance Covenants.

 

“Currency Disruption Event” means the occurrence of any of the following with respect to any Eligible Currency: (a) any Lender shall have notified the Administrative Agent, the Collateral Agent, the Servicer and the Borrower of a determination by such Lender that it would be contrary to law or to the directive of any central bank or other Governmental Authority (whether or not having the force of law) to obtain such Eligible Currency in the applicable market to fund any Advance, (b) any Lender shall have notified the Administrative Agent, the Collateral Agent, the Servicer and the Borrower of a determination by such Lender that the rate at which such Eligible Currency is being offered to such Lender in the applicable market (i) does not accurately reflect the cost to such Lender of making, funding or maintaining any Advance or (ii) has been permanently discontinued or for which adequate and reasonable means do not exist for ascertaining such rate or (c) any Lender shall have notified the Administrative Agent, the Collateral Agent, the Servicer and the Borrower of the inability of such Lender, as applicable, to obtain such Eligible Currency or such other rate in the applicable market to make, fund or maintain any Advance.

 

"Cut-Off Date" means, (a) (i) with respect to each Closing Date Asset, the Closing Date and (ii) with respect to each Loan Asset that is not a Closing Date Asset, the date such Loan Asset is committed to be acquired by the Borrower and (b) solely for purposes of determining the new Assigned Value or Advance Rate, Material Modification, First Lien Loan, Value Adjustment Event in respect of an asset for which the Borrower (or the Servicer on its behalf) has requested that the Administrative Agent reset the Advance Rate or a new Assigned Value in connection with a Redetermination Request, the Reset Cut-Off Date.

 

"Debt-to-Recurring-Revenue Ratio" means, with respect to any Loan Asset that is a Recurring Revenue Loan for any period, the meaning of “Debt-to-Recurring Revenue Ratio” or any comparable definition in the Underlying Instruments for each Loan Asset, and in any case that “Debt-to-Recurring Revenue Ratio” or such comparable definition is not defined in such Underlying Instruments, the ratio of (a) Indebtedness of the related Obligor less Unrestricted Cash, to (b) Recurring Revenue, as calculated by the Servicer in accordance with the Servicing Standard using information from and calculations consistent with the relevant compliance statements and financial reporting packages provided by the relevant Obligor as per the requirements of the related Underlying Instruments; provided that, in the event of a lack of any such information necessary to calculate the Debt-to-Recurring Revenue Ratio, the Debt-to-Recurring Revenue Ratio shall be a ratio calculated by the Administrative Agent in its sole discretion after consultation with the Servicer.

 

"Defaulted Loan" means any Loan Asset as to which any one of the following events has occurred:

 

(a)            (i) an Obligor payment default, other than in respect of expenses, occurs under such Loan Asset that continues and has not been cured after giving effect to any grace period applicable thereto or (ii) a default has occurred under the Underlying Instruments and any applicable grace period has expired and the holders of such Loan Asset have accelerated the repayment of the Loan Asset (but only until such acceleration has been rescinded) in the manner provided in the Underlying Instruments, but in no event more than five (5) Business Days, after the applicable due date under the related Underlying Instruments;

 

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(b)            a Bankruptcy Event with respect to the related Obligor;

 

(c)            any payment default, other than in respect of expenses, occurs under any other senior or pari passu obligation for borrowed money of the related Obligor that continues and has not been cured after giving effect to any grace period applicable thereto, but in no event more than five (5) Business Days, after the applicable due date under the related agreement (including in respect of the acceleration of the debt under the applicable agreement);

 

(d)            such Loan Asset has (x) a rating by S&P of "CC" or below or "SD" or (y) a Moody's probability of default rating (as published by Moody's) of "D" or "LD" or, in each case, had such ratings before they were withdrawn by S&P or Moody's, as applicable;

 

(e)            a Responsible Officer of the Servicer or any Loan Party has actual knowledge that such Loan Asset is pari passu or junior in right of payment as to the payment of principal and/or interest to another debt obligation of the same Obligor which has (i) a rating by S&P of "CC" or below or "SD" or (ii) a Moody's probability of default rating (as published by Moody's) of "D" or "LD," and in each case such other debt obligation remains outstanding (provided that both the Loan Asset and such other debt obligation are full recourse obligations of the applicable Obligor); or

 

(f)            the Servicer determines that all or a material portion of such Loan Asset is uncollectible or otherwise places it on non-accrual status in accordance with the policies and procedures of the Servicer and the Servicing Standard.

 

"Defaulting Lender" means any Lender that: (i) has failed to fund any of its obligations to made Advances within two (2) Business Days following the applicable Advance Date, (ii) has notified the Administrative Agent or the Borrower that it does not intend to comply with such funding obligations or has made a public statement to that effect with respect to such funding obligations hereunder or under other agreements in which it commits to extend credit, (iii) has, for two (2) or more Business Days, failed, in good faith, to confirm in writing to the Administrative Agent, in response to a written request of the Administrative Agent, that it will comply with its funding obligations hereunder or (iv) has, or has a direct or indirect parent company that has, become subject to a Bankruptcy Event.

 

"Delayed Draw Loan Asset" means a Loan Asset that (a) requires the Borrower to make one or more future advances to the Obligor pursuant to the related Underlying Instruments, (b) specifies a maximum amount that can be borrowed on one or more fixed borrowing dates and (c) does not permit the re-borrowing of any amounts previously repaid by the Obligor; but any such Loan Asset will be a Delayed Draw Loan Asset to the extent of such commitments and only until all commitments by the Borrower to make advances to the Obligor expire or are terminated or are reduced to zero.

 

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“Designated Base Rate” means the reference rate (and, if applicable, the methodology for calculating such base rate) determined by the Administrative Agent in its commercially reasonable discretion and in consultation with the Borrower based on (a) in the case of LIBOR, the Alternative Rate or (b) the reference rate being used that is consistent with accepted market practice for secured transactions involving middle market commercial loans, and as to which the Administrative Agent may, in its reasonable discretion, make such adjustments to such rate or the spread thereon, as well as the business day convention, interest determination dates and related provisions and definitions, in each case that are consistent with such accepted market practice for the use of such rate; provided that the written consent of the Borrower shall be required with respect to any LIBOR successor rate that is not a Designated Base Rate.

 

"Determination Date" means, with respect to each Payment Date, the 10th Business Day preceding such Payment Date.

 

"DIP Loan" means any Loan Asset (a) with respect to which the related Obligor is a debtor-in-possession as defined under the Bankruptcy Code, (b) which has the priority allowed pursuant to Section 364 of the Bankruptcy Code and (c) the terms of which have been approved by a court of competent jurisdiction.

 

"Disbursement Request" means a disbursement request from the Borrower to the Administrative Agent and the Collateral Agent in the form attached hereto as Exhibit C in connection with a disbursement request from the Unfunded Exposure Account in accordance with Section 2.04(d) or a disbursement request from the Principal Collection Subaccount in accordance with Section 2.18, as applicable.

 

"Discretionary Sale" has the meaning assigned to that term in Section 2.07(b).

 

"Disqualified Institution" means any financial institution, fund or Person that, in each case is primarily engaged in the business of originating or acquiring middle market loans (including with respect to acting in an advisory or management capacity with respect to any fund that originates or acquires middle market loans).

 

“Diversity Score” means, as of any day, a single number that indicates collateral concentration in terms of both issuer and industry concentration, calculated as set forth in Schedule VI hereto, as such Schedule VI may be updated at the option of the Administrative Agent in its sole discretion.

 

“Dollar Advance” means an Advance denominated in Dollars.

 

“Dollar Equivalent” means, (a) for any amount denominated in Dollars, such amount and (b) for any amount denominated in any other currency, (i) with respect to any amount relating to an Advance or other amounts due under this Agreement, the equivalent amount thereof in Dollars as determined by the Administrative Agent at such time on the basis of the current spot rate determined by the Administrative Agent in a commercially reasonable manner using the lower of (A) the current spot rate (B) the spot rate as of the date of the applicable Advance and (ii) with respect to any amount relating to any Loan Asset, the equivalent amount thereof in Dollars determined by the Servicer using the Spot Rate.

 

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"Dollars" means, and the conventional "$" signifies, the lawful currency of the United States of America.

 

"EBITDA" means, with respect to any period and any Loan Asset other than a Recurring Revenue Loan, the meaning of "EBITDA," "Adjusted EBITDA" or any comparable term in the Underlying Instruments for such Loan Asset (together will all add-backs and exclusions as designated in such Underlying Instruments), and in any case that "EBITDA," "Adjusted EBITDA" or such comparable term is not defined in such Underlying Instruments, an amount, for the principal Obligor on such Loan Asset and any of its parents or Subsidiaries that are obligated pursuant to the Underlying Instruments for such Loan Asset (determined on a consolidated basis without duplication in accordance with GAAP) equal to net income from continuing operations for such period plus (a) cash interest expense, (b) income taxes, (c) depreciation and amortization for such period (to the extent deducted in determining earnings from continuing operations for such period), (d) amortization of intangibles (including, but not limited to, goodwill, financing fees and other capitalized costs), to the extent not otherwise included in clause (c) above, other non-cash charges and organization costs, (e) extraordinary losses in accordance with GAAP, and (f) any other item the Borrower and the Administrative Agent mutually deem to be appropriate.

 

"Eligibility Criteria" means the criteria set forth in Schedule II hereto.

 

"Eligible Country" is defined on Schedule II hereto.

 

“Eligible Currency” means GBPs, CADs, Euros, AUDs and Dollars.

 

“Eligible Currency Accounts” means the segregated trust accounts designated as “[CURRENCY] Eligible Currency Account” in the name of the Borrower subject to the Lien of the Collateral Agent for the benefit of the Secured Parties, including any sub account thereof; provided that the funds deposited therein (including any interest and earnings thereon) from time to time shall constitute the property and assets of the Borrower, and the Borrower shall be solely liable for any Taxes payable with respect to each Eligible Currency Account. For the avoidance of doubt, there shall be one Eligible Currency Account (which may include subaccounts, including a principal collection and interest collection subaccount) for each Eligible Currency other than Dollars.

 

"Eligible Loan Asset" means, as of any date of determination, a Loan Asset in respect of which each of the applicable criteria contained in Section 4.02 and Schedule II hereto is true and correct as of such date. In no event shall a Non-Levered Loan Asset be an Eligible Loan Asset hereunder.

 

"Environmental Laws" means any and all laws, rules, orders, regulations, statutes, ordinances, guidelines, codes, decrees, or other legally binding requirements (including, without limitation, principles of common law) of any Governmental Authority, regulating, relating to or imposing liability or standards of conduct concerning pollution, the preservation or protection of the environment, natural resources or human health (including employee health and safety), or the generation, manufacture, use, labeling, treatment, storage, handling, transportation or release of, or exposure to, Materials of Environmental Concern, as has been, is now, or may at any time hereafter be, in effect.

 

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"Equity Cure Notice” has the meaning assigned to such term in Section 2.06(c).

 

“Equity Interests” means, with respect to any Person, its equity ownership interests, its common stock and any other capital stock or other equity ownership units of such Person authorized from time to time, and any other shares, options, interests, participations or other equivalents (however designated) of or in such Person, whether voting or nonvoting, including common stock, options, warrants, preferred stock, phantom stock, membership units (common or preferred), stock appreciation rights, membership unit appreciation rights, convertible notes or debentures, stock purchase rights, membership unit purchase rights and all securities convertible, exercisable or exchangeable, in whole or in part, into any one or more of the foregoing.

 

“Equity Security” means (a) any equity security or any other security that is not eligible for purchase by a Loan Party as an Eligible Loan Asset and (b) any security purchased as part of a “unit” with an Eligible Loan Asset and that itself is not eligible for purchase by a Loan Party as an Eligible Loan Asset.

“ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” means (a) any corporation that is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the relevant Person, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with that Person, or (c) solely for purposes of Section 302 of ERISA and Section 412 of the Code, a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as, or that otherwise is aggregated under Section 414(o) of the Code with, that Person, any corporation described in clause (a) above or any trade or business described in clause (b) above.

 

“ERISA Event” means (a) with respect to a Pension Plan, any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than events for which the thirty (30) day notice period has been waived; (b) a withdrawal by the Borrower or any of its ERISA Affiliates from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as a termination under Section 4062(e) of ERISA; (c) the failure to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA), whether or not waived, with respect to a Pension Plan; (d) the failure to make any required contribution to a Multiemployer Plan; (e) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to a complete or partial withdrawal by the Borrower or any of its ERISA Affiliates from a Multiemployer Plan, written notification of the Borrower or any of its ERISA Affiliates concerning the imposition of any withdrawal liability, as such term is defined in Part I of Subtitle E of Title IV of ERISA, as a result of a complete or partial withdrawal from a Multiemployer Plan or written notification that a Multiemployer Plan is insolvent or is in reorganization within the meaning of Title IV of ERISA or in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA); (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (g) the filing under Section 4041(c) of ERISA of a notice of intent to terminate a Pension Plan, the treatment of a Pension Plan or Multiemployer Plan amendment as a termination under Section 4041 or Section 4041A of ERISA, or the receipt by the Borrower or any of its ERISA Affiliates from the PBGC of any notice relating to the intention to terminate a Pension Plan or Multiemployer Plan; (h) the imposition of any liability under Title IV of ERISA with respect to the termination of any Pension Plan or Multiemployer Plan, other than for the payment of plan contributions or PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any of its ERISA Affiliates; or (i) the occurrence of a non-exempt prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) which could result in liability to the Borrower or any of its ERISA Affiliates.

 

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“EURIBOR” means, for any day during a Remittance Period, with respect to any Euro Advance (or portion thereof), the rate per annum (carried out to the fifth decimal place) equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Reuters Screen (or any applicable successor page) at approximately 11:00 a.m., London time, on such day that displays an average European Money Markets Institute Settlement Rate (such page currently being EURIBOR01) for deposits in Euros with a term equivalent to one month; provided that if such rate is not available at any such time for any reason, then “EURIBOR” with respect to any Advance shall be the rate at which Euro deposits of €5,000,000 and for a one-month maturity are offered by the principal London office of the Administrative Agent or the principal London office of any bank reasonably selected by the Administrative Agent in immediately available funds in the Euro-zone interbank market at approximately 11:00 a.m., London time, on the applicable day (or, if such day is not a Business Day, on the immediately preceding Business Day); provided further that, in the event that the rate as so determined above shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. EURIBOR shall always be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

"Euro Advance" means an Advance denominated in Euro.

 

"Euro" means the lawful currency of the Member States of the European Union that have adopted and retain the single currency in accordance with the treaty establishing the European Community, as amended from time to time; provided that if any member state or states ceases to have such single currency as its lawful currency (such member state(s) being the “Exiting State(s)"), such term shall mean the single currency adopted and retained as the lawful currency of the remaining member states and shall not include any successor currency introduced by the Exiting State(s).

 

“Event of Default” has the meaning assigned to that term in Section 7.01.

 

“Excepted Persons” has the meaning assigned to that term in Section 12.12(a).

 

“Excess Concentration Amount” means, as of any date of determination, with respect to all Loan Assets included in the Collateral, the amount by which the sum of the Adjusted Borrowing Values of such Loan Assets exceeds any applicable Concentration Limitations, to be calculated without duplication, after giving effect to any sales, purchases or substitutions of Loan Assets as of such date; provided that with respect to any Loan Asset or portion thereof, if more than one Concentration Limitation would be exceeded, the Concentration Limitation that would result in the highest Excess Concentration Amount shall be used to determine the Excess Concentration Amount.

 

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”Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Existing Golub BDC CLO” means (i) each of the CLOs approved by the Administrative Agent and identified on Schedule VII (as such Schedule VII may be updated from time to time by the Borrower), (ii) any existing and future special purpose vehicle borrower under a credit facility or total return swap undertaken by Golub Capital BDC, Inc. or an Affiliate thereof or (iii) any future special purpose vehicle (which, for the avoidance of doubt, shall include any future CLO) that is a wholly or partly owned subsidiary of Golub Capital BDC, Inc. or an Affiliate thereof.

 

“Excluded Amounts” means (a) any amount received in the Collection Account with respect to any Loan Asset included as part of the Collateral, which amount is attributable to the payment of any Tax, fee or other charge imposed by any Governmental Authority on such Loan Asset or on any Related Collateral and (b) any amount received in the Collection Account or other Controlled Account representing (i) a reimbursement of insurance premiums, (ii) any escrows relating to Taxes, insurance and other amounts in connection with Loan Assets which are held in an escrow account for the benefit of the Obligor and the secured party pursuant to escrow arrangements under the Underlying Instruments, (iii) amounts received in the Collection Account with respect to any Loan Asset retransferred or substituted for upon the occurrence of a Warranty Breach Event or that is otherwise replaced by a Substitute Eligible Loan Asset, or that is otherwise sold or transferred by the Borrower pursuant to Section 2.07, to the extent such amount is attributable to a time after the effective date of such replacement or sale, (iv) any interest accruing on a Loan Asset prior to the related Cut-Off Date that was not purchased by the Borrower and is for the account of the Person from whom the Borrower purchased such Loan Asset, and (v) amounts deposited into the Collection Account in error.

 

“Excluded Taxes” means (a) Taxes imposed on or measured by the Recipient’s net income (however denominated), franchise Taxes imposed on the Recipient, and branch profits Taxes imposed on the Recipient, in each case, (i) by the jurisdiction (or any political subdivision thereof) under the laws of which such Recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that are Other Connection Taxes, (b) in the case of any Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender pursuant to a law in effect on the date on which (i) such Lender becomes a party hereto or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.11, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.11(g), and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

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“FATCA” means Sections 1471 through 1474 of the Code (or any amended or successor versions of Sections 1471 through 1474 of the Code that are substantively comparable and not materially more onerous to comply with), as of the date of this Agreement, and any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code (or any amended or successor version described above).

 

“Facility Amount” means the aggregate Commitments as then in effect, which on the Fifth Amendment Effective Date shall be $400,000,000, as such amount may be increased pursuant to Section 2.21 or reduced pursuant to Section 2.16(b); provided that, at all times (a) when an Event of Default exists and is continuing and (b) during the Amortization Period, the Facility Amount shall mean the aggregate Advances Outstanding at such time.

 

“Facility Maturity Date” means the earliest of (a) the Business Day designated by the Borrower to the Lender pursuant to Section 2.16(b) to terminate this Agreement, (b) the Stated Maturity or (c) the date on which the Facility Maturity Date is declared (or is deemed to have occurred automatically) pursuant to Section 7.01.

 

”Fees” means (a) the Unused Fee and (b) the fees payable to each Lender pursuant to the terms of any Lender Fee Letter.

 

“Financial Asset” has the meaning specified in Section 8-102(a)(9) of the UCC.

 

“Financial Covenant Test” means a test that will not be satisfied if as of the last day of any fiscal quarter, Golub Capital BDC, Inc. fails to maintain GAAP net assets (as reflected in its 10Q or 10K without any deductions) in an amount at least equal to $250,000,000, as increased by 50% of the net proceeds of any equity offerings by Golub Capital BDC, Inc. consummated after the Closing Date (excluding, for the avoidance of doubt, any net proceeds of any equity offerings by Golub Capital BDC, Inc. in connection with any merger consummated in accordance with Section 5.04(a)).

 

“Financial Sponsor” means any Person, including any subsidiary of such Person, whose principal business activity is acquiring, holding and selling investments (including controlling interests) in otherwise unrelated companies that each are distinct legal entities with separate management, books and records and bank accounts, whose operations are not integrated with one another and whose financial condition and creditworthiness are independent of the other companies so owned by such Person.

 

“First Lien Loan” means any Loan Asset (a) that is secured by a valid and perfected first priority Lien on substantially all of the Obligor’s assets constituting Related Collateral, subject to any expressly permitted Liens under the Underlying Instrument for such Loan Asset or such comparable definition if “permitted liens” is not defined therein, (b) that provides that the payment obligation of the Obligor on such Loan Asset is either senior to, or pari passu with, and is not (and cannot by its terms become) subordinate in right of payment to all other Indebtedness of such Obligor (other than customary “super priority” facilities), (c) for which Liens on the Related Collateral securing any other outstanding Indebtedness of the Obligor (excluding expressly permitted Liens described in clause (a) above but including Liens securing second lien loans) is expressly subject to and contractually or structurally subordinate to the priority Liens securing such First Lien Loan, (d) that the Servicer determines in accordance with the Servicing Standard that the value of the Related Collateral (or the enterprise value) and ability to generate cash flow on or about the time of origination equals or exceeds the Outstanding Balance of the Loan Asset plus the aggregate outstanding balances of all other Indebtedness of equal seniority secured by the same Related Collateral, (e) for which the Senior Leverage Ratio as of the Cut-Off Date is less than 4.50:1.00, and (f) that is not a Second Lien Loan, Unitranche Loan (other than a Unitranche Loan described in the proviso of the definition thereof) or FLLO Loan.

 

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“FLLO Loan” means any Loan Asset that would constitute a First Lien Loan (without regard to clause (f) of the definition thereof) except that, at any time prior to and/or after an event of default under the Underlying Instrument, such Loan Asset will be paid after one or more tranches of first lien loans issued by the Obligor have been paid in full in accordance with a specified waterfall or other priority of payments as specified in the Underlying Instrument, an agreement among lenders or other applicable agreement.

 

“Foreign Plan” means any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to or by, or entered into with, the Borrower with respect to employees outside the United States.

 

"Funding Business Day" means a day of the year other than (a) Saturday and Sunday and (b) any other day on which commercial banks in New York, New York or the city in which the offices of Collateral Agent are located are authorized or required by applicable law, regulation or executive order to close.

 

“Fifth Amendment Effective Date” means June 18, 2020.

 

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States.

 

"GBP" means the lawful currency of the United Kingdom.

 

"GBP Advance" means an Advance denominated in GBP.

 

“Governmental Authority” means, with respect to any Person, any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any body or entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person.

 

“Governmental Plan” has the meaning assigned to that term in Section 4.01(x).

 

“Grant” or “Granted” means to grant, bargain, sell, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over and confirm. A Grant of the Collateral, or of any other instrument, shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including (solely after the occurrence and continuance of an Event of Default), the immediate continuing right to claim for, collect, receive and receipt for principal and interest payments in respect of the Collateral, and all other monies payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

 

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“Increased Amount Date” has the meaning assigned to that term in Section 2.21.

 

“Increased Costs” means any amounts required to be paid by the Borrower to an Affected Party pursuant to Section 2.10.

 

“Increasing Lender” has the meaning assigned to that term in Section 2.21.

 

“Indebtedness” means:

 

(a)           with respect to any Obligor under any Loan Asset, without duplication, (i) all obligations of such entity for borrowed money or with respect to deposits or advances of any kind, (ii) all obligations of such entity evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such entity under conditional sale or other title retention agreements relating to property acquired by such entity, (iv) all obligations of such entity in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (v) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such entity, whether or not the indebtedness secured thereby has been assumed, (vi) all guarantees by such entity of indebtedness of others, (vii) all Capital Lease Obligations of such entity, (viii) all obligations, contingent or otherwise, of such entity as an account party in respect of letters of credit and letters of guaranty and (ix) all obligations, contingent or otherwise, of such entity in respect of bankers’ acceptances, in each case, excluding (to the extent not included in the definition of “Indebtedness” in the Underlying Instruments or included in the calculation of Senior Leverage Ratio or Total Leverage Ratio) (a) letters of credit, to the extent undrawn or otherwise cash collateralized, bankers’ acceptances and surety bonds, whether or not matured (unless such indebtedness constitutes drawn and unreimbursed amounts), (b) the principal balance (including capitalized interest if applicable) of holdco notes, seller notes and convertible notes that constitute subordinated indebtedness, (c) earn-outs and similar deferred purchase price, but only so long as such earn-outs and similar deferred purchase price remain contingent in nature or, if no longer contingent in nature, does not remain past due for more than ten (10) Business Days following the due date therefor, (d) working capital and similar purchase price adjustments in connection with acquisitions not prohibited hereunder, (e) royalty payments made in the ordinary course of business in respect of licenses (to the extent such licenses are otherwise permitted), (f) accruals for payroll and other non-interest bearing liabilities incurred in the ordinary course of business, (g) deferred rent obligations, (h) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (i) all obligations of such Person under commodity purchase or option agreements or other commodity price hedging arrangements, in each case whether contingent or matured, (j) all obligations of such Person under any foreign exchange contract, currency swap agreement, interest rate swap, cap or collar agreement or other similar agreement or arrangement designed to alter the risks of that Person arising from fluctuations in currency values or interest rates, in each case whether contingent or matured, and (k) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any disqualified stock in such Person or any other Person, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

 

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(b)           for all other purposes, with respect to any Person at any date, (i) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (iv) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (v) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the indebtedness secured thereby has been assumed, (vi) all guarantees by such Person of indebtedness of others, (vii) all Capital Lease Obligations of such Person, (viii) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (ix) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, but expressly excluding any obligation of such Person to fund any Loan Asset constituting a Delayed Draw Loan Asset.

 

“Indemnified Amounts” has the meaning assigned to that term in Section 8.01.

 

“Indemnified Party” has the meaning assigned to that term in Section 8.01.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

 

“Indemnifying Party” has the meaning assigned to that term in Section 8.04.

 

“Independent Manager” means a natural person who, (a) for the five (5)-year period prior to his or her appointment as Independent Manager, has not been, and during the continuation of his or her service as Independent Manager is not: (i) an employee, director, stockholder, member, manager, partner or officer of a Loan Party or any of its respective Affiliates (other than his or her service as an Independent Manager of such Loan Party or other Affiliates that are structured to be “bankruptcy remote”); (ii) a customer or supplier of a Loan Party or any of its Affiliates (other than his or her service as an Independent Manager of such Loan Party or other Affiliates that are structured to be “bankruptcy remote”); or (iii) any member of the immediate family of a person described in (i) or (ii), and (b) has prior experience as an Independent Manager for a corporation or limited liability company whose charter documents required the unanimous consent of all Independent Managers thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy.

 

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“Index” means the S&P/LSTA U.S. Leveraged Loan 100 Index, any successor index thereto or any comparable nationally recognized U.S. leveraged loan index.

 

“Indorsement” has the meaning specified in Section 8-102(a)(11) of the UCC, and “Indorsed” has a corresponding meaning.

 

“Industry Classification” means any of the industry categories set forth in Schedule V hereto, including any modifications that may be made thereto or additional categories that may be subsequently established by reference to the September 30, 2018 S&P Dow Jones Indices and MSCI Inc. Global Industry Classification Standard; provided that the Administrative Agent has provided its prior written consent to any such modification or additional category.

 

“Initial Advance” means the first Advance made pursuant to Article II.

 

“Instrument” has the meaning specified in Section 9-102(a)(47) of the UCC.

 

“Insurance Policy” means, with respect to any Loan Asset, an insurance policy covering liability and physical damage to, or loss of, the Related Collateral.

 

”Interest Collection Subaccount” means, collectively, (i) a sub-account (account number at the Account Bank) of the Collection Account entitled “Interest Collection Subaccount,” into which Interest Collections shall be segregated and (ii) each sub-account of the Collection Account of each Securitization Subsidiary into which Interest Collections shall be segregated.

 

“Interest Collections” means, with respect to any date of determination, without duplication, the sum of:

 

(a)           all payments of interest and delayed compensation (representing compensation for delayed settlement) received in cash by a Loan Party during the related Remittance Period on the Loan Assets, including the accrued interest received in connection with a sale thereof during the related Remittance Period;

 

(b)          all principal and interest payments received by a Loan Party during the related Remittance Period on Permitted Investments purchased with Interest Collections;

 

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(c)           all fees received by a Loan Party during the related Remittance Period; and

 

(d)           any equity contributions classified as Interest Collections by the contributing equityholder.

 

“Investment Criteria” means with respect to each Loan Asset acquired by the Borrower, compliance with each of the requirements set forth below:

 

(a)           no Event of Default or Unmatured Event of Default is continuing;

 

(b)          such Loan Asset is an Eligible Loan Asset;

 

(c)          there is no uncured Borrowing Base Deficiency (unless a Loan Asset is being acquired in connection with the cure of any Borrowing Base Deficiency); and

 

(d)           the Weighted Average Life Test is satisfied or, if not satisfied, would be maintained or improved;

 

provided that the acquisition of Non-Levered Loan Assets will not be required to comply with the Investment Criteria.

 

“Joinder Supplement” means an agreement among the Borrower, a Lender and the Administrative Agent in the form of Exhibit M (appropriately completed) delivered in connection with a Person becoming a Lender hereunder after the Closing Date.

 

“Lender” means (a) Morgan Stanley and (b) any Lender, and/or any other Person to whom a Lender assigns any part of its rights and obligations under this Agreement and the other Transaction Documents in accordance with the terms of Section 12.04.

 

“Lender Fee Letter” means each fee letter agreement that shall be entered into by and among the Borrower, the Servicer, the applicable Lender and/or the Administrative Agent in connection with the transactions contemplated by this Agreement.

 

“LIBOR” means, for any day during a Remittance Period, with respect to any Advance in Dollars or GBPs, as applicable (or portion thereof), the rate per annum (carried out to the fifth decimal place) equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Reuters Screen (or any applicable successor page) at approximately 11:00 a.m., London time on such day that displays an average ICE Benchmark Administration Interest Settlement Rate (such page currently being LIBOR01) for deposits in Dollars or GBPs, as applicable, with a term equivalent to one (1) month; provided that if such rate is not available at any such time for any reason (other than in connection with an Alternative Rate), then “LIBOR” with respect to any Advance in Dollars or GBPs, as applicable, the rate at which Dollar deposits of $5,000,000 or GBP deposits of £2,500,000, as applicable, and for a one (1)-month maturity are offered by the principal London office of the Administrative Agent or the principal London office of any bank reasonably selected by the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, on the applicable day (or, if such day is not a Business Day, on the immediately preceding Business Day); provided further that in the event that the rate as so determined above shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. Notwithstanding anything in the foregoing, if at any time while any Advance is outstanding the Administrative Agent reasonably determines that LIBOR is likely to cease to exist or be reported on the Reuters Screen, the Administrative Agent, the Borrower and the Servicer may amend this Agreement (without the consent of any other party hereto) to replace the “LIBOR” with an alternative rate, including any applicable spread adjustments thereto (the “Alternative Rate”) that gives due consideration to (x) any alternative rate proposed or recommended by the LSTA or the ARRC as the successor for LIBOR with respect to loans similar to the Eligible Loan Assets or (y) accepted market practice for secured transactions involving loans similar to the Eligible Loan Assets, and following such amendment all references herein to “LIBOR” will mean such Alternative Rate. LIBOR shall always be determined by the Administrative Agent, and such determination shall be conclusive absent manifest or demonstrable error.

 

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“Lien” means any mortgage or deed of trust, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, claim, preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale, lease or other title retention agreement, sale subject to a repurchase obligation, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing) or the filing of or agreement to give any financing statement perfecting a security interest under the UCC or comparable law of any jurisdiction.

 

“Loan Asset” means any leveraged or commercial loan acquired by a Loan Party, but excluding, as applicable, the Retained Interest and Excluded Amounts.

 

“Loan Asset Checklist” means an electronic or hard copy, as applicable, of a checklist delivered by or on behalf of the Borrower to the Collateral Custodian, for each Loan Asset, of all applicable Required Loan Documents to be included within the respective Loan File.

 

“Loan Asset Schedule” means the Loan Asset Schedule identifying the Loan Assets delivered by the Borrower or Servicer to the Collateral Custodian and the Administrative Agent. Each such schedule shall set forth the applicable information specified on Schedule IV, which shall also be provided to the Collateral Custodian in electronic format acceptable to the Collateral Custodian.

 

“Loan Assignment” has the meaning set forth in the applicable Purchase and Sale Agreement.

 

“Loan File” means, with respect to each Loan Asset, a file containing (a) each of the documents and items as set forth on the Loan Asset Checklist with respect to such Loan Asset and (b) copies of any other Records relating to such Loan Assets and Related Asset pertaining thereto.

 

“Loan Party” means, collectively and individually as the context requires, the Borrower and each Securitization Subsidiary party hereto.

 

“LSTA” means the Loan Syndications and Trading Association (or any successor organization thereto).

 

“Maintenance Covenant” means, as of any date of determination, a covenant by the Obligor of a Loan Asset to comply with one or more financial covenants during each reporting period applicable to such Loan Asset, whether or not any action by, or event relating to, the Obligor occurs after such date of determination; provided that a covenant that otherwise satisfies the definition hereof and only applies when amounts are outstanding under the related Loan Asset shall be a Maintenance Covenant.

 

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“Management Agreement” means the Second Amended and Restated Investment Advisory Agreement, dated August 5, 2014, by and between Golub Capital BDC, Inc. and GC Advisors LLC.

 

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U or X of the Federal Reserve Board.

 

“Material Adverse Effect” means, with respect to any event or circumstance, a material adverse effect on (a) the business, financial condition, operations, performance or properties of the Originator, the Servicer or any Loan Party, (b) the validity, enforceability or collectability of this Agreement or any other Transaction Document or the validity, enforceability or collectability of the Loan Assets generally or any material portion of the Loan Assets, (c) the rights and remedies of the Collateral Agent, the Collateral Custodian, the Account Bank, the Administrative Agent, any Lender and the Secured Parties with respect to matters arising under this Agreement or any other Transaction Document, (d) the ability of each of the Borrower, each Securitization Subsidiary, the Originator and the Servicer to perform their respective obligations under this Agreement or any other Transaction Document, or (e) the status, existence, perfection, priority or enforceability of the Collateral Agent’s lien on the Collateral Portfolio or any Securitization Subsidiary Collateral Portfolio. The occurrence of one or more Qualifying Value Adjustment Events with respect to the Loan Assets shall not be deemed to be the sole cause of a “Material Adverse Effect” hereunder.

 

“Materials of Environmental Concern” means any material, substance or waste that is listed, regulated, or otherwise defined as hazardous, toxic, radioactive, a pollutant or a contaminant (or words of similar regulatory intent or meaning) under applicable Environmental Law, or which could give rise to liability under any Environmental Law.

 

“Material Modification” means any amendment or waiver of, or modification or supplement with respect to, an Underlying Instrument governing an Eligible Loan Asset executed or effected on or after the Cut-Off Date for such Eligible Loan Asset (or, in the case of clause (d) below, a change to any other Indebtedness of the Obligor, as applicable) that is not consented to by the Administrative Agent in writing which:

 

(a)           reduces or forgives any or all of the principal amount due under such Eligible Loan Asset;

 

(b)           extends or delays the stated maturity date for such Eligible Loan Asset by more than three (3) calendar months;

 

(c)           waives one or more interest payments, permits any interest due in cash to be deferred or capitalized and added to the principal amount of such Eligible Loan Asset (other than any deferral or capitalization already allowed by the terms of the Underlying Instruments of any Eligible Loan Asset as of the Cut-Off Date) or reduces the amount of interest due (in each case, other than in connection with any prepayment);

 

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(d)          (i) contractually or structurally subordinates such Eligible Loan Asset by operation of a priority of payments, turnover provisions, the transfer of assets in order to limit recourse to the related Obligor or the granting of Liens on any Related Collateral, (ii) increases the commitment amount of any loan senior or pari passu with such Eligible Loan Asset other than in connection with any increase permitted by the related Underlying Instruments as of the related Cut-Off Date or (ii) the Obligor thereof incurs any additional Indebtedness under a separate loan facility which was not in place as of the Cut-Off Date which is senior to or pari passu with such Eligible Loan Asset;

 

(e)           substitutes, alters or releases any material portion of the Related Collateral securing such Eligible Loan Asset (excluding a release in connection with a payoff of all or a portion of such Eligible Loan Asset) and any such substitution, alteration or release, as determined in the sole discretion of the Administrative Agent, materially and adversely affects the value of such Eligible Loan Asset; or

 

(f)           amends, waives, forbears, supplements or otherwise modifies (i) the meaning of “Senior Leverage Ratio,” “Cash Interest Coverage Ratio,” “Total Leverage Ratio,” “EBITDA,” “Permitted Liens”, “Recurring Revenue”, “Debt-to-Recurring-Revenue Ratio” or any respective comparable terms in the Underlying Instruments for such Eligible Loan Asset (to the extent such financial covenants or terms are included in the Underlying Instruments) or (ii) any term or provision of such Underlying Instruments referenced in or utilized in the calculation of the “Senior Leverage Ratio,” “Cash Interest Coverage Ratio,” “Total Leverage Ratio,” “EBITDA,” “Permitted Liens”, “Recurring Revenue”, “Debt-to-Recurring-Revenue Ratio” or any respective comparable terms for such Eligible Loan Asset, in the case of either clause (i) or (ii) above, in a manner that, in the sole discretion of the Administrative Agent, is materially adverse to the Administrative Agent, any Lender or the value of such Eligible Loan Asset.

 

“Maximum Portfolio Advance Rate” means, as of any date of determination, (i) during the Revolving Period, the advance rate corresponding to the Diversity Score of the Loan Assets included in the Collateral as of such date, as set forth below and (ii) thereafter, the Weighted Average Advance Rate as of such date:

 

Diversity Score   Maximum Portfolio Advance Rate  
x ≤ 3.0     0 %
3.0 < x ≤ 5.0     25 %
5.0 < x ≤ 10.0     50 %
x > 10.0     62.5 %

 

“Measurement Date” means each of the following dates: (a) the Closing Date; (b) each Reporting Date occurring in a calendar month in which a Payment Date does not occur (a “Monthly Reporting Date”); (c) each Determination Date; (d) the last day of each Remittance Period; (e) the date as of which an Advance or reduction of the Advances Outstanding is requested; (f) the date as of which a release of Principal Collections is requested pursuant to Section 2.18; (g) the date of any Discretionary Sale described in Section 2.07(a); (h) the date as of which the Servicer obtains actual knowledge of a decrease in the Assigned Value of any Loan Asset if such knowledge is obtained prior to noon on such date or, otherwise, prior to noon on the next succeeding Business Day; (i) the last day of the Revolving Period; and (j) the date on which funds on deposit in the Principal Collection Subaccount are converted into another Eligible Currency pursuant to Section 2.17(f)(iii).

 

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“Minimum Equity Amount” means (a) as of any date of determination, the greater of (A) $45,000,000 and (B) the aggregate Adjusted Borrowing Value of all Eligible Loan Assets issued by each of the three (3) largest Obligors, as of such date of determination, and their respective Affiliates.

 

“Minimum Utilization” means (a) during the Ramp-Up Period, 0% (b) after the Ramp-Up Period but prior to the end of the Revolving Period, 65% of the Facility Amount, and (c) thereafter, 0%.

 

"Monthly Determination Date” means, with respect to each Monthly Reporting Date, the 10th Business Day preceding such Monthly Reporting Date.

 

“Moody’s” means Moody’s Investors Service, Inc. (or its successors in interest).

 

“Morgan Stanley” means Morgan Stanley Bank, N.A., and its successors and assigns.

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the applicable Person or any ERISA Affiliate of that Person contributed or had any obligation to contribute, or with respect to which such Person or ERISA Affiliate has any liability (whether actual or contingent).

 

"Net Purchased Loan Balance” means, as of any date of determination, an amount equal to (a) the aggregate Outstanding Balance of all Loan Assets acquired by any Loan Party prior to such date minus (b) the aggregate Outstanding Balance of all Loan Assets (other than Warranty Loan Assets and Non-Levered Loan Assets) repurchased or substituted by the Originator prior to such date.

 

“New Commitments” has the meaning assigned to that term in Section 2.21.

 

"No-Action Relief” means the no-action letter issued on September 7, 2018 by the staff of the Division of Investment Management by the Securities and Exchange Commission to Golub Capital BDC, Inc., Golub Capital Investment Corporation and GC Advisors LLC.

 

"No-Action Relief Assets” has the meaning assigned to that term in Section 2.14(a).

 

"Non-Approval Event” means, as of any date of determination, an event that (a) will be deemed to have occurred if the quotient of (i) the aggregate Outstanding Balance of the Loan Assets out of the last fifteen (15) Eligible Loan Assets (other than with respect to clause 1 of the definition thereof) submitted by the Borrower to the Administrative Agent which the Administrative Agent has rejected divided by (ii) the aggregate Outstanding Balance of such fifteen (15) Loan Assets, is greater than 50% and (b) will be continuing until the conditions set forth in clause (a) of this definition are no longer satisfied; provided that, until fifteen (15) Eligible Loan Assets have been submitted to the Administrative Agent by the Borrower, the ratio of clause (a)(i) over clause (a)(ii) shall be deemed to be zero.

 

“Non-Levered Loan Asset” has the meaning assigned to that term in Schedule II.

 

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“Noteless Loan” means a Loan Asset with respect to which the Underlying Instruments (a) do not require the Obligor to execute and deliver a promissory note to evidence the Indebtedness created under such Loan Asset or (b) require any holder of the Indebtedness created under such Loan Asset to affirmatively request a promissory note from the related Obligor (and none has been requested with respect to such Loan Asset held by a Loan Party).

 

“Notice of Borrowing” means an irrevocable written notice of borrowing from the Borrower to the Administrative Agent substantially in the form attached hereto as Exhibit D.

 

“Notice of Exclusive Control” has the meaning given to such term in the Control Agreement.

 

“Notice of Reduction” means a notice of a reduction of the Advances Outstanding pursuant to Section 2.16, substantially in the form attached hereto as Exhibit E.

 

“Obligations” means all present and future indebtedness and other liabilities and obligations (howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or due or to become due) of the Borrower or any Securitization Subsidiary to the Lenders, the Administrative Agent, the Account Bank, the Secured Parties, the Collateral Agent or the Collateral Custodian arising under this Agreement and/or any other Transaction Document and shall include, all liability for Yield and principal of the Advances Outstanding, Breakage Fees, Prepayment Premiums, indemnifications and other amounts due or to become due by the Borrower to the Lenders, the Administrative Agent, the Collateral Agent, the Collateral Custodian, the Secured Parties and the Account Bank under this Agreement and/or any other Transaction Document, including any Lender Fee Letter and costs and expenses payable by the Borrower to the Lenders, the Administrative Agent, the Account Bank, the Collateral Agent or the Collateral Custodian, including attorneys’ fees, costs and expenses, including interest, fees and other obligations that accrue after the commencement of an insolvency proceeding (in each case whether or not allowed as a claim in such insolvency proceeding).

 

“Obligor” means, with respect to a Loan Asset, the Person who is obligated to repay such Loan Asset (including, if applicable, a guarantor thereof), and whose assets are primarily relied upon by the Borrower at the time such Loan Asset was originated or purchased by the Borrower as the source of repayment of such Loan Asset.

 

“Obligor Information” means, with respect to any Obligor, (a) the legal name and tax identification number of such Obligor, (b) the jurisdiction in which such Obligor is domiciled, (c) the audited financial statements for such Obligor for the three prior fiscal years (or such shorter period of time that the Obligor has been in existence), (d) the Servicer’s internal credit memo with respect to the Obligor and the related Loan Asset, including explanation of any EBITDA adjustments and detailed projections of free cash flow through maturity, (e) any lender presentations and confidential information memorandum received by the Servicer, (f) the annual report for the most recent fiscal year of such Obligor, (g) a company forecast for such Obligor including plans related to capital expenditures, (h) the financials for the most recent fiscal quarter, (i) the business model, company strategy and names of known peers of such Obligor, (j) the shareholding pattern and details of the management team of such Obligor, (k) details of any banking facilities and the debt maturity schedule of such Obligor and (l) Underlying Instruments.

 

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“OFAC” means the U.S. Department of Treasury’s Office of Foreign Asset Control.

 

“Officer’s Certificate” means a certificate signed by the president, the secretary, an assistant secretary, the chief financial officer or any vice president, as an authorized officer, of any Person.

 

“Opinion of Counsel” means a customary written opinion of counsel, which opinion and counsel are acceptable to the Administrative Agent in its sole discretion.

 

“Originator” means Golub Capital BDC, Inc., a Delaware corporation, in its capacity as the Originator hereunder and as the seller under the Originator Purchase and Sale Agreement, together with its successors and assigns in such capacity.

 

“Originator Purchase and Sale Agreement” means that certain Purchase and Sale Agreement, dated as of the Closing Date, between the Originator, as the seller, and the Borrower, as the purchaser.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Advance or Transaction Document).

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Transaction Document.

 

“Outstanding Balance” means, as of any date of determination, (a) if a Loan Asset is denominated and payable in Dollars as of such date, the outstanding principal balance of such Loan Asset, and (b) if a Loan Asset is denominated and payable in an Eligible Currency other than Dollars, the equivalent in Dollars of the outstanding principal balance of such Loan Asset as of such date, determined by the Servicer using the Spot Rate (or, for purposes of daily reporting by the Collateral Agent, the Spot Rate as determined by the Collateral Agent pursuant to clause (y) of the definition thereof), in each case exclusive of any PIK Interest or accrued interest on such Loan Asset as of such date; provided that, for purposes of calculating the “Outstanding Balance” of any PIK Loan Asset, principal payments received on such Loan Asset shall first be applied to reducing or eliminating any outstanding PIK Interest or accrued interest.

 

“Pari Passu Provisions” means, in relation to any amount payable pursuant to Section 2.04:

 

(i)            (v) in the case of any item (or items) ranking pari passu denominated in Dollars, the Borrower shall use an amount of Dollars from the Available Collections to make payments in Dollars to meet such item or items, (w) in the case of any item (or items) ranking pari passu denominated in Euro, the Borrower shall use an amount of Euro from the Available Collections to make payments in Euro to meet such item or items, (x) in the case of any item (or items) ranking pari passu denominated in GBP, the Borrower shall use an amount of GBP from the Available Collections to make payments in GBP to meet such item or items, (y) in the case of any item (or items) ranking pari passu denominated in CAD, the Borrower shall use an amount of CAD from the Available Collections to make payments in CAD to meet such item or items and (z) in the case of any item (or items) ranking pari passu denominated in AUD, the Borrower shall use an amount of AUD from the Available Collections to make payments in AUD to meet such item or items;

 

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(ii)           (x) if there is an insufficient aggregate amount comprised in the Available Collections to meet any such item (or items) ranking pari passu denominated in Dollars, the Borrower shall exchange a sufficient amount denominated in an Eligible Currency other than Dollars from the Available Collections, if such is available after application of any amounts in such Eligible Currency in respect of any items ranking pari passu subject to and in accordance with Section 2.04, into Dollars at the Spot Rate to meet such item or items, (y) if there is an insufficient aggregate amount comprised in the Available Collections to meet any such item (or items) ranking pari passu denominated in an Eligible Currency other than Dollars, the Borrower shall exchange a sufficient amount denominated in Dollars from the Available Collections, if such is available after application of any Dollar amounts in respect of any items ranking pari passu subject to and in accordance with Section 2.04, into such Eligible Currency at the Spot Rate to meet such item or items, or (z) if there is an insufficient aggregate amount comprised in the Available Collections to meet any such item (or items) ranking pari passu denominated in an Eligible Currency other than Dollars, the Borrower shall exchange a sufficient amount denominated in any other Eligible Currency other than such Eligible Currency and Dollars from the Available Collections, if such is available after application of any amounts in the other Eligible Currency in respect of any items ranking pari passu subject to and in accordance with Section 2.04, into such Eligible Currency at the Spot Rate to meet such item or items, in the case of (x), (y) and (z), subject to such exchange being sufficient to pay any remaining item (or items) ranking pari passu denominated in (in the case of (x)) Dollars or (in the case of (y) or (z)) an Eligible Currency other than Dollars, and provided that where such amounts are insufficient, all payments for such item (or items) ranking pari passu shall be made in accordance with clause (iii) below); and

 

(iii)          if there is an insufficient aggregate amount in the Available Collections to meet all items ranking pari passu in full, then the relevant shortfall shall be borne proportionately between such items, and in such circumstances, the Available Collections (determined in Dollars, with amounts in an Eligible Currency other than Dollars converted into Dollars by the Servicer at the Spot Rate) to be applied in respect of such items ranking pari passu shall be applied in respect of such items, pro rata (based on the percentage of the aggregate amount payable in respect of all such items represented by each such item, in each case, determined in Dollars, with amounts in an Eligible Currency other than Dollars converted into Dollars by the Servicer at the Spot Rate).

 

“Participant Register” has the meaning set forth in Section 12.04(a).

 

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“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56 (signed into law October 26, 2001).

 

“Payment Date” means the 23rd calendar day of each January, April, July and October, unless such day is not a Business Day, in which case the following Business Day, commencing in April, 2019; provided that the final Payment Date shall occur on the Collection Date.

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

“Pension Plan” means an “employee pension benefit plan” as such term is defined in Section 3(2) of ERISA, other than a Multiemployer Plan, that is subject to Title IV or ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate of the Borrower or to which the Borrower or any ERISA Affiliate of the Borrower contributes or has an obligation to contribute, or has any liability (whether actual or contingent).

 

“Permitted Investments” means, as of any date of determination:

 

(a)           direct interest bearing obligations of, and interest bearing obligations guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality of the United States, the obligations of which are backed by the full faith and credit of the United States;

 

(b)          demand or time deposits in, certificates of deposit of, demand notes of, or bankers’ acceptances issued by any depository institution or trust company organized under the laws of the United States or any State thereof (including any federal or state branch or agency of a foreign depository institution or trust company) and subject to supervision and examination by federal and/or state banking authorities (including, if applicable, the Collateral Agent, the Collateral Custodian or the Administrative Agent or any agent thereof acting in its commercial capacity); provided that the short-term unsecured debt obligations of such depository institution or trust company at the time of such investment are rated at least “A-1” by S&P and “P-1” by Moody’s;

 

(c)           commercial paper that (i) is payable in an Eligible Currency and (ii) is rated at least “A-1” by S&P and “P-1” by Moody’s; and

 

(d)          units of money market funds rated in the highest credit rating category by any nationally recognized statistical rating organization, including S&P and Moody’s.

 

No Permitted Investment shall have an “f,” “r,” “p,” “pi,” “q,” “sf” or “t” subscript affixed to its S&P rating. Any such investment may be made or acquired from or through the Collateral Agent or the Administrative Agent or any of their respective Affiliates, or any entity for whom the Collateral Agent, the Administrative Agent, the Account Bank, the Collateral Custodian or any of their respective Affiliates provides services and receives compensation (so long as such investment otherwise meets the applicable requirements of the foregoing definition of Permitted Investment at the time of acquisition). The Collateral Agent and Collateral Custodian shall have no obligation to determine or oversee compliance with the foregoing.

 

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“Permitted Liens” means any of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) Liens for state, municipal or other local Taxes if such Taxes shall not at the time be due and payable or if a Person shall currently be contesting the validity thereof in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of such Person, (b) Liens imposed by law, such as materialmen’s, warehousemen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens, arising by operation of law in the ordinary course of business for sums that are not overdue or are being contested in good faith, (c) with respect to agented Loan Assets, security interests, liens and other encumbrances in favor of the lead agent, the collateral agent or the paying agent on behalf of all holders of indebtedness of such Obligor under the related facility, (d) with respect to any Loan Assets, restrictions on transfer set forth in the applicable Underlying Instrument and (e) Liens granted pursuant to or by the Transaction Documents.

 

"Permitted Seller” means any subsidiary of Golub Capital BDC, Inc.

 

“Person” means an individual, partnership, corporation (including a statutory or business trust), limited liability company, joint stock company, trust, unincorporated association, sole proprietorship, joint venture, government (or any agency or political subdivision thereof) or other entity.

 

“PIK Interest” means interest accrued on a Loan Asset that is added to the principal amount of such Loan Asset instead of being paid as cash interest as it accrues.

 

“PIK Loan Asset” means a Loan Asset which provides for a portion of the interest that accrues thereon to be added to the principal amount of such Loan Asset for some period of time prior to such Loan Asset requiring the current cash payment of such previously capitalized interest, which cash payment shall be treated as an Interest Collection at the time it is received and which does not have a required all in current cash payment of at least 3.0% per annum.

 

"Pledge Agreement" means the Pledge Agreement among the Borrower, each Securitization Subsidiary and the Collateral Agent pursuant to which the Borrower pledges all of the Capital Stock owned by it in each Securitization Subsidiary to the Collateral Agent for the benefit of the Secured Parties.

 

“Politically Exposed Person” means a natural person currently or formerly entrusted with a senior public role or function (e.g., a senior official in the executive, legislative, military, administrative, or judicial branches of government), an immediate family member of a prominent public figure, a known close associate of a prominent public figure, or any corporation, business or other entity that has been formed by, or for the benefit of, a prominent public figure. Immediate family members include family within one-degree of separation of the prominent public figure (e.g., spouse, parent, sibling, child, step-child, or in-law). Known close associates include those widely- and publicly-known close business colleagues and personal advisors to the prominent public figure, in particular financial advisors or persons acting in a fiduciary capacity.

 

“Post-Specified Period” means the period from and including JanuaryMarch 18, 2021 to but excluding July 16,September 17, 2021.

 

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“Prepayment Premium” means, in the event that this Agreement is terminated or the Facility Amount is permanently reduced, in each case, pursuant to Section 2.16(b), prior to the one (1) year anniversary of the Closing Date, an amount equal to 101.0% of either (x) the Facility Amount, in the case of such termination, or (y) the amount of such reduction, in the case of such permanent reduction of the Facility Amount and, in each case, such amounts shall be payable pro rata to each Lender at the time of such termination or such reduction, as applicable; provided that the Prepayment Premium shall be calculated without giving effect to the proviso in the definition of “Facility Amount.”

 

“Principal Collection Subaccount” means, collectively, (i) a sub-account (account number at the Account Bank) of the Collection Account entitled “Principal Collection Subaccount,” into which Principal Collections shall be segregated and (ii) each sub-account of the Collection Account of each Securitization Subsidiary into which Principal Collections shall be segregated.

 

“Principal Collections” means with respect to any date of determination, all amounts received by a Loan Party during the related Remittance Period that do not constitute Interest Collections and any other amounts that have been designated as Principal Collections pursuant to the terms of this Agreement (but not including the proceeds of any liquidations, sales, dispositions or securitizations of Non-Levered Loan Assets that the Servicer directs to be deposited into the Contribution Account).

 

“Pro Rata Share” means, with respect to each Lender, the percentage obtained by dividing the Commitment of such Lender (or, following the termination thereof, the outstanding principal amount of all Advances of such Lender), by the aggregate Commitments of all the Lenders (or, following the termination thereof, the aggregate Advances Outstanding).

 

“Proceeds” means, with respect to any property included in the Collateral, all property that is receivable or received when such property is collected, sold, liquidated, foreclosed, exchanged, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes all rights to payment with respect to such Collateral including any insurance relating thereto.

 

 “Purchase and Sale Agreement” means, individually or collectively as the context requires, (a) the Originator Purchase and Sale Agreement and (b) each Securitization Subsidiary Purchase and Sale Agreement.

 

“Purchase Price” means, with respect to any Loan Asset, an amount (expressed as a percentage of par) equal to the greater of (a) zero and (b) the actual price paid by a Loan Party in the applicable Eligible Currency for such Loan Asset; provided that if the actual price paid by such Loan Party for such Loan Asset (i) is greater than or equal to 97% of par and such Loan Party purchased such Loan Asset within three months of the origination of such Loan Asset or (ii) exceeds 100% of par, in each case, the Purchase Price shall be deemed to be 100%.

 

“Qualifying Value Adjustment Event” has the meaning assigned to that term in clause (iii)(1) of the definition of Assigned Value.

 

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“Ramp-Up Period” means the periods beginning on (a) the Closing Date and (b) the closing date of each Existing Golub BDC CLO approved in writing by the Administrative Agent in its sole discretion and, in each case, ending on the earlier to occur of (x) the four-month anniversary thereof and (y) the first date thereafter on which the Borrowing Base on such date equals the Facility Amount.

 

“Recipient” means the Administrative Agent and any Lender, as applicable.

 

“Records” means all documents relating to the Loan Assets, including books, records and other information executed in connection with the origination or acquisition of the Loan Assets or maintained with respect to the Loan Assets and the related Obligors that a Loan Party, the Originator or the Servicer have generated, in which such Loan Party has acquired an interest pursuant to a Purchase and Sale Agreement or in which such Loan Party or the Originator have otherwise obtained an interest (excluding, for the avoidance of doubt, any investment committee memorandums or related material utilized by any of the Originator, the Servicer or such Loan Party in connection with the origination or acquisition of such Loan Asset).

 

“Recurring Revenue” means, with respect to any Eligible Loan Assets that are Recurring Revenue Loans, the definition of annualized recurring revenue used in the Underlying Instruments for each such Eligible Loan Asset, or any comparable term for “Revenue”, “Recurring Revenue” or “Adjusted Revenue” in the Underlying Instruments for each such Eligible Loan Asset or if there is no such term in the Underlying Instruments, all recurring maintenance, service, support, hosting, subscription and other revenues identified by the Servicer (including, without limitation, software as a service subscription revenue), of the related Obligor and any of its parents or Subsidiaries that are obligated with respect to such Eligible Loan Asset pursuant to its Underlying Instruments (determined on a consolidated basis without duplication in accordance with GAAP).

 

“Recurring Revenue Loan” means an Eligible Loan Asset that is underwritten based on the Recurring Revenue of the Obligor, as determined by the Administrative Agent in its sole discretion after consultation with the Servicer and designated as such in the related Approval Notice.

 

"Redetermination Request” means a request of the Borrower (or the Servicer on its behalf) to the Administrative Agent for the Administrative Agent to determinate a new Advance Rate or Assigned Value for a Loan Asset following a Redetermination Event.

 

"Redetermination Event” means an event identified as such by the Borrower (or the Servicer on its behalf on a Redetermination Request).

 

“Register” has the meaning assigned to that term in Section 2.13.

 

“Registered” means a debt obligation that is in registered form for U.S. federal income tax purposes within the meaning of Section 881(c)(2)(B)(i) of the Code and the Treasury regulations promulgated thereunder and that is issued after July 18, 1984; provided that a certificate of interest in a grantor trust shall not be treated as Registered unless each of the obligations or securities held by the trust was issued after that date.

 

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"Related Asset" means, with respect to each Loan Asset, all right, title and interest of the Borrower in and to:

 

(a)            any amounts on deposit in any deposit accounts, cash reserve, collection, custody or lockbox accounts securing the Loan Assets;

 

(b)            all rights with respect to the Loan Assets to which the Originator and/or the Borrower, as applicable, is entitled as lender under the applicable Underlying Instruments;

 

(c)            the Controlled Accounts, together with all cash and investments in each of the foregoing other than amounts earned on investments therein;

 

(d)            any Related Collateral securing a Loan Asset, all payments paid in respect thereof and all monies due or to become due and paid in respect thereof after the applicable Cut-Off Date and all liquidation proceeds;

 

(e)            all Required Loan Documents, the Loan Files related to any Loan Asset, any Records, and the documents, agreements, and instruments included in the Loan Files or Records;

 

(f)            all Insurance Policies with respect to any Loan Asset;

 

(g)            all Liens, guaranties, indemnities, warranties, letters of credit, accounts, bank accounts and property subject thereto from time to time purporting to secure or support payment of any Loan Asset, together with all UCC financing statements, mortgages or similar filings signed or authorized by an Obligor relating thereto;

 

(h)            all records (including computer records) with respect to the foregoing; and

 

(i)             all collections, income, payments, proceeds and other benefits of each of the foregoing.

 

"Related Collateral" means, with respect to a Loan Asset, any property or other assets designated and pledged or mortgaged as collateral to secure repayment of such Loan Asset, as applicable, including, mortgaged property and/or a pledge of the stock, membership or other ownership interests in the related Obligor and all Proceeds from any sale or other disposition of such property or other assets.

 

"Release Date" has the meaning set forth in Section 2.07(c).

 

"Remittance Period" means, (a) as to the initial Payment Date, the period beginning on, and including, the Closing Date and ending on, and including, the Determination Date immediately preceding such Payment Date and (b) as to any subsequent Payment Date, the period beginning, and including, on the first day after the most recently ended Remittance Period and ending on, and including, the Determination Date immediately preceding such Payment Date, or, with respect to the final Remittance Period, the Collection Date.

 

"Replacement Servicer" has the meaning assigned to that term in Section 6.01(c).

 

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"Reporting Date" means with respect to any calendar month, the 23rd day of such calendar month, commencing in February 2019; provided that, in each case, if such day is not a Business Day then the Reporting Date shall occur on the following Business Day.

 

“Reporting Period” means each period beginning on the day following the preceding Monthly Determination Date or Determination Date, as applicable and ending on the earliest of the next Determination Date or Monthly Determination Date.

 

"Required Lenders" means (a) Morgan Stanley (as a Lender hereunder) and its successors and assigns and (b) the other Lenders, if any, representing, together with Morgan Stanley, an aggregate of at least 51% of the aggregate Commitments of the Lenders then in effect.

 

"Required Loan Documents" means, for each Loan Asset, the following documents or instruments, all as specified on the related Loan Asset Checklist:

 

(a)           (i) the original executed promissory note or, in the case of a lost note, a copy of the executed underlying promissory note accompanied by an original executed affidavit and indemnity endorsed by the Borrower in blank (and an unbroken chain of endorsements from each prior holder of such promissory note to the Borrower), or (ii) if such promissory note is not issued in the name of the Borrower or is a Noteless Loan, an executed copy of each assignment and assumption agreement, transfer document or instrument relating to such Loan Asset evidencing the assignment of such Loan Asset from any prior third party owner thereof to the Borrower and from the Borrower in blank; and

 

(b)           copies of the executed (i) guaranty, (ii) Underlying Instrument, (iii) if applicable, acquisition agreement (or similar agreement) and (iv) security agreement or other agreement that secures the obligations represented by such Loan Asset, in each case as set forth on the Loan Asset Checklist.

 

“Reset Cut-Off Date” means the date following the submission of a Redetermination Request on which the Administrative Agent assigns a new Assigned Value or Advance Rate in connection with an Eligible Loan Asset.

 

"Responsible Officer" means, with respect to any Person, any duly authorized officer of such Person (or in the case of the Borrower, the Servicer, the Originator or any Affiliate thereof, any duly authorized senior officer) with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any other duly authorized officer of such Person to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject.

 

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"Restricted Junior Payment" means (a) any dividend or other distribution, direct or indirect, on account of any class of membership interests of the Borrower now or hereafter outstanding, except a dividend paid solely in interests of that class of membership interests or in any junior class of membership interests of the Borrower (other than dividends or distributions of amounts on deposit in the Contribution Account that were not utilized to acquire Non-Levered Loan Assets or the proceeds of the sale of a Non-Levered Loan Asset; (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any class of membership interests of the Borrower now or hereafter outstanding, (c) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire membership interests of the Borrower now or hereafter outstanding, and (d) any payment of management fees by the Borrower. For the avoidance of doubt, (x) payments and reimbursements due to the Servicer in accordance with this Agreement or any other Transaction Document do not constitute Restricted Junior Payments, (y) (I) distributions by the Borrower to holders of its membership interests of Loan Assets or of cash or other proceeds relating thereto which have been substituted by the Borrower in accordance with this Agreement, (II) distributions by the Borrower of amounts received in accordance with Section 2.04 or with respect to any Advance, or (III) distributions that constitute BDC Tax Distributions and (z) (I) returns of amounts deposited into the Contribution Account to the Originator, which amounts were not utilized to acquire Non-Levered Loan Assets or (II) distributions of the proceeds of the sale of a Non-Levered Loan Asset, shall, in each case, not constitute Restricted Junior Payments.

 

"Retained Interest" means, with respect to any Loan Asset that is transferred to a Loan Party, (a) all of the obligations, if any, of the agent(s) under the documentation evidencing such Loan Asset and (b) the applicable portion of the interests, rights and obligations under the documentation evidencing such Loan Asset that relate to such portion(s) of the indebtedness and interest in other obligations that are owned by another lender.

 

“Revenue” means, with respect to any Eligible Loan Assets that are Recurring Revenue Loans, the definition of annualized recurring revenue used in the Underlying Instruments for each such Eligible Loan Asset, or any comparable term for “Revenue” or “Adjusted Revenue” in the Underlying Instruments for each such Eligible Loan Asset; provided that if there is no such term in the Underlying Instruments, revenue for the related Obligor and any of its parents or Subsidiaries that are obligated with respect to such Eligible Loan Asset pursuant to its Underlying Instruments (determined on a consolidated basis without duplication in accordance with GAAP) for the most recent four fiscal quarter period for which financial statements have been delivered.

 

"Review Criteria" has the meaning assigned to that term in Section 11.02(b)(i).

 

"Revolving Loan" means a loan that is a line of credit or contains an unfunded commitment arising from an extension of credit to an Obligor, pursuant to the terms of which amounts borrowed may be repaid and subsequently reborrowed.

 

"Revolving Period" means the period commencing on the Closing Date and ending on the earlier to occur of (a) the Commitment Termination Date and (b) the Facility Maturity Date.

 

"S&P" means Standard & Poor's Ratings Group, a Standard & Poor's Financial Services LLC business (or its successors in interest).

 

"Sanctions" means economic and trade sanctions administered or enforced by any of the following authorities: OFAC, the U.S. Department of State, the European Union, Her Majesty's Treasury (United Kingdom) or the United Nations Security Council.

 

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“Screen Rate” means with respect to (a) Dollar Advances and GBP Advances, LIBOR, (b) with respect to Euro Advances, EURIBOR, (c) CAD Advances, CDOR and (d) AUD Advances, BBSW; provided that, upon and during the occurrence of a Currency Disruption Event, with respect to the Advances affected by such Currency Disruption Event, the applicable “Screen Rate” shall be the Designated Base Rate.

 

"Second Lien Loan" means any Loan Asset (a) that is secured by a valid and perfected Lien on substantially all of the Obligor's assets constituting Related Collateral for such Loan Asset, subject only to the prior Lien provided to secure the obligations under a "first lien" loan and any other expressly permitted Liens under the Underlying Instrument for such Loan Asset, including any "permitted liens" as defined in such Underlying Instrument, or such comparable term if "permitted liens" is not defined therein, (b) that, except for the express lien priority provisions under the documentation of the “first lien” lenders (including super priority facilities permitted thereunder, if any), is either senior to, or pari passu with, all other Indebtedness of such Obligor, and (c) that the Servicer determines in accordance with the Servicing Standard that the value of the Related Collateral (or the enterprise value and ability to generate cash flow) on or about the time of origination equals or exceeds the Outstanding Balance of the Loan Asset plus the aggregate outstanding balances of all other Indebtedness of equal or greater seniority secured by the same Related Collateral (including, without limitation, the outstanding principal balance of the "first lien" loan).

 

"Secured Obligations" has the meaning assigned to that term in Section 2.12(a).

 

"Secured Party" means each of the Administrative Agent, each Lender, each Affected Party, each Indemnified Party, the Collateral Custodian, the Collateral Agent, the Account Bank and, with respect to any expenses incurred in connection with its duties hereunder, the Servicer.

 

"Securities Act" means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Securitization” means any private or public term or conduit securitization transaction undertaken by any Loan Party that is secured, directly or indirectly, primarily by Loan Assets currently or formerly owned by a Loan Party or any portion thereof or any interest therein released from the Lien of this Agreement, including, without limitation, any collateralized loan obligation or collateralized debt obligation offering or other asset securitization or term facility, for which Morgan Stanley Senior Funding, Inc. or an Affiliate thereof acts as an underwriter or placement agent.

 

“Securitization Subsidiary” means an entity wholly-owned by the Borrower formed for the sole purpose of owning Loan Assets in anticipation of a Securitization. For the avoidance of doubt, no Person shall be a Securitization Subsidiary after such Person completes a Securitization and the Lien on its Securitization Subsidiary Collateral Portfolio is released in accordance with the terms hereof.

 

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"Securitization Subsidiary Collateral Portfolio" means, with respect to any Securitization Subsidiary party hereto, all right, title, and interest (whether now owned or hereafter acquired or arising, and wherever located) of such Securitization Subsidiary in, to and under all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, contract rights, general intangibles, instruments, certificates of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, commercial tort claims, deposit accounts, inventory, investment property, letter-of-credit rights, software, supporting obligations, accessions, or other property of such Securitization Subsidiary, including, all right, title and interest of such Securitization Subsidiary in the following (in each case excluding the Retained Interest and the Excluded Amounts):

 

(i)           the Loan Assets, and all monies due or to become due in payment under such Loan Assets on and after the related Cut-Off Date, including, but not limited to, all Available Collections;

 

(ii)           the Related Assets with respect to the Loan Assets referred to in clause (i) above;

 

(iii)          the Controlled Accounts and all Permitted Investments purchased with funds on deposit in the Controlled Accounts;

 

(iv)          the Assigned Documents;

 

(v)           each Purchase and Sale Agreement; and

 

(vi)          all income and Proceeds of the foregoing.

 

The “Securitization Subsidiary Collateral Portfolio” shall not include any Non-Levered Loan Asset, the Contribution Account or the funds on deposit therein.

 

"Securitization Subsidiary Joinder" means an agreement among the Borrower, a Securitization Subsidiary and the Administrative Agent in the form of Exhibit N (appropriately completed) delivered in connection with a Person becoming a Securitization Subsidiary hereunder after the Closing Date.

 

"Securitization Subsidiary Purchase and Sale Agreement" means each Purchase and Sale Agreement, in form and substance acceptable to the Administrative Agent in its sole discretion, among the Borrower, as the Seller, and the applicable Securitization Subsidiary, as the purchaser.

 

"Senior Leverage Ratio" means, with respect to any Loan Asset (other than a Recurring Revenue Loan) for any period, the meaning of "Senior Leverage Ratio" or any comparable term in the Underlying Instruments for each Loan Asset (subject to the exclusions in the definition of Indebtedness), and in any case that "Senior Leverage Ratio" or such comparable term is not defined in such Underlying Instruments, the ratio of (a) first lien senior secured (or such applicable lien or applicable level within the capital structure) Indebtedness (including first lien last out loans) less Unrestricted Cash to (b) EBITDA, as calculated by the Servicer in accordance with the Servicing Standard using information from and calculations consistent with the relevant compliance statements and financial reporting packages provided by the relevant Obligor as per the requirements of the related Underlying Instruments.

 

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"Servicer" means, as of any date of determination, the Person then authorized, pursuant to Section 6.01 to service, administer, and collect on the Loan Assets and exercise rights and remedies in respect of the same.

 

"Servicer Certificate" has the meaning assigned to that term in Section 6.08(c).

 

"Servicer Default" means the occurrence of any one or more of the following events:

 

(a)           any failure by the Servicer to make any payment, transfer or deposit into the Collection Account (including with respect to bifurcation and remittance of Interest Collections and Principal Collections) or the Unfunded Exposure Account (other than Indemnities being disputed in good faith), as required by any Transaction Documents, which continues unremedied for a period of two (2) Business Days;

 

(b)           any failure by the Servicer to deliver any required Servicing Report on or before the date such report is required to be made or given under the terms of this Agreement and such failure continues unremedied for a period of two (2) Business Days;

 

(c)           any Change of Control with respect to the Servicer, any merger of the Servicer into another Person (where the Servicer is not a surviving entity) or any assignment of the Servicer's role without the prior written consent of the Administrative Agent in its sole discretion shall occur;

 

(d)           any assignment of the rights or obligations as "Servicer" hereunder to any Person without the prior written consent of the Administrative Agent, which consent may be withheld by the Administrative Agent in its sole and absolute discretion;

 

(e)           any representation, warranty or certification made by the Servicer (in each case, solely in its capacity as Servicer) in any Transaction Document or in any certificate delivered pursuant to any Transaction Document, upon which the Administrative Agent or the Lenders have relied to their detriment, shall prove to have been incorrect when made, which has a Material Adverse Effect and continues to be unremedied for a period of thirty (30) days; provided that the delivery of a certificate or other report which corrects any inaccuracy contained in a previous report or certification shall be deemed to cure such inaccuracy as of the date of delivery of such updated report or certificate and any and all inaccuracies arising from continuation of such initial inaccurate report or certificate shall cure any breach or failure arising therefrom as of the date of such failure;

 

(f)            except as otherwise provided in this definition of "Servicer Default," any failure on the part of the Servicer (in each case, solely in its capacity as Servicer) duly to (i) observe or perform any other covenants or agreements of the Servicer set forth in this Agreement or the other Transaction Documents to which the Servicer is a party (including any delegation of the Servicer's duties that is not permitted by Section 6.01 of this Agreement) or (ii) comply with the Servicing Standard regarding the servicing of the Collateral Portfolio or any Securitization Subsidiary Collateral Portfolio, and, in each case, the same continues unremedied for a period of five (5) Business Days (if such failure can be remedied) after the earlier to occur of (x) the date on which written notice of such failure is given or (y) the date on which the Servicer acquires knowledge thereof;

 

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(g)           a Bankruptcy Event shall occur with respect to the Servicer;

 

(h)           (i) the rendering of one or more judgments, decrees or orders by a court or arbitrator of competent jurisdiction for the payment of money in excess individually or in the aggregate of $1,000,000 against the Servicer, and the Servicer shall not have either (a) discharged or provided for the discharge of any such judgment, decree or order in accordance with its terms or (b) perfected a timely appeal of such judgment, decree or order and caused the execution of same to be stayed during the pendency of the appeal; (ii) any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Servicer to enforce any such judgment; or (iii) the Servicer shall have made payments of amounts in excess of $1,000,000 in the settlement of any litigation, claim or dispute (excluding payments actually made from insurance proceeds);

 

(i)            an Event of Default shall occur and be continuing; or

 

(j)            any other event which has caused a Material Adverse Effect on the assets, liabilities, financial condition, prospects (whether financial or otherwise), business or operations of the Servicer or the ability of the Servicer to meet its obligations under the Transaction Documents to which it is a party.

 

"Servicer ERISA Event" means (a) with respect to a Pension Plan, any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than events for which the thirty (30) day notice period has been waived; (b) a withdrawal by the Servicer or any of its ERISA Affiliates from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as a termination under Section 4062(e) of ERISA; (c) the failure to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA), whether or not waived, with respect to a Pension Plan; (d) the failure to make any required contribution to a Multiemployer Plan; (e) the incurrence by the Servicer or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to a complete or partial withdrawal by the Servicer or any of its ERISA Affiliates from a Multiemployer Plan, written notification of the Servicer or any of its ERISA Affiliates concerning the imposition of any withdrawal liability, as such term is defined in Part I of Subtitle E of Title IV of ERISA, as a result of a complete or partial withdrawal from a Multiemployer Plan or written notification that a Multiemployer Plan is insolvent or is in reorganization within the meaning of Title IV of ERISA or in "endangered" or "critical" status (within the meaning of Section 432 of the Code or Section 305 of ERISA); (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (g) the filing under Section 4041(c) of ERISA of a notice of intent to terminate a Pension Plan, the treatment of a Pension Plan or Multiemployer Plan amendment as a termination under Section 4041 or Section 4041A of ERISA, or the receipt by the Servicer or any of its ERISA Affiliates from the PBGC of any notice relating to the intention to terminate a Pension Plan or Multiemployer Plan; (h) the imposition of any liability under Title IV of ERISA with respect to the termination of any Pension Plan or Multiemployer Plan, other than for the payment of plan contributions or PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Servicer or any of its ERISA Affiliates; or (i) the occurrence of a non-exempt prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) which could result in liability to the Servicer or any of its ERISA Affiliates.

 

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"Servicer Pension Plan" means an "employee pension benefit plan" as such term is defined in Section 3(2) of ERISA, other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Servicer or any ERISA Affiliate of the Servicer or to which the Servicer or any ERISA Affiliate of the Servicer contributes or has an obligation to contribute, or has any liability (whether actual or contingent).

 

"Servicer Removal Notice" has the meaning assigned to that term in Section 6.01(b).

 

"Servicing Fee" means the fee payable to the Servicer on each Payment Date in arrears in respect of each Remittance Period, which fee shall be equal to the product of (a) 0.50% per annum, (b) the arithmetic mean of the aggregate Outstanding Balance of all Eligible Loan Assets on the first day and on the last day of the related Remittance Period and (c) the actual number of days in such Remittance Period, divided by 360; provided that, in the sole discretion of the Servicer, the Servicer may, from time to time, waive all or any portion of the Servicing Fee payable on any Payment Date.

 

"Servicing Report" has the meaning assigned to that term in Section 6.08(b).

 

"Servicing Standard" means, with respect to any Loan Assets included in the Collateral, to service and administer such Loan Assets in accordance with Applicable Law, the terms of this Agreement, the Underlying Instruments and, to the extent consistent with the foregoing, with the same care, skill, prudence and diligence with which the Servicer services and administers loans for its own account or for the account of others.

 

"Similar Law" has the meaning assigned to that term in Section 4.01(x).

 

“SLA Threshold Amount” has the meaning assigned to that term in the definition of “Subject Loan Asset.”

 

"Solvent" means, as to any Person as of any date of determination, having a state of affairs such that all of the following conditions are met: (a) the fair value of the property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code; (b) the present fair saleable value of the property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in a business or a transaction, and does not propose to engage in a business or a transaction, for which such Person's property assets would constitute unreasonably small capital.

 

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"Specified Period" means the period from and including June 18, 2020 to but excluding JanuaryMarch 18, 2021.

 

“Spot Rate” means, as of any date of determination, with respect to the conversion of any Eligible Currency (other than Dollars), (x) for an actual currency exchange, the applicable currency Dollar spot rate obtained by the Servicer through customary banking channels including the Collateral Custodian’s own banking facilities or (y) for all other purposes, the applicable currency Dollar spot rate that appeared on the Bloomberg screen for such currency (A) if such date is a Determination Date, at the end of such date or (B) otherwise, at the end of the immediately preceding Business Day; provided that, solely with respect to the calculation of the Unused Fee on each day for the related Remittance Period and for the calculation in clause (b) of the definition of “Yield”, the Advances Outstanding in any Eligible Currency other than Dollars shall be converted at the foreign currency-dollar spot rate that appeared on the Bloomberg screen for such Eligible Currency as of the Determination Date immediately preceding such day.

 

"Standby Investment" means the Wells Fargo Institutional Money Market Account (Cusip 992925917).

 

"State" means one of the fifty states of the United States or the District of Columbia.

 

"Stated Maturity" means February 1, 2024.

 

"Structured Finance Obligation" means any obligation of a special purpose vehicle secured directly by, referenced to, or representing ownership of, a pool of receivables or other assets, including collateralized debt obligations and single asset repackages.

 

"Subject Loan Asset" means, as of any date of determination during the Specified Period, (I) any Eligible Loan Asset (a) with respect to which one or more Qualifying Value Adjustment Events have occurred and (b) with an origination date prior to the Specified Period or (II) any other Eligible Loan Asset designated as a Subject Loan Asset by the Borrower with the consent of the Administrative Agent in its sole discretion; provided that, (i) subject to clause (ii), if, during the Specified Period, the aggregate Outstanding Balance of all Subject Loan Assets exceeds 50.0% of the sum of (x) the aggregate Outstanding Balance of all Eligible Loan Assets plus (y) aggregate Principal Collections on deposit in the Controlled Accounts as of such date (the sum of clauses (x) and (y), the “SLA Threshold Amount”), and subsequently is reduced to an amount less than 50.0% of the SLA Threshold Amount, then additional Eligible Loan Assets satisfying the requirements of this definition may be designated as Subject Loan Assets in the order in which the related Qualifying Value Adjustment Events occur with respect to such Loan Assets, in each case, at the discretion of the Borrower, (ii) if on any date of determination, multiple Eligible Loan Assets become subject to Qualifying Value Adjustments Events on the same date of determination such that the aggregate Outstanding Balance of all Subject Loan Assets would exceed 50.0% of the SLA Threshold Amount, then (A) the Borrower shall determine which such Eligible Loan Assets will constitute Subject Loan Assets so long as the Borrower provides the Administrative Agent with written notice of such determination within three (3) Business Day of the date on which the Borrower provides the Administrative Agent with notice of the related Qualifying Value Adjustment Event in respect of the Loan Asset it wishes to designate as a Subject Loan Asset pursuant to this clause (ii)(A) and (B) otherwise, the Administrative Agent, in its sole discretion, shall determine which such Eligible Loan Assets will constitute Subject Loan Assets and (iii) in the event that a portion of any single Eligible Loan Asset would cause the aggregate amount of Subject Loan Assets by Outstanding Balance to exceed 50% of the SLA Threshold Amount, only the portion of such Eligible Loan Asset not in excess of 50% of the SLA Threshold Amount shall be deemed to be a Subject Loan Asset.

 

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Notwithstanding the foregoing, if, during the Specified Period, the aggregate Outstanding Balance of all Subject Loan Assets exceeds 50.0% of the SLA Threshold Amount, the Borrower may elect that one or more Subject Loan Assets no longer be classified as a Subject Loan Asset (although such designated Subject Loan Assets will remain subject to the decreased Advance Rate per the definition thereof); provided that (i) upon such election, the Administrative Agent may amend the Assigned Value for such Eligible Loan Asset in its sole discretion and (ii) the Borrower shall only be permitted to make such election in the order in which such Loan Assets were designated Subject Loan Assets beginning with the most recent such designation and in sequential order thereafter. At any time during the Specified Period, if the aggregate Outstanding Balance of all Subject Loan Assets is less than 50.0% of the SLA Threshold Amount, a Loan Asset that was previously a Subject Loan Asset prior to being re-designated by the Borrower pursuant to this paragraph may, at the Borrower’s election, be classified as a Subject Loan Asset again (for the avoidance of doubt, such Loan Asset would retain its then-current Assigned Value at the time of its re-designation as a Subject Loan Asset).

 

"Subsidiary" means with respect to a Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

 

"Substitute Eligible Loan Asset" means each Eligible Loan Asset Granted by a Loan Party to the Collateral Agent, on behalf of the Secured Parties, pursuant to Section 2.07(c)(ii).

 

"Synthetic Security" means a security or swap transaction that has payments associated with either payments of interest and/or principal on a reference obligation or the credit performance of a reference obligation.

 

"Target Portfolio Amount" means, $640,000,000.

 

"Tax Expense Cap" means, for any Payment Date, a per annum amount equal to $50,000.

 

"Taxes" means any present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), charges, assessments or fees of any nature (including interest, penalties, and additions thereto) that are imposed by any Governmental Authority.

 

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"Termination/Reduction Notice" means each notice required to be delivered by the Borrower in respect of any termination of this Agreement or any permanent reduction of the Facility Amount, in the form of Exhibit F.

 

"Total Leverage Ratio" means, with respect to any Loan Asset (other than a Recurring Revenue Loan) for any period, the meaning of "Total Leverage Ratio" or any comparable term in the Underlying Instruments for each Loan Asset (subject to the exclusions in the definition of Indebtedness), and in any case that "Total Leverage Ratio" or such comparable term is not defined in such Underlying Instruments, the ratio of (a) Indebtedness less Unrestricted Cash, to (b) EBITDA, as calculated by the Servicer in accordance with the Servicing Standard using information from and calculations consistent with the relevant compliance statements and financial reporting packages provided by the relevant Obligor as per the requirements of the related Underlying Instruments.

 

"Transaction Documents" means this Agreement, any Assignment and Acceptance, each Purchase and Sale Agreement, each Control Agreement, each Securitization Subsidiary Joinder, the Pledge Agreement, the Wells Fargo Fee Letter, each Lender Fee Letter and each document, instrument or agreement related to any of the foregoing.

 

"U.S. Tax Compliance Certificate" has the meaning assigned to that term in Section 2.11(g)(i)c.

 

"UCC" means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

 

"Underlying Instruments" means the loan agreement, credit agreement or other agreement pursuant to which a Loan Asset has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Loan Asset or of which the holders of such Loan Asset are the beneficiaries.

 

"Unfunded Exposure Account" means, collectively, (i) a trust account (account number at the Account Bank) entitled "Unfunded Exposure Account," in the name of the Borrower subject to the lien and control of the Collateral Agent for the benefit of the Secured Parties and (ii) each trust account established for a Securitization Subsidiary in the name of the Collateral Agent and under the sole dominion and control of the Collateral Agent for the benefit of the Secured Parties (it being understood, however, that the Servicer shall be able to request distributions and releases therefrom in accordance herewith); provided that the funds deposited therein (including any interest and earnings thereon) from time to time shall constitute the property and assets of the applicable Loan Party and such Loan Party shall be solely liable for any Taxes payable with respect to the Unfunded Exposure Account.

 

"Unfunded Exposure Amount" means, as of any date of determination, with respect to a Delayed Draw Loan Asset, an amount equal to the aggregate amount of all unfunded commitments associated with such Loan Asset as of such date.

 

“Unfunded Exposure Amount Shortfall” has the meaning assigned to that term in Section 2.02(f).

 

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“Unfunded Exposure Equity Amount” means, on any date of determination, an amount equal to:

 

(i)             for all Eligible Loan Assets which have any unfunded commitments, the aggregate sum of the products of (a) the Unfunded Exposure Amount for each such Eligible Loan Asset multiplied by (b) the difference of (x) 100% minus (y) the Advance Rate for each such Eligible Loan Asset;

 

plus

 

(ii)         for all Eligible Loan Assets which have any unfunded commitments, the aggregate sum of the products of (a) (x) 100% minus the Assigned Value for each such Loan Asset multiplied by (y) the Unfunded Exposure Amount of each such Loan Asset multiplied by (b) the Advance Rate for each such Eligible Loan Asset.

 

"United States" means the United States of America.

 

"United States Tax Person" means a "United States Person" as defined in Section 7701(a)(30) of the Code.

 

“Unitranche Loan” means any Loan Asset (a) that is secured by a valid and perfected first priority Lien on substantially all of the Obligor’s assets constituting Related Collateral for such Loan Asset, subject to expressly permitted Liens, including any “permitted liens” as defined in the Underlying Instrument for such Loan Asset or such comparable definition if “permitted liens” is not defined therein and (b) that provides that the payment obligation of the Obligor on such Loan Asset is either senior to, or pari passu with, all other indebtedness of such Obligor; provided that any Loan Asset that would otherwise constitute a First Lien Loan but for clause (e) of the definition thereof shall constitute a First Lien Loan and any Loan Asset that would satisfy the definition of both “Unitranche Loan” and “First Lien Loan” shall constitute a First Lien Loan.

 

"Unmatured Event of Default" means any event that, if it continues uncured, will, with lapse of time, notice or lapse of time and notice, constitute an Event of Default.

 

"Unrestricted Cash" means, (a) with respect to any Loan Asset, the meaning of "Unrestricted Cash" or any comparable term in the Underlying Instruments for the applicable Loan Asset and (b) in any case that "Unrestricted Cash" or such comparable term is not defined in such Underlying Instruments or otherwise as applicable in this Agreement, cash and cash equivalents of the applicable Person available for use for general corporate purposes and not held in any reserve account or legally or contractually restricted for any particular purposes or uses.

 

"Unused Fee" has the meaning assigned to that term in Section 2.09.

 

"Unused Fee Rate" means (a) during the Ramp-Up Period, a rate equal to 0.25% per annum and (b) thereafter, a rate equal to 0.50% per annum.

 

“Valuation Firm” means the nationally recognized accounting firm or valuation firm chosen in accordance with the definition of Approved Valuation Firm.

 

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"Valuation Standard" means a standard that will be satisfied if an Approved Valuation Firm uses one or a combination of credit-based methodologies that are generally acceptable in the market as commercially reasonable practices to derive a fair assessment of the current market value of an Eligible Loan Asset; provided that such assessment shall take into consideration, but not be limited to, the following:

 

(a)           the financial performance and outlook of the Obligor of such Eligible Loan Asset;

 

(b)           a fundamental analysis to value the Obligor of such Eligible Loan Asset which may be based on discounted cash flow and a multiples-based approach based on comparable companies in the relevant sector or another generally accepted methodology for valuing companies in the relevant sector; and

 

(c)           any other facts or circumstances deemed relevant by the Approved Valuation Firm, including such facts and circumstances that constitute the basis for a Value Adjustment Event with respect to such Eligible Loan Asset, if applicable.

 

"Value Adjustment Event" means, with respect to any Loan Asset, the occurrence of any one or more of the following events after the related Cut-Off Date:

 

(a)           (i) the Cash Interest Coverage Ratio with respect to such Loan Asset on any date reported under the Underlying Instrument decreases by more than 20.0% from the Cash Interest Coverage Ratio as calculated on the applicable Cut-Off Date, (ii) the Total Leverage Ratio with respect to such Loan Asset (other than in the case of a Recurring Revenue Loan) on any date reported under the Underlying Instrument increases by more than 20.0% from the same Total Leverage Ratio as calculated on the applicable Cut-Off Date, or (iii) in the case of any Recurring Revenue Loan, the Debt-to-Recurring-Revenue Ratio with respect to such Loan Asset on any date reported under the Underlying Instrument increases by more than 20.0% from the Debt-to-Recurring-Revenue Ratio calculated on the applicable Cut-Off Date;

 

(b)           an Obligor payment default, other than in respect of expenses, occurs under such Loan Asset that continues and has not been cured after giving effect to any grace period applicable thereto;

 

(c)           any payment default, other than in respect of expenses, occurs under any other senior or pari passu obligation for borrowed money of the related Obligor;

 

(d)           a Bankruptcy Event with respect to the related Obligor (after giving effect to any applicable grace or cure period thereunder);

 

(e)           the related Obligor fails to deliver to the Borrower or the Servicer any financial reporting information (i) as required by the Underlying Instruments of such Loan Asset (after giving effect to any applicable grace or cure period thereunder) and (ii) with a frequency of at least quarterly; provided that such financial reporting information shall be provided no later than (A) with respect to quarterly financial information for the first, second or third quarter of any fiscal year, (I) for the first and second quarters of fiscal year 2020, ninety (90) days after the end of each such quarter, and (II) thereafter, sixty (60) days after the end of each quarter, and (B) with respect to annual financial information for any fiscal year, (I) for the fiscal year ending on December 31, 2019, two hundred and ten (210) days after the end of such fiscal year, but only if unaudited financial reporting is delivered prior to the date that is one hundred and eighty (180) days following the end of such fiscal year, and otherwise, one hundred and eighty (180) days after the end of such fiscal year and (II) thereafter, one hundred and twenty (120) days after the end of each fiscal year (in each case, unless waived or otherwise agreed to by the Administrative Agent in its sole discretion in writing);

 

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(f)            the occurrence of a Material Modification not previously approved in writing by the Administrative Agent in its sole discretion with respect to such Loan Asset;

 

(g)           with respect to any Recurring Revenue Loan, the related Obligor’s last quarter annualized Revenue is less than the minimum covenant, if any, specified in the Underlying Instrument; or

 

(h)           the Servicer determines that all or a material portion of such Loan Asset is uncollectible or otherwise places it on non-accrual status in accordance with the policies and procedures of the Servicer and the Servicing Standard.

 

"Warranty Breach Event" means, as to any Loan Asset, (a) the discovery that, as of the related Cut-Off Date, such Loan Asset did not satisfy the definition of "Eligible Loan Asset" or there otherwise existed a breach of any representation or warranty relating to such Loan Asset or (b) the applicable Loan Party fails to satisfy Section 3.02(a)(ii) or Section 3.04(b), as applicable, with respect to such Loan Asset.

 

"Warranty Breach Loan Asset" means any Loan Asset with respect to which a Warranty Breach Event has occurred.

 

"Weighted Average Advance Rate" means, as of any date of determination with respect to all Eligible Loan Assets included in the Aggregate Adjusted Borrowing Value, the number obtained by (a) summing the products obtained by multiplying (i) the Advance Rate of each Eligible Loan Asset by (ii) such Eligible Loan Asset's contribution to the Aggregate Adjusted Borrowing Value and dividing (b) such sum by the Aggregate Adjusted Borrowing Value.

 

"Weighted Average Life" means, as of any date of determination, the number obtained by (a) for each Eligible Loan Asset, multiplying the amount of each scheduled distribution of principal to be paid after such determination date by the number of years (rounded to the nearest hundredth) from such determination date until such scheduled distribution of principal is due; (b) summing all of the products calculated pursuant to clause (a) above; and (c) dividing the sum calculated pursuant to clause (b) above by the sum of all scheduled distributions of principal due on all the Eligible Loan Assets as of such determination date.

 

"Weighted Average Life Test" means a test that will be satisfied on any date of determination if the Weighted Average Life of all Eligible Loan Assets as of such date is less than or equal to nine (9) years minus the number of years (rounded to the nearest quarter year) that have elapsed since the later of (a) the Closing Date and (b) the most recent facility renewal date, if applicable.

 

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"Wells Fargo Fee Letter" means the Wells Fargo Fee Schedule, dated as of November 29, 2018, agreed to by the Borrower.

 

"Yield" means the sum of the following, payable on each Payment Date:

 

(a)           with respect to any previously ended Remittance Period and each Eligible Currency, the sum for each day in such Remittance Period of amounts determined in accordance with the following formula (but only to the extent that such amounts were not previously paid to the Lenders):

 

YR x L
D

 

where: YR = the Yield Rate applicable to such Advance on such day during such Remittance Period;

 

L = the outstanding principal amount of such Advance on such day; and

 

D = 360 or, to the extent that the Yield Rate is the Alternative Rate, the number of days in the accounting year applicable to such Alternative Rate;

 

plus

 

(b)           with respect to any previously ended Remittance Period and each Eligible Currency, the sum for each day in such Remittance Period of amounts determined in accordance with the following formula (but only to the extent that such amounts were not previously paid to the Lenders):

 

YR x L
D

 

where: YR = the Yield Rate applicable on such day;

 

L = the greater of (a) the Minimum Utilization minus the Advances Outstanding on such day, and (b) 0; and

 

D = 360 or, to the extent that the Yield Rate is the Alternative Rate, the number of days in the accounting year applicable to such Alternative Rate;

 

provided that (i) no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by Applicable Law and (ii) Yield shall not be considered paid by any distribution if at any time such distribution is later required to be rescinded by the Lender to the Borrower or any other Person for any reason including, such distribution becoming void or otherwise avoidable under any statutory provision or common law or equitable action, including, any provision of the Bankruptcy Code.

 

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"Yield Rate" means, for any Advance in any Eligible Currency, as of any date of determination during any Remittance Period applicable to such Advance, an interest rate per annum equal to the Screen Rate on such date plus the Applicable Margin.

 

"Zero-Coupon Obligation" means any loan that, at the time of purchase, does not by its terms provide for the payment of cash interest.

 

Section 1.02           Other Terms.

 

(a)            All capitalized terms used which are not specifically defined shall have the meanings provided in Article 9 of the UCC in effect on the date hereof to the extent the same are used or defined therein.

 

(b)            Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

 

Section 1.03           Computation of Time Periods. Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."

 

Section 1.04           Interpretation.

 

In each Transaction Document, unless a contrary intention appears:

 

(a)            The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.

 

(b)           Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.

 

(c)            The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation."

 

(d)            The word "will" shall be construed to have the same meaning and effect as the word "shall."

 

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(e)            The word "law" shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders and decrees, of all Governmental Authorities.

 

(f)            Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as amended, modified, supplemented, restated or replaced from time to time in accordance with the terms thereof (subject to any restrictions on such amendments, modifications, supplements, restatements or replacements set forth herein), (ii) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (iii) any reference herein to any Person shall be construed to include such Person's successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (iv) the words "herein," "hereof" and "hereunder," and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (v) all references herein to Articles, Sections, Exhibits, Annexes and Schedules shall be construed to refer to Articles and Sections of, and Exhibits, Annexes and Schedules to, this Agreement and (vi) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

(g)            Unless expressly stated otherwise, any decision, consent, approval, waiver or other determination to be made at the discretion of the Administrative Agent (or any Lender) shall be in its sole discretion.

 

(h)            All calculations required to be made hereunder with respect to the Loan Assets and the Borrowing Base shall be made on a trade date basis.

 

(i)            Reference to any time means New York, New York time (unless expressly specified otherwise).

 

(j)            Any reference to "close of business" means 6:00 p.m., New York, New York time.

 

(k)            Other than as set forth herein, any use of the term "knowledge" or "actual knowledge" in this Agreement shall mean actual knowledge of a Responsible Officer after reasonable inquiry.

 

(l)             For purposes of this Agreement, an Event of Default or Servicer Default shall be deemed to be continuing until it is waived in accordance with Section 12.01(a) or cured in accordance with the terms hereof.

 

(m)           Any and all calculations herein with respect to the Loan Assets and all determinations as to whether an Loan Asset is an Eligible Loan Asset shall be made on the basis of information (as to the terms of the Underlying Instruments with respect to each such Loan Asset) and upon reports of payments, if any, received on such Loan Asset that are furnished by or on behalf of the Obligor of such Loan Asset and, to the extent they are not manifestly in error, such information or reports may be conclusively relied upon by the Borrower, the Servicer and the Originator in making such calculations and determinations.

 

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(n)            For all purposes of this Agreement with respect to the calculation of EBITDA, Cash Interest Coverage Ratio, Debt-to-Recurring-Revenue Ratio, Revenue, Senior Leverage Ratio or Total Leverage Ratio at any time, each such calculation shall be made utilizing the most recent financial information and calculations for the testing period required to be reported pursuant to the Underlying Instruments of the Obligors received by the Borrower (or the Servicer on its behalf) and such calculation of EBITDA, Cash Interest Coverage Ratio, Debt-to-Recurring-Revenue Ratio, Senior Leverage Ratio or Total Leverage Ratio shall be deemed to remain the same for each day of such testing period (unless otherwise specified, in each case, by the Borrower (or the Servicer on its behalf)).

 

(o)           The Obligations shall be joint and several obligations of each Loan Party in all respects.

 

Section 1.05           Currency Conversion. For purposes of (i) complying with any requirement of this Agreement stated in Dollars and (ii) calculating any ratio or other test set forth in this Agreement, the amount of any Loan Asset denominated in an Eligible Currency other than Dollars shall be deemed to be the Dollar Equivalent of such amount of such Eligible Currency.

 

Section 1.06           Computation of Covenants. Unless otherwise expressly stated in this Agreement, if at any time any change in generally accepted accounting principles (including the adoption of IFRS) would affect the computation of a Value Adjustment Event or Material Modification, Borrower and Administrative Agent shall negotiate in good faith to amend such covenant to preserve the original intent in light of such change; provided, that, until so amended, such term shall continue to be computed in accordance with the application of generally accepted accounting principles prior to such change.

 

ARTICLE II

 

THE FACILITY

 

Section 2.01           Advances.

 

(a)            Advances. From time to time from the Closing Date until the end of the Revolving Period, the Borrower may request that the Lenders make Advances secured by the Collateral, in an aggregate amount up to the Availability as of such date, to the Borrower (or to a Securitization Subsidiary as directed by the Borrower) for the purpose of (x) purchasing Eligible Loan Assets, (y) depositing funds in the Unfunded Exposure Account in an amount up to the Unfunded Exposure Amount of the related Delayed Draw Loan Asset or (z) making a distribution of such amounts to the holders of the membership interests of the Borrower. Under no circumstances shall any Lender be required to make any Advance if after giving effect to such Advance and the addition to the Collateral of the Eligible Loan Assets being acquired by the Borrower using the proceeds of such Advance, (i) an Event of Default exists or would result therefrom or (ii) a Borrowing Base Deficiency exists or would result therefrom. Notwithstanding anything to the contrary herein, no Lender shall be obligated to provide the Borrower with aggregate funds in connection with an Advance that would exceed such Lender's unused Commitment then in effect.

 

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(b)            Promissory Note. Upon the request of any Lender, the Borrower shall promptly execute and deliver to such Lender a promissory note of the Borrower (in form and substance satisfactory to the Administrative Agent in its sole discretion) evidencing the Advances of such Lender with appropriate insertions as to the date and principal amount.

 

(c)            Borrowing Base Certificate. On each Reporting Date, the Borrower (or the Servicer on its behalf) will provide a Borrowing Base Certificate, updated as of such date, to the Administrative Agent and each Lender (with a copy to the Collateral Agent). On the Business Day immediately following receipt of notice by the Administrative Agent that the Assigned Value of an Eligible Loan Asset is changed, the Borrower (or the Servicer on its behalf) will deliver an adjusted Borrowing Base Certificate to the Administrative Agent and each Lender.

 

Section 2.02           Procedure for Advances.

 

(a)               During the Revolving Period, the Lenders will make Advances on any Funding Business Day at the request of the Borrower, subject to and in accordance with the terms and conditions of Sections 2.01 and 2.02 and subject to the provisions of Article III hereof.

 

(b)               For each Advance, the Borrower shall deliver an irrevocable written notice in the form of a Notice of Borrowing to the Administrative Agent and each Lender, with a copy to the Collateral Agent and the Collateral Custodian, no later than noon on (i) the proposed Advance Date for Dollar Advances, (ii) the Funding Business Day prior to the proposed Advance Date for CAD Advances, Euro Advances and GBP Advances (or such shorter period as agreed to from time to time by the Administrative Agent and each of the Lenders) and (iii) the Funding Business Day two (2) Funding Business Days prior to the proposed Advance Date for AUD Advances; provided that, if such Notice of Borrowing is delivered later than noon, in the case of an Advance made in Dollars, such Notice of Borrowing shall be deemed to have been received on the following Funding Business Day. Each Notice of Borrowing shall include a duly completed Borrowing Base Certificate (updated to the date such Advance is requested and giving pro forma effect to the Advance requested and the use of the proceeds thereof) and an updated Loan Asset Schedule, and shall specify:

 

(i)              the proposed aggregate amount of such Advance; provided that the amount of such Advance must be at least equal to the Dollar Equivalent of $500,000 in such Eligible Currency;

 

(ii)             the proposed date of such Advance;

 

(iii)            a representation that all conditions precedent for an Advance described in Article III hereof have been satisfied; provided that, in connection with any Notice of Borrowing in respect of the acquisition by the Borrower of a loan asset constituting a newly originated loan, where the related Advance is to be remitted to the Principal Collection Subaccount, the conditions set forth in Section 3.02(a)(ii) shall not apply, excepting that, notwithstanding the foregoing, the requirements set forth in the proviso of Section 3.02(a)(ii) shall apply;

 

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(iv)            the amount of cash that will be funded by the Originator into the Unfunded Exposure Account in connection with any Delayed Draw Loan Asset funded by such Advance, if applicable;

 

(v)             whether such Advance should be remitted to the Principal Collection Subaccount, the Unfunded Exposure Account, or (subject to completion of customary “know your customer” and anti-money laundering and sanctions diligence), the account of the Originator or a Securitization Subsidiary; and

 

(vi)            the proposed Eligible Currency of such Advance.

 

On the date of each Advance, upon satisfaction of the applicable conditions set forth in Article III, each Lender shall, in accordance with the Notice of Borrowing, either make available to the Borrower, by (A) if the related Notice of Borrowing was delivered at least one Funding Business Day prior to such date, 2:00 p.m., New York City time, and (B) if the related Notice of Borrowing was delivered on such date, no later than the close of business on such date, (x) an amount equal to such Lender's Pro Rata Share of such Advance, for deposit by the Collateral Agent into the Principal Collection Subaccount or (y) an amount equal to such Lender's Pro Rata Share of such Advance, for deposit by the Collateral Agent into the Unfunded Exposure Account, as applicable. For the avoidance of doubt, each Advance and related increase in the Advances Outstanding shall be allocated ratably to each Lender in accordance with their respective Lender's Pro Rata Share as in effect before such increase. Any Lender which fails to remit its Pro Rata Share in connection with any Advance in accordance with this Section 2.02 shall constitute a Defaulting Lender, and the Borrower shall have all rights available to the Borrower pursuant to Section 2.19.

 

(c)            Each Advance shall bear interest at the applicable Yield Rate.

 

(d)            Subject to Section 2.16 and the other terms, conditions, provisions and limitations set forth herein (including, the payment of the Prepayment Premium, as applicable), the Borrower may borrow, repay or prepay and reborrow Advances without any penalty, fee or premium on and after the Closing Date and prior to the end of the Revolving Period.

 

(e)            The obligation of each Lender to remit its Pro Rata Share of any Advance shall be several from that of each other Lender and the failure of any Lender to so make such amount available to the Borrower shall not relieve any other Lender of its obligation hereunder.

 

(f)            Notwithstanding anything to the contrary herein (including, without limitation, the existence of an Unmatured Event of Default or a Borrowing Base Deficiency), if, on the last day of the Revolving Period, the amount on deposit in the Unfunded Exposure Account is less than the Aggregate Unfunded Exposure Amount, the Borrower shall request an Advance in the amount of such shortfall (the “Unfunded Exposure Amount Shortfall”). Following receipt of a Notice of Borrowing (which shall specify the account details of the Unfunded Exposure Account where the funds will be made available), each Lender shall fund its Pro Rata Share of such Unfunded Exposure Amount Shortfall in accordance with Section 2.02(b), notwithstanding anything to the contrary herein (including, without limitation, the Borrower’s failure to satisfy any of the conditions precedent set forth in Section 3.02) other than an Event of Default.

 

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Section 2.03           Determination of Yield. The Administrative Agent shall determine the Yield in respect of all Advances (including unpaid Yield related thereto, if any, due and payable on a prior Payment Date) to be paid by the Borrower on each Payment Date for the related Remittance Period and shall advise the Servicer thereof on or prior to the fifth (5th) Business Day prior to such Payment Date.

 

Section 2.04           Remittance Procedures. The Servicer shall instruct the Collateral Agent by delivery of the Servicing Report and, if the Servicer fails to do so, the Administrative Agent may instruct the Collateral Agent, to apply funds on deposit in the Controlled Accounts, subject to Pari Passu Provisions, as described in this Section 2.04; provided that, at any time after delivery of a Notice of Exclusive Control, the Administrative Agent shall instruct the Collateral Agent to apply funds on deposit in the Controlled Accounts as described in this Section 2.04.

 

(a)            Interest Payments prior to an Event of Default. Prior to the Borrower or the Administrative Agent becoming aware of the occurrence of an Event of Default or prior to the occurrence of the Facility Maturity Date, on each Payment Date, the Collateral Agent shall (as directed pursuant to the first paragraph of this Section 2.04) (x) transfer all Interest Collections in all Interest Collection Accounts to the Interest Collection Account of the Borrower (such transfer constituting a deemed dividend of all such amounts by each such Securitization Subsidiary to the Borrower in proportion with its percentage ownership of the outstanding shares of such Securitization Subsidiary) and (y) transfer Interest Collections held by the Account Bank in the Collection Account, in accordance with the Servicer Report, to the following Persons in the following amounts, calculated as of the most recent Determination Date, and priority:

 

(i)            to the payment of Taxes, registration and filing fees then due and owing by the Borrower that are attributable solely to the operations of the Borrower; provided that the aggregate amounts payable under this clause (i) shall not exceed the Tax Expense Cap;

 

(ii)           to the payment of accrued and unpaid Administrative Expenses; provided that the aggregate amounts payable under this clause (ii) shall not exceed the Administrative Expense Cap;

 

(iii)          to the Servicer, in payment in full of all accrued and unpaid Servicing Fees;

 

(iv)          pro rata, in accordance with the amounts due under this clause (iv), to each Lender, all Yield, the Unused Fee, and any Breakage Fees that are accrued and unpaid as of the last day of the related Remittance Period;

 

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(v)           to pay the Advances Outstanding to the extent necessary to eliminate any outstanding Borrowing Base Deficiency on a pro forma basis after giving effect to all payments through this clause (v);

 

(vi)          pro rata, to each Lender and the Administrative Agent, as applicable, all accrued and unpaid fees, expenses (including attorneys' fees, costs and expenses), Increased Costs and indemnity amounts payable by the Borrower to the Administrative Agent or any Lender under the Transaction Documents;

 

(vii)         to pay the Advances Outstanding, together with any applicable Prepayment Premium not paid pursuant to Section 2.04(b)(iii), in connection with any complete refinancing or termination of this Agreement in accordance with Section 2.16(b), until paid in full;

 

(viii)        to the payment of any Administrative Expenses, to the extent not paid pursuant to clause (ii) above due to the limitation contained therein;

 

(ix)          to pay to the Servicer, all reasonable expenses incurred in connection with the performance of its duties under the Transaction Documents;

 

(x)           to pay to the Valuation Firm all accrued and unpaid fees and expenses;

 

(xi)          to pay any BDC Tax Distribution; and

 

(xii)         so long as, to the Administrative Agent’s, Servicer’s and Borrower’s knowledge, no Unmatured Event of Default has occurred and is continuing, to the Borrower, any remaining amounts as Interest Collections.

 

(b)            Principal Payments prior to an Event of Default. Prior to the Borrower or the Administrative Agent becoming aware of the occurrence of an Event of Default or prior to the occurrence of the Facility Maturity Date, on each Payment Date the Collateral Agent shall (as directed pursuant to the first paragraph of this Section 2.04) (x) transfer all Principal Collections in all Principal Collections Accounts to the Principal Collections Account of the Borrower (such transfer constituting a deemed dividend of all such amounts by each such Securitization Subsidiary to the Borrower in proportion with its percentage ownership of the outstanding shares of such Securitization Subsidiary) and (y) transfer Principal Collections held by the Account Bank in the Collection Account, in accordance with the Servicer Report, to the following Persons in the following amounts, calculated as of the most recent Determination Date, and priority:

 

(i)            to pay amounts due under Section 2.04(a)(i) through Section 2.04(a)(v), to the extent not paid thereunder;

 

(ii)           (x) prior to the end of the Revolving Period (at the discretion of the Servicer), to the Unfunded Exposure Account in an amount necessary to cause the amount on deposit in the Unfunded Exposure Account to equal the Aggregate Unfunded Exposure Amount; or (y) after the end of the Revolving Period, to the Unfunded Exposure Account in an amount necessary to cause the amount on deposit in the Unfunded Exposure Account to equal the Aggregate Unfunded Exposure Amount;

 

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(iii)          (A) during the Revolving Period, to pay amounts due under Section 2.04(a)(v) but only to the extent not paid in full thereunder and to the extent necessary to eliminate any outstanding Borrowing Base Deficiency, on a pro forma basis after giving effect to all payments through this clause (iii); or (B) during the Amortization Period, to repay the Advances Outstanding and any accrued and unpaid Prepayment Premium until paid in full;

 

(iv)          to the payment of any Administrative Expenses, to the extent not paid pursuant to clause (i);

 

(v)           to pay amounts due under Section 2.04(a)(ix) to the extent not paid thereunder;

 

(vi)          to pay amounts due under Section 2.04(a)(x) to the extent not paid thereunder;

 

(vii)         to pay any BDC Tax Distribution: and

 

(viii)        so long as, to the Administrative Agent’s, Servicer’s and Borrower’s knowledge, no Unmatured Event of Default has occurred and is continuing, to the Borrower any remaining amounts.

 

(c)            Payment on and after the occurrence of an Event of Default. If the Borrower or the Administrative Agent have become aware that an Event of Default exists and, in any case, after the declaration, or automatic occurrence, of the Facility Maturity Date, on each Business Day thereafter the Collateral Agent shall (as directed pursuant to the first paragraph of this Section 2.04) (x) transfer all collected funds held in all Collection Accounts to the Borrower Collection Account (such transfer constituting (provided such Securitization Subsidiary is able to pay its debts as they fall due immediately after such transfer) a deemed dividend of all such amounts by each such Securitization Subsidiary to the Borrower in proportion with its percentage ownership of the outstanding shares of such Securitization Subsidiary) and (y) transfer collected funds held by the Account Bank in the Collection Account to the following Persons in the following amounts, calculated as of the prior Business Day, and priority:

 

(i)            to the payment of Taxes, registration and filing fees then due and owing by the Borrower that are attributable solely to the operations of the Borrower; provided that the aggregate amounts payable under this clause (i) shall not exceed the Tax Expense Cap;

 

(ii)           to the payment of accrued and unpaid Administrative Expenses (excluding indemnities);

 

(iii)          to the Servicer, in payment in full of all accrued and unpaid Servicing Fees but only to the extent that the Servicer is not an Affiliate of the Borrower, the Originator or GC Advisors LLC;

 

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(iv)          pro rata, in accordance with the amounts due under this clause (iv), to each Lender, all Yield, the Unused Fee, and any Breakage Fees that are accrued and unpaid as of the last day of the related Remittance Period;

 

(v)           pro rata, to each Lender and the Administrative Agent, as applicable, all accrued and unpaid fees, expenses (including attorneys' fees, costs and expenses), Increased Costs and indemnity amounts payable by the Borrower to the Administrative Agent or any Lender under the Transaction Documents;

 

(vi)          to pay the Advances Outstanding and any applicable Prepayment Premium until paid in full;

 

(vii)         to the payment of any Administrative Expenses, to the extent not paid pursuant to clause (ii) above due to the limitation contained therein;

 

(viii)        to the Servicer, in payment in full of all accrued and unpaid Servicing Fees to the extent not paid pursuant to clause (iii) above due to the limitation contained therein;

 

(ix)          to the Servicer, all reasonable expenses incurred in connection with the performance of its duties under the Transaction Documents;

 

(x)           to pay to the Approved Valuation Firm all accrued and unpaid fees and expenses; and

 

(xi)          to the Borrower, any remaining amounts.

 

(d)            Unfunded Exposure Account; Delayed Draw Loan Assets. Funds on deposit in the Unfunded Exposure Account as of any date of determination may be withdrawn to fund draw requests of the relevant Obligors under any Delayed Draw Loan Asset. Any such draw request made by an Obligor, along with wiring instructions for the applicable Obligor, shall be forwarded by the Borrower or the Servicer to the Collateral Agent (with a copy to the Administrative Agent) in the form of a Disbursement Request, and the Collateral Agent shall instruct the Account Bank to fund such draw request in accordance with the Disbursement Request. As of any date of determination, the Servicer (or, after delivery of a Notice of Exclusive Control, the Administrative Agent) may cause any amounts on deposit in the Unfunded Exposure Account that exceed (i) the aggregate of all Unfunded Exposure Equity Amounts prior to the end of the Revolving Period and (ii) the Aggregate Unfunded Exposure Amount, in each case, to be deposited into the Principal Collection Subaccount as Principal Collections.

 

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(e)            Insufficiency of Funds. The parties hereby agree that if the funds on deposit in the Collection Account are insufficient to pay any amounts due and payable on a Payment Date or otherwise, the Borrower shall nevertheless remain responsible for, and shall pay when due, all amounts payable under this Agreement and the other Transaction Documents in accordance with the terms of this Agreement and the other Transaction Documents. The parties further agree that amounts that may be distributed to the Borrower or the holders of any Equity Interest in the Borrower are fully subordinated and junior to the Obligations of the Borrower to the Secured Parties. In the event the Borrower is subject to a Bankruptcy Event, any claim that the Borrower or the holders of any Equity Interest in the Borrower may have with respect to such distributions shall, notwithstanding anything to the contrary herein and notwithstanding any objection to, or rescission of, such filing, be fully subordinate in right of payment to the Obligations of the Borrower to the Secured Parties. The foregoing sentence and the provisions of Section 2.04 shall constitute a "subordination agreement" within the meaning of Section 510(a) of the Bankruptcy Code. The Borrower and the Originator hereby agree that they may only receive distributions from amounts available pursuant to Sections 2.04(a)(xi), 2.04(b)(vii) and 2.04(c)(xi) or with respect to any Advance pursuant to Section 2.01 or the release of any Eligible Currency (other than Dollars) pursuant to this Agreement.

 

(f)             Repayment of Obligations. Notwithstanding anything to the contrary contained herein, the Borrower shall repay the Advances Outstanding, all accrued and unpaid Yield, any Breakage Fees, Increased Costs, all accrued and unpaid costs and expenses of the Administrative Agent and Lenders and all other Obligations (other than unmatured contingent obligations for which no claim has been made) in full on the Facility Maturity Date.

 

(g)            Conversion. The Servicer shall, pursuant to Section 2.17(f) instruct the Collateral Agent, no later than the date immediately preceding each Payment Date and subject to the Pari Passu Provisions, to convert amounts on deposit in the applicable Collection Account into each Eligible Currency (pro rata based on available amounts from each other Eligible Currency, unless otherwise directed in writing by the Servicer) using the Spot Rate to the extent necessary to make payments required in each Eligible Currency pursuant to Section 2.04(a), Section 2.04(b) and Section 2.04(c). All risk and expense incident to such conversion is the responsibility of the Borrower, and the Collateral Agent shall have (x) no responsibility for fluctuations in exchange rates affecting any Collections or conversion thereof and (y) to the extent it complies with the instructions provided by the Servicer pursuant to the Servicing Standard, no liability for any losses incurred or resulting from the rates obtained in such foreign exchange transactions.

 

Section 2.05           Instructions to the Collateral Agent and the Account Bank. All instructions and directions given to the Collateral Agent or the Account Bank by the Servicer, the Borrower or the Administrative Agent pursuant to Section 2.04 shall be in writing. The Servicer and the Borrower shall promptly transmit to the Administrative Agent a copy of all instructions and directions given to the Collateral Agent or the Account Bank by such party pursuant to Section 2.04. The Administrative Agent shall promptly transmit to the Servicer and the Borrower a copy of all instructions and directions given to the Collateral Agent or the Account Bank by the Administrative Agent pursuant to Section 2.04. If either the Administrative Agent or the Collateral Agent disagrees with the computation of any amounts to be paid or deposited by the Borrower or the Servicer under Section 2.04 or otherwise pursuant to this Agreement, or upon their respective instructions, it shall so notify the Borrower, the Servicer and the Collateral Agent or the Administrative Agent, as applicable, in writing and in reasonable detail to identify the specific disagreement. If such disagreement cannot be resolved within five (5) Business Days, the determination of the Administrative Agent as to such amounts shall be conclusive and binding on the parties hereto absent manifest or demonstrable error. In the event the Collateral Agent or the Account Bank receives instructions from the Servicer or the Borrower which conflict with any instructions received from the Administrative Agent, the Collateral Agent or the Account Bank, as applicable, shall rely on and follow the instructions given by the Administrative Agent.

 

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Section 2.06           Borrowing Base Deficiency Payments.

 

(a)            If, on any day prior to the Collection Date, any Borrowing Base Deficiency exists (other than as specified in clause (d) below), then the Borrower shall eliminate such Borrowing Base Deficiency in its entirety within three (3) Business Days (or such longer period as set forth herein) of the Borrower receiving written notice from the Administrative Agent of such Borrowing Base Deficiency by effecting one or more (or any combination thereof) of the following actions in order to eliminate such Borrowing Base Deficiency as of such date of determination: (i) deposit cash in Dollars into the Principal Collection Subaccount, (ii) repay Advances Outstanding (together with any Breakage Fees in respect of the amount so prepaid), (iii) to the extent such sales, in conjunction with other actions, eliminated such Borrowing Base Deficiency, sell Loan Assets in accordance with Section 2.07, (iv) Grant (or arrange for one or more Securitization Subsidiaries to Grant) additional Eligible Loan Assets and/or (v) delivery of an Equity Cure Notice (subject to the requirements set forth in Section 2.06(c)); provided that, if the Borrower requests to Grant (or arrange for one or more Securitization Subsidiaries to Grant) another Eligible Loan Asset within three Business Days of such Borrowing Base Deficiency and the Administrative Agent, in its sole and absolute discretion, does not either reject such Loan Asset or approve such Loan Asset within three Business Days of the Borrower’s request to Grant (or arrange for one or more Securitization Subsidiaries to Grant) such Loan Asset, then the Administrative Agent may, in its sole and absolute discretion, elect in writing to extend the three Business Day grace period set forth in this Section 2.06.

 

(b)            No later than 4:00 p.m. on the Business Day of the repayment of Advances Outstanding or Grant of additional Eligible Loan Assets pursuant to Section 2.06(a), the Borrower (or the Servicer on its behalf) shall deliver (i) to the Administrative Agent (with a copy to the Collateral Agent and the Collateral Custodian) notice of such repayment or Grant and a duly completed Borrowing Base Certificate, updated to the date such repayment or Grant is being made and giving pro forma effect to such repayment or Grant, and (ii) to the Administrative Agent, if applicable, a description of any Eligible Loan Asset and each Obligor of such Eligible Loan Asset to be Granted and an updated Loan Asset Schedule. Failure to deliver any such notice shall not affect the cure of the Borrowing Base Deficiency made pursuant to Section 2.06(a).

 

(c)            The Borrower may cure a Borrowing Base Deficiency pursuant to Section 2.06(a)(iv) by delivering a notice to the Administrative Agent within three (3) Business Days after such Borrowing Base Deficiency (such notice, an “Equity Cure Notice”), subject to the following requirements:

 

(i)     Such Equity Cure Notice sets forth evidence reasonably satisfactory to the Administrative Agent that the Originator has arranged for funds to be made available to the Borrower in an aggregate amount sufficient to cure such Borrowing Base Deficiency (which funds may be raised in connection with such means as is available to the applicable Affiliates of the Originator); and

 

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(ii)    The amount necessary to cure such Borrowing Base Deficiency is contributed to the Borrower in immediately available funds, and such amount shall be applied by the Borrower to eliminate such Borrowing Base Deficiency, in each case, within ten (10) Business Days of the date such Equity Cure Notice is delivered to the Administrative Agent.

 

(d)            Notwithstanding anything to the contrary set forth in clause (a) above, if a Borrowing Base Deficiency exists on the last day of the Specified Period and (i) if such Borrowing Base Deficiency is in an amount less than or equal to $7,500,000, then such Borrowing Base Deficiency will not be required to be cured within three (3) Business Days pursuant to clause (a) above and, as of any Payment Date during such time as the Borrowing Base Deficiency is not cured pursuant to the terms of clause (a) above, Interest Collections and Principal Collections shall be used to pay down Advances Outstanding in accordance with Section 2.04(a)(v) and Section 2.04(b)(iii)(A) (in addition to any other combination of cure mechanisms applied by the Borrower as set forth in clause (a) above) until the earlier of (x) the expiration of the Post-Specified Period and (y) the date on which such deficiency is cured; and (ii) if such Borrowing Base Deficiency is in an amount greater than $7,500,000, the Borrower shall, within three (3) Business Days of the last day of the Specified Period, cure such deficiency (using any combination of cure mechanisms applied by the Borrower as set forth in clause (a) above) until the Borrowing Base Deficiency is less than or equal to $7,500,000 (and any failure to effectuate such cure shall be deemed to be an Event of Default pursuant to Section 7.01(j)), after which, as of any Payment Date during such time as the Borrowing Base Deficiency is not cured pursuant to the terms of clause (a) above, Interest Collections and Principal Collections shall be used to pay down Advances Outstanding in accordance with Section 2.04(a)(vi) and Section 2.04(b)(ii)(A) (in addition to any other combination of cure mechanisms applied by the Borrower as set forth in clause (a) above), until the earlier of (x) the expiration of the Post-Specified Period and (y) the date on which such deficiency is cured. If a Borrowing Base Deficiency exists on any date of determination during the Post-Specified Period and such Borrowing Base Deficiency is greater than the Borrowing Base Deficiency in existence on the previous date of determination (any such increase in Borrowing Base Deficiency, a "Borrowing Base Deficiency Increase"), it shall be an Event of Default pursuant to Section 7.01(j) if such Borrowing Base Deficiency has not been reduced in accordance with the provisions set forth in clauses (a), (b) and (c) above by an amount equal to or greater than the applicable Borrowing Base Deficiency Increase within three (3) Business Days of such later date of determination. If a Borrowing Base Deficiency exists after the expiration of the Post-Specified Period, it shall be an Event of Default pursuant to Section 7.01(j) if it has not been remedied in accordance with the provisions set forth in clauses (a), (b) and (c) above.

 

Section 2.07           Sale of Loan Assets; Affiliate Transactions.

 

(a)            Substitutions. The Borrower may, with the consent of the Administrative Agent in its sole discretion, replace (or direct any Securitization Subsidiary to replace) any Loan Asset with an Eligible Loan Asset so long as (i) no event has occurred, or would result from such substitution, which constitutes an Event of Default and no event has occurred and is continuing, or would result from such substitution, which constitutes an Unmatured Event of Default or a Borrowing Base Deficiency and (ii) simultaneously therewith, the Borrower (or a Securitization Subsidiary) Grants (in accordance with all of the terms and provisions contained herein) a Substitute Eligible Loan Asset.

 

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(b)            Discretionary Sales. (i) The Borrower shall be permitted to sell (or direct any Securitization Subsidiary to sell) Loan Assets to Persons other than the Originator or its Affiliates from time to time (such sale, a “Discretionary Sale”); provided that (i) the proceeds of such sale shall be deposited into the Collection Account to be disbursed in accordance with Section 2.04 hereof, (ii) any sale to an Affiliate of the Originator meets the requirements set forth in Section 2.07(d) below, (iii) after giving effect to any such sale, no Borrowing Base Deficiency shall exist, (iv) no event has occurred, or would result from such sale, which constitutes an Unmatured Event of Default and (v) after giving effect to such sale, the Weighted Average Life Test is satisfied or, if not satisfied, would be maintained or improved.

 

(ii)  The Borrower shall be permitted to sell (or direct any Securitization Subsidiary to sell) Non-Levered Loan Assets to any Person at any time without restriction. The proceeds of such sale may (i) be deposited into the Collection Account to be disbursed in accordance with Section 2.04 here or (ii) prior to the occurrence and continuation of an Event of Default, deposited into the Contribution Account for distribution to the Originator.

 

(iii)  The Borrower shall be permitted to sell (or direct any Securitization Subsidiary to sell) ineligible Loan Assets (including any Equity Security or Margin Stock) at any time without restriction. In addition, the Borrower may sell (or direct any Securitization Subsidiary to sell) any Loan Asset without restriction in connection with a termination of this facility.

 

(c)            Repurchase or Substitution of Warranty Breach Loan Assets. No later than ten (10) Business Days following the earlier of knowledge by a Loan Party of a Loan Asset becoming a Warranty Breach Loan Asset or receipt by such Loan Party from the Administrative Agent or the Servicer of written notice thereof, the Borrower shall (or shall cause a Securitization Subsidiary to) either:

 

(i)            make a deposit in the applicable Eligible Currency to the Collection Account (for allocation pursuant to Section 2.04) in immediately available funds in an amount equal to the sum of (x) (i) the then-applicable Advance Rate of such Loan Asset, multiplied by (ii) the Outstanding Balance of such Loan Asset, plus (y) any expenses or fees with respect to such Loan Asset and costs and damages incurred by the Administrative Agent or by any Lender in connection with any violation by such Loan Asset of any Applicable Law (a notification regarding the amount of such expenses or fees to be provided by the Administrative Agent to the Borrower); provided that (A) the Administrative Agent shall have the right to determine whether the amount so deposited is sufficient to satisfy the foregoing requirements and (B) the deposit of such funds into the Collection Account may result from the sale of such Warranty Breach Loan Asset pursuant to Section 2.07(a); or

 

(ii)           with the prior written consent of the Administrative Agent, in its sole discretion, substitute for such Warranty Breach Loan Asset a Substitute Eligible Loan Asset.

 

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Upon confirmation of the deposit of the amounts set forth in Section 2.07(c)(i) into the Collection Account or the delivery by the Borrower of a Substitute Eligible Loan Asset for each Warranty Breach Loan Asset pursuant to Section 2.07(c)(ii) (the date of such confirmation or delivery, the "Release Date"), such Warranty Breach Loan Asset and Related Asset shall be removed from the Collateral and, as applicable, the Substitute Eligible Loan Asset and Related Asset shall be included in the Collateral. On the Release Date of each Warranty Breach Loan Asset, the Collateral Agent, for the benefit of the Secured Parties, shall automatically and without further action be deemed to release to the Borrower, without recourse, representation or warranty, all the right, title and interest and any Lien of the Collateral Agent, for the benefit of the Secured Parties in, to and under the Warranty Breach Loan Asset and any Related Asset and all future monies due or to become due with respect thereto.

 

(d)            Conditions to Sales, Substitutions and Repurchases. Any sales, substitutions or repurchases effected pursuant to Sections 2.07(a), (b), or (c) shall be subject to the satisfaction of the following conditions (it being understood that a Borrowing Base Deficiency may be continuing in connection with any sale effected pursuant to Section 2.06(a)(iii) so long as such sales, collectively with other actions, are sufficient to eliminate such Borrowing Base Deficiency) (as certified in writing to the Administrative Agent and Collateral Agent by the Borrower):

 

(i)           the Borrower shall deliver a Borrowing Base Certificate and an updated Loan Asset Schedule to the Administrative Agent in connection with such sale, substitution or repurchase;

 

(ii)          the Borrower shall deliver a list of all Loan Assets to be sold, substituted, repurchased;

 

(iii)         the Borrower shall (A) with respect to sales and repurchases, give one (1) Business Day's notice of such sale or repurchase to the Administrative Agent and Collateral Agent and (B) with respect to substitutions, have received an Approval Notice (for each Loan Asset added to the Collateral on the related Cut-Off Date);

 

(iv)         the Borrower shall notify the Administrative Agent of any amount to be deposited into the Collection Account in connection with any sale, substitution or repurchase;

 

(v)          the representations and warranties contained in Sections 4.01, 4.02 and 4.03 hereof shall continue to be correct in all respects, except to the extent relating to an earlier date; and

 

(vi)         any repayment of Advances Outstanding in connection with any sale, substitution or repurchase of Loan Assets hereunder shall comply with the requirements set forth in Section 2.16.

 

So long as the conditions set forth in this clause (d), Section 2.07(b) and Section 2.07(e), as applicable, are satisfied, in no event shall the sale price of any Loan Asset sold pursuant to Section 2.07(b) be required to exceed the Adjusted Borrowing Value of such Loan Asset multiplied by the Advance Rate of such Loan Asset.

 

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(e)            Affiliate Transactions.

 

(i)            A Loan Party may sell Loan Assets to Affiliates if such transaction is at arm’s length and for fair market value if such Loan Party is selling (A) a Non-Levered Loan Asset to any Affiliate at any price, (B) a Loan Asset other than a Non-Levered Loan Asset to an Existing Golub BDC CLO (directly or indirectly) or to GC Advisors LLC (or an Affiliate) for a substantially concurrent transfer to a special purpose vehicle in accordance with the No-Action Relief in connection with an Existing Golub BDC CLO.

 

(ii)           Other than as set forth in Section 2.07(e)(i), the Originator (or an Affiliate thereof) shall not reacquire from any Loan Party, and neither the Originator nor any Affiliates thereof will have a right or ability to purchase, the Loan Assets of such Loan Party without the prior written consent of the Administrative Agent (other than with respect to sales pursuant to Section 2.06(a)(iii)), and any such transactions shall be at arm’s-length and for fair market value, except in the case of removals or substitutions of Loan Assets by the Borrower pursuant to Section 2.07(c).

 

(f)             Limitations on Sales and Substitutions. The Outstanding Balance of all Loan Assets (other than Warranty Loan Assets) (i) sold pursuant to Section 2.07(b) to Persons other than the Originator or its Affiliates (other than during the Specified Period and the Post-Specified Period, Subject Loan Assets (A) sold at fair market value and (B) during the Post-Specified Period, the sale of which maintains or improves any Borrowing Base Deficiency then in existence), (ii) sold pursuant to Section 2.07(e) to the Originator or an Affiliate thereof and (iii) substituted pursuant to Section 2.07(a) (other than during the Specified Period and the Post-Specified Period Subject Loan Assets (A) sold at fair market value and (B) during the Post-Specified Period, the sale of which maintains or improves any Borrowing Base Deficiency then in existence) shall not exceed 20% of the Net Purchased Loan Balance; provided, that any Loan Asset sold to any collateralized loan obligation (or, in the case of clause (z)(II) below, any credit facility) undertaken by the Servicer or an Affiliate thereof (directly or indirectly) or to GC Advisors LLC (or an Affiliate) for a substantially concurrent transfer to a special purpose vehicle in accordance with the No-Action Relief shall be excluded from the numerator in the foregoing threshold so long as such Loan Asset is sold on arm’s-length terms for fair market value (determined as required by, and in accordance with, the U.S. Investment Advisers Act of 1940, as amended) (x) (1) for which the closing date was within the two months prior to the proposed date of sale and (2) for which Morgan Stanley Senior Funding, Inc. or an Affiliate thereof acts as an underwriter or placement agent, (y) consented to in writing by the Administrative Agent or (z) (I) with respect to a collateralized loan obligation, that had its effective date and was declared fully ramped up (whether by meeting its target initial par amount requirement or otherwise) by the Servicer prior to the sale of Loan Assets to such collateralized loan obligation and (II) with respect to any sale of Loan Assets to such collateralized loan obligation or credit facility, such sale is being performed by the Servicer for the purpose of “rebalancing” and not ramping the transaction, shall be excluded from the foregoing threshold so long as such Loan Asset is sold on arm’s-length terms for fair market value (determined as required by, and in accordance with, the U.S. Investment Advisers Act of 1940, as amended); provided, further, that the aggregate Loan Assets sold pursuant to Section 2.07(e) to any collateralized loan obligation undertaken by the Servicer or an Affiliate thereof (directly or indirectly) and for which the closing date was within the two months prior to the proposed date of sale that otherwise does not meet the requirements of the immediately preceding proviso, shall not exceed 10% of the Net Purchased Loan Balance in any twelve-month period unless otherwise consented to by the Administrative Agent. The Outstanding Balance of all defaulted Loan Assets (other than Warranty Loan Assets) (i) sold pursuant to Section 2.07(b) to Persons other than the Originator or its Affiliates, (ii) sold pursuant to Section 2.07(e) to the Originator or an Affiliate thereof and (iii) substituted pursuant to Section 2.07(a) shall not exceed 10% of the Net Purchased Loan Balance; provided that any Loan Asset sold to any credit facility undertaken by the Servicer or an Affiliate thereof (directly or indirectly) (x) that had its effective date and was declared fully ramped up (whether by meeting its target initial par amount requirement or otherwise) by the Servicer prior to the sale of Eligible Loan Assets to such collateralized loan obligation and (y) with respect to any sale of Eligible Loan Assets to such collateralized loan obligation, such sale is being performed by the Servicer for the purpose of “rebalancing” and not ramping the transaction, shall be excluded from the foregoing threshold so long as such Loan Asset is sold on arm’s-length terms for fair market value (determined as required by, and in accordance with, the U.S. Investment Advisers Act of 1940, as amended). For the avoidance of doubt, the 10% threshold set forth in the second sentence of this clause (f) shall be a sub-limit of the 20% threshold set forth in the first sentence of this clause (f). Notwithstanding anything to the contrary herein, solely during the Specified Period, the written consent of the Administrative Agent shall be required for any sale or substitution that would result in the aggregate Outstanding Balance of all Subject Loan Assets to be in excess of 50.0% of the SLA Threshold Amount.

 

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(g)            Sales to Affiliates of Replacement Servicer. To the extent that Golub Capital BDC, Inc. (or an Affiliate thereof) is no longer the Servicer, the Replacement Servicer may only sell assets owned by the Borrower to such Replacement Servicer’s Affiliates to the extent that it receives the consent of the “member” of the Borrower identified in the Borrower LLC Agreement.

 

Section 2.08           Payments and Computations, Etc.

 

(a)            All amounts to be paid or deposited by a Loan Party or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof no later than 1:00 p.m. on the day when due in Dollars or in such other Eligible Currency in immediately available funds to the Collection Account or such other account as is designated by the Administrative Agent. Any Obligation hereunder shall not be reduced by any distribution of any portion of Available Collections if at any time such distribution is rescinded or required to be returned by any Lender to the Borrower or any other Person for any reason. Each Advance shall accrue interest at the applicable Yield Rate for its Eligible Currency for each day during each applicable Remittance Period. All computations of interest and all computations with respect to the Yield and the Yield Rate shall be computed on the basis of a year of three hundred and sixty (360) days and the actual number of days elapsed; provided that with respect to GBP Advances, such computations shall be computed on the basis of a year of three hundred and sixty-five (365) days and the actual number of days elapsed. Each Advance shall accrue interest at the Yield Rate for each day beginning on, and including, the Advance Date with respect to such Advance and ending on, but excluding, the date such Advance is repaid in full.

 

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(b)            Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of Yield or any fee payable hereunder, as the case may be. To the extent that Available Collections are insufficient on any Payment Date to satisfy the full amount of any Increased Costs pursuant to Section 2.04(a)(v) and Section 2.04(b)(i), such unpaid amounts shall remain due and owing and shall be payable on the next succeeding Payment Date until repaid in full.

 

(c)            If any Advance requested by the Borrower pursuant to Section 2.02 is not for any reason whatsoever, except as a result of the gross negligence or willful misconduct of, or failure to fund such Advance on the part of, the Lenders, made or effectuated, as the case may be, on the date specified therefor, the Borrower shall indemnify such Lender against any loss, cost or expense incurred by such Lender related thereto, including, any loss (including cost of funds and out-of-pocket expenses), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund Advances or maintain the Advances. Any such Lender shall provide to the Borrower documentation setting forth the amounts of any loss, cost or expense referred to in the previous sentence, such documentation to be conclusive absent manifest error.

 

Section 2.09           Unused Fee. The Borrower shall pay, in accordance with Section 2.04, pro rata to each Lender, an unused fee (the "Unused Fee") payable in arrears for each Remittance Period, equal to the sum of the products for each day during such Remittance Period of (a) one divided by three hundred and sixty (360), (b) the applicable Unused Fee Rate and (c) the Facility Amount minus the greater of (i) the Advances Outstanding on such date and (ii) the Minimum Utilization.

 

Section 2.10           Increased Costs; Capital Adequacy.

 

(a)            If any Change in Law shall:

 

(i)            impose, modify or deem applicable any reserve, special deposit, assessment, fee, tax, insurance charge, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any the Administrative Agent, any Lender or any Affiliate, participant, successor or assign thereof (each of which shall be an "Affected Party");

 

(ii)           impose on any Affected Party or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Advances or participation therein or the obligation or right of any Lender to make Advances hereunder; or

 

(iii)          change the amount of capital maintained or required or requested or directed to be maintained by any Affected Party; and the result of any of the foregoing shall be to increase the cost to or impose a cost upon such Affected Party of funding or making or maintaining any Advance or of maintaining its obligation to make any such Advance or otherwise performing its obligations under the Transaction Documents or to increase the cost to such Affected Party or to reduce the amount of any sum received or receivable by such Affected Party, whether of principal, interest or otherwise or to require any payment calculated by reference to the amount of interest or loans received or held by such Affected Party, then the Borrower will pay to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional costs incurred or reduction suffered.

 

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(b)            If any Affected Party determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Affected Party's capital or on the capital of Affected Party's holding company, if any, as a consequence of this Agreement or the Advances made by such Affected Party to a level below that which such Affected Party or Affected Party's holding company could have achieved but for such Change in Law (taking into consideration such Affected Party's policies and the policies of such Affected Party's holding company with respect to capital adequacy and liquidity), the Borrower will pay to such Affected Party such additional amount or amounts as will compensate such Affected Party or Affected Party's holding company for any such reduction suffered on the immediately following Payment Date pursuant to Section 2.04 to the extent of available funds.

 

(c)            A certificate of an Affected Party providing an explanation of the applicable Change in Law and setting forth the amount or amounts necessary to compensate such Affected Party or its holding company, as the case may be, as specified in clause (a) or (b) of this Section 2.10 shall be delivered to the Borrower and shall be conclusive absent manifest or demonstrable error. In determining any amount provided for in this Section 2.10, the Affected Party may use any reasonable averaging and attribution methods. The Borrower shall pay such Affected Party the amount shown as due on any such certificate on the Payment Date following receipt thereof to the extent of available funds.

 

(d)            If a Currency Disruption Event as described in clause (a) of the definition of “Currency Disruption Event” with respect to any Lender occurred, such Lender shall in turn so notify the Borrower, whereupon the Yield Rate with respect to all Advances Outstanding of the affected Lender denominated in the affected Eligible Currency shall accrue Yield at the Designated Base Rate plus the Applicable Margin.

 

(e)            Failure or delay on the part of any Affected Party to demand compensation pursuant to this Section 2.10 shall not constitute a waiver of any Affected Party's right to demand such compensation; provided that the Borrower shall not be required to compensate any Affected Party pursuant to this Section 2.10 for any increased costs or reductions incurred more than one hundred and eighty (180) days prior to the date that such Affected Party notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Affected Party's intention to claim compensation therefor; provided, further, that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the one hundred and eighty (180)-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

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(f)             In the event that any Affected Party shall incur any loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Affected Party to make any purchase or loan or maintain any purchase or loan) as a result of any Advance not being made in accordance with a request therefor under Section 2.02, then, on the immediately following Payment Date following written notice from such Affected Party to the Borrower, the Borrower shall pay to such Affected Party, the amount of such loss or expense, pursuant to Section 2.04 (to the extent of available funds). Such written notice (which shall include calculations in reasonable detail) shall, in the absence of manifest or demonstrable error, be conclusive and binding upon the Borrower.

 

(g)            This Section 2.10 shall not apply to any (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes.

 

Section 2.11           Taxes.

 

(a)            Any and all payments made by the Borrower or made by the Servicer on behalf of the Borrower under this Agreement will be made free and clear of and without deduction or withholding for or on account of any Taxes. If any Taxes are required by Applicable Law to be withheld from any amounts payable to any Recipient, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the amount payable by the Borrower to such Person will be increased as necessary (the amount of such increase, the "Additional Amount") such that every net payment made under this Agreement after withholding or deduction for or on account of any Taxes (including, any Taxes on such increase) is not less than the amount that would have been paid had no such deduction or withholding been made.

 

(b)            The Borrower or Servicer shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent or a Lender timely reimburse it for the payment of, any Other Taxes.

 

(c)            The Borrower, the Servicer and the Originator shall pay (i) with respect to the Borrower, on the Payment Date pertaining to the Remittance Period in which such cost is incurred and (ii) with respect to the Servicer and the Originator, on demand, in each case, any and all stamp, sales, excise and other Taxes and fees payable or determined to be payable to any Governmental Authority in connection with the execution, delivery, filing and recording of this Agreement, the other Transaction Documents or any other document providing liquidity support, credit enhancement or other similar support to the Lenders in connection with this Agreement or the funding or maintenance of Advances hereunder.

 

(d)            The Borrower will indemnify, from funds available to it pursuant to Section 2.04 (and to the extent the funds available for indemnification provided by the Borrower is insufficient the Servicer, on behalf of the Borrower, will indemnify) each Recipient for the full amount of Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.11) payable or paid by such Person or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. All payments in respect of this indemnification shall be made within ten (10) days from the date a written demand therefor is delivered to the Borrower. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

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(e)            Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), and (ii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Transaction Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Transaction Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this Section 2.11(e).

 

(f)            Within thirty (30) days after the date of any payment by the Borrower or by the Servicer on behalf of the Borrower of any Taxes, the Borrower or the Servicer, as applicable, will furnish to the Administrative Agent at the applicable address set forth on this Agreement, appropriate evidence of payment thereof.

 

(g)            Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.11(g)(i), (ii) and (iii)) shall not be required if in the Lender's reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(i)            If any Lender is not a United States Tax Person, such Lender shall deliver to the Borrower, to the extent legally entitled to do so, with a copy to the Administrative Agent, on or prior to the date such Lender becomes a party to the Agreement (and from time to time thereafter upon reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

 

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a.           in the case of a Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Transaction Document, executed copies of IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "interest" article of such tax treaty and (y) with respect to any other applicable payments under any Transaction Document, IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "business profits" or "other income" article of such tax treaty;

 

b.           executed copies of IRS Form W-8ECI;

 

c.           in the case of a Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit L-1 to the effect that such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, a "10 percent shareholder" of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a "controlled foreign corporation" described in Section 881(c)(3)(C) of the Code (a "U.S. Tax Compliance Certificate") and (y) executed copies of IRS Form W-8BEN or W-8BEN-E; or

 

d.           to the extent a Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit L-2 or Exhibit L-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Lender is a partnership and one or more direct or indirect partners of such Lender are claiming the portfolio interest exemption, such Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit L-4 on behalf of each such direct and indirect partner;

 

(ii)           If a Lender is a United States Tax Person, such Lender shall deliver to the Borrower, with a copy to the Administrative Agent, on or prior to the date such Lender becomes a party to this Agreement (and from time to time thereafter upon reasonable request of the Borrower or the Administrative Agent), two (or such other number as may from time to time by prescribed by Applicable Law) duly completed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.

 

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(iii)          If a payment made to a Lender under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Applicable Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (iii), "FATCA" shall include any amendments made to FATCA after the date of this Agreement.

 

(iv)         If any Lender is not a United States Tax Person, such Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made.

 

(v)          Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 2.11(g) expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

(h)            Unless required by Applicable Law, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender, as the case may be. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes as to which it has been indemnified or paid Additional Amounts pursuant to this Section 2.11, it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made or Additional Amounts paid under this Section 2.11 with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 2.11(h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.11(h), in no event will the indemnified party by required to pay any amount to any indemnifying party pursuant to this Section 2.11(h) the payment of which would place the indemnified party in a less favorable net after-Tax position that the indemnified party would have been in if the indemnification payments or Additional Amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

 

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(i)             Each party's obligations under this Section 2.11 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.

 

(j)             If at any time the Borrower shall be liable for the payment of any Additional Amounts in accordance with this Section 2.11, then the Borrower shall have the option to terminate this Agreement (in accordance with the provisions of Section 2.16(b)); provided that such option to terminate shall in no event relieve the Borrower of paying any amounts owing pursuant to this Section 2.11 in accordance with the terms hereof.

 

Section 2.12           Grant of a Security Interest; Collateral Assignment of Agreements.

 

(a)            (i) To secure the prompt, complete and indefeasible payment in full when due, whether by lapse of time, acceleration or otherwise, of the Obligations and the performance by the Borrower of all of the covenants and obligations to be performed by it pursuant to this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent (collectively, the "Secured Obligations"), the Borrower hereby (A) collaterally assigns and pledges to the Collateral Agent, on behalf of the Secured Parties and (B) Grants a security interest to the Collateral Agent, on behalf of the Secured Parties, in all of the Borrower's right, title and interest in, to and under (but none of the obligations under) all of the Collateral, whether now existing or hereafter arising or acquired by the Borrower, and wherever the same may be located. For the avoidance of doubt, the Collateral shall not include any Excluded Amounts, and the Borrower does not hereby assign, pledge or Grant a security interest in any such amounts. Anything herein to the contrary notwithstanding, (x) the Borrower shall remain liable under the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (y) the exercise by the Collateral Agent, for the benefit of the Secured Parties, of any of its rights in the Collateral shall not release the Borrower from any of its duties or obligations under the Collateral, and (z) none of the Administrative Agent, the Collateral Agent, any Lender nor any Secured Party shall have any obligations or liability under the Collateral by reason of this Agreement, nor shall the Administrative Agent, the Collateral Agent, any Lender nor any Secured Party be obligated to perform any of the obligations or duties of the Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

 

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(ii) To secure the prompt, complete and indefeasible payment in full when due, whether by lapse of time, acceleration or otherwise, of the Obligations and the performance by the Borrower of all of the covenants and obligations to be performed by it pursuant to this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, each Securitization Subsidiary hereby (A) collaterally assigns and pledges to the Collateral Agent, on behalf of the Secured Parties and (B) Grants a security interest to the Collateral Agent, on behalf of the Secured Parties, in all of such Securitization Subsidiary's right, title and interest in, to and under (but none of the obligations under) all of the Collateral, whether now existing or hereafter arising or acquired by such Securitization Subsidiary, and wherever the same may be located. For the avoidance of doubt, the Collateral shall not include any Excluded Amounts, and such Securitization Subsidiary does not hereby assign, pledge or Grant a security interest in any such amounts. Anything herein to the contrary notwithstanding, (x) such Securitization Subsidiary shall remain liable under the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (y) the exercise by the Collateral Agent, for the benefit of the Secured Parties, of any of its rights in the Collateral shall not release such Securitization Subsidiary from any of its duties or obligations under the Collateral, and (z) none of the Administrative Agent, the Collateral Agent, any Lender nor any Secured Party shall have any obligations or liability under the Collateral by reason of this Agreement, nor shall the Administrative Agent, the Collateral Agent, any Lender nor any Secured Party be obligated to perform any of the obligations or duties of the Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

 

The foregoing Grants shall, for the purpose of determining the property subject to the Lien of this Agreement, be deemed to include any securities and any investments Granted to the Collateral Agent by or on behalf of the Borrower, whether or not such securities or investments satisfy the criteria set forth in the definitions of "Eligible Loan Asset" or "Permitted Investments," as the case may be.

 

(b)            As Security for the Secured Obligations, each Loan Party hereby collaterally assigns to the Collateral Agent, for the benefit of the Secured Parties, all of the such Loan Party’s right and title to and interest in, to and under (but not any obligations under) each Purchase and Sale Agreement (and any UCC financing statements filed under or in connection therewith), the Underlying Instruments related to each Loan Asset, all other agreements, documents and instruments evidencing, securing or guarantying any Loan Asset and all other agreements, documents and instruments related to any of the foregoing but excluding any Excluded Amounts or Retained Interest (the "Assigned Documents"). In furtherance and not in limitation of the foregoing, each Loan Party hereby collaterally assigns to the Collateral Agent, for the benefit of the Secured Parties, its right to indemnification under each Purchase and Sale Agreement. Each Loan Party confirms that following notice from the Administrative Agent to such Loan Party of the occurrence of an Event of Default until the Collection Date the Collateral Agent (at the direction of the Administrative Agent) on behalf of the Secured Parties shall have the sole right to enforce such Loan Party’s rights and remedies under each Purchase and Sale Agreement and any UCC financing statements filed under or in connection therewith for the benefit of the Secured Parties.

 

The parties hereto agree that such collateral assignment to the Collateral Agent, for the benefit of the Secured Parties, shall terminate upon the Collection Date.

 

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Section 2.13           Evidence of Debt. The Administrative Agent shall maintain, solely for this purpose as a non-fiduciary agent of the Borrower, at its address referred to in Section 12.02 a copy of each Assignment and Acceptance and participation agreement delivered to and accepted by it and a register for the recordation of the names and addresses and interests of the Lenders (including principal amounts and stated interest on the Advances) (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent and each Lender shall treat each person whose name is recorded in the Register as a Lender under this Agreement for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time during business hours and from time to time upon reasonable prior notice. No Advance hereunder shall be assigned or sold, in whole or in part without registering such assignment or sale on the Register.

 

Section 2.14           Release of Loan Assets.

 

(a)            The Lien of the Collateral Agent shall be automatically released with respect to: (i) any Loan Asset (and the Related Asset) sold or substituted in accordance with the applicable provisions of Section 2.07, (ii) any Loan Asset (and the Related Asset) with respect to which all amounts have been paid in full by the related Obligor and deposited in the Collection Account, (iii) amounts distributed to the Borrower pursuant to Section 2.04, and (iv) the entire Collateral following the Collection Date. Any Non-Levered Loan Asset sold by the Borrower shall be automatically released from the Lien of the Collateral Agent. The Collateral Agent, for the benefit of the Secured Parties, shall, at the sole expense of the Servicer and the Borrower and at the direction of the Administrative Agent, execute such documents and instruments of release as may be prepared by the Servicer on behalf of the Borrower, give notice of such release to the Collateral Custodian (in the form of Exhibit J) (unless the Collateral Custodian and Collateral Agent are the same Person) and take other such actions as shall reasonably be requested by the Borrower to effect such release of the Lien created pursuant to this Agreement. Upon receiving such notification by the Collateral Agent as described in the immediately preceding sentence, if applicable, the Collateral Custodian shall deliver the Required Loan Documents to the Borrower. Notwithstanding anything to the contrary herein, each of the Administrative Agent, Collateral Agent, Collateral Custodian and Lender agree that the release of the Lien on any Loan Assets (and Related Assets) designated to be sold to GC Advisors LLC (or an Affiliate) for a substantially concurrent transfer to a special purpose vehicle in accordance with the No-Action Relief in connection with an Existing Golub BDC CLO (the “No-Action Relief Assets”) shall be deemed to occur prior to the payment by the Borrowers of its Obligations with respect to such No-Action Relief Assets on the applicable date of transfer and the release of the Lien (other than with respect to the No-Action Relief Assets) with respect to any other Loan Assets being sold to such Existing Golub BDC CLO shall be deemed to occur simultaneously with the payment by the Borrower of its Obligations with respect to such Loan Assets on the applicable date of transfer, in each case, so as to allow the Borrower to sell, assign and otherwise transfer the Collateral to certain parties in accordance with the terms of the No-Action Relief and the related transaction documentation of the Existing Golub BDC CLO (it being understood no such release shall occur until the Administrative Agent has received evidence reasonably satisfactory to it that the conditions precedent to closing of the Existing Golub BDC CLO have been satisfied).

 

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(b)         A Securitization Subsidiary may obtain the release of its entire Securitization Subsidiary Collateral Portfolio (including such Securitization Subsidiary’s Collection Accounts) and shall no longer be party to this Agreement upon (i) the closing of a Securitization by such Securitization Subsidiary and transfer by the Borrower of the equity in such Securitization Subsidiary to an Affiliate, third party or charitable trust or any combination of the foregoing and (ii) satisfaction of the following conditions precedent:

 

(i)            the Borrower shall have delivered a pro forma Borrowing Base Certificate and Loan Asset Schedule to the Administrative Agent reflecting such release;

 

(ii)           the Borrower shall deliver a list of all Loan Assets to be released;

 

(iii)          the Borrower shall have provided ten Business Days’ prior notice of such release to the Administrative Agent and the Collateral Agent and the Administrative Agent shall have provided its prior written consent to such release in its sole discretion;

 

(iv)          the Borrower shall have notified the Administrative Agent of any amount to be deposited into the Borrower’s Collection Account in connection with such release;

 

(v)           the representations and warranties contained in Sections 4.01, 4.02 and 4.03 hereof shall be correct in all respects, except to the extent relating to an earlier date, after giving effect to such release;

 

(vi)          after giving effect to such release of the applicable Securitization Subsidiary Collateral Portfolio and the deposit into the Borrower Collection Account in connection therewith and any payments of Advances Outstanding expected to be made in connection with the closing of the Securitization, no Event of Default, Unmatured Event of Default or Borrowing Base Deficiency shall exist; and

 

(vii)         the Borrower and the Servicer (on behalf of the Borrower) shall agree to pay the legal fees and expenses of the Administrative Agent, each Lender, the Collateral Agent and the Collateral Custodian in connection with any such release.

 

The Collateral Agent, for the benefit of the Secured Parties, shall, at the sole expense of the Servicer and at the direction of the Administrative Agent, execute such documents and instruments of release as may be prepared by the Servicer on behalf of applicable Securitization Subsidiary, give notice of such release to the Collateral Custodian (in the form of Exhibit J) (unless the Collateral Custodian and Collateral Agent are the same Person) and take other such actions (including consenting to a UCC-3 termination for the relevant Securitization Subsidiary, as applicable) as shall reasonably be requested by the applicable Securitization Subsidiary to effect such release of the Lien in such Securitization Subsidiary Collateral Portfolio created pursuant to this Agreement (which release shall be effective simultaneously with the closing of the relevant Securitization) and to evidence that such Securitization Subsidiary is no longer party to this Agreement. Upon receiving such notification by the Collateral Agent as described in the immediately preceding sentence, if applicable, the Collateral Custodian shall deliver the Required Loan Documents to the applicable Securitization Subsidiary or any trustee or collateral administrator of such Securitization Subsidiary, as applicable, as directed by the Servicer.

 

Section 2.15         Treatment of Amounts Received by any Loan Party. Amounts received by any Loan Party pursuant to Section 2.07 on account of Loan Assets (other than Non-Levered Loan Assets) shall be treated as payments of Principal Collections or Interest Collections, as applicable, on Loan Assets hereunder.

 

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Section 2.16          Prepayment; Termination; Reduction.

 

(a)           Except as expressly permitted or required herein, including any repayment necessary to cure a Borrowing Base Deficiency, Advances Outstanding in any Eligible Currency may only be prepaid in whole or in part at the option of the Borrower at any time by delivering a Notice of Reduction (which notice shall include a Borrowing Base Certificate) to the Administrative Agent and the Collateral Agent at least one (1) Business Day prior to such prepayment; provided that any prepayment of Advances in an Eligible Currency other than Dollars shall be made by converting such prepayment into the applicable Eligible Currency at the Spot Rate to the extent sufficient funds have not been remitted in such Eligible Currency. In the event that an Advance is remitted to the Principal Collection Subaccount in connection with a Notice of Borrowing in respect of the acquisition by the Borrower of a loan asset constituting a newly originated loan and such loan asset is not acquired by the Borrower within two (2) Business Days of the date of such Advance, the Servicer shall cause the Borrower to effect a prepayment in an amount equal to such Advance within two (2) Business Days of such Advance. The Borrower may use amounts on deposit in the Contribution Account at any time for purposes of making a prepayment of Advances Outstanding. Upon any prepayment in full, the Borrower shall also pay in full all accrued and unpaid Yield. Upon any prepayment, the Borrower shall also pay any Breakage Fees, Increased Costs and all accrued and unpaid costs and expenses of the Administrative Agent and Lenders related to such prepayment; provided that no reduction in Advances Outstanding shall be given effect unless (i) sufficient funds have been remitted to pay all such amounts in full, as determined by the Administrative Agent, in its sole discretion and (ii) no event has occurred or would result from such prepayment which would constitute an Event of Default or an Unmatured Event of Default. The Administrative Agent shall apply amounts received from the Borrower pursuant to this Section 2.16(a) to the payment of any Breakage Fees and to the pro rata reduction of the Advances Outstanding. Any notice relating to any repayment pursuant to this Section 2.16(a) shall be irrevocable.

 

(b)           The Borrower may, at its option and upon three (3) Business Days' prior written notice of such termination or permanent reduction in the form of Exhibit F to the Administrative Agent and the Collateral Agent, either (i) terminate this Agreement and the other Transaction Documents upon payment in full of all Advances Outstanding, all accrued and unpaid Yield and Fees, any Breakage Fees, Increased Costs, all accrued and unpaid costs and expenses of the Administrative Agent and Lenders, payment of the Prepayment Premium pro rata to each Lender and payment of all other Obligations (other than unmatured contingent obligations for which no claim has been made), or (ii) permanently reduce in part the Facility Amount upon payment in full, all accrued and unpaid Yield and Unused Fees (pro rata with respect to the portion of the Facility Amount so reduced), any Breakage Fees, Increased Costs, all accrued and unpaid costs and expenses of the Administrative Agent and Lenders and the Prepayment Premium pro rata to each Lender. Notwithstanding anything to the contrary herein, no Prepayment Premium shall be due (i) to any Lender that is a Defaulting Lender pursuant to Section 2.19, (ii) to the Administrative Agent as a lender if the Administrative Agent has previously resigned as Administrative Agent pursuant to the terms of this Agreement, (iii) during the continuation of a Non-Approval Event, (iv) following the occurrence of a Currency Disruption Event and (v) if at any time the Servicer does not consent to the Alternative Rate and, upon payment in full of all Obligations hereunder, terminates the Transaction Documents. The Commitment of each Lender shall be reduced by an amount equal to its Pro Rata Share (prior to giving effect to any reduction of Commitments hereunder) of the aggregate amount of any reduction under this Section 2.16(b).

 

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(c)           The Borrower hereby acknowledges and agrees that the Prepayment Premium constitutes additional consideration for the Lenders to enter into this Agreement.

 

Section 2.17          Collections and Allocations.

 

(a)           The Collateral Agent shall promptly identify all Available Collections received in the Collection Account as being on account of Interest Collections or Principal Collections and shall segregate all Interest Collections and Principal Collections and transfer the same to the Interest Collection Subaccount and the Principal Collection Subaccount, respectively. If, notwithstanding such compliance, the Servicer receives any collections directly, the Servicer (upon obtaining knowledge thereof) shall transfer, or cause to be transferred, any such collections received directly by it (if any) to the Collection Account by the close of business within two (2) Business Days after obtaining knowledge of the receipt of such Collections; provided that the Servicer shall identify to the Collateral Agent any collections received directly by the Servicer as being on account of Interest Collections or Principal Collections. The Collateral Agent shall further provide to the Servicer a statement as to the amount of Interest Collections and Principal Collections on deposit in the Interest Collection Subaccount and the Principal Collection Subaccount no later than three (3) Business Days prior to each Reporting Date for inclusion in the Servicing Report delivered pursuant to Section 6.08(b).

 

(b)           On the Cut-Off Date with respect to any Loan Asset, the Servicer will (i) deposit or will cause the Borrower to deposit into the Collection Account all Available Collections denominated in Dollars received in respect of Eligible Loan Assets being transferred to and included as part of the Collateral on such date and (ii) deposit or will cause the Borrower to deposit into the applicable Eligible Currency Account all Available Collections not denominated in Dollars received in respect of Eligible Loan Assets being transferred to and included as part of the Collateral on such date. The Servicer may, on any date, instruct the Account Bank to convert funds on deposit in any or all Eligible Currency Accounts into Dollars using the Spot Rate. Such converted funds shall then be transferred into the Collection Account.

 

(c)           With the prior written consent of the Administrative Agent (a copy of which will be provided by the Servicer to the Collateral Agent), the Servicer may withdraw from the Collection Account any deposits thereto constituting Excluded Amounts if the Servicer has, prior to such withdrawal and consent, delivered to the Administrative Agent a report setting forth the calculation of such Excluded Amounts in form and substance satisfactory to the Administrative Agent and the Collateral Agent.

 

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(d)           Prior to the delivery of a Notice of Exclusive Control, the Servicer shall, pursuant to written instruction (which may be in the form of standing instructions), direct the Collateral Agent to invest, or cause the investment of, funds on deposit in the Controlled Accounts in Permitted Investments, from the date of this Agreement until the Collection Date. Absent any such written instruction, such funds shall be invested in the Standby Investment. A Permitted Investment acquired with funds deposited in any Controlled Account shall mature not later than the Business Day immediately preceding any Payment Date, and shall not be sold or disposed of prior to its maturity. All such Permitted Investments shall be registered in the name of the Account Bank or its nominee for the benefit of the Collateral Agent. All income and gain realized from any such investment, as well as any interest earned on deposits in any Controlled Account shall be distributed in accordance with the provisions of Article II hereof. The Borrower shall deposit in the Collection Account or the Unfunded Exposure Account, as the case may be (with respect to investments made hereunder of funds held therein), an amount equal to the amount of any actual loss incurred, in respect of any such investment, immediately upon realization of such loss. None of the Account Bank, the Collateral Agent, the Administrative Agent or any Lender shall be liable for the amount of any loss incurred, in respect of any investment, or lack of investment, of funds held in any Controlled Account. The parties hereto acknowledge that the Collateral Agent, the Administrative Agent, a Lender or any of their respective Affiliates may receive compensation with respect to the Permitted Investments. The Servicer shall, pursuant to written instruction (which may be in the form of standing instructions), direct the Collateral Agent to invest, or cause the investment of, funds on deposit in the Contribution Account in Permitted Investments, from the Closing Date until the Collection Date. Absent any such written instruction, such funds shall not be invested.

 

(e)           Until the Collection Date, neither the Borrower nor the Servicer shall have any rights of direction or withdrawal, with respect to amounts held in any Controlled Account, except to the extent explicitly set forth in Section 2.04, Section 2.17(c) or Section 2.18.

 

(f)            Eligible Currency.

 

(i)          Subject to the Pari Passu Provisions, any and all payments made by the Borrower under the Transaction Documents shall be made in the applicable Eligible Currency, as follows: (A) repayment of Advances in an Eligible Currency other than Dollars shall be made in the corresponding Eligible Currency, and (B) payment of interest on the Advances in an Eligible Currency other than Dollars shall be made in the corresponding Eligible Currency. Each party hereto agrees that the Available Collections and all such other amounts described in Section 2.04(a), Section 2.04(b) and Section 2.04(c) shall be applied in accordance with the priority of payments set forth in Section 2.04(a), Section 2.04(b) and Section 2.04(c). The Lenders and the Administrative Agent hereby instruct the Collateral Agent to apply the Available Collections and all such other amounts described in Section 2.04(a), Section 2.04(b) and Section 2.04(c) in accordance with Section 2.04(a), Section 2.04(b) and Section 2.04(c); provided that such payments shall be subject to availability of such funds pursuant to Section 2.04(a), Section 2.04(b) and Section 2.04(c).

 

(ii)          The Servicer shall instruct the Collateral Agent, on the Determination Date immediately preceding each Payment Date, to convert amounts on deposit in the Collection Account into each Eligible Currency to the extent necessary to make payments pursuant to Section 2.04(a), Section 2.04(b) and Section 2.04(c), as applicable (as determined by the Servicer using the Spot Rate). The Borrower may receive collections on Non-Levered Loan Assets in currencies other than Eligible Currencies and deposit such funds into the Contribution Account and distribute funds in such other currencies, in each case, to the extent such amounts are not required to be deposited into the Collection Account in accordance herewith.

 

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(iii)        Any Available Collections on deposit in the Principal Collection Subaccount denominated in an Eligible Currency may be converted by the Servicer into another Eligible Currency on any Business Day (other than a Payment Date) using the Spot Rate so long as (A) no Borrowing Base Deficiency exists after giving effect to such conversion, and (B) the converted amounts are used solely for purposes of acquiring a Loan denominated in such other Eligible Currency pursuant to Section 2.18. The Servicer shall provide no less than one (1) Business Day’s prior written notice to the Administrative Agent and the Collateral Agent of any such conversion.

 

Section 2.18         Reinvestment of Principal Collections.

 

On the terms and conditions hereinafter set forth as certified in writing to the Collateral Agent and the Administrative Agent, prior to the end of the Revolving Period, the Servicer may, to the extent of any Principal Collections on deposit in the Principal Collection Subaccount:

 

(a)         direct the Collateral Agent to withdraw such funds for the purpose of reinvesting in additional Eligible Loan Assets to be Granted hereunder; provided that the following conditions are satisfied:

 

(i)             all conditions precedent set forth in Section 3.02 and Section 3.04 have been satisfied;

 

(ii)            no Event of Default has occurred, or would result from such withdrawal and reinvestment, and no Unmatured Event of Default exists or would result from such withdrawal and reinvestment;

 

(iii)           delivery of a Disbursement Request executed by the Borrower and a Responsible Officer of the Servicer; or

 

(b)         direct the Collateral Agent to withdraw such funds for the purpose of making payments in respect of the Advances Outstanding in the applicable Eligible Currency at such time in accordance with and subject to the terms of Section 2.16.

 

Upon the satisfaction of the applicable conditions set forth in this Section 2.18 (as certified by the Borrower to the Collateral Agent and the Administrative Agent), the Collateral Agent shall release funds from the Principal Collection Subaccount as directed by the Servicer in an amount not to exceed the lesser of (x) the amount requested by the Servicer for reinvestment or repayment and (y) the amount on deposit in the Principal Collection Subaccount on such day.

 

Section 2.19         Defaulting Lenders.

 

(a)         Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the portion of the Loan funded by such Defaulting Lender shall not be included in determining whether Required Lenders have taken or may take any action hereunder and the Defaulting Lender shall not be included in determining whether all Lenders have taken or may have taken any action hereunder; provided that any waiver, amendment or modification requiring the consent of all Lenders which affects such Defaulting Lender differently than other affected Lenders or Lenders shall require the consent of such Defaulting Lender, as applicable.

 

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(b)         In the event that the Administrative Agent, and, so long as no Event of Default exists, the Borrower determines (such determination not to be unreasonably withheld) that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, such Lender will cease to be a Defaulting Lender and the provisions of clause (a) above shall, from and after such determination, cease to be of further force or effect with respect to such Lender; provided that no change hereunder from Defaulting Lender to a non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender having been a Defaulting Lender.

 

(c)         Replacement of a Lender.

 

(i)             If any Lender other than Morgan Stanley becomes a Defaulting Lender or a Lender other than Morgan Stanley or any Affiliate thereof imposes or attempts to impose costs pursuant to Section 2.10, then the Borrower may, at its sole expense and effort, upon not less than five (5) Business Days advance notice to the Administrative Agent and (if different) the related Lender, (x) require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 12.04), all of its respective interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender if a Lender accepts such assignment); provided that (A) the Borrower shall have received the prior written consent of the Administrative Agent with respect to any assignee that is not already a Lender hereunder, which consent shall not be unreasonably withheld, (B) the assignee shall not be an Affiliate of any of the Borrower, the Servicer or the Originator and (C) such assigning Lender shall have received payment of an amount equal to all outstanding Advances funded or maintained by such Lender, together with all accrued interest thereon and all accrued Fees or (y) terminate the Commitment of such Lender and repay all Obligations of the Borrower owing to such Lender relating to the portion of the Advance held by such Lender as of such termination date, without the payment of any penalty, fee or premium. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to exist.

 

(ii)            Any Lender being replaced pursuant to Section 2.19(c)(i) above shall execute and deliver an Assignment and Acceptance with respect to such Lender's applicable Commitment and outstanding portion of the Advance funded by such Lender. Pursuant to such Assignment and Acceptance, (A) the assignee Lender shall acquire all or a portion, as the case may be, of the assigning Lender’s Commitment and outstanding portion of the Advance and (B) all obligations of the Borrower owing to the assigning Lender relating to the Advance and Commitments so assigned shall be paid in full by the assignee Lender to such assigning Lender concurrently with such Assignment and Acceptance, the assignee Lender shall become a Lender hereunder and under each of the Transaction Documents and the assigning Lender shall cease to constitute a Lender hereunder with respect to such assigned portion of the Advance and Commitments, except with respect to indemnification provisions under this Agreement, which shall survive as to such assignment Lender. In connection with any such replacement, if any such Defaulting Lender does not execute and deliver to the Administrative Agent a duly executed Assignment and Acceptance reflecting such replacement within three (3) Business Days of the date on which the assignee Lender executes and delivers such Assignment and Acceptance to such Defaulting Lender, then such Defaulting Lender shall be deemed to have executed and delivered such Assignment and Acceptance without any action on the part of the Defaulting Lender.

 

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Section 2.20         Investment of Amounts on Deposit in Contribution Account. The Collateral Custodian shall cause the Account Bank, prior to the Closing Date, to establish a single, segregated non-interest bearing account, which shall be designated as the Contribution Account, in the name of and for the benefit of the Borrower. The Servicer may, to the extent of any amounts on deposit in the Contribution Account, withdraw such funds for the purpose of investing in Non-Levered Loan Assets. For the avoidance of doubt, the Borrower, or the Servicer on behalf of the Borrower, shall have sole rights of withdrawal with respect to the Contribution Account, and the Account Bank shall only withdraw funds from the Contribution Account pursuant to the instructions of the Borrower or the Servicer.

 

Section 2.21         Incremental Facilities.

 

(a)         The Borrower may, by written notice to the Administrative Agent and each Lender, elect to request, prior to the last day of the Revolving Period, an increase to the existing Commitments (any such increase, the “New Commitments”) by an amount with the consent of the Administrative Agent and each Lender whose Commitment is being increased thereby in their respective sole discretion and subject to any internal approvals, which would increase the Facility Amount to an amount greater than $400,000,000. Each such notice shall specify (i) the date (each, an “Increased Amount Date”) on which the Borrower proposes that the New Commitments shall be effective and approved in writing by the Administrative Agent and (ii) the identity of each Lender or other Person (each, an “Increasing Lender”) to whom the Borrower proposes any portion of such New Commitments be allocated and the amounts of such allocations (if then known). Such New Commitments shall become effective as of such Increased Amount Date; provided that (A) no Event of Default shall exist on such Increased Amount Date before or after giving effect to such New Commitments; (B) the New Commitments shall be effected pursuant to an Assignment and Acceptance for each existing Lender or one or more Joinder Supplements for any new Lender executed and delivered by the Borrower, such new Lender and the Administrative Agent, and each of which shall be recorded in the Register; (C) the Borrower shall pay any applicable Breakage Fees in connection with the New Commitments and shall pay any other required fees in connection with the New Commitments; (D) the Borrower shall deliver or cause to be delivered any legal opinions or other customary closing documents (substantially consistent with the documents set forth in Section 3.01) reasonably requested by Administrative Agent or an Increasing Lender in connection with any such transaction; and (E) the effectiveness of any allocation of New Commitments to a non-Lender shall be subject to the prior written consent of the Administrative Agent.

 

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(b)         On any Increased Amount Date on which New Commitments are effected, subject to the satisfaction of the foregoing terms and conditions, (i) each of the existing Lenders shall assign to each of the Increasing Lenders, and each of the Increasing Lenders shall purchase from each of the existing Lenders, at the principal amount thereof (together with accrued interest), such interests in the Advances Outstanding on such Increased Amount Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Advances will be held by existing Lenders and Increasing Lenders ratably in accordance with their Commitments after giving effect to the addition of such New Commitments to the Commitments, (ii) each New Commitment shall be deemed, for all purposes, a Commitment and each Advance made thereunder (a “New Advance”) shall be deemed, for all purposes, an Advance and (iii) each new Lender shall become a Lender with respect to the Commitments and all matters relating thereto.

 

(c)         The Administrative Agent shall notify the Lenders promptly upon receipt of the Borrower’s notice of each Increased Amount Date and in respect thereof (i) the New Commitments and the Increasing Lenders and (ii) in the case of each notice to any Lender, the respective interests in such Lender’s Advances, in each case subject to the assignments contemplated by this Section 2.21.

 

The terms and provisions of the New Advances shall be identical to the Advances. Each Assignment and Acceptance or each Joinder Supplement, as applicable, may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Transaction Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, and consented to by the Borrower (such consent not to be unreasonably withheld), to effect the provisions of this Section 2.21.

 

ARTICLE III

 

CONDITIONS PRECEDENT

 

Section 3.01         Conditions Precedent to Effectiveness.

 

(a)         This Agreement shall be effective upon satisfaction of the conditions precedent that:

 

(i)             all acts and conditions (including, the obtaining of any necessary consents and regulatory approvals and the making of any required filings, recordings or registrations) required to be done and performed and to have happened prior to the execution, delivery and performance of this Agreement and all related Transaction Documents and to constitute the same legal, valid and binding obligations, enforceable in accordance with their respective terms, shall have been done and performed and shall have happened in due and strict compliance with all Applicable Law;

 

(ii)            in the reasonable judgment of the Administrative Agent, there has not been (x) any change in Applicable Law which adversely affects any Lender's or the Administrative Agent's ability to enter into the transactions contemplated by the Transaction Documents or (y) any Material Adverse Effect or material disruption in the financial, banking or commercial loan or capital markets generally;

 

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(iii)           any and all information submitted to each Lender and the Administrative Agent by any Loan Party, the Originator or the Servicer or any of their Affiliates is true and accurate;

 

(iv)           each Lender shall have received all documentation and other information requested by such Lender and/or required by regulatory authorities with respect to any Loan Party, the Originator and the Servicer under applicable "know your customer" and Anti-Money Laundering Laws, including, the Patriot Act, all in form and substance satisfactory to each Lender;

 

(v)            the Administrative Agent shall have received on or before the date of such effectiveness the items listed in Schedule I hereto, each in form and substance satisfactory to the Administrative Agent and each Lender;

 

(vi)           in the judgment of the Administrative Agent and each Lender, there shall have been no material adverse change in any Loan Party's (or the Servicer's) underwriting, servicing, collection, operating and reporting procedures and systems since the completion of due diligence by the Administrative Agent and each Lender;

 

(vii)          the results of the Administrative Agent's financial, legal, tax and accounting due diligence relating to the Originator, each Loan Party, the Servicer, the Eligible Loan Assets and the transactions contemplated hereunder are satisfactory to the Administrative Agent; and

 

(viii)         the Borrower shall have paid in full all fees then required to be paid, including all fees required hereunder and under the applicable Lender Fee Letters and the Wells Fargo Fee Letter and shall have reimbursed the Lenders, the Administrative Agent, the Collateral Custodian, the Account Bank and the Collateral Agent for all fees, costs and expenses of closing the transactions contemplated hereunder and under the other Transaction Documents, including the attorney fees and any other legal and document preparation costs incurred by the Lenders and the Administrative Agent.

 

(b)           By its execution and delivery of this Agreement, each of the Borrower and the Servicer hereby certifies that each of the conditions precedent to the effectiveness of this Agreement set forth in this Section 3.01 (other than such conditions precedent subject to the judgment, consent or satisfaction of the Administrative Agent or any Lender) have been satisfied.

 

Section 3.02         Conditions Precedent to All Advances. Each Advance to the Borrower from the Lenders shall be subject to the further conditions precedent that:

 

(a)         On the Advance Date of such Advance, the following statements shall be true and correct, and the Borrower by accepting any amount of such Advance shall be deemed to have certified that:

 

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(i)             the Servicer (on behalf of the Borrower) shall have delivered to the Administrative Agent and each Lender (with a copy to the Collateral Custodian and the Collateral Agent), no later than noon on (i) the proposed Advance Date for Dollar Advances and (ii) the Business Day prior to the proposed Advance Date for Advances in an Eligible Currency other than Dollars (or such shorter period as agreed to from time to time by the Administrative Agent and each Lender): (A) a Notice of Borrowing and an Officer's Certificate (which may be included as part of the Notice of Borrowing) computed as of the proposed Advance Date and after giving effect thereto and to the purchase by the Borrower of the Eligible Loan Assets to be purchased by it on such Advance Date, demonstrating that the Investment Criteria are satisfied on the date on which the Borrower (or the Servicer on its behalf) commits to purchase such Eligible Loan Asset (and after giving effect to such commitment), (B) a Borrowing Base Certificate, (C) a Loan Asset Schedule and (D) such additional information, approvals, documents, certificates and reports as may be reasonably requested by the Administrative Agent and an executed copy of each assignment and assumption agreement, transfer document or instrument (including any Loan Assignment) relating to each Loan Asset to be Granted evidencing the assignment of such Loan Asset from any prior third party owner thereof directly to the applicable Loan Party (other than in the case of any Loan Asset acquired by the applicable Loan Party at origination);

 

(ii)            the Borrower shall have delivered to the Collateral Custodian (with a copy to the Administrative Agent), no later than 4:00 p.m. on the related Advance Date, a copy of the duly executed original promissory notes of the Loan Assets (or, in the case of any Noteless Loan, a fully executed assignment agreement or credit agreement (as applicable)); provided that, notwithstanding the foregoing, the Borrower shall cause the Loan Asset Checklist and the other Required Loan Documents with respect to such Loan Assets to be in the possession of the Collateral Custodian not later than (A) five (5) Business Days if the Servicer or its Affiliate is the agent with respect to such Loan Asset and (B) otherwise, thirty (30) days in each case after the related Cut-Off Date as to any Loan Assets;

 

(iii)           the representations and warranties contained in Sections 4.01, 4.02 and 4.03 are true and correct in all respects, and there exists no material breach of any covenant contained in Sections 5.01, 5.02, 5.03 and 5.04 before and after giving effect to the Advance to take place on such Advance Date and to the application of proceeds therefrom, on and as of such day as though made on and as of such date (other than any representation and warranty that is made as of a specific date);

 

(iv)           no Event of Default has occurred, or would result from such Advance, no Unmatured Event of Default or Borrowing Base Deficiency exists or would result from such Advance;

 

(v)            no event has occurred and is continuing, or would result from such Advance, which constitutes a Servicer Default or any event which, if it continues uncured, will, with notice or lapse of time, constitute a Servicer Default;

 

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(vi)           since the Closing Date, there has been no Material Adverse Effect;

 

(vii)          no Liens exist in respect of Taxes (other than Permitted Liens) which are prior to the lien of the Collateral Agent on the Eligible Loan Assets to be Granted on such Advance Date;

 

(viii)         all terms and conditions of each Purchase and Sale Agreement required to be satisfied in connection with the assignment of each Eligible Loan Asset being Granted hereunder on such Advance Date (and the Related Asset related thereto), including, the perfection of the applicable Loan Party's interests therein, shall have been satisfied in full, and all filings (including, UCC filings) required to be made by any Person and all actions required to be taken or performed by any Person in any jurisdiction to give the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest (subject only to Permitted Liens) in the Collateral, including such Eligible Loan Assets and the Related Asset and the proceeds thereof shall have been made, taken or performed;

 

(ix)           the Loan Asset to be acquired with the proceeds of such Advance is an Eligible Loan Asset as of the date of funding; and

 

(x)            (A) with respect to Eligible Loan Assets purchased with Advances, such Advance shall be denominated in the same Eligible Currency as such Loan Asset, (B) with respect to Eligible Loan Assets purchased with available Principal Collections, such Principal Collections shall be denominated in the same Eligible Currency (or converted to such Eligible Currency pursuant to Section 2.17(f)(iii)) as the Loan Asset acquired in connection with such reinvestment and (C) with respect to any substitution pursuant to Section 2.07(a), the Loan sold in connection with such substitution shall be denominated in the same Eligible Currency as the Loan Asset acquired in connection with such substitution;.

 

(b)           The Borrower shall have provided a request for an Approval Notice for each Loan Asset intended to be included in the Collateral in connection with the applicable Advance Date (and such information in respect of each such Loan Asset that is requested by the Administrative Agent). The Administrative Agent shall have provided an Approval Notice to the Borrower for each of the Eligible Loan Assets identified in the applicable Loan Asset Schedule for inclusion in the Collateral on the applicable Advance Date.

 

(c)           No Applicable Law shall prohibit, and no order, judgment or decree of any federal, state or local court or governmental body, agency or instrumentality shall prohibit or enjoin, the making of such Advances by any Lender or the proposed Grant of Eligible Loan Assets in accordance with the provisions hereof.

 

(d)           The proposed Advance Date shall take place during the Revolving Period.

 

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(e)           The Borrower shall have paid in full all fees then required to be paid, including all fees required hereunder and under the applicable Lender Fee Letters and the Wells Fargo Fee Letter.

 

The failure to satisfy any of the foregoing conditions precedent in respect of any Advance shall give rise to a right of the Administrative Agent and the Lenders to rescind the related Advance, to the extent of funds on deposit in the Collection Account, and direct the Borrower to pay to the Administrative Agent for the benefit of the Lenders an amount equal to the Advances made during any such time that any of the foregoing conditions precedent were not satisfied.

 

Section 3.03         Advances Do Not Constitute a Waiver. No Advance made hereunder shall constitute a waiver of any condition to any Lender's obligation to make such an Advance unless such waiver is in writing and executed by such Lender.

 

Section 3.04         Conditions to Acquisition of Loan Assets. Each Grant of an additional Eligible Loan Asset pursuant to Section 2.06, a Substitute Eligible Loan Asset pursuant to Section 2.07(c), an additional Eligible Loan Asset pursuant to Section 2.18 or any other Grant of a Loan Asset hereunder shall be subject to the further conditions precedent that (as certified to the Collateral Agent by the Borrower):

 

(a)         the Servicer (on behalf of the Borrower) shall have delivered to the Administrative Agent and each Lender (with a copy to the Collateral Custodian and the Collateral Agent) no later than 5:00 p.m. on the date that is one (1) Business Day prior to the related Cut-Off Date: (i) a Borrowing Base Certificate, (ii) a Loan Asset Schedule, (iii) and Approval Notice (for each Loan Asset added to the Collateral on the related Cut-Off Date) and (iv) such additional information, approvals, documents, certificates and reports as may be requested by the Administrative Agent and an executed copy of each assignment and assumption agreement, transfer document or instrument (including any Loan Assignment) relating to each Loan Asset to be pledged evidencing the assignment of such Loan Asset from any prior third party owner thereof directly to the applicable Loan Party (other than in the case of any Loan Asset acquired by the applicable Loan Party at origination);

 

(b)         the Borrower shall have delivered to the Collateral Custodian (with a copy to the Administrative Agent), no later than noon on the related Cut-Off Date, a copy of the duly executed original promissory notes of the Loan Assets (and, in the case of any Noteless Loan, a fully executed assignment agreement); provided that, notwithstanding the foregoing, the Borrower shall cause the Loan Asset Checklist and the Required Loan Documents to be in the possession of the Collateral Custodian not later than (A) five (5) Business Days if the Servicer or its Affiliate is the agent with respect to such Loan Asset and (B) otherwise, thirty (30) days, in each case after the related Cut-Off Date as to any Loan Assets;

 

(c)          with respect to Eligible Loan Assets purchased with Advances and available Principal Collections, the Investment Criteria are satisfied on the date on which the Borrower (or the Servicer on its behalf) commits to purchase such Eligible Loan Asset (and after giving effect to such commitment);

 

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(d)         no Liens exist in respect of Taxes (other than Permitted Liens) which are prior to the lien of the Collateral Agent on the Eligible Loan Assets to be Granted on such Cut-Off Date;

 

(e)          all terms and conditions of each Purchase and Sale Agreement required to be satisfied in connection with the assignment of each Eligible Loan Asset being Granted hereunder on such Cut-Off Date (and the Related Asset), including, the perfection of the applicable Loan Party's interests therein, shall have been satisfied in full, and all filings (including, UCC filings) required to be made by any Person and all actions required to be taken or performed by any Person in any jurisdiction to give the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest (subject only to Permitted Liens) in such Eligible Loan Assets and the Related Asset and the proceeds thereof shall have been made, taken or performed;

 

(f)          the Administrative Agent shall have provided an Approval Notice to the Borrower for each of the Eligible Loan Assets identified in the applicable Loan Asset Schedule for inclusion in the Collateral on the applicable Cut-Off Date;

 

(g)         no Event of Default has occurred, or would result from such Grant, and no Unmatured Event of Default exists, or would result from such Grant (other than, with respect to any Grant of an Eligible Loan Asset necessary to cure a Borrowing Base Deficiency in accordance with Section 2.06, an Unmatured Event of Default arising solely pursuant to such Borrowing Base Deficiency); and

 

(h)         the representations and warranties contained in Sections 4.01, 4.02 and 4.03 are true and correct in all material respects, and there exists no breach of any covenant contained in Sections 5.01, 5.02, 5.03 and 5.04 before and after giving effect to the Grant to take place on such Cut-Off Date, on and as of such day as though made on and as of such date (other than any representation and warranty that is made as of a specific date).

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.01         Representations and Warranties of the Loan Parties. Each Loan Party hereby represents and warrants, as of each Measurement Date and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made (unless a specific date is specified below):

 

(a)         Organization, Good Standing and Due Qualification. Such Loan Party is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware and has the power and all licenses necessary to own its assets and to transact the business in which it is engaged and is duly qualified and in good standing under the laws of each jurisdiction where the transaction of such business or its ownership of the Loan Assets and the Collateral requires such qualification.

 

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(b)         Power and Authority; Due Authorization; Execution and Delivery. Such Loan Party has the power, authority and legal right to make, deliver and perform this Agreement and each of the Transaction Documents to which it is a party and all of the transactions contemplated hereby and thereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement and each of the Transaction Documents to which it is a party, and to Grant to the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest in the Collateral on the terms and conditions of this Agreement, subject only to Permitted Liens.

 

(c)         Binding Obligation. This Agreement and each of the Transaction Documents to which such Loan Party is a party constitutes the legal, valid and binding obligation of such Loan Party, enforceable against it in accordance with their respective terms, except as the enforceability hereof and thereof may be limited by Bankruptcy Laws and by general principles of equity (whether such enforceability is considered in a proceeding in equity or at law).

 

(d)         All Consents Required. No consent of any other party and no consent, license, approval or authorization of, or registration or declaration with, any Governmental Authority, bureau or agency is required in connection with the execution, delivery or performance by such Loan Party of this Agreement or any Transaction Document to which it is a party or the validity or enforceability of this Agreement or any such Transaction Document or the Loan Assets or the transfer of an ownership interest or security interest in such Loan Assets, other than such as have been met or obtained and are in full force and effect.

 

(e)         No Violation. The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and all other agreements and instruments executed and delivered or to be executed and delivered pursuant hereto or thereto in connection with the Grant of the Collateral will not (i) create any Lien on the Collateral other than Permitted Liens or (ii) violate any Applicable Law or the Constituent Documents of such Loan Party or (iii) violate any contract or other agreement to which such Loan Party is a party or by which such Loan Party or any property or assets of such Loan Party may be bound.

 

(f)          No Proceedings. There is no litigation or administrative proceeding or investigation pending or threatened against such Loan Party or any properties of such Loan Party, before any Governmental Authority (i) asserting the invalidity of this Agreement or any other Transaction Document to which such Loan Party is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which such Loan Party is a party or (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.

 

(g)          Selection Procedures. In selecting the Loan Assets to be Granted pursuant to this Agreement, no selection procedures were employed which are intended to be adverse to the interests of the Lenders.

 

(h)         Bulk Sales. The Grant of the security interest in the Collateral by such Loan Party to the Collateral Agent, for the benefit of the Secured Parties, pursuant to this Agreement, is in the ordinary course of business for such Loan Party and is not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction.

 

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(i)          Grant of Collateral. The Loan Parties have good and marketable title to all of the Collateral. Such Loan Party has taken all actions necessary to perfect its interest in the Collateral transferred by the Originator. Except as otherwise expressly permitted by the terms of this Agreement, no item of Collateral has been sold, transferred, assigned or pledged by such Loan Party to any Person, other than as contemplated by Article II and the Grant of such Collateral to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the terms of this Agreement.

 

(j)          Indebtedness. Such Loan Party has no Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) Indebtedness incurred under the terms of the Transaction Documents and (ii) Indebtedness incurred pursuant to certain ordinary business expenses arising pursuant to the transactions contemplated by this Agreement and the other Transaction Documents.

 

(k)          Sole Purpose. Such Loan Party has been formed solely for the purpose of engaging in transactions of the types contemplated by this Agreement, and has not engaged in any business activity other than the negotiation, execution and to the extent applicable, performance of this Agreement and the transactions contemplated by the Transaction Documents; provided that, any Securitization Subsidiary may enter into any agreements or letters (including, but not limited to, engagement letters, term sheets and agreements with rating agencies), so long as any Lien created thereunder is expressly subordinated to the Liens created hereunder, as is customary for an issuer prior to and in contemplation of a Securitization.

 

(l)          No Injunctions. No injunction, writ, restraining order or other order of any nature adversely affects such Loan Party's performance of its obligations under this Agreement or any Transaction Document to which such Loan Party is a party.

 

(m)        Taxes. Such Loan Party has filed or caused to be filed (on a consolidated basis or otherwise) on a timely basis all tax returns (including, all foreign, federal, state, local and other tax returns) required to be filed by it, is not liable for Taxes payable by any other Person and has paid or made adequate provisions for the payment of all Taxes, assessments and other governmental charges due and payable from such Loan Party except for those Taxes being contested in good faith by appropriate proceedings and in respect of which it has established reserves in accordance with GAAP on its books or to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect. No Tax lien (other than a Permitted Lien) or similar adverse claim has been filed, and no claim is being asserted, with respect to any such Tax, assessment or other governmental charge. Any Taxes, fees and other governmental charges due and payable by such Loan Party in connection with the execution and delivery of this Agreement and the other Transaction Documents and the transactions contemplated hereby or thereby have been paid or shall have been paid if and when due.

 

(n)         Location. Such Loan Party's location (within the meaning of Article 9 of the UCC) is Delaware. The chief executive office of such Loan Party (and the location of such Loan Party's records regarding the Collateral (other than those delivered to the Collateral Custodian)) is located at the address set forth in Section 12.02 (or at such other address as shall be designated by such party in a written notice to the other parties hereto).

 

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(o)         Tradenames. Such Loan Party has not changed its name since its formation and does not have tradenames, fictitious names, assumed names or "doing business as" names under which it has done or is doing business.

 

(p)         Solvency. Such Loan Party is not the subject of any Bankruptcy Proceedings or Bankruptcy Event. Such Loan Party is Solvent, and the transactions under this Agreement and any other Transaction Document to which such Loan Party is a party do not and will not render such Loan Party not Solvent. Such Loan Party is paying its debts as they become due (subject to any applicable grace period); and such Loan Party, after giving effect to the transactions contemplated hereby, will have adequate capital to conduct its business.

 

(q)         No Subsidiaries. Such Loan Party has no Subsidiaries other than, in the case of the Borrower, the Securitization Subsidiaries party hereto.

 

(r)          Value Given. Such Loan Party has given fair consideration and reasonably equivalent value to the Originator (or such other Permitted Seller) in exchange for the purchase of the Loan Assets (or any number of them) from the Originator (or such other Permitted Seller) pursuant to the applicable Purchase and Sale Agreement. No such transfer has been made for or on account of an antecedent debt owed by such Loan Party to the Originator and no such transfer is or may be voidable or subject to avoidance under any section of the Bankruptcy Code.

 

(s)          Reports Accurate. All Servicer Certificates, Servicing Reports, Notices of Borrowing, Borrowing Base Certificates and other written or electronic information, exhibits, financial statements, documents, books, records or reports furnished by such Loan Party (or the Servicer on its behalf) to the Administrative Agent, the Collateral Agent, the Lenders or the Collateral Custodian in connection with the Transaction Documents are, as of their date, accurate, true and correct in all material respects and no such document or certificate omits to state a material fact or any fact necessary to make the statements contained therein not misleading in all material respects; provided that, solely with respect to written or electronic factual information furnished by the Servicer which was provided to the Servicer from an Obligor with respect to a Loan Asset, such information need only be accurate, true and correct to the knowledge of such Loan Party. Any projections or forward-looking information (including such statements with respect to the collectability of, or risks or benefits associated with a Loan Asset) provided by or on behalf of the Servicer were prepared in good faith based on assumptions believed by the Servicer to be reasonable at the time so prepared.

 

(t)          Exchange Act Compliance; Regulations T, U and X. None of the transactions contemplated herein or in the other Transaction Documents (including, the use of proceeds from the sale of the Collateral) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto, including, Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. Such Loan Party does not own or intend to carry or purchase, and no proceeds from the Advances will be used to carry or purchase, any Margin Stock or to extend "purpose credit" within the meaning of Regulation U.

 

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(u)         No Adverse Agreements. There are no agreements in effect adversely affecting the rights of such Loan Party to make, or cause to be made, the grant of the security interest in the Collateral contemplated by the Grant.

 

(v)         Event of Default/Unmatured Event of Default. No event has occurred and is continuing which constitutes an Event of Default or an Unmatured Event of Default (other than any Event of Default or Unmatured Event of Default which has previously been disclosed to the Administrative Agent as such).

 

(w)        Servicing Standard. Each of the Loan Assets was underwritten or acquired and is being serviced in conformance with the Servicing Standard and the standard underwriting, credit, collection, operating and reporting procedures and systems of the Servicer or the Originator.

 

(x)          ERISA.

 

(i)             The present value of all benefits vested under each Pension Plan does not exceed the value of the assets of the Pension Plan allocable to such vested benefits (based on the value of such assets as of the last annual valuation date) determined in accordance with the assumptions used for funding such Pension Plan pursuant to Sections 412 and 430 of the Code. No ERISA Event has occurred or is reasonably expected to occur, that, in the aggregate, could subject such Loan Party to any material tax, penalty or other liability.

 

(ii)            Each Foreign Plan is in compliance in all material respects with its terms and with the requirements of any and all Applicable Laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities. Except as could not, in the aggregate, subject such Loan Party to any material tax, penalty or other liability: (i) all contributions required to be made with respect to a Foreign Plan have been timely made; (ii) such Loan Party has not incurred any obligations in connection with the termination of, or withdrawal from, any Foreign Plan; and (iii) the present value of the accrued benefit liabilities (whether or not vested) under each Foreign Plan, determined as of the end of such Loan Party's most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Foreign Plan allocable to such benefit liabilities.

  

(iii)           Such Loan Party (a) is not a Benefit Plan Investor and (b) is not a "governmental plan" within the meaning of Section 3(32) of ERISA ("Governmental Plan"), and neither such Loan Party nor any transactions by or with such Loan Party are subject to state statutes regulating investments of and fiduciary obligations with respect to Governmental Plans or to state statutes that impose prohibitions similar to those contained in Section 406 of ERISA or Section 4975 of the Code ("Similar Law").

 

(y)         Allocation of Charges. There is not any agreement or understanding between the Servicer and such Loan Party (other than as expressly set forth herein or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations to make payments or otherwise in respect of any taxes, fees, assessments or other governmental charges.

 

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(z)          Broker/Dealer. Such Loan Party is not a broker/dealer or subject to the Securities Investor Protection Act of 1970, as amended.

 

(aa)       Instructions to Obligors. The Collection Account is the only account to which Obligors (solely with respect to non-agented Loan Assets), agent banks or administrative agents on the Loan Assets have been instructed by such Loan Party, or the Servicer on the Loan Party's behalf, to send Principal Collections and Interest Collections on the Collateral. Notwithstanding the foregoing, any Securitization Subsidiary may notify administrative or payment agents of any change in payment instructions necessary to close a Securitization. Such Loan Party has not granted any Person other than the Collateral Agent, on behalf of the Secured Parties, a Lien on the Collection Account.

 

(bb)      Investment Company Act. Such Loan Party is not required to register as an "investment company" under the provisions of the 1940 Act.

 

(cc)       Compliance with Law. Such Loan Party (i) has complied in all material respects with all Applicable Law to which it may be subject and (ii) is not in violation of any order of any Governmental Authority or other board or tribunal. Such Loan Party has not received any notice that it is not in compliance in any respect with any of the requirements of the foregoing.

 

(dd)       Collections. Such Loan Party acknowledges that all Available Collections received by it or its Affiliates with respect to the Collateral Granted hereunder are held and shall be held in trust for the benefit of the Collateral Agent, on behalf of the Secured Parties until deposited into the Collection Account within two (2) Business Days after receipt as required herein.

  

(ee)       Set-Off, etc. No Loan Asset in the Collateral has been compromised, satisfied, rescinded or set-off by such Loan Party, the Originator or the Obligor thereof, and no Loan Asset in the Collateral is subject to compromise, satisfaction, rescission, set-off, counterclaim, defense, abatement, suspension, deferment, deduction, reduction or termination or whether arising out of transactions concerning the Collateral or otherwise, by such Loan Party, the Originator or the Obligor with respect thereto, except, in each case, for amendments, adjustments, extensions, subordination and modifications, if any, to such Collateral otherwise permitted pursuant to Section 6.04(a) of this Agreement and in accordance with the Servicing Standard.

 

(ff)        Securitization Subsidiaries. In the case of the Borrower only, each Securitization Subsidiary is in compliance with the representations and warranties set forth in this Section 4.01.

 

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(gg)      Environmental. With respect to each item of Related Collateral as of the applicable Cut-Off Date for the Loan Asset related to such Related Collateral, to the actual knowledge of a Responsible Officer of such Loan Party: (i) the related Obligor's operations comply in all material respects with all applicable Environmental Laws; (ii) none of the related Obligor's operations is the subject of a federal or state investigation evaluating whether any remedial action, involving expenditures, is needed to respond to a release of any Materials of Environmental Concern into the environment; and (iii) the related Obligor does not have any material contingent liability in connection with any release of any Materials of Environmental Concern into the environment, in each case, except as otherwise specified in the Underlying Instruments pertaining to such Loan Asset. As of the applicable Cut-Off Date for the Loan Asset related to such Related Collateral, none of such Loan Party, the Originator nor the Servicer has received any written or verbal notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Related Collateral, nor does any such Person have knowledge or reason to believe that any such notice will be received or is being threatened.

 

(hh)      Anti-Terrorism; OFAC; Anti-Corruption.

 

(i)             None of such Loan Party nor any of its Affiliates nor, to the knowledge of such Loan Party, any Obligor (i) is a Person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such Person in any manner violative of Section 2 of such executive order, or (iii) is a Person (1) designated on OFAC's list of Specially Designated Nationals and Blocked Persons or otherwise the subject of any Sanctions or (2) in violation of the limitations or prohibitions under any other Sanctions.

 

(ii)            None of such Loan Party nor any of its Affiliates (i) is a Politically Exposed Person, immediate family member of a Politically Exposed Person or close associate of a Politically Exposed Person; or (ii) a foreign shell bank. For purposes of the forgoing, "foreign shell bank" means a bank that does not maintain a physical presence in any country and is not subject to inspection by a banking authority.

 

(iii)           No part of the proceeds of any Advance will be used by such Loan Party or any of its Affiliates, or permitted to be used by any other Person (in each case, directly or indirectly including by an Obligor), (i) for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of applicable anti-corruption and anti-bribery laws, including the United States Foreign Corrupt Practices Act of 1977, as amended; (ii) to fund or facilitate any money laundering or terrorist financing activities or business, or in any other manner that would cause or result in violation of applicable anti-money laundering laws, rules or regulations, including the Patriot Act, as amended (collectively, "Anti-Money Laundering Laws"); or (iii) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions, or in any other manner that would result in a violation by any Person of any Sanctions.

 

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(iv)           No Collateral or any portion thereof is or will consist of funds, assets or other property or interests in property that is blocked or frozen pursuant to any Sanctions.

 

(v)            Such Loan Party acknowledges by executing this Agreement that each Lender and the Administrative Agent (for itself and not on behalf of any other Lender) hereby notifies such Loan Party that United States law requires each United States Lender and the Administrative Agent to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party (and certain Persons having a beneficial interest in such Loan Party) and other information that will allow such Lender and the Administrative Agent, as applicable, to identify such Loan Party.

 

(ii)         Security Interest.

 

(i)             This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Collateral in favor of the Collateral Agent, on behalf of the Secured Parties, which security interest is prior to all other Liens (except for Permitted Liens), and is enforceable as such against creditors of and purchasers from such Loan Party;

 

(ii)            the Collateral is comprised of "instruments," "security entitlements," "general intangibles," "accounts," "certificated securities," "uncertificated securities," "securities accounts," "deposit accounts," "supporting obligations" or "insurance" (each as defined in the applicable UCC) and/or such other category of collateral under the applicable UCC as to which such Loan Party has complied with its obligations under this Section 4.01(ii);

 

(iii)           with respect to Collateral that constitute "security entitlements":

 

a.            all of such security entitlements have been credited to one of the Controlled Accounts and the securities intermediary for each Controlled Account has agreed to treat all assets credited to such Controlled Account as "financial assets" within the meaning of the applicable UCC;

 

b.            such Loan Party has taken all steps necessary to cause the securities intermediary to identify in its records such Loan Party, subject to the Lien of the Collateral Agent, for the benefit of the Secured Parties, as the Person having a security entitlement against the securities intermediary in each of the Controlled Accounts; and

 

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c.            the Controlled Accounts are not in the name of any Person other than such Loan Party, as applicable, subject to the lien of the Collateral Agent, for the benefit of the Secured Parties. The securities intermediary of any Controlled Account which is a "securities account" under the UCC has agreed to comply with the entitlement orders and instructions of such Loan Party, as applicable, the Servicer and the Collateral Agent (acting at the direction of the Administrative Agent) in accordance with the Transaction Documents, including causing cash to be invested in Permitted Investments; provided that, upon the delivery of a Notice of Exclusive Control by the Collateral Agent (acting at the direction of the Administrative Agent), the securities intermediary has agreed to only follow the entitlement orders and instructions of the Collateral Agent, on behalf of the Secured Parties, including with respect to the investment of cash in Permitted Investments;

 

(iv)            all Controlled Accounts constitute "securities accounts" or "deposit accounts" as defined in the applicable UCC;

 

(v)             with respect to any Controlled Account which constitutes a "deposit account" as defined in the applicable UCC, such Loan Party, the Account Bank and the Collateral Agent, on behalf of the Secured Parties, have entered into an account control agreement which permits the Collateral Agent on behalf of the Secured Parties to direct disposition of the funds in such deposit account without further consent of such Loan Party;

 

(vi)            such Loan Party owns and has good and marketable title to (or, with respect to its interests in assets securing any Loan Assets, a valid security interest in) the Collateral (other than with respect to the Controlled Accounts) free and clear of any Lien (other than Permitted Liens) of any Person;

 

(vii)           such Loan Party has received all consents and approvals required by the terms of any Loan Asset to the granting of a security interest in the Loan Assets hereunder to the Collateral Agent, on behalf of the Secured Parties (after giving effect to any provisions of the UCC that render such requirement void);

 

(viii)          such Loan Party has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect the security interest in the Collateral and that portion of the Loan Assets in which a security interest may be perfected by filing granted to the Collateral Agent, on behalf of the Secured Parties, under this Agreement;

 

(ix)            other than as expressly permitted by the terms of this Agreement and the security interest Granted to the Collateral Agent, on behalf of the Secured Parties, pursuant to this Agreement, such Loan Party has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Collateral. Such Loan Party has not authorized the filing of and is not aware of any financing statements against such Loan Party that include a description of collateral covering the Collateral other than any financing statement (A) relating to the security interests granted to such Loan Party under the applicable Purchase and Sale Agreement, or (B) that has been terminated and/or fully and validly assigned to the Collateral Agent on or prior to the Closing Date. Such Loan Party is not aware of the filing of any judgment or Tax lien filings against such Loan Party;

 

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(x)              all original executed underlying promissory notes that constitute or evidence each Loan Asset has been, or subject to the delivery requirements contained herein, will be delivered to the Collateral Custodian;

 

(xi)             [reserved];

 

(xii)            none of the underlying promissory notes (if any) that constitute or evidence the Loan Assets has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Collateral Agent, on behalf of the Secured Parties;

 

(xiii)           with respect to any Collateral that constitutes a "certificated security," such certificated security has been delivered to the Collateral Custodian, on behalf of the Secured Parties and, if in registered form, has been specially Indorsed to the Collateral Agent, for the benefit of the Secured Parties, or in blank by an effective Indorsement or has been registered in the name of the Collateral Agent, for the benefit of the Secured Parties, upon original issue or registration of transfer by such Loan Party of such certificated security; and

 

(xiv)           with respect to any Collateral that constitutes an "uncertificated security," that such Loan Party shall cause the issuer of such uncertificated security to register the Collateral Agent, on behalf of the Secured Parties, as the registered owner of such uncertificated security.

 

(jj)         [Reserved].

 

(kk)       Constituent Documents in Effect. The Borrower LLC Agreement and the Constituent Documents of each Loan Party remain in full force and effect and there exists no breach of, default under, or threatened breach of, the Borrower LLC Agreement or any Constituent Document of such Loan Party by the Borrower, such Loan Party or the Originator that could reasonably be expected to cause a Material Adverse Effect.

 

Section 4.02        Representations and Warranties of each Loan Party Relating to the Agreement and the Collateral. Each Loan Party hereby represents and warrants, as of the Closing Date, as of each applicable Cut-Off Date (solely with respect to the relevant Loan Assets being pledged as of such Cut-Off Date), as of each Measurement Date and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made:

 

(a)         Valid Transfer and Security Interest. This Agreement constitutes a Grant of a security interest in all of the Collateral to the Collateral Agent, for the benefit of the Secured Parties, which is a valid and first priority perfected security interest in the Collateral and in that portion of the Collateral in which a security interest may be perfected by filing subject only to Permitted Liens. No Person claiming through or under such Loan Party shall have any claim to or interest in the Controlled Accounts.

 

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(b)        Eligibility of Collateral. (i) The Loan Asset Schedule (other than with respect to Non-Levered Loan Assets), and the information contained in each Notice of Borrowing, is an accurate and complete listing of all the Loan Assets contained in the Collateral as of the related Cut-Off Date and the information contained therein with respect to the identity of such item of Collateral and the amounts owing thereunder is true and correct as of the related Cut-Off Date in all material respects, (ii) to the knowledge of such Loan Party, each Loan Asset designated on any Borrowing Base Certificate as an Eligible Loan Asset and each Loan Asset included as an Eligible Loan Asset in any calculation of Borrowing Base or Borrowing Base Deficiency is an Eligible Loan Asset and (iii) with respect to each item of Collateral (other than with respect to Non-Levered Loan Assets), all consents, licenses, approvals or authorizations of or registrations or declarations of any Governmental Authority or any Person required to be obtained, effected or given by such Loan Party in connection with the transfer of a security interest in each item of Collateral to the Collateral Agent, for the benefit of the Secured Parties, have been duly obtained, effected or given and are in full force and effect.

 

(c)        No Fraud. Each Loan Asset was originated without any fraud or misrepresentation by the Originator or, to the best of such Loan Party's knowledge, on the part of the Obligor.

 

Section 4.03        Representations and Warranties of the Servicer. The Servicer hereby represents and warrants, as of each Measurement Date and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made:

 

(a)         Organization and Good Standing. The Servicer has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with all requisite corporate power and authority to own or lease its properties and to conduct its business as such business is presently conducted and to enter into and perform its obligations pursuant to this Agreement.

 

(b)        Due Qualification. The Servicer is duly qualified to do business as a corporation and is in good standing as a corporation, and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its property and or the conduct of its business requires such qualification, licenses or approvals.

 

(c)         Power and Authority; Due Authorization; Execution and Delivery. The Servicer (i) has all necessary power, authority and legal right to (a) execute and deliver this Agreement and the other Transaction Documents to which it is a party, (b) carry out the terms of the Transaction Documents to which it is a party, and (ii) has duly authorized by all necessary corporate action the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party. This Agreement and each other Transaction Document to which the Servicer is a party have been duly executed and delivered by the Servicer.

 

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(d)        Binding Obligation. This Agreement and each other Transaction Document to which the Servicer is a party constitutes a legal, valid and binding obligation of the Servicer enforceable against the Servicer in accordance with its respective terms, except as such enforceability may be limited by Bankruptcy Laws and general principles of equity (whether considered in a suit at law or in equity).

 

(e)        No Violation. The consummation of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party and the fulfillment of the terms hereof and thereof will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Servicer's Constituent Documents or any contractual obligation of the Servicer, (ii) result in the creation or imposition of any Lien upon any of the Servicer's properties pursuant to the terms of any contractual obligation, other than this Agreement and Permitted Liens, or (iii) violate any Applicable Law.

 

(f)         No Proceedings. There is no litigation, proceeding or investigation pending or threatened against the Servicer, before any Governmental Authority (i) asserting the invalidity of this Agreement or any other Transaction Document to which the Servicer is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which the Servicer is a party or (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.

 

(g)        All Consents Required. All approvals, authorizations, consents, orders, licenses or other actions of any Person or of any Governmental Authority (if any) required for the due execution, delivery and performance by the Servicer of this Agreement and any other Transaction Document to which the Servicer is a party have been obtained.

 

(h)        Reports Accurate. All Servicer Certificate, Servicing Report, Notices of Borrowing, Borrowing Base Certificates and other written or electronic information, exhibits, financial statements, documents, books, records or reports furnished by the Servicer to the Administrative Agent, the Collateral Agent, the Lenders or the Collateral Custodian in connection with the Transaction Documents are, as of their date, accurate, true and correct in all material respects and no such document or certificate omits to state a material fact or any fact necessary to make the statements contained therein not misleading in all material respects; provided that, solely with respect to written or electronic factual information furnished by the Servicer which was provided to the Servicer from an Obligor with respect to a Loan Asset, such information need only be accurate, true and correct to the knowledge of the Servicer. Any projections or forward-looking information (including such statements with respect to the collectability of, or risks or benefits associated with a Loan Asset) provided by or on behalf of the Servicer were prepared in good faith based on assumptions believed by the Servicer to be reasonable at the time so prepared.

 

(i)         Servicing Standard. The Servicer has complied in all material respects with the Servicing Standard with regard to the servicing of the Loan Assets.

 

(j)          Collections. The Servicer acknowledges that all Available Collections received by it or its Affiliates with respect to the Collateral transferred or Granted hereunder are held and shall be held in trust for the benefit of the Secured Parties until deposited into the Collection Account within two (2) Business Days from receipt as required herein.

 

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(k)         Solvency. The Servicer is not the subject of any Bankruptcy Proceedings or Bankruptcy Event. The transactions under this Agreement and any other Transaction Document to which the Servicer is a party do not and will not render the Servicer not Solvent.

 

(l)         Taxes. The Servicer has filed or caused to be filed on a timely basis all tax returns that are required to be filed by it (subject to any extensions to file properly obtained by the same) and is not liable for Taxes payable by any other Person. The Servicer has paid or made adequate provisions for the payment of all Taxes and all assessments made against it or any of its property (other than any amount of Tax the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Servicer or to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect), and no Tax lien (other than a Permitted Lien) has been filed and no claim is being asserted, with respect to any such Tax, assessment or other charge.

 

(m)        Exchange Act Compliance; Regulations T, U and X. None of the transactions contemplated herein or the other Transaction Documents (including, the use of the Proceeds from the sale of the Collateral) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto, including, Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.

 

(n)        Security Interest. The Servicer will take all steps necessary to ensure that such Loan Party has granted a security interest (as defined in the UCC) to the Collateral Agent, for the benefit of the Secured Parties, in the Collateral, which is enforceable in accordance with Applicable Law upon execution and delivery of this Agreement and such security interest is a valid and first priority perfected security interest in the Loan Assets and that portion of the Collateral in which a security interest may be perfected by filing (except for any Permitted Liens). All filings (including, such UCC filings) as are necessary for the perfection of the Secured Parties' security interest in the Loan Assets and that portion of the Collateral in which a security interest may be perfected by filing have been (or prior to the applicable Advance will be) made.

 

(o)        ERISA. The present value of all benefits vested under each Servicer Pension Plan does not exceed the value of the assets of the Servicer Pension Plan allocable to such vested benefits (based on the value of such assets as of the last annual valuation date) determined in accordance with the assumptions used for funding such Servicer Pension Plan pursuant to Sections 412 and 430 of the Code. No Servicer ERISA Event has occurred or is reasonably expected to occur that, in the aggregate, could subject the Servicer to any material tax, penalty or other liability.

 

(p)        Anti-Terrorism; OFAC; Anti-Corruption.

 

(i)            None of the Servicer nor any of its Affiliates nor, to the knowledge of the Servicer, any Obligor (i) is a Person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such Person in any manner violative of Section 2 of such executive order, or (iii) is a Person (1) designated on OFAC's list of Specially Designated Nationals and Blocked Persons or otherwise the subject of any Sanctions or (2) in violation of the limitations or prohibitions under any other Sanctions.

 

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(ii)            None of the Servicer nor any of its Affiliates (i) is a Politically Exposed Person, immediate family member of a Politically Exposed Person or close associate of a Politically Exposed Person; or (ii) a foreign shell bank. For purposes of the forgoing, "foreign shell bank" means a bank that does not maintain a physical presence in any country and is not subject to inspection by a banking authority.

 

(iii)           No part of the proceeds of any Advance will be used by the Servicer or any of its Affiliates, or permitted to be used by any other Person (in each case, directly or indirectly including by an Obligor), (i) for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of applicable anti-corruption and anti-bribery laws, including the United States Foreign Corrupt Practices Act of 1977, as amended; (ii) to fund or facilitate any money laundering or terrorist financing activities or business, or in any other manner that would cause or result in violation of applicable Anti-Money Laundering Laws; or (iii) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions, or in any other manner that would result in a violation by any Person of any Sanctions.

 

(iv)           No Collateral or any portion thereof is or will consist of funds, assets or other property or interests in property that is blocked or frozen pursuant to any Sanctions.

 

(v)            The Servicer acknowledges by executing this Agreement that each Lender and the Administrative Agent (for itself and not on behalf of any other Lender) hereby notifies such Loan Party that United States law requires each United States Lender and the Administrative Agent to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party (and certain Persons having a beneficial interest in such Loan Party) and other information that will allow such Lender and the Administrative Agent, as applicable, to identify such Loan Party.

 

(q)            Environmental. With respect to each item of Related Collateral, to the actual knowledge of a Responsible Officer of the Servicer: (i) the related Obligor's operations comply in all material respects with all applicable Environmental Laws; (ii) none of the related Obligor's operations is the subject of a federal or state investigation evaluating whether any remedial action, involving expenditures, is needed to respond to a release of any Materials of Environmental Concern into the environment; and (iii) the related Obligor does not have any material contingent liability in connection with any release of any Materials of Environmental Concern into the environment, in each case, except as otherwise specified in the Underlying Instruments pertaining to such Loan Asset. The Servicer has not received any written or verbal notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Related Collateral, nor does the Servicer have knowledge or reason to believe that any such notice will be received or is being threatened.

 

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(r)          No Injunctions. No injunction, writ, restraining order or other order of any nature adversely affects the Servicer's performance of its obligations under this Agreement or any Transaction Document to which the Servicer is a party.

 

(s)         Instructions to Obligors. The Collection Account is the only account to which Obligors (solely with respect to non-agented Loan Assets), agent banks or administrative agents on the Loan Assets have been instructed by the Servicer on such Loan Party's behalf to send Principal Collections and Interest Collections on the Collateral.

 

(t)         Allocation of Charges. There is not any agreement or understanding between the Servicer and such Loan Party (other than as expressly set forth herein or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations to make payments or otherwise in respect of any taxes, fees, assessments or other governmental charges.

 

(u)        Servicer Default. No event has occurred which constitutes a Servicer Default (other than any Servicer Default which has previously been disclosed to the Administrative Agent as such).

 

(v)         Broker/Dealer. The Servicer is not a broker/dealer or subject to the Securities Investor Protection Act of 1970, as amended.

 

(w)        Compliance with Applicable Law. The Servicer has complied in all material respects with all Applicable Law to which it may be subject.

 

Section 4.04        Representations and Warranties of the Collateral Agent. The Collateral Agent in its individual capacity and as Collateral Agent represents and warrants as follows:

 

(a)         Organization; Power and Authority. It is a duly organized and validly existing national banking association in good standing under the laws of the United States. It has full corporate power, authority and legal right to execute, deliver and perform its obligations as Collateral Agent under this Agreement.

 

(b)        Due Authorization. The execution and delivery of this Agreement and the consummation of the transactions provided for herein have been duly authorized by all necessary association action on its part, either in its individual capacity or as Collateral Agent, as the case may be.

 

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(c)         No Conflict. The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with, result in any breach of its articles of incorporation or bylaws or any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Collateral Agent is a party or by which it or any of its property is bound.

 

(d)        No Violation. The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with or violate, in any respect, any Applicable Law.

 

(e)        All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or Governmental Authority applicable to the Collateral Agent, required in connection with the execution and delivery of this Agreement, the performance by the Collateral Agent of the transactions contemplated hereby and the fulfillment by the Collateral Agent of the terms hereof have been obtained.

 

(f)         Validity, Etc. The Agreement constitutes the legal, valid and binding obligation of the Collateral Agent, enforceable against the Collateral Agent in accordance with its terms, except as such enforceability may be limited by applicable Bankruptcy Laws and general principles of equity (whether considered in a suit at law or in equity).

 

Section 4.05        Representations and Warranties of the Collateral Custodian. The Collateral Custodian in its individual capacity and as Collateral Custodian represents and warrants as follows:

 

(a)         Organization; Power and Authority. It is a duly organized and validly existing national banking association in good standing under the laws of the United States. It has full corporate power, authority and legal right to execute, deliver and perform its obligations as Collateral Custodian under this Agreement.

 

(b)        Due Authorization. The execution and delivery of this Agreement and the consummation of the transactions provided for herein have been duly authorized by all necessary association action on its part, either in its individual capacity or as Collateral Custodian, as the case may be.

 

(c)         No Conflict. The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with, result in any breach of its articles of incorporation or bylaws or any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Collateral Custodian is a party or by which it or any of its property is bound.

 

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(d)        No Violation. The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with or violate, in any respect, any Applicable Law.

 

(e)         All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or Governmental Authority applicable to the Collateral Custodian, required in connection with the execution and delivery of this Agreement, the performance by the Collateral Custodian of the transactions contemplated hereby and the fulfillment by the Collateral Custodian of the terms hereof have been obtained.

 

(f)         Validity, Etc. The Agreement constitutes the legal, valid and binding obligation of the Collateral Custodian, enforceable against the Collateral Custodian in accordance with its terms, except as such enforceability may be limited by applicable Bankruptcy Laws and general principles of equity (whether considered in a suit at law or in equity).

 

ARTICLE V

 

GENERAL COVENANTS

 

Section 5.01        Affirmative Covenants of the Loan Parties.

 

From the Closing Date until the Collection Date:

 

(a)         Organizational Procedures and Scope of Business. Each Loan Party will observe all organizational procedures required by its Constituent Documents and the laws of its jurisdiction of formation in all material respects. Without limiting the foregoing, each Loan Party will limit the scope of its business to: (i) the acquisition of Loan Assets or Non-Levered Loan Assets and the ownership and management of the Related Asset and the related assets in the Collateral; (ii) the sale, transfer or other disposition of Loan Assets as and when permitted under the Transaction Documents; (iii) entering into and performing under the Transaction Documents; (iv) consenting or withholding consent as to proposed amendments, waivers and other modifications of the Underlying Instruments to the extent not in conflict with the terms of this Agreement or any other Transaction Document; (v) exercising any rights (including but not limited to voting rights and rights arising in connection with a Bankruptcy Event with respect to an Obligor or the consensual or non-judicial restructuring of the debt or equity of an Obligor) or remedies in connection with the Loan Assets and participating in the committees (official or otherwise) or other groups formed by creditors of an Obligor to the extent not in conflict with the terms of this Agreement or any other Transaction Document; and (vi) engaging in any activity and to exercise any powers permitted to limited liability companies under the laws of the State of Delaware that are related to the foregoing and necessary, convenient or advisable to accomplish the foregoing; provided that, any Securitization Subsidiary may enter into any agreements or letters (including, but not limited to, engagement letters, term sheets and agreements with rating agencies), so long as any Lien created thereunder is expressly subordinated to the Liens created hereunder, as is customary for an issuer prior to and in contemplation of a Securitization.

 

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(b)        Special Purpose Entity Requirements. Each Loan Party will at all times: (i) maintain at least one (1) Independent Manager; (ii) maintain its own separate books and records and bank accounts; (iii) hold itself out to the public and all other Persons as a legal entity separate from the Originator and any other Person; (iv) file its own tax returns, if any, as may be required under Applicable Law, to the extent it is (A) not part of a consolidated group filing a consolidated return or returns or (B) not treated as a division for tax purposes of another taxpayer, and pay any Taxes so required to be paid under Applicable Law in accordance with the terms of this Agreement; (v) not commingle its assets with assets of any other Person (other than any Securitization Subsidiary); (vi) conduct its business in its own name and strictly comply with all organizational formalities to maintain its separate existence; (vii) maintain separate financial statements, except to the extent that such Loan Party's financial and operating results are consolidated with those of the Originator in consolidated financial statements or to the extent any Securitization Subsidiary’s financial and operating results are consolidated with those of such Loan Party; provided that appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Loan Party from such Affiliate and to indicate that such Loan Party's assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person; (viii) pay its own liabilities only out of its own funds; (ix) maintain an arm's-length relationship with its Affiliates and not enter into any transaction with an Affiliate except on commercially reasonable terms similar to those available to unaffiliated parties in an arm's length transaction (except for (A) capital contributions or capital distributions permitted under the terms and conditions of such Loan Party's organizational document and properly reflected on the books and records of such Loan Party and (B) in connection with the transfer of assets or funds amongst the Borrower and the Securitization Subsidiaries); (x) pay the salaries of its own employees, if any; (xi) not hold out its credit or assets as being available to satisfy the obligations of others (it being understood that the assets of the Securitization Subsidiaries shall be pledged to secure the obligations of the Borrower); (xii) allocate fairly and reasonably any overhead for shared office space; (xiii) to the extent used, use separate stationery, invoices and checks; (xiv) except as expressly permitted by this Agreement, not pledge its assets as security for the obligations of any other Person (it being understood that the assets of the Securitization Subsidiaries shall be pledged to secure the obligations of the Borrower); (xv) correct any known misunderstanding regarding its separate identity; (xvi) maintain adequate capital in light of its contemplated business purpose transactions and liabilities and pay its operating expenses and liabilities from its own assets (it being understood that this covenant shall apply to the Borrower and the Securitization Subsidiaries on a combined basis); (xvii) cause the managers, officers, agents and other representatives of such Loan Party to act at all times with respect to such Loan Party consistently and in furtherance of the foregoing and in the best interests of such Loan Party; and (xviii) not acquire the obligations or any securities of its Affiliates (other than the Securitization Subsidiaries). Where necessary, a Loan Party will obtain proper authorization from its members for limited liability company action.

 

(c)         Preservation of Company Existence. Each Loan Party will preserve and maintain its limited liability company existence in good standing under the laws of its jurisdiction of formation and will promptly obtain and thereafter maintain qualifications to do business as a foreign limited liability company in any other state in which it does business and in which it is required to so qualify under Applicable Law.

 

(d)         Compliance with Legal Opinions. The Borrower shall take all other actions necessary to maintain the accuracy of the factual assumptions in all material respects set forth in the legal opinions of Dechert LLP, as special counsel to the Borrower, issued in connection with the Originator Purchase and Sale Agreement and relating to the issues of substantive consolidation and true sale of the Loan Assets.

 

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(e)         Deposit of Collections. Each Loan Party shall promptly (but in no event later than two (2) Business Days after receipt) deposit or cause to be deposited into the Collection Account (or, with respect to assets denominated in an Eligible Currency other than Dollars, the applicable Eligible Currency Account) any and all Available Collections received by such Loan Party, the Servicer or any of their Affiliates.

 

(f)         Disclosure of Purchase Price. Each Loan Party shall disclose to the Administrative Agent and the Lenders the purchase price for each Loan Asset proposed to be acquired by such Loan Party.

 

(g)         Obligor Defaults and Bankruptcy Events. To the extent that the Administrative Agent has not received such notice from a Loan Party or the Servicer in writing, such Loan Party shall give, or shall cause the Servicer to give, notice to the Administrative Agent and the Lenders within two (2) Business Days of the occurrence of any payment default, other than expenses, by an Obligor under any Loan Asset or any Bankruptcy Event with respect to any Obligor under any Loan Asset.

 

(h)         Required Loan Documents. Each Loan Party shall deliver to the Collateral Custodian a hard copy or electronic copy of the Required Loan Documents (other than with respect to any original executed promissory note and, with respect to Non-Levered Loan Assets, only Required Loan Documents described in clause (a) of the definition of “Required Loan Documents”) and the Loan Asset Checklist pertaining to each Loan Asset not later than (i) the Cut-Off Date pertaining to such Loan Asset if the Servicer or its Affiliate is the agent with respect to such Loan Assets and (ii) otherwise, thirty (30) days after the Cut-Off Date.

 

(i)          Taxes. Each Loan Party will file or cause to be filed its tax returns, if any, and pay any and all Taxes imposed on it or its property as required by the Transaction Documents (except as contemplated in Section 4.01(m)).

 

(j)          Notice of Event of Default. Each Loan Party shall notify the Administrative Agent and each Lender of the occurrence of any Event of Default under this Agreement promptly, and in any event within two (2) Business Days, upon obtaining knowledge of such event. In addition, no later than two (2) Business Days following such Loan Party’s knowledge or notice of the occurrence of any Event of Default or Unmatured Event of Default, such Loan Party will provide to the Administrative Agent and each Lender a written statement of a Responsible Officer of such Loan Party setting forth the details of such event and the action that such Loan Party proposes to take with respect thereto.

 

(k)           Notice of Material Events. Each Loan Party shall promptly notify the Administrative Agent and each Lender of any event or other circumstance that is reasonably likely to have a Material Adverse Effect.

 

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(l)          Notice of Income Tax Liability. Each Loan Party shall furnish to the Administrative Agent and each Lender notice within ten (10) Business Days (confirmed in writing within five (5) Business Days thereafter) of the receipt of revenue agent reports or other written proposals, determinations or assessments of the Internal Revenue Service or any other taxing authority which propose, determine or otherwise set forth positive adjustments (i) to the Tax liability of the Originator or any "affiliated group" (of which the Originator is a member) in an amount equal to or greater than $2,500,000 in the aggregate, or (ii) to the Tax liability of such Loan Party itself in an amount equal to or greater than $500,000 in the aggregate. Any such notice shall specify the nature of the items giving rise to such adjustments and the amounts thereof.

 

(m)        Beneficial Ownership Certification. Each Loan Party shall deliver promptly following the request of the Administrative Agent, a Beneficial Ownership Certification.

 

(n)         Notice of Breaches of Representations and Warranties under this Agreement. Each Loan Party shall promptly notify the Administrative Agent and each Lender if it obtains knowledge that any representation or warranty set forth in Section 4.01 or Section 4.02 was incorrect at the time it was given or deemed to have been given and at the same time deliver to the Collateral Agent, the Administrative Agent and the Lenders a written notice setting forth in reasonable detail the nature of such facts and circumstances.

 

(o)         Notice of Breaches of Representations and Warranties under each Purchase and Sale Agreement. Each Loan Party confirms and agrees that such Loan Party will, upon receipt of notice or discovery thereof, promptly send to the Administrative Agent, each Lender and the Collateral Agent a notice of (i) any breach of any representation, warranty, agreement or covenant under a Purchase and Sale Agreement or (ii) any event or occurrence that, upon notice, or upon the passage of time or both, would constitute such a breach.

 

(p)        Notice of Proceedings. Each Loan Party shall notify the Administrative Agent and each Lender, as soon as possible and in any event within five (5) Business Days, after such Loan Party receives notice or obtains knowledge thereof, of any settlement of, judgment (including a judgment with respect to the liability phase of a bifurcated trial) in or commencement of any labor controversy, litigation, action, suit or proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Collateral, the Transaction Documents, the Collateral Agent's security interest in the Collateral.

 

(q)        Notice of ERISA Events. Each Loan Party shall promptly notify the Administrative Agent and each Lender (i) in the event that a Lien is imposed on any asset of such Loan Party with respect to any Pension Plan or Multiemployer Plan or (ii) in the event any ERISA Event occurs.

 

(r)         Notice of Benefit Plan Investor Status or Prohibited Transaction. Each Loan Party shall promptly notify the Administrative Agent and each Lender in the event such Loan Party becomes a Benefit Plan Investor, in the event such Loan Party becomes subject to state statutes regulating investments of or fiduciary obligations with respect to such governmental plans or to state statutes that impose prohibitions similar to those contained in Section 406 of ERISA or Section 4975 of the Code or in the event such Loan Party has knowledge that this Agreement or any other action or transaction in connection with this Agreement or any other Transaction Document will constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a non-exempt violation of Similar Law.

 

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(s)         [Reserved].

 

(t)         Additional Documents. Each Loan Party shall, to the extent reasonably obtainable by such Loan Party, provide the Administrative Agent and each Lender with (i) copies of such documents as the Administrative Agent or any Lender may reasonably request evidencing the truthfulness of the representations set forth in this Agreement or (ii) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with the applicable "know your customer" requirements under the Patriot Act or other applicable Anti-Money Laundering Laws.

 

(u)         Protection of Security Interest. With respect to the Collateral acquired by each Loan Party, such Loan Party will (i) if acquired from the Originator, acquire such Collateral pursuant to and in accordance with the terms of the applicable Purchase and Sale Agreement or such other similar agreement, as applicable, (ii) (at the expense of the applicable Loan Party) take all action necessary to perfect, protect and more fully evidence such Loan Party's ownership of such Collateral free and clear of any Lien other than the Lien created hereunder and Permitted Liens, including, (A) with respect to the Loan Assets and that portion of the Collateral in which a security interest may be perfected by filing, filing and maintaining (at the expense of the applicable Loan Party), effective financing statements against the Originator in all necessary or appropriate filing offices, (including any amendments thereto or assignments thereof) and filing continuation statements, amendments or assignments with respect thereto in such filing offices, (including any amendments thereto or assignments thereof) and (B) executing or causing to be executed such other instruments or notices as may be necessary or appropriate, (iii) (at the expense of the applicable Loan Party) take all action necessary to cause a valid, subsisting and enforceable first priority perfected security interest, subject only to Permitted Liens, to exist in favor of the Collateral Agent (for the benefit of the Secured Parties) in such Loan Party's interests in all of the Collateral being Granted hereunder including the filing of UCC financing statements in the applicable jurisdiction adequately describing the Collateral (which may include an "all asset" filing), and naming each Loan Party as debtor and the Collateral Agent as the secured party, and filing continuation statements, amendments or assignments with respect thereto in such filing offices, (including any amendments thereto or assignments thereof), (iv) permit the Administrative Agent or any Lender or their respective agents or representatives to visit the offices of such Loan Party during normal office hours and upon reasonable advance notice examine and make copies of all documents, books, records and other information concerning the Collateral and discuss matters related thereto with any of the officers or employees of such Loan Party having knowledge of such matters (provided that such Loan Party shall not be liable for the costs and expenses of more than one such visit in any calendar year unless an Event of Default has occurred), and (v) take all additional action that the Administrative Agent, any Lender or the Collateral Agent may reasonably request to perfect, protect and more fully evidence the respective first priority perfected security interests of the parties to this Agreement in the Collateral, or to enable the Administrative Agent or the Collateral Agent to exercise or enforce any of their respective rights hereunder.

 

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(v)         Liens. Each Loan Party will promptly notify the Administrative Agent and the Lenders of the existence of any Lien on the Collateral (other than Permitted Liens) and such Loan Party shall defend the right, title and interest of the Collateral Agent, for the benefit of the Secured Parties, in, to and under the Collateral against all claims of third parties.

 

(w)        Other Documents. At any time from time to time upon prior written request of the Administrative Agent or any Lender, at the sole expense of such Loan Party, each Loan Party will promptly and duly execute and deliver such further instruments and documents (to the extent provided to such Loan Party or reasonably obtainable by such Loan Party) and take such further actions as the Administrative Agent or any Lender may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement including the first priority security interest in the Collateral (subject only to Permitted Liens) granted hereunder and of the rights and powers herein granted (including, among other things, authorizing the filing of such UCC financing statements as the Administrative Agent may request).

 

(x)         Compliance with Law. Each Loan Party shall at all times comply in all material respects with all Applicable Law applicable to such Loan Party or any of its assets (including, Environmental Laws, and all federal securities laws), and such Loan Party shall do or cause to be done all things necessary to preserve and maintain in full force and effect its legal existence, and all licenses material to its business.

 

(y)        Proper Records. Each Loan Party shall at all times keep proper books of records and accounts in which full, true and correct entries shall be made of its transactions in accordance with GAAP and set aside on its books from its earning for each fiscal year all such proper reserves in accordance with GAAP.

 

(z)         Satisfaction of Obligations. Each Loan Party shall pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves with respect thereto have been provided on the books of such Loan Party.

 

(aa)       Performance of Covenants. Each Loan Party shall observe, perform and satisfy all the terms, provisions, covenants and conditions required to be observed, performed or satisfied by it, and shall pay when due all costs, fees and expenses required to be paid by it, under the other Transaction Documents. Each Loan Party shall pay and discharge all Taxes, levies, liens and other charges on it or its assets and on the Collateral that, in each case, in any manner would create any lien or charge upon the Collateral, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP.

 

(bb)      Tax Treatment. Each Loan Party, the Originator and the Lenders shall treat the Advances advanced hereunder as indebtedness of such Loan Party for U.S. federal income tax purposes and to file any and all tax forms in a manner consistent therewith.

 

(cc)       Maintenance of Records. Each Loan Party will maintain records with respect to the Collateral and the conduct and operation of its business with no less a degree of prudence than if the Collateral were held by such Loan Party for its own account and will furnish the Administrative Agent and each Lender, upon the reasonable request by the Administrative Agent, information with respect to the Collateral and the conduct and operation of its business.

 

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(dd)      [Reserved].

 

(ee)       [Reserved].

 

(ff)        Continuation Statements. Each Loan Party shall, not earlier than six months and not later than three months prior to the fifth anniversary of the date of filing of the financing statement referred to in Schedule I hereto or any other financing statement filed pursuant to this Agreement or in connection with any Advance hereunder, unless the Collection Date shall have occurred:

 

(i)            authorize and deliver and file or cause to be filed an appropriate continuation statement with respect to such financing statement; and

 

(ii)           deliver or cause to be delivered to the Collateral Agent, the Administrative Agent and the Lenders an opinion of the counsel for such Loan Party, in form and substance reasonably satisfactory to the Administrative Agent, confirming and updating the opinion delivered pursuant to Schedule I with respect to perfection and otherwise to the effect that the security interest hereunder continues to be an enforceable and perfected security interest, subject to no other Liens of record except as provided herein or otherwise permitted hereunder, which opinion may contain usual and customary assumptions, limitations and exceptions.

 

(gg)      Disregarded Entity. Each Loan Party will be either (i) disregarded as an entity separate from its owner pursuant to Treasury Regulation Section 301.7701-3(b)(ii) or (ii) a partnership (other than a publicly traded partnership) all of whose beneficial owners are United States persons for U.S. federal income tax purposes, and neither such Loan Party nor any other Person on its behalf shall make an election to be treated as a corporation for U.S. federal income tax purposes under Treasury Regulation Section 301.7701-3(c).

 

(hh)      Notices; Material Information, etc. Each Loan Party shall, within five (5) Business Days after filing, provide to the Administrative Agent written notification of the filing of any litigation against such Loan Party or the Originator which, if a judgment were to be obtained by the plaintiff, would result in the occurrence of an Event of Default or otherwise cause a Material Adverse Effect.

 

(ii)         [Reserved].

 

(jj)         Other Information. Each Loan Party shall, to the extent reasonably obtainable by such Loan Party, deliver, (i) promptly following the Administrative Agent's request, in any event within five (5) days of such request, such other information, financial or otherwise, with respect to such Loan Party and the Collateral, as the Administrative Agent may reasonably request from time to time and (ii) to the extent a Beneficial Ownership Certificate has previously been provided by such Loan Party to the Administrative Agent, promptly following any change in the information provided in such Beneficial Ownership Certification that would result in a change to the list of beneficial owners identified in parts (c) or (d) of such certification.

 

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(kk)       Securitization Subsidiaries. Each Loan Party shall cause each Securitization Subsidiary to comply with the covenants set forth in Sections 5.01(a) through (jj) and the negative covenants set forth in Section 5.02, as if such covenants were applicable directly to such Securitization Subsidiary and each reference to such Loan Party therein were a reference to such Securitization Subsidiary.

 

(ll)         Reduction of Subject Loan Assets. If on any date of determination solely during the Specified Period, the aggregate Outstanding Balance of all Subject Loan Assets exceeds 50.0% of the SLA Threshold Amount, as a result of pay-downs or prepayments in respect of any Eligible Loan Asset(s), the Borrower shall use commercially reasonable efforts to eliminate such excess within five (5) Business Days after obtaining knowledge of such event from the Administrative Agent (including but not limited to by effecting sales of one or more Subject Loan Assets subject to Section 2.07(f) or the re-classification of such Subject Loan Asset pursuant to the terms of the definition thereof).

 

Section 5.02        Negative Covenants of the Loan Parties.

 

From the Closing Date until the Collection Date:

 

(a)         Special Purpose Entity Requirements. Except as otherwise permitted by this Agreement, no Loan Party shall (i) guarantee any obligation of any Person, including any Affiliate (it being understood that the assets of the Securitization Subsidiaries shall be pledged to secure the obligations of the Borrower); (ii) engage, directly or indirectly, in any business, other than the actions required or permitted to be performed under the Transaction Documents; (iii) incur, create or assume any Indebtedness, other than Indebtedness incurred under the Transaction Documents; (iv) make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person, except that such Loan Party may invest in those Loan Assets and other investments permitted under the Transaction Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Transaction Documents and permit the same to remain outstanding in accordance with such provisions; (v) fail to pay its debts and liabilities from its assets when due; (vi) to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, sale or other transfer of any of its assets outside the ordinary course of such Loan Party's business other than such activities as are expressly permitted pursuant to this Agreement; (vii) create, form or otherwise acquire any Subsidiaries (other than Securitization Subsidiaries, solely in the case of the Borrower); or (viii) release, sell, transfer, convey or assign any Loan Asset unless in accordance with the Transaction Documents.

 

(b)         Requirements for Material Actions. No Loan Party shall fail to provide (and at all times such Loan Party's organizational documents shall reflect) that the unanimous consent of all managers (including the consent of the Independent Manager(s)) is required for such Loan Party to (i) file any insolvency, or reorganization case or proceeding, (ii) institute proceedings to have such Loan Party be adjudicated bankrupt or insolvent, (iii) institute proceedings under any applicable insolvency law, (iv) seek any relief under any law relating to relief from debts or the protection of debtors, (v) consent to the filing or institution of bankruptcy or insolvency proceedings against such Loan Party, (vi) file a petition seeking, or consent to, reorganization or relief with respect to such Loan Party under any applicable federal or state law relating to bankruptcy or insolvency, (vii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for such Loan Party, or a substantial part of its property, (viii) make any assignment for the benefit of its creditors, (ix)  admit in writing its inability to pay its debts generally as they become due, or (x) take any action in furtherance of any of the foregoing.

 

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(c)         Protection of Title. No Loan Party shall take any action which would directly or indirectly impair or adversely affect any Loan Party's title to the applicable Collateral.

 

(d)         Transfer Limitations. No Loan Party shall transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any interest in the Collateral to any person other than the Collateral Agent for the benefit of the Secured Parties, or engage in financing transactions or similar transactions with respect to the Collateral with any person other than the Administrative Agent and the Lenders, in each case, except as otherwise expressly permitted by the terms of this Agreement.

 

(e)         Liens. No Loan Party shall not create, incur or permit to exist any Lien in or on any of the Collateral subject to the security interest granted by such Loan Party pursuant to this Agreement, other than Permitted Liens.

 

(f)         Organizational Documents. No Loan Party shall amend, modify or terminate any of the Constituent Documents of such Loan Party without the prior written consent of the Administrative Agent. Notwithstanding the foregoing, any Securitization Subsidiary may amend or restate any of its Constituent Documents in connection with a Securitization without the consent of any other Person so long as such amendment or restatement is effective on or after the closing of such Securitization.

 

(g)         Merger, Acquisitions, Sales, etc. No Loan Party shall change its organizational structure, enter into any transaction of merger or consolidation or amalgamation, or asset sale (other than pursuant to Section 2.07), or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) without the prior written consent of the Administrative Agent.

 

(h)         Use of Proceeds. No Loan Party shall use the proceeds of any Advance other than (i) to finance the purchase on a "true sale" basis (or the origination), by such Loan Party of Collateral, (ii) to pay fees and expenses in connection with the transactions contemplated under this Agreement, (iii) to fund the Unfunded Exposure Account in order to establish reserves for unfunded commitments of Delayed Draw Loan Assets included in the Collateral or (iv) to distribute such proceeds to the Originator.

 

(i)          Limited Assets. No Loan Party shall hold or own any assets that are not part of the Collateral (other than with respect to Non-Levered Loan Assets).

 

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(j)          Tax Treatment. No Loan Party shall elect to be treated as a corporation for U.S. federal income tax purposes and shall take all reasonable steps necessary to avoid being treated as a corporation for U.S. federal income tax purposes.

 

(k)         [Reserved].

 

(l)          Purchase and Sale Agreement. No Loan Party will amend, modify, waive or terminate any provision of a Purchase and Sale Agreement without the prior written consent of the Administrative Agent.

 

(m)        Restricted Junior Payments. No Loan Party shall make any Restricted Junior Payment, except that, so long as the Facility Maturity Date has not been declared or automatically occurred and, to the Administrative Agent’s, Servicer’s and such Loan Party’s knowledge, no Event of Default or Unmatured Event of Default has occurred and is continuing or would result therefrom, such Loan Party may declare and make Restricted Junior Payments to the holders of its membership interests from amounts available pursuant to Sections 2.04(a)(xi) and 2.04(c)(xi). Nothing herein shall restrict any Securitization Subsidiary from effecting any dividend of Loan Assets or cash from such Securitization Subsidiary to such Loan Party, which such dividend shall not require the consent of the Administrative Agent or any other Person.

 

(n)         ERISA Matters. No Loan Party will (i) take, and will exercise its best efforts not to permit any ERISA Affiliate to take, any action that could reasonably be expected to result in an ERISA Event that, in the aggregate, could subject such Loan Party to any material tax, penalty or other liability, or (ii) take, and will exercise its best efforts not to permit any ERISA Affiliate to take, any action that could result in the imposition of a Lien on any asset of such Loan Party with respect to any Pension Plan or Multiemployer Plan.

 

(o)         Instructions to Obligors. No Loan Party will make any change, or permit the Servicer to make any change, in its instructions to Obligors (solely with respect to non-agented Loan Assets), agent banks or administrative agents on the Loan Assets regarding payments to be made with respect to the Collateral to the Collection Account (or, with respect to assets denominated in an Eligible Currency other than Dollars, the applicable Eligible Currency Account), unless the Administrative Agent has consented to such change. Notwithstanding the foregoing, any Securitization Subsidiary may notify administrative or payment agents of any change in payment instructions necessary to close a Securitization.

 

(p)         Change of Jurisdiction, Location, Names or Location of Loan Files. No Loan Party shall change the jurisdiction of its formation, make any change to its corporate name or use any tradenames, fictitious names, assumed names, "doing business as" names or other names unless, prior to the effective date of any such change in the jurisdiction of its formation, name change or use, such Loan Party receives prior written consent from the Administrative Agent of such change and delivers to the Administrative Agent such financing statements as the Administrative Agent may request to reflect such name change or use, together with such Opinions of Counsel and other documents and instruments as the Administrative Agent may request in connection therewith. No Loan Party will change the location of its chief executive office unless prior to the effective date of any such change of location, such Loan Party notifies the Administrative Agent of such change of location in writing. No Loan Party will move, or consent to the Collateral Custodian or the Servicer moving, the Loan Files from the location thereof on the Closing Date, unless the Administrative Agent shall consent to such move in writing and the Servicer shall provide the Administrative Agent with such Opinions of Counsel and other documents and instruments as the Administrative Agent may request in connection therewith.

 

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(q)         Allocation of Charges. There will not be any agreement or understanding between the Servicer and any Loan Party (other than as expressly set forth herein or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations to make payments or otherwise in respect of any Taxes, fees, assessments or other governmental charges; provided that it is understood and acknowledged that such Loan Party will be disregarded as an entity separate from the Originator for U.S. federal income tax purposes.

 

(r)          Anti-Terrorism; OFAC; Anti-Corruption. Each of the representations and warranties set out in sub clauses (i) through (v) (inclusive) of Section 4.01(hh) shall be deemed here restated and, mutatis mutandis, construed as covenants made and given under this Section 5.02.

 

(s)         Securitization Subsidiary. The Borrower shall not form any new Securitization Subsidiary without the prior written consent of the Administrative Agent and delivery to the Administrative Agent of a complete set of all agreements, documents, certificates and opinions for such Securitization Subsidiary acceptable to the Administrative Agent in its sole discretion. The Borrower shall cause the Constituent Documents of each Securitization Subsidiary to prohibit any transfer of the equity in such Securitization Subsidiary without the prior written consent of each of the Administrative Agent and the board of directors of such Securitization Subsidiary, unless such transfer is in connection with a Securitization.

 

Section 5.03        Affirmative Covenants of the Servicer.

 

From the Closing Date until the Collection Date:

 

(a)         Compliance with Law. The Servicer will comply in all material respects with all Applicable Law, including those with respect to servicing the Collateral or any part thereof.

 

(b)         Preservation of Company Existence. The Servicer will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation, and qualify and remain qualified in good standing in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have a Material Adverse Effect.

 

(c)         Obligations and Compliance with Collateral. The Servicer will duly fulfill and comply with all obligations on the part of each Loan Party to be fulfilled or complied with under or in connection with the administration of each item of Collateral and will do nothing to impair the rights of the Collateral Agent, for the benefit of the Secured Parties, or of the Secured Parties in, to and under the Collateral. It is understood and agreed that the Servicer does not hereby assume any obligations of the Borrower in respect of any Advances or assume any responsibility for the performance by the Borrower of any of its obligations hereunder or under any other agreement executed in connection herewith that would be inconsistent with its undertaking as the Servicer.

 

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(d)         Keeping of Records and Books of Account.

 

(i)             The Servicer will maintain and implement administrative and operating procedures (including, an ability to recreate records evidencing Collateral in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information necessary or advisable for the collection of all Collateral and the identification of the Collateral.

 

(ii)            Subject to Section 6.11, the Servicer shall permit the Administrative Agent, each Lender or their respective agents or representatives, to visit the offices of the Servicer during normal office hours and upon reasonable advance notice and examine and make copies of all documents, books, records and other information concerning the Collateral and the Servicer's servicing thereof and discuss matters related thereto with any of the officers or employees of the Servicer having knowledge of such matters (provided that the Servicer shall not be liable for the costs and expenses of more than one such visit in any calendar year unless an Event of Default has occurred hereunder).

 

(iii)            The Servicer will on or prior to the Closing Date, mark its internal records to relating to the Collateral with a legend describing the sale of the Collateral to any Loan Party and the Grant from such Loan Party to the Collateral Agent, for the benefit of the Secured Parties.

 

(e)         Preservation of Security Interest. The Servicer (at the Borrower's expense) will file such financing and continuation statements and any other documents that it reasonably should know may be required by any law or regulation of any Governmental Authority to preserve and protect fully the first priority perfected security interest of the Collateral Agent, for the benefit of the Secured Parties, in, to and under the Loan Assets and that portion of the Collateral in which a security interest may be perfected by filing.

 

(f)          Events of Default. The Servicer will provide the Administrative Agent and each Lender (with a copy to the Collateral Agent) with immediate written notice of the occurrence of each Event of Default and each Unmatured Event of Default of which the Servicer has knowledge or has received notice. In addition, no later than two (2) Business Days following the Servicer's knowledge or notice of the occurrence of any Event of Default or Unmatured Event of Default, the Servicer will provide to the Collateral Agent, the Administrative Agent and each Lender a written statement of a Responsible Officer of the Servicer setting forth the details of such event and the action that the Servicer proposes to take with respect thereto.

 

(g)         Taxes. The Servicer will file its tax returns, if any, and pay any and all Taxes imposed on it or its property as required under the Transaction Documents (except as contemplated by Section 4.03(l)).

 

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(h)         Other. The Servicer will promptly furnish to the Collateral Agent, the Administrative Agent and each Lender, to the extent reasonably obtainable by the Servicer, such other information, documents, records or reports respecting the Collateral or the condition or operations, financial or otherwise, of each Loan Party or the Servicer as the Collateral Agent, any Lender or the Administrative Agent may from time to time reasonably request in order to protect the interests of the Administrative Agent, the Lenders, the Collateral Agent or Secured Parties under or as contemplated by this Agreement.

 

(i)          Proceedings Related to the Loan Parties, the Originator and the Servicer and the Transaction Documents. The Servicer shall notify the Administrative Agent and each Lender as soon as possible and in any event within five (5) Business Days after the Servicer receives notice or obtains knowledge thereof of any settlement of, judgment (including a judgment with respect to the liability phase of a bifurcated trial) in or commencement of any labor controversy, litigation, action, suit or proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that could reasonably be expected to have a Material Adverse Effect, the Originator or the Servicer (or any of their Affiliates that are in the business of originating, acquiring or servicing assets similar to Loan Assets) or the Transaction Documents. For purposes of this Section 5.03(i), (i) any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Transaction Documents in excess of $1,000,000 shall be deemed to be expected to have such a Material Adverse Effect and (ii) any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Servicer or the Originator in excess of $10,000,000 shall be deemed to be expected to have such a Material Adverse Effect.

 

(j)          Deposit of Collections. The Servicer shall promptly (but in no event later than two (2) Business Days after receipt) deposit or cause to be deposited into the Collection Account any and all Available Collections received by any Loan Party, the Servicer or any of their Affiliates.

 

(k)         Special Purpose Entity Requirements. At the Borrower's expense, the Servicer shall take such actions as are necessary to cause each Loan Party to be in compliance with the special purpose entity requirements set forth in Sections 5.01(a) and 5.01(b) and 5.02(a) and 5.02(b); provided that, for the avoidance of doubt, the Servicer shall not be required to expend any of its own funds to cause a Loan Party to be in compliance with subsection 5.02(a)(v) or subsection 5.01(b)(xvi).

 

(l)          [Reserved].

 

(m)        Proceedings Related to the Collateral. The Servicer shall notify the Administrative Agent and each Lender as soon as possible and in any event within two (2) Business Days after any Responsible Officer of the Servicer receives notice or has actual knowledge of any settlement of, judgment (including a judgment with respect to the liability phase of a bifurcated trial) in or commencement of any labor controversy, litigation, action, suit or proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that the Servicer reasonably believes would have a Material Adverse Effect on the interests of the Collateral Agent or the Secured Parties in, to and under the Collateral. For purposes of this Section 5.03(m), any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Collateral or the Collateral Agent's or the Secured Parties' interest in the Collateral in excess of $10,000,000 or more shall be deemed to be expected to have such a Material Adverse Effect. In addition, this Section 5.03(m) shall not be construed to require delivery by the Servicer or any Affiliate thereof of any proceeding, litigation, suit or action involving an Obligor to the extent that such delivery of notice is required pursuant to Section 5.01(p).

 

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(n)        Compliance with Legal Opinions. The Servicer shall take all other actions necessary to maintain the accuracy of the factual assumptions in all material respects set forth in the legal opinions of Dechert LLP, as special counsel to the Servicer, issued in connection with the Transaction Documents and relating to the issues of substantive consolidation and true sale of the Loan Assets.

 

(o)         Instructions to Agents and Obligors. Subject to Section 6.04(d), the Servicer shall direct, or shall cause the Originator to direct, any agent or administrative agent for any Loan Asset to remit all payments and collections with respect to such Loan Asset, and, if applicable, to direct the Obligor with respect to such Loan Asset to remit all such payments and collections with respect to such Loan Asset directly to the Collection Account (or, with respect to assets denominated in an Eligible Currency other than Dollars, the applicable Eligible Currency Account). The Servicer shall take steps consistent with the Servicing Standard to ensure, and shall cause the Originator to take commercially reasonable steps to ensure, that only funds constituting payments and collections relating to Loan Assets shall be deposited into the Collection Account.

 

(p)         Capacity as Servicer. The Servicer will ensure that, at all times when it is dealing with or in connection with the Loan Assets in its capacity as Servicer, it holds itself out as Servicer, and not in any other capacity.

 

(q)         Notice of Breaches of Representations and Warranties under each Purchase and Sale Agreement. The Servicer confirms and agrees that the Servicer will, upon receipt of notice or discovery thereof, promptly send to the Administrative Agent, each Lender and the Collateral Agent a notice of (i) any breach of any representation, warranty, agreement or covenant under a Purchase and Sale Agreement or (ii) any event or occurrence that, upon notice, or upon the passage of time or both, would constitute such a breach, in each case, promptly upon learning thereof.

 

(r)         Audits. Periodically after the Closing Date, at the discretion of the Administrative Agent and each Lender, the Servicer shall allow the Administrative Agent and each Lender (during normal office hours and upon advance notice) to review the Servicer's collection and administration of the Collateral in order to assess compliance by the Servicer with the Servicing Standard, as well as with the Transaction Documents, and to conduct an audit of the Collateral and Required Loan Documents in conjunction with such a review (provided that the Servicer shall not be liable for the costs and expenses of more than one such visit in any calendar year unless an Event of Default has occurred hereunder). Such review shall be reasonable in scope and shall be completed in a reasonable period of time.

 

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(s)         Notice of Breaches of Representations and Warranties under this Agreement. The Servicer shall promptly notify the Administrative Agent and the Lenders if any representation or warranty set forth in Section 4.03 was incorrect at the time it was given or deemed to have been given and at the same time deliver to the Collateral Agent, the Administrative Agent and the Lenders a written notice setting forth in reasonable detail the nature of such facts and circumstances.

 

(t)          Insurance Policies. The Servicer has caused, and will cause, to be performed any and all acts required to be performed to preserve the rights and remedies of the Collateral Agent and the Secured Parties in any Insurance Policies applicable to Loan Assets (to the extent the Servicer is the agent or servicer under the applicable Underlying Instruments) including, in each case, any necessary notifications of insurers, assignments of policies or interests therein, and establishments of co-insured, joint loss payee and mortgagee rights in favor of the Collateral Agent and the Secured Parties; provided that, unless a Loan Party is the sole lender under such Underlying Instruments, the Servicer shall only take such actions that are customarily taken by or on behalf of a lender in a syndicated loan facility to preserve the rights of such lender.

 

(u)         Disregarded Entity. The Servicer shall not permit or take any action that would cause a Loan Party to be treated as other than a disregarded entity or a partnership (other than a publicly traded partnership) all of whose beneficial owners are United States persons for U.S. federal income tax purposes.

 

(v)         Anti-Terrorism; OFAC; Anti-Corruption. Each of the representations and warranties set out in sub clauses (i) through (v) (inclusive) of Section 4.03(p) shall be deemed here restated and, mutatis mutandis, construed as covenants made and given under this Section 5.03.

 

(w)        Value Adjustment Event. Promptly upon obtaining knowledge thereof, the Servicer will provide the Administrative Agent and each Lender (with a copy to the Collateral Agent) with written notice of the occurrence of any event that the Servicer reasonably believes is a Value Adjustment Event with respect to any Eligible Loan Asset; provided that, the Servicer will be deemed to not have knowledge of any Valuation Adjustment Event that requires a determination be made by the Administrative Agent until such determination has been made. Any such notice will be considered delivered if notation of such potential Value Adjustment Event is made in any Borrowing Base Certificate, Servicing Report, or other report delivered by the Servicer or a Loan Party to the Administrative Agent within the timeframe contemplated by this Section 5.03(w).

 

Section 5.04        Negative Covenants of the Servicer.

 

From the Closing Date until the Collection Date:

 

(a)         Mergers, Acquisition, Sales, etc. The Servicer will not consolidate with or merge into any other Person or convey or transfer its properties and assets substantially as an entirety to any Person, unless the Servicer is the surviving entity and unless:

 

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(i)            the Servicer has delivered to the Administrative Agent and each Lender (A) an Officer's Certificate stating that any such consolidation, merger, conveyance or transfer and any supplemental agreement executed in connection therewith comply with this Section 5.04 and that all conditions precedent herein provided for relating to such transaction have been complied with and (B) such other items as the Administrative Agent may reasonably request; provided that in no event shall the Servicer be required to provide an Opinion of Counsel to the Administrative Agent or Lenders with respect to a merger effectuated in accordance with the proviso below;

 

(ii)           the Servicer shall have delivered notice of such consolidation, merger, conveyance or transfer to the Administrative Agent and each Lender;

 

(iii)          after giving effect thereto, no Event of Default or Servicer Default or event that with notice or lapse of time would constitute either an Event of Default or a Servicer Default shall exist; and

 

(iv)          the Administrative Agent shall have consented in writing to such consolidation, merger, conveyance or transfer.

 

provided that the consent of the Administrative Agent and the Required Lenders shall not be required in the event that the Servicer consolidates or merges into entity with the same investment adviser as the Servicer (“Permitted Entity”) or conveys or transfers all or substantially all of its properties and assets to a Permitted Entity, in each case, so long as (x) the surviving entity has, together with all other entities and accounts advised by the same investment adviser, at least $2,000,000,000 of assets under management (measured as of the last day of the most recent fiscal quarter of such surviving entity and the other entities and accounts), (y) the surviving entity’s regular business includes the servicing of assets similar to the Collateral Portfolio and (z) the surviving entity reaffirms its obligations under this Agreement and the other Transaction Documents.

 

(b)         Change in Payment Instructions to Obligors. The Servicer will not make any change in its instructions to Obligors (solely with respect to non-agented Loan Assets), agent banks or administrative agents on the Loan Assets regarding payments to be made with respect to the Collateral to the Collection Account, unless the Administrative Agent has consented to such change.

 

(c)         [Reserved].

 

(d)        Allocation of Charges. There will not be any agreement or understanding between the Servicer and any Loan Party (other than as expressly set forth herein or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations to make payments or otherwise in respect of any Taxes, fees, assessments or other governmental charges.

 

(e)         Taxable Mortgage Pool Matters. The Servicer will manage the portfolio and advise any Loan Party with respect to the purchases from any third party seller so as to not at any time cause such Loan Party to be treated as a taxable mortgage pool for U.S. federal income tax purposes or cause more than 50% of the of the Loan Assets owned by such Loan Party to consist of real estate mortgages as defined in Treasury Regulation Section 301.7701(i)-1 of the Code.

 

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Section 5.05        Affirmative Covenants of the Collateral Agent.

 

From the Closing Date until the Collection Date:

 

(a)         Compliance with Law. The Collateral Agent will comply in all respects with all Applicable Law.

 

(b)         Preservation of Existence. The Collateral Agent will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation and qualify and remain qualified in good standing in each jurisdiction where failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have a Material Adverse Effect.

 

Section 5.06        Negative Covenants of the Collateral Agent.

 

From the Closing Date until the Collection Date, the Collateral Agent will not make any changes to the Collateral Agent Fees without the prior written approval of the Administrative Agent.

 

Section 5.07        Affirmative Covenants of the Collateral Custodian.

 

From the Closing Date until the Collection Date:

 

(a)         Compliance with Law. The Collateral Custodian will comply in all respects with all Applicable Law.

 

(b)         Preservation of Existence. The Collateral Custodian will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation and qualify and remain qualified in good standing in each jurisdiction where failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have a Material Adverse Effect.

 

(c)         Location of Required Loan Documents. Subject to Article XII of this Agreement, the Required Loan Documents shall remain at all times in the possession of the Collateral Custodian at its address located at 425 Hennepin Ave, Minneapolis, MN 55414 unless notice of a different address is given in accordance with the terms hereof or unless the Administrative Agent agrees to allow certain Required Loan Documents to be released to the Servicer on a temporary basis in accordance with the terms hereof, except as such Required Loan Documents may be released pursuant to the terms of this Agreement.

 

Section 5.08        Negative Covenants of the Collateral Custodian.

 

From the Closing Date until the Collection Date:

 

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(a)         Required Loan Documents. The Collateral Custodian will not dispose of any documents constituting the Required Loan Documents in any manner that is inconsistent with the performance of its obligations as the Collateral Custodian pursuant to this Agreement and will not dispose of any Collateral except as contemplated by this Agreement.

 

(b)         No Changes in Collateral Custodian Fees. The Collateral Custodian will not make any changes to the Collateral Custodian Fees without the prior written approval of the Administrative Agent.

 

ARTICLE VI

 

ADMINISTRATION AND SERVICING OF CONTRACTS

 

Section 6.01        Appointment and Designation of the Servicer.

 

(a)         Initial Servicer. Each Loan Party hereby appoints Golub Capital BDC, Inc., pursuant to the terms and conditions of this Agreement, as Servicer, with the authority to service, administer and exercise rights and remedies, on behalf of each Loan Party, in respect of the Collateral. Until the Administrative Agent gives Golub Capital BDC, Inc. a Servicer Removal Notice, Golub Capital BDC, Inc. hereby accepts such appointment and agrees to perform the duties and responsibilities of the Servicer pursuant to the terms hereof. The Servicer and the Borrower hereby acknowledge that the Administrative Agent and the Secured Parties are third party beneficiaries of the obligations undertaken by the Servicer hereunder.

 

(b)        Servicer Removal Notice. The Borrower, the Servicer, each Lender and the Administrative Agent hereby agree that, upon the occurrence of an Event of Default (including, as a result of a Servicer Default), the Administrative Agent, by written notice to the Servicer (with a copy to the Collateral Agent) (a "Servicer Removal Notice"), may terminate all of the rights, obligations, power and authority of the Servicer under this Agreement. On and after the receipt by the Servicer of a Servicer Removal Notice pursuant to this Section 6.01(b), the Servicer shall continue to perform all servicing functions under this Agreement until the date specified in the Servicer Removal Notice or otherwise specified by the Administrative Agent in writing or, if no such date is specified in such Servicer Removal Notice or otherwise specified by the Administrative Agent, until a date mutually agreed upon by the Servicer and the Administrative Agent and shall be entitled to receive, to the extent of funds available therefor pursuant to Section 2.04, the Servicing Fee therefor accrued until such date. After such date, the Servicer agrees that it will terminate its activities as Servicer hereunder in a manner that the Administrative Agent believes will facilitate the transition of the performance of such activities to a successor Servicer, and the successor Servicer shall assume each and all of the Servicer's obligations to service and administer the Collateral, on the terms and subject to the conditions herein set forth, and the Servicer shall use its best efforts to assist the successor Servicer in assuming such obligations.

 

(c)         Appointment of Replacement Servicer. At any time following the delivery of a Servicer Removal Notice, the Administrative Agent may, in its sole discretion, appoint a replacement servicer (the "Replacement Servicer"), which appointment shall take effect upon the Replacement Servicer accepting such appointment by a written assumption in a form satisfactory to the Administrative Agent in its sole discretion. Upon the appointment of a Replacement Servicer, the initial Servicer shall have no liability with respect to any action performed by the Replacement Servicer on or after the date that the Replacement Servicer becomes the successor to the Servicer.

 

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(d)         Liabilities and Obligations of Replacement Servicer. Upon its appointment, the Replacement Servicer shall be the successor in all respects to the Servicer with respect to servicing functions under this Agreement and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof, and all references in this Agreement to the Servicer shall be deemed to refer to the Replacement Servicer; provided that the Replacement Servicer shall have (i) no liability with respect to any action performed by the terminated Servicer prior to the date that the Replacement Servicer becomes the successor to the Servicer or any claim of a third party based on any alleged action or inaction of the terminated Servicer, (ii) no obligation to perform any advancing obligations, if any, of the Servicer unless it elects to in its sole discretion, (iii) no obligation to pay any Taxes required to be paid by the Servicer (provided that the Replacement Servicer shall pay any income Taxes for which it is liable), (iv) no obligation to pay any of the fees and expenses of any other party to the transactions contemplated hereby, and (v) no liability or obligation with respect to any Servicer indemnification obligations of any prior Servicer, including the original Servicer. The indemnification obligations of the Replacement Servicer upon becoming a Replacement Servicer, are expressly limited to those arising on account of its failure to act in good faith and with reasonable care under the circumstances. In addition, the Replacement Servicer shall have no liability relating to the representations and warranties of the Servicer contained in Section 4.03.

 

(e)         Authority and Power. All authority and power granted to the Servicer under this Agreement shall automatically cease and terminate upon termination of this Agreement as to the Servicer and shall pass to and be vested in the applicable Loan Party and each Loan Party is hereby authorized and empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such transfer of servicing rights. The Servicer agrees to cooperate with each Loan Party in effecting the termination of the responsibilities and rights of the Servicer to conduct servicing of the Collateral.

 

(f)          Subcontracts. The Servicer may, with the prior written consent of the Administrative Agent (other than in the case of its Affiliates for which such consent shall not be required), subcontract with any other Person for servicing, administering or collecting the Collateral; provided that (i) the Servicer shall select any such Person with reasonable care and shall be solely responsible for the fees and expenses payable to any such Person, (ii) the Servicer shall not be relieved of, and shall remain liable for, the performance of the duties and obligations of the Servicer pursuant to the terms hereof without regard to any subcontracting arrangement and (iii) any such subcontract (other than a subcontract between the Servicer and its Affiliate) shall be terminable upon the occurrence of a Servicer Default.

 

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(g)         Waiver. Each Loan Party acknowledges that, after delivery of a Servicer Removal Notice, the Administrative Agent or any of its Affiliates may act as the Collateral Agent and/or the Servicer, and the Borrower waives any and all claims against the Administrative Agent, each Lender or any of their respective Affiliates, the Collateral Agent and the Servicer (other than claims relating to such party's gross negligence or willful misconduct) relating in any way to the custodial or collateral administration functions having been performed by the Administrative Agent or any of its Affiliates in accordance with the terms and provisions (including the standard of care) set forth in the Transaction Documents.

 

Section 6.02        Duties of the Servicer.

 

(a)         Duties. The Servicer shall take or cause to be taken all such actions as may be necessary or advisable to service, administer and collect on the Collateral from time to time, all in accordance with Applicable Law and the Servicing Standard. Prior to the delivery of a Servicer Removal Notice, but subject to the terms of this Agreement (including, Section 6.04), the Servicer has the sole and exclusive authority to make any and all decisions with respect to the Collateral and take or refrain from taking any and all actions with respect to the Collateral. Without limiting the foregoing, the duties of the Servicer shall include the following:

 

(i)            supervising the Collateral, including communicating with Obligors, executing amendments, providing consents and waivers, enforcing and collecting on the Collateral and otherwise managing the Collateral on behalf of the Loan Parties;

 

(ii)           maintaining all necessary servicing records with respect to the Collateral and providing such reports to the Administrative Agent and each Lender (with a copy to the Collateral Agent and the Collateral Custodian) in respect of the servicing of the Collateral (including information relating to its performance under this Agreement) as may be required hereunder or as the Administrative Agent or any Lender may request;

 

(iii)          maintaining and implementing administrative and operating procedures (including, an ability to recreate servicing records evidencing the Collateral in the event of the destruction of the originals thereof) and keeping and maintaining all documents, books, records and other information necessary or advisable for the collection of the Collateral;

 

(iv)          promptly delivering to the Administrative Agent, each Lender, the Collateral Agent or the Collateral Custodian, from time to time, such information and servicing records (including information relating to its performance under this Agreement) as the Administrative Agent, each Lender, Collateral Custodian or the Collateral Agent may from time to time request;

 

(v)           identifying each Loan Asset in its internal servicing records to reflect the ownership of such Loan Asset by the applicable Loan Party;

 

(vi)          using its best efforts to maintain the perfected security interest of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral;

 

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(vii)         maintaining the Loan File with respect to Loan Assets included as part of the Collateral;

 

(viii)        directing the Collateral Agent to make payments pursuant to the terms of the Servicing Report in accordance with Section 2.04;

 

(ix)          directing the sale or substitution of Collateral in accordance with Section 2.07;

 

(x)           providing advice to the Borrower with respect to the purchase and sale of and payment for the Loan Assets;

 

(xi)          instructing the Obligors and the administrative agents on the Loan Assets to make payments directly into the Collection Account established and maintained with the Collateral Agent;

 

(xii)         delivering the Loan Files and a Loan Asset Schedule to the Collateral Custodian;

 

(xiii)        preparing and delivering to the Borrower, the Collateral Agent and the Administrative Agent on each Reporting Date a Borrowing Base Certificate setting forth the calculation of the Borrowing Base as of such Reporting Date;

 

(xiv)        directing the Collateral Agent to convert amounts denominated in any Eligible Currency to any other Eligible Currency for any permitted purpose hereunder; and

 

(xv)         complying with such other duties and responsibilities as may be required of the Servicer by this Agreement.

 

It is acknowledged and agreed that the Servicer shall perform its servicing duties hereunder only to the extent a lender under the related loan syndication Underlying Instruments has the right to do so unless a Loan Party is the sole lender thereunder.

 

(b)         Notwithstanding anything to the contrary contained herein, the exercise by the Administrative Agent, the Collateral Agent, each Lender and the Secured Parties of their rights hereunder shall not release the Servicer (unless replaced by a Replacement Servicer), the Originator or any Loan Party from any of their duties or responsibilities with respect to the Collateral other than with respect to any mistake, reckless act or any action or inaction undertaken in a negligent manner on the part of any of the Administrative Agent, the Collateral Agent, each Lender and the Secured Parties. The Secured Parties, the Administrative Agent, each Lender and the Collateral Agent shall not have any obligation or liability with respect to any Collateral, nor shall any of them be obligated to perform any of the obligations of the Servicer hereunder, unless one of them becomes a Replacement Servicer hereunder.

 

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Section 6.03        Authorization of the Servicer.

 

(a)         Each of each Loan Party, the Administrative Agent and each Lender hereby authorizes the Servicer (including any successor thereto) to take any and all steps consistent with the Servicing Standard in its name and on its behalf necessary or desirable in the determination of the Servicer and not inconsistent with the sale of the Collateral by the Originator to the Borrower or the Borrower to a Securitization Subsidiary, as applicable, under the applicable Purchase and Sale Agreement and, thereafter, the Grant by each Loan Party to the Collateral Agent on behalf of the Secured Parties hereunder, to collect all amounts due under any and all Collateral, including, endorsing any of their names on checks and other instruments representing Interest Collections and Principal Collections, executing and delivering any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Collateral and, after the delinquency of any Collateral and to the extent permitted under and in compliance with Applicable Law, to commence proceedings with respect to enforcing payment thereof, to the same extent as the Originator could have done if it had continued to own such Collateral. Each Loan Party, the Originator and the Collateral Agent on behalf of the Secured Parties shall furnish the Servicer (and any successors thereto) with any powers of attorney and other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder, and shall cooperate with the Servicer to the fullest extent in order to ensure the collectability of the Collateral. In no event shall the Servicer be entitled to make the Secured Parties, the Administrative Agent, the Collateral Agent or any Lender a party to any litigation without such party's express prior written consent, or to make any Loan Party a party to any litigation (other than any routine foreclosure or similar collection procedure) without the Administrative Agent's consent.

 

(b)        After the declaration of the Facility Maturity Date, at the direction of the Administrative Agent, the Servicer shall take such action as the Administrative Agent may deem necessary or advisable to enforce collection of the Collateral; provided that the Administrative Agent may, at any time that an Event of Default has occurred and is continuing, notify any Obligor with respect to any Collateral of the assignment of such Collateral to the Collateral Agent on behalf of the Secured Parties and direct that payments of all amounts due or to become due be made directly to the Administrative Agent or any servicer, collection agent or account designated by the Administrative Agent and, upon such notification and at the expense of the Borrower, the Administrative Agent may enforce collection of any such Collateral, and adjust, settle or compromise the amount or payment thereof.

 

Section 6.04        Collection of Payments; Accounts.

 

(a)         Collection Efforts, Modification of Collateral.

 

(i)            The Servicer will collect, cause to be collected, or make arrangements for the collection of all payments due and owing to the Borrower pursuant to the terms and provisions of the Loan Assets included in the Collateral as and when the same become due, all in accordance with the Servicing Standard.

 

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(ii)           In the performance of its obligations hereunder, a Loan Party (or the Servicer on its behalf) may enter into any amendment or waiver of or supplement to any Underlying Instrument, all in accordance with the Servicing Standard; provided that, on and after the occurrence of an Event of Default, the prior written consent of the Administrative Agent shall be required for any waiver, modification or variance that would impair the collectability of the Collateral Portfolio, increase such Loan Party’s commitment or outstanding loans thereunder or extend the maturity of any outstanding or committed loans of such Loan Party thereunder beyond the Facility Maturity Date.

 

(b)        [Reserved].

 

(c)         Taxes and other Amounts. The Servicer will use efforts consistent with the Servicing Standard to collect all payments with respect to amounts due for Taxes, assessments and insurance premiums relating to each Loan Asset to the extent required to be paid to such Loan Party for such application under the applicable Underlying Instruments and remit such amounts to the appropriate Governmental Authority or insurer as required by the Underlying Instruments.

 

(d)         Payments to Collection Account. On or before the applicable Cut-Off Date, the Servicer shall have instructed all (solely with respect to non-agented Loan Assets), agent banks or administrative agents on the Loan Assets to make all payments in respect of the Collateral in the applicable Eligible Currency directly to the Collection Account; provided that the Servicer is not required to so instruct any Obligor which is solely a guarantor or other surety (or an Obligor that is not designated as the "lead borrower" or another such similar term) unless and until the Servicer calls on the related guaranty or secondary obligation.

 

(e)         Controlled Accounts. Each of the parties hereto hereby agrees that (i) each Controlled Account is intended to be a "securities account" or "deposit account" within the meaning of the UCC and (ii) except as otherwise expressly provided herein and in the Control Agreement, as applicable, prior to the delivery of a Notice of Exclusive Control, the Borrower, the Servicer and the Collateral Agent (acting at the direction of the Administrative Agent) shall be entitled to exercise the rights that comprise each Financial Asset held in each Controlled Account which is a securities account and have the right to direct the disposition of funds in any Controlled Account which is a deposit account; provided that, after the delivery of a Notice of Exclusive Control, such rights shall be exclusively held by the Collateral Agent (acting at the direction of the Administrative Agent). Each of the parties hereto hereby agrees to cause the securities intermediary that holds any money or other property for a Loan Party in a Controlled Account that is a securities account to agree with the parties hereto that (A) the cash and other property (subject to Section 6.04(f) below with respect to any property other than investment property, as defined in Section 9-102(a)(49) of the UCC) is to be treated as a Financial Asset and (B) regardless of any provision in any other agreement, for purposes of the UCC, with respect to the Controlled Accounts, New York shall be deemed to be the Account Bank's jurisdiction (within the meaning of Section 9-304 of the UCC) and the securities intermediary's jurisdiction (within the meaning of Section 8-110 of the UCC). All securities or other property underlying any Financial Assets credited to the Controlled Accounts in the form of securities or instruments shall be registered in the name of the Account Bank or if in the name of a Loan Party or the Collateral Agent, Indorsed to the Account Bank, Indorsed in blank, or credited to another securities account maintained in the name of the Account Bank, and in no case will any Financial Asset credited to the Controlled Accounts be registered in the name of such Loan Party, payable to the order of such Loan Party or specially Indorsed to such Loan Party, except to the extent the foregoing have been specially Indorsed to the Account Bank or Indorsed in blank.

 

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(f)          Underlying Instruments. Notwithstanding any term hereof (or any term of the UCC that might otherwise be construed to be applicable to a "securities intermediary" as defined in the UCC) to the contrary, none of the Collateral Agent, the Collateral Custodian nor any securities intermediary shall be under any duty or obligation in connection with the acquisition by a Loan Party, or the Grant by such Loan Party to the Collateral Agent, of any Loan Asset in the nature of a loan or a participation in a loan to examine or evaluate the sufficiency of the documents or instruments delivered to it by or on behalf of such Loan Party under the related Underlying Instruments, or otherwise to examine the Underlying Instruments, in order to determine or compel compliance with any applicable requirements of or restrictions on transfer (including any necessary consents). The Collateral Custodian shall hold any Instrument delivered to it evidencing any Loan Asset Granted to the Collateral Agent hereunder as custodial agent for the Collateral Agent in accordance with the terms of this Agreement.

 

(g)        Adjustments. If (i) the Servicer makes a deposit into the Collection Account in respect of an Interest Collection or a Principal Collection of a Loan Asset and such Interest Collection or Principal Collection was received by the Servicer in the form of a check that is not honored for any reason or (ii) the Servicer makes a mistake with respect to the amount of any Interest Collection or Principal Collection and deposits an amount that is less than or more than the actual amount of such Interest Collection or Principal Collection, the Servicer shall appropriately adjust the amount subsequently deposited into the Collection Account to reflect such dishonored check or mistake. Any scheduled payment in respect of which a dishonored check is received shall be deemed not to have been paid.

 

Section 6.05        [Reserved].

 

Section 6.06        Servicer Compensation. As compensation for its activities hereunder and reimbursement for its expenses, the Servicer shall be entitled to be paid the Servicing Fee and reimbursed its reasonable out-of-pocket expenses as provided in Section 2.04.

 

Section 6.07        Payment of Certain Expenses by Servicer. The Servicer will be required to pay all expenses incurred by it in connection with its activities under this Agreement, including fees and disbursements of its independent accountants, Taxes imposed on the Servicer and expenses incurred by the Servicer in connection with payments and reports pursuant to this Agreement. The Servicer may be reimbursed for any reasonable out-of-pocket expenses incurred hereunder (including out-of-pocket expenses paid by the Servicer on behalf of the Borrower), subject to the availability of funds pursuant to Section 2.04.

 

Section 6.08        Reports to the Administrative Agent; Account Statements; Servicer Information.

 

(a)         Borrowing Base Certificate. On each Measurement Date, the Borrower (or the Servicer on its behalf) will provide a Borrowing Base Certificate, updated as of such date, to the Administrative Agent and each Lender (with a copy to the Collateral Agent).

 

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(b)         Servicing Report. On each Reporting Date, the Servicer will provide to the Borrower, each Lender, the Administrative Agent and the Collateral Agent, a statement including (i) a Borrowing Base Certificate, (ii) a Loan Asset Schedule, (iii) a then current calculation of the Weighted Average Life Test, (iv) a list of Loan Assets acquired, sold, substituted or released during the last Reporting Period, (v) a then current calculation of the Diversity Score in respect of the Loan Assets included in the Collateral and (vi) if such Reporting Date occurs in a calendar month in which a Payment Date occurs, amounts to be remitted pursuant to Section 2.04 to the applicable parties (which shall include any applicable wiring instructions of the parties receiving payment) (such monthly statement, a "Servicing Report"), with respect to the Monthly Determination Date or Determination Date, as applicable, in the case of clauses (i) through (iii) and with respect to the Reporting Period in the case of clause (iv), signed by a Responsible Officer of the Servicer and the Borrower and substantially in the form of Exhibit H.

 

(c)         Servicer Certificate. Together with each Servicing Report, the Servicer shall submit to the Administrative Agent, each Lender and the Collateral Agent a certificate substantially in the form of Exhibit I (a "Servicer Certificate"), signed by a Responsible Officer of the Servicer, which shall include a certification by such Responsible Officer that, to his/her knowledge, no Event of Default, Servicer Default or Unmatured Event of Default has occurred as of the date of such Servicer Certificate.

 

(d)         Financial Statements. The Servicer will submit for reasonably prompt delivery to the Administrative Agent, each Lender and the Collateral Agent, upon the written request of any such party (i) the unaudited financial statements of Golub Capital BDC, Inc. for the most recent fiscal quarter and (ii) audited financial statements of Golub Capital BDC, Inc. audited by a firm of nationally recognized independent public accountants, as of the end of the most recent fiscal year, in each case, only to the extent such financial statements are not publicly available on EDGAR in accordance with the deadlines required pursuant to the Exchange Act and the associated rules and regulations.

 

(e)         Obligor Financial Statements; Valuation Reports; Other Reports. The Servicer will deliver to the Administrative Agent, the Lenders and the Collateral Agent, with respect to each Obligor, (i) all documents and information required to be delivered by the Obligor under the Underlying Instruments with respect to each Loan Asset, and the complete financial reporting package with respect to such Obligor and with respect to each Loan Asset for such Obligor (including any financial statements, management discussion and analysis, executed covenant compliance certificates and related covenant calculations with respect to such Obligor and with respect to each Loan Asset for such Obligor) provided to a Loan Party and/or the Servicer quarterly by such Obligor, which delivery shall be made within sixty (60) days after the end of such Obligor's first three (3) fiscal quarters and one hundred twenty (120) days after the end of such Obligor's fiscal year-end (which financial reporting package shall include, at minimum, sufficient details to determine Cash Interest Coverage Ratio, Senior Leverage Ratio, Total Leverage Ratio and EBITDA, as applicable, for such Obligor) and (ii) (x) on a quarterly basis, (A) the status of each Loan Asset, including an assessment of the related Obligor and information known to the Servicer that may be material to their future financial performance, (B) the Servicer's expectations, projections or plans for working out, restructuring, managing, selling or otherwise monetizing such Loan Asset and (C) any other information reasonably requested by the Administrative Agent (including a report listing, and providing an explanation of, all amendments, modifications and waivers made with respect to any Underlying Instrument related to any Loan Asset during the immediately preceding Remittance Period and all information provided to an Approved Valuation Firm) relating to any Loan Asset, and (y) promptly upon receipt by a Loan Party or the Servicer, the valuation report(s) for such fiscal quarter. Upon demand by the Administrative Agent, the Servicer will provide such other information as the Administrative Agent may request with respect to any Obligor.

 

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(f)          Amendments to Loan Assets. The Servicer will deliver to the Administrative Agent, the Lenders and the Collateral Custodian a copy of any material amendment, restatement, supplement, waiver or other modification to the Underlying Instruments of any Loan Asset (along with any internal documents prepared by the Servicer and provided to its investment committee in connection with such amendment, restatement, supplement, waiver or other modification) within ten (10) Business Days of the effectiveness of such amendment, restatement, supplement, waiver or other modification.

 

(g)         Electronic Format. Notwithstanding anything to the contrary contained herein, information required to be delivered or submitted to any Secured Party pursuant to Section 5.03(h) and this Article VI shall be deemed to have been delivered on the date on which such information is posted on a website to which the Administrative Agent has access or upon receipt of such information through email or another delivery method acceptable to the Administrative Agent.

  

(h)         Obligor Reports. The Servicer shall furnish to the Administrative Agent within a reasonable period updated Obligor Information for each Obligor if and when such information is available.

 

(i)          Officer's Certificate. On each anniversary of the date of this Agreement, the Borrower shall deliver an Officer's Certificate, in form and substance acceptable to the Lenders and the Administrative Agent, providing (i) a certification, based upon a review and summary of UCC search results, that there is no other interest in the Collateral perfected by filing of a UCC financing statement other than in favor of the Collateral Agent and (ii) a certification, based upon a review and summary of tax and judgment lien searches satisfactory to the Administrative Agent, that there is no other interest in the Collateral based on any tax or judgment lien.

 

Section 6.09        Annual Statement as to Compliance. The Servicer will provide to the Administrative Agent, each Lender and the Collateral Agent within ninety (90) days following the end of each fiscal year of the Servicer, commencing with the fiscal year ending on December 31, 2019, a fiscal report signed by a Responsible Officer of the Servicer certifying that (a) a review of the activities of the Servicer, and the Servicer's performance pursuant to this Agreement, for the fiscal period ending on the last day of such fiscal year has been made under such Person's supervision and (b) the Servicer has performed or has caused to be performed all of its obligations under this Agreement throughout such year and no Servicer Default has occurred.

 

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Section 6.10        Annual Independent Public Accountant's Servicing Reports. The Servicer will cause a nationally recognized auditing firm (who may also render other services to the Servicer) to furnish to the Administrative Agent, each Lender and the Collateral Agent within (a) one hundred eighty (180) days following the end of the fiscal year ending on December 31, 2019 and (b) ninety (90) days following the end of each fiscal year of the Servicer thereafter, a report covering such fiscal year to the effect that such auditors have applied certain agreed-upon procedures (a copy of which procedures are attached hereto as Schedule III, it being understood that the Servicer and the Administrative Agent will provide an updated Schedule III reflecting any further amendments to such Schedule III prior to the issuance of the first such agreed-upon procedures report, a copy of which shall replace the then-existing Schedule III) to certain documents and records relating to the Collateral under any Transaction Document, compared the information contained in the Servicing Reports and the Servicer Certificates delivered during the period covered by such report with such documents and records and that no matters came to the attention of such auditors that caused them to believe that such servicing was not conducted in compliance with this Article VI, except for such exceptions as such auditors shall believe to be immaterial and such other exceptions as shall be set forth in such statement.

 

Section 6.11        Procedural Review of Loan Assets; Access to Servicer and Servicer's Records.

 

(a)         Each of each Loan Party and the Servicer shall permit both (i) the Administrative Agent (who may be accompanied by any Lender (at its sole discretion)) and (ii) the representatives of the Administrative Agent, each at any time and from time to time as the Administrative Agent shall reasonably request (A) to inspect and make copies of and abstracts from its records relating to the Loan Assets and (B) to visit its properties in connection with the collection, processing or servicing of the Loan Assets for the purpose of examining such records, and to discuss matters relating to the Loan Assets or such Person's performance under this Agreement and the other Transaction Documents with any officer or employee or auditor (if any) of such Person having knowledge of such matters. Each of the Borrower and the Servicer agrees to render to the Administrative Agent such clerical and other assistance as may be reasonably requested with regard to the foregoing; provided, that such assistance shall not interfere in any material respect with the Servicer's business and operations. So long as no Unmatured Event of Default, Event of Default or Servicer Default has occurred and is continuing, such visits and inspections shall occur only (x) upon five (5) Business Days' prior written notice and (y) during normal business hours. During the existence of an Unmatured Event of Default, an Event of Default or a Servicer Default, there shall be no limit on the timing of such inspections provided that the Administrative Agent shall have provided the Borrower and Servicer with one Business Day notice before any such inspection. The Administrative Agent agrees to use good faith efforts to provide the Lenders at least ten (10) Business Days advance notice of any inspection or visit under this Section 6.11(a) so that the Lenders may accompany the Administrative Agent at their option.

 

(b)         Each Loan Party and the Servicer, as applicable, shall provide to the Administrative Agent access to the Loan Assets and all other documents regarding the Loan Assets included as part of the Collateral in its possession, in such cases where the Administrative Agent is required in connection with the enforcement of the rights or interests of the Lenders, or by applicable statutes or regulations, to review such documentation, such access being afforded without charge but only (i) upon five (5) Business Days' prior written notice (so long as no Unmatured Event of Default, Event of Default or Servicer Default has occurred and is continuing) and (ii) during normal business hours. During the existence of an Unmatured Event of Default, an Event of Default or a Servicer Default, there shall be no limit on the timing of such inspections and no prior notice will be required before any inspection. From and after the Closing Date and periodically thereafter at the reasonable discretion of the Administrative Agent, the Administrative Agent may review each Loan Party's and the Servicer's collection and administration of the Loan Assets in order to assess compliance by the Servicer with the Servicer's written policies and procedures, as well as this Agreement and may conduct an audit of the Loan Assets and Records in conjunction with such review (subject to and in accordance with Section 6.11(a)).

 

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Section 6.12        The Servicer Not to Resign. The Servicer shall not resign from the obligations and duties hereby imposed on it except upon the Servicer's determination that (a) the performance of its duties hereunder is or becomes impermissible under Applicable Law and (b) there is no reasonable action that the Servicer could take to make the performance of its duties hereunder permissible under Applicable Law. No such resignation shall become effective until a Replacement Servicer shall have assumed the responsibilities and obligations of the Servicer in accordance with Section 6.02.

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

Section 7.01        Events of Default. If any of the following events (each, an "Event of Default") shall occur:

 

(a)         a default in the payment when due of (i) any principal of any Advance or (ii) any other amount payable by the Borrower, the Servicer or the Originator, including any Yield, any Unused Fee or any other fee and such failure to pay is not cured within one (1) Business Day after the same becomes due; provided, however, that an Event of Default shall not occur under this clause (a) if such failure to pay is caused by an error or omission of an administrative or operational nature and such payment is in fact made on or before the third following Business Day;

 

(b)         any failure to pay, on the Facility Maturity Date, all accrued Obligations;

 

(c)         (i) any of any Loan Party, the Originator or the Servicer shall, (x) with respect to a Loan Party, fail to pay any principal of, or premium or interest on, any Indebtedness (other than the Obligations) and (y) with respect to the Originator, the Servicer, fail to pay any principal of, or premium or interest on, any Indebtedness (other than the Obligations), in excess of $2,500,000 with respect to the Originator and $1,000,000 with respect to a Loan Party, when the same becomes due and payable; (ii) any other default by any of any Loan Party, the Originator or the Servicer under any agreement, contract, document or instrument relating to any such Indebtedness or any other event shall occur and shall continue after the applicable grace period, if the effect of such default or event is to accelerate the maturity of such Indebtedness; or (iii) any such Indebtedness is in fact declared to be due and payable or required to be prepaid, redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case, prior to the stated maturity thereof;

 

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(d)        except as otherwise provided in this definition of "Event of Default," a default in the performance, or breach, of any other covenant or other agreement of a Loan Party or the Originator in the Transaction Documents to which it is a party (it being understood, without limiting the generality of the foregoing, that the failure to satisfy the Weighted Average Life Test is not, in and of itself, an Event of Default and the existence of a Borrowing Base Deficiency is not, in and of itself, an Event of Default except to the extent provided in clause ((j) immediately below) and the same continues unremedied (it being agreed that the sale of any Loan Asset that is not an Eligible Loan Asset shall remedy the failure of any representation, warranty or certification related to such Loan Asset being an Eligible Loan Asset) for a period of 30 days (if such failure can be remedied) after the date on which written notice of such failure requiring the same to be remedied shall have been given to such Loan Party or the Servicer by the Administrative Agent or Collateral Agent; provided that the delivery of a certificate or other report within 30 days that corrects any inaccuracy contained in a previous certificate or report shall be deemed to cure such inaccuracy as of the date of delivery of such updated certificate or report and any and all inaccuracies arising from the continuation of such initial inaccurate certificate or report;

 

(e)         the occurrence of a Bankruptcy Event relating to any Loan Party, the Originator or the Servicer;

 

(f)         the occurrence of a Servicer Default;

 

(g)         (i) the rendering of one or more judgments, decrees or orders by a court or arbitrator of competent jurisdiction for the payment of money in excess individually or in the aggregate of $1,000,000 against a Loan Party and the Servicer and such Loan Party or the Servicer, as applicable, shall not have either (A) discharged or provided for the discharge of any such judgment, decree or order in accordance with its terms or (B) perfected a timely appeal of such judgment, decree or order and caused the execution of same to be stayed during the pendency of the appeal; (ii) any action shall be legally taken by a judgment creditor to attach or levy upon any assets of a Loan Party to enforce any such judgment; or (iii) (x) any Loan Party and the Servicer shall have each in the aggregate made payments of amounts in excess of $1,000,000, in the settlement of any litigation, claim or dispute (excluding payments actually made from insurance proceeds);

 

(h)        the failure of a Loan Party to qualify as a bankruptcy remote entity based upon customary criteria or the failure to satisfy Section 5.01(d) and Dechert LLP is unable to issue a new legal opinion (with updated factual assumptions) within 30 Business Days after the date a Responsible Officer of such Loan Party becomes aware of such failure;

 

(i)            (1) any Transaction Document, or any lien or security interest granted thereunder, shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease in all material respects to be the legally valid, binding and enforceable obligation of any Loan Party, the Originator or the Servicer,

 

(2)            any Loan Party, the Originator or the Servicer or any other party shall, directly or indirectly, contest in any manner the effectiveness, validity, binding nature or enforceability of any Transaction Document or any lien or security interest thereunder (except as the enforceability hereof and thereof may be limited by Bankruptcy Laws and by general principles of equity (whether such enforceability is considered in a proceeding in equity or at law)), or

 

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(3)            any security interest in any Collateral securing any Obligation shall, in whole or in part, cease to be a first priority perfected security interest except as otherwise expressly permitted to be released in accordance with the applicable Transaction Document (provided that this clause (3) shall not apply to an immaterial portion of the Collateral which (x) does not meet the criteria solely as set forth in the second sentence of clause (2) of Schedule II, (y) does not result in a Borrowing Base Deficiency and (z) does not have a Material Adverse Effect on the Secured Parties); or with respect to any mistake on the part of the Administrative Agent or Collateral Agent in connection with the failure to have a first priority perfected security interest in respect of any portion of the Collateral);

 

(j)          a Borrowing Base Deficiency exists and has not been remedied in accordance with Section 2.06 within the time period set forth therein; provided that, in each case, during the period of time that such event remains unremedied, any payments required to be made by the Servicer on a Payment Date shall be made under Section 2.04(c);

 

(k)         any Loan Party shall become required to register as an "investment company" in accordance with the 1940 Act or the arrangements contemplated by the Transaction Documents shall become required to register as an "investment company" in accordance with the 1940 Act;

  

(l)          the Internal Revenue Service shall file notice of a Lien pursuant to Section 6323 of the Code with regard to any assets of any Loan Party or the Originator, or the PBGC shall file notice of a Lien pursuant to Section 4068 of ERISA with regard to any of the assets of any Loan Party or the Originator;

 

(m)        the occurrence of an ERISA Event or a Servicer ERISA Event;

 

(n)         any Change of Control shall occur;

 

(o)         any representation, warranty or certification made by any Loan Party or the Servicer in any Transaction Document or in any certificate delivered pursuant to any Transaction Document shall prove to have been incorrect when made and continues to be unremedied (it being agreed that the sale of any Loan Asset that is not an Eligible Loan Asset shall remedy the failure of any representation, warranty or certification related to such Loan Asset being an Eligible Loan Asset) for a period of thirty (30) days after the earlier to occur of (i) the date on which written notice of such incorrectness requiring the same to be remedied shall have been given to such Loan Party or the Originator by the Administrative Agent or the Collateral Agent (which shall be given at the direction of the Administrative Agent) and (ii) the date on which a Responsible Officer of such Loan Party or the Originator acquires knowledge thereof; provided that the delivery of a certificate or other report within 30 days which corrects any inaccuracy contained in a previous certificate or report shall be deemed to cure such inaccuracy as of the date of delivery of such updated certificate or report and any and all inaccuracies arising from the continuation of such initial inaccurate certificate or report; or

 

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(p)         (i) failure of a Loan Party to maintain at least one Independent Manager or (ii) the removal of any Independent Manager without cause or prior written notice to the Administrative Agent (in each case as required by the organization documents of such Loan Party);

 

(q)         the failure to satisfy the Financial Covenant Test; or

 

(r)         any Loan Party, the Originator or the Servicer makes or attempts to make any assignment of its rights or obligations under this Agreement or any other Transaction Document without first obtaining the specific written consent of each of the Lenders and the Administrative Agent, which consent may be withheld by any Lender or the Administrative Agent in its sole and absolute discretion;

 

then the Administrative Agent may or, at the request of the Required Lenders, shall, by notice to the Borrower, declare the "Facility Maturity Date" to have occurred; provided that, in the case of any event described in Section 7.01(e) above, the "Facility Maturity Date" shall be deemed to have occurred automatically upon the occurrence of such event. Upon any such declaration or automatic occurrence, (i) the Revolving Period shall end and each Loan Party shall cease purchasing Loan Assets from the Originator or the Borrower, as applicable, under any Purchase and Sale Agreement or from any other third party and shall cease originating Loan Assets, (ii) the Administrative Agent or the Required Lenders may declare the Advances to be immediately due and payable in full (without presentment, demand, protest or notice of any kind, all of which are hereby waived by each Loan Party) and any other Obligations to be immediately due and payable, (iii) the Administrative Agent may terminate the Servicer by providing a Servicer Removal Notice in accordance with Section 6.01(b), and (iv) all proceeds and distributions in respect of the Collateral shall be distributed by the Collateral Agent (at the direction of the Administrative Agent) as described in Section 2.04(c) (provided that the Loan Parties shall in any event remain liable to pay such Advances Outstanding and all such amounts and Obligations immediately in accordance with Section 2.04(e)). In addition, upon any such declaration or upon any such automatic occurrence, the Collateral Agent, on behalf of the Secured Parties and at the direction of the Administrative Agent, shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided under the UCC of the applicable jurisdiction and other Applicable Law, which rights shall be cumulative. Without limiting any obligation of the Servicer hereunder, each Loan Party confirms and agrees that the Collateral Agent, on behalf of the Secured Parties and at the direction of the Administrative Agent (or any designee thereof, including, the Servicer), following an Event of Default, shall, at its option, have the sole right to enforce such Loan Party's rights and remedies under each Assigned Document, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates to perform any of the obligations of such Loan Party under any such Assigned Document. If any Event of Default shall have occurred, Applicable Margin shall be increased pursuant to the definition thereof, effective as of the date of the occurrence of such Event of Default, and shall apply on each day after the occurrence of such Event of Default.

 

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Section 7.02        Additional Remedies of the Administrative Agent.

 

(a)         If, upon the declaration or automatic occurrence of the Facility Maturity Date (including, the date on which the Facility Maturity Date is declared (or is deemed to have occurred automatically) pursuant to Section 7.01), the aggregate outstanding principal amount of the Advances Outstanding, all accrued and unpaid Fees and Yield and any other Obligations are not immediately paid in full, then the Collateral Agent (acting as directed by the Administrative Agent) or the Administrative Agent, in addition to all other rights specified hereunder, shall have the right, in its own name and as agent for the Lenders, to immediately sell (at the Borrower’s expense) in a commercially reasonable manner, in a recognized market (if one exists) at such price or prices as the Administrative Agent may reasonably deem satisfactory, any or all of the Collateral Portfolio and apply the proceeds thereof to the Obligations.

 

(b)         The parties recognize that it may not be possible to sell all of the Collateral on a particular Business Day, or in a transaction with the same purchaser, or in the same manner because the market for the assets constituting the Collateral may not be liquid. Accordingly, the Administrative Agent may elect, in its sole discretion, the time and manner of liquidating any of the Collateral, and nothing contained herein shall obligate the Administrative Agent to liquidate any of the Collateral on the date the Administrative Agent or all of the Lenders declares the Advances Outstanding hereunder to be immediately due and payable pursuant to Section 7.01 or to liquidate all of the Collateral in the same manner or on the same Business Day.

 

(c)         If the Collateral Agent (acting as directed by the Administrative Agent) or the Administrative Agent proposes to sell the Collateral or any part thereof in one or more parcels at a public or private sale, at the request of the Collateral Agent or the Administrative Agent, as applicable, each Loan Party and the Servicer shall make available to (i) the Administrative Agent, on a timely basis, all information relating to the Collateral subject to sale, including, copies of any disclosure documents, contracts, financial statements of the applicable Obligors, covenant certificates and any other materials requested by the Administrative Agent, and (ii) each prospective bidder, on a timely basis, all reasonable information relating to the Collateral subject to sale, including, copies of any disclosure documents, contracts, financial statements of the applicable Obligors, covenant certificates and any other materials reasonably requested by each such bidder.

 

(d)         Each of each Loan Party and the Servicer agrees, to the full extent that it may lawfully so agree, that neither it nor anyone claiming through or under it will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption law now or hereafter in force in any locality where any Collateral may be situated in order to prevent, hinder or delay the enforcement or foreclosure of this Agreement, or the absolute sale of any of the Collateral or any part thereof, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereof, and each of each Loan Party and the Servicer, for itself and all who may at any time claim through or under it, hereby waives, to the full extent that it may be lawful so to do, the benefit of all such laws, and any and all right to have any of the properties or assets constituting the Collateral marshaled upon any such sale, and agrees that the Collateral Agent, or the Administrative Agent on its behalf, or any court having jurisdiction to foreclose the security interests granted in this Agreement may sell the Collateral as an entirety or in such parcels as the Collateral Agent (acting at the direction of the Administrative Agent) or such court may determine. Pursuant to the UCC, each of each Loan Party and the Collateral Agent hereby specifically agrees (x) that it shall not raise any objection to a Secured Party's purchase of the Collateral (through bidding on the obligations or otherwise) and (y) that a foreclosure sale conducted in conformity with the principles set forth in various no-action letters promulgated by the SEC staff (1) shall be considered to be a "public" sale for purposes of the UCC and (2) shall be considered to be commercially reasonable notwithstanding that a Secured Party purchases the Collateral at such a sale.

 

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(e)         Any amounts received from any sale or liquidation of the Collateral pursuant to this Section 7.02 in excess of the Obligations will be applied by the Collateral Agent (as directed by the Administrative Agent) in accordance with the provisions of Section 2.04(c), or as a court of competent jurisdiction may otherwise direct.

 

(f)          The Administrative Agent and the Lenders shall have, in addition to all the rights and remedies provided herein and provided by applicable federal, state, foreign, and local laws (including, the rights and remedies of a secured party under the UCC of any applicable state, to the extent that the UCC is applicable, and the right to offset any mutual debt and claim), all rights and remedies available to the Lenders at law, in equity or under any other agreement between any Lender and the Borrower.

 

(g)         Except as otherwise expressly provided in this Agreement, no remedy provided for by this Agreement shall be exclusive of any other remedy, each and every remedy shall be cumulative and in addition to any other remedy, and no delay or omission to exercise any right or remedy shall impair any such right or remedy or shall be deemed to be a waiver of any Event of Default.

 

(h)            Each of each Loan Party and the Servicer hereby irrevocably appoints, during the continuance of an Event of Default and at all times following the Facility Maturity Date, each of the Collateral Agent and the Administrative Agent its true and lawful attorney (with full power of substitution) in its name, place and stead and at its expense, in connection with the enforcement of the rights and remedies provided for in this Agreement, including without limitation the following powers: (i) to give any necessary receipts or acquittance for amounts collected or received hereunder, (ii) to make all necessary transfers of the Collateral in connection with any such sale or other disposition made pursuant hereto, (iii) to execute and deliver for value all necessary or appropriate bills of sale, assignments and other instruments in connection with any such sale or other disposition, each Loan Party and the Servicer hereby ratifying and confirming all that such attorney (or any substitute) shall lawfully do hereunder and pursuant hereto, and (iv) to sign any agreements, orders or other documents in connection with or pursuant to any Transaction Document. Nevertheless, if so requested by the Collateral Agent or the Administrative Agent, each Loan Party shall ratify and confirm any such sale or other disposition by executing and delivering to the Collateral Agent or the Administrative Agent all proper bills of sale, assignments, releases and other instruments as may be designated in any such request.

 

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(i)          The Administrative Agent is hereby authorized and empowered, during the existence of an Event of Default and at all times following the Facility Maturity Date, on behalf of each Loan Party, to endorse the name of such Loan Party or the Originator, as applicable, upon any check, draft, instrument, receipt, instruction, or other document or agreement or item, coming into the Administrative Agent's possession, and to receive and apply the proceeds therefrom in accordance with the terms hereof. The Administrative Agent is hereby granted an irrevocable power of attorney, which is coupled with an interest, to execute all checks, drafts, receipts, instruments, instructions, or other documents, agreements, or items on behalf of such Loan Party, either before or after demand of payment on the Obligations but only during the existence of an Event of Default, as shall be deemed by the Administrative Agent to be necessary or advisable, in the sole discretion of the Administrative Agent, to preserve the security interests and Liens in the Collateral or to secure the repayment of the Obligations, and the Administrative Agent shall not incur any liability, in the absence of gross negligence or willful misconduct, in connection with or arising from its exercise of such power of attorney. The application by the Administrative Agent of such funds shall, unless the Administrative Agent shall agree otherwise in writing, be the same as set forth in Section 2.04 hereof.

 

Section 7.03        Option to Purchase Collateral. Notwithstanding anything to the contrary herein, in connection with any liquidation in full of the Collateral, including without limitation, (a) upon the termination of the Commitment following the occurrence and during the continuation of an Event of Default or (b) at the Stated Maturity, provided that, in the case of the Servicer, a Servicer Default described in clause (g) of the definition thereof, the Servicer, the Equityholder and/or any of their Affiliates shall, subject to the additional requirements set forth in this Section 7.03, have the right to purchase all (but not less than all) of the Loan Assets included in the Collateral at a purchase price at least equal to the sum of the-then accrued and outstanding Obligations, as reasonably determined by the Administrative Agent. Any such party may exercise such right by giving written notice to the Borrower and the Administrative Agent (with a copy to the Collateral Agent) of its election to exercise such right (the “Exercise Notice”) which shall include a proposed purchase price and be delivered not later than 5:00 p.m. New York City time on the Stated Maturity or the date on which each of the Equity Investors and the Servicer receive notice from the Administrative Agent of the occurrence of such Event of Default and termination of the Commitments, as applicable; provided that if notice of an Event of Default and termination of the Commitment is delivered by the Administrative Agent after 2:00 p.m. New York City time, the Exercise Notice shall be delivered not later than 9:00 a.m. New York City time on the Business Day immediately following the date of such notice. Once an Exercise Notice is delivered to the Administrative Agent, the delivering party (or its designated Affiliate or managed fund) shall be obligated, irrevocably and unconditionally, to purchase the Collateral, at the price referenced above, for settlement within the normal settlement period for such Collateral. The cash purchase price must be received no later than 10 Business Days following delivery of the Exercise Notice or, if earlier, upon settlement of the loan transfers. The Administrative Agent shall not cause liquidation of the Loan Assets to occur during the time that the Servicer and Equityholder are entitled to provide an Exercise Notice. The sale of Collateral by a Loan Party as set forth in this Section 7.03 is not intended to be a foreclosure by the Collateral Agent on any of the Collateral pursuant to a public or private sale under the UCC and the Borrower shall be required to deliver the Collateral to one legal buyer in accordance with market settlement procedures.

 

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ARTICLE VIII

 

INDEMNIFICATION

 

Section 8.01        Indemnities by the Borrower.

 

(a)         Except for Taxes (other than Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim) and without limiting any other rights which the Affected Parties, the Secured Parties, the Administrative Agent, the Lenders, the Collateral Agent, the Account Bank, the Collateral Custodian or any of their respective Affiliates may have hereunder or under Applicable Law, the Loan Parties hereby agree to indemnify, jointly and severally, the Affected Parties, the Secured Parties, the Administrative Agent, the Lenders, the Collateral Agent, the Account Bank, the Collateral Custodian and each of their respective Affiliates, assigns, officers, directors, employees and agents (each, an "Indemnified Party" for purposes of this Article VIII) against, and to hold each Indemnified Party harmless from, any and all damages, losses, claims, liabilities and related costs and expenses, including attorneys' fees and disbursements of (x) one outside counsel to the Administrative Agent (and any Lender Affiliated with the Administrative Agent) and the Lenders (subject to clause (z) below), (y) one outside counsel to the Collateral Agent, the Account Bank and the Collateral Custodian, and (z) one counsel per foreign or local jurisdiction deemed reasonably necessary by the Administrative Agent or the Collateral Agent, as applicable (all of the foregoing being collectively referred to as "Indemnified Amounts"), awarded against or actually incurred by such Indemnified Party arising out of, in any way connected with, or as a result of this Agreement, any of the other Transaction Documents or in respect of any of the Collateral or any claim, litigation, investigation or proceeding relating to any of the foregoing, including the enforcement of this Agreement or any Transaction Document against the Borrower, regardless of whether any such Indemnified Party is a party thereto (and regardless of whether such matter is initiated by a third party or by the Borrower or any of its Affiliates or shareholders); provided that Indemnified Amounts shall not be available to an Indemnified Party to the extent that such damages, losses, claims, liabilities and related costs and expenses (i) are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted solely from the gross negligence or willful misconduct on the part of such Indemnified Party or (ii) result from Loan Assets which are uncollectible due to the Obligor’s financial inability to pay.

 

(b)        Any amounts subject to the indemnification provisions of this Section 8.01 shall be paid by the Borrower to the Administrative Agent on behalf of the applicable Indemnified Party within two (2) Business Days following the Administrative Agent's written demand therefor on behalf of the applicable Indemnified Party (and the Administrative Agent shall pay such amounts to the applicable Indemnified Party promptly after the receipt by the Administrative Agent of such amounts). The Administrative Agent, on behalf of any Indemnified Party making a request for indemnification under this Section 8.01, shall submit to the Borrower a certificate (solely based on information provided by such Indemnified Party if not the Administrative Agent) setting forth the basis for and the computations of the Indemnified Amounts with respect to which such indemnification is requested, which certificate shall be conclusive absent demonstrable error.

 

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(c)         If for any reason the indemnification provided above in this Section 8.01 is unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless in respect of any losses, claims, damages or liabilities, then the Borrower shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by such Indemnified Party on the one hand and the Borrower on the other hand but also the relative fault of such Indemnified Party as well as any other relevant equitable considerations.

 

(d)         If the Borrower has made any payments in respect of Indemnified Amounts to the Administrative Agent on behalf of an Indemnified Party pursuant to this Section 8.01 and such Indemnified Party thereafter collects any of such amounts from others, such Indemnified Party will promptly repay such amounts collected to the Borrower, without interest.

 

(e)         The obligations of the Borrower under this Section 8.01 shall survive the resignation or removal of the Administrative Agent, the Lenders, the Servicer, the Collateral Agent, the Account Bank or the Collateral Custodian, the invalidity or unenforceability of any term or provision of this Agreement or any other Transaction Document, any investigation made by or on behalf of the Administrative Agent, the Collateral Agent, any Lender, the Servicer, the Account Bank or the Collateral Custodian and the termination of this Agreement.

 

Section 8.02        Indemnities by Servicer.

 

(a)         Without limiting any other rights which any Indemnified Party may have hereunder or under Applicable Law, the Servicer hereby agrees to indemnify each Indemnified Party from and against any and all Indemnified Amounts, awarded against or incurred by any Indemnified Party as a consequence of any acts or omissions of the Servicer constituting bad faith, willful misconduct or gross negligence in the performance of its duties hereunder and any other Transaction Document to which it is a party; provided that Indemnified Amounts shall not be available to an Indemnified Party to the extent that such Indemnified Amounts are determined by a court of competent jurisdiction by a final and non-appealable judgment to have resulted solely from the gross negligence or willful misconduct on the part of such Indemnified Party claiming indemnification hereunder.

 

(b)        Any Indemnified Amounts shall be paid by the Servicer to the Administrative Agent, for the benefit of the applicable Indemnified Party, within fifteen (15) Business Days following receipt by the Servicer of the Administrative Agent's written demand therefor (and the Administrative Agent shall pay such amounts to the applicable Indemnified Party promptly after the receipt by the Administrative Agent of such amounts). The Administrative Agent, on behalf of any Indemnified Party making a request for indemnification under this Section 2, shall submit to the Servicer a certificate setting forth the basis for and the computations of the Indemnified Amounts with respect to which such indemnification is requested, which certificate shall be conclusive absent demonstrable error.

 

(c)         If the Servicer has made any indemnity payments to the Administrative Agent, on behalf of an Indemnified Party pursuant to this Section 8.02 and such Indemnified Party thereafter collects any of such amounts from others, such Indemnified Party will promptly repay such amounts collected to the Servicer, without interest.

 

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(d)        The obligations of the Servicer under this Section 8.02 shall survive the resignation or removal of the Administrative Agent, the Lenders, the Collateral Agent, the Account Bank or the Collateral Custodian, the invalidity or unenforceability of any term or provision of this Agreement or any other Transaction Document, any investigation made by or on behalf of the Administrative Agent, the Collateral Agent, any Lender, the Borrower, the Account Bank or the Collateral Custodian and the termination of this Agreement.

 

(e)         The Servicer shall have no liability for making indemnification hereunder to the extent any such indemnification constitutes recourse for uncollectible or uncollected Loan Assets.

 

(f)         Any indemnification pursuant to this Section 8.02 shall not be payable from the Collateral.

 

Section 8.03        Waiver of Certain Claims. To the extent permitted by Applicable Law, none of the Borrower or the Servicer shall assert, and each hereby waives, any claim against any Indemnified Person, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any of the Transaction Documents.

 

Section 8.04        Legal Proceedings. In the event an Indemnified Party becomes involved in any action, claim, or legal, governmental or administrative proceeding (an "Action") for which it seeks indemnification hereunder, the Indemnified Party shall promptly notify the other party or parties against whom it seeks indemnification (the "Indemnifying Party") in writing of the nature and particulars of the Action; provided that its failure to do so shall not relieve the Indemnifying Party of its obligations hereunder except to the extent such failure has a material adverse effect on the Indemnifying Party. Upon written notice to the Indemnified Party acknowledging in writing that the indemnification provided hereunder applies to the Indemnified Party in connection with the Action (subject to the exclusion in the first sentence of Section 8.01, the first sentence of Section 8.02, as applicable), the Indemnifying Party may assume the defense of the Action at its expense with counsel acceptable to the Indemnified Party. The Indemnified Party shall have the right to retain separate counsel in connection with the Action, and the Indemnifying Party shall not be liable for the legal fees and expenses of the Indemnified Party after the Indemnifying Party has done so; provided that if the Indemnified Party determines in good faith that there may be a conflict between the positions of the Indemnified Party and the Indemnifying Party in connection with the Action, or that the Indemnifying Party is not conducting the defense of the Action in a manner reasonably protective of the interests of the Indemnified Party, the legal fees and expenses of the Indemnified Party shall be paid by the Indemnifying Party; provided further that the Indemnifying Party shall not, in connection with any one Action or separate but substantially similar or related Actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees or expenses of more than one separate firm of attorneys (and any required local counsel) for such Indemnified Party, which firm (and local counsel, if any) shall be designated in writing to the Indemnifying Party by the Indemnified Party. If the Indemnifying Party elects to assume the defense of the Action, it shall have full control over the conduct of such defense; provided that the Indemnifying Party and its counsel shall, as requested by the Indemnified Party or its counsel, consult with and keep them informed with respect to the conduct of such defense. The Indemnifying Party shall not settle an Action without the prior written approval of the Indemnified Party unless such settlement provides for the full and unconditional release of the Indemnified Party from all liability in connection with the Action. The Indemnified Party shall reasonably cooperate with the Indemnifying Party in connection with the defense of the Action.

 

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Section 8.05        After-Tax Basis. Indemnification under Sections 8.01 and Section 8.02 shall be in an amount necessary to make the Indemnified Party whole after taking into account any Tax consequences to the Indemnified Party of the receipt of the indemnity provided hereunder, including the effect of such Tax or refund on the amount of Tax measured by net income or profits that is or was payable by the Indemnified Party.

 

ARTICLE IX

 

THE ADMINISTRATIVE AGENT

 

Section 9.01        The Administrative Agent.

 

(a)        Appointment. Each Lender hereby irrevocably appoints and authorizes the Administrative Agent as its agent hereunder and hereby further authorizes the Administrative Agent to appoint additional agents to act on its behalf and for the benefit of each Lender. Each Lender further authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Transaction Documents as are delegated to the Administrative Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Transaction Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth in this Agreement, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Transaction Document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term "agent" in this Agreement with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Applicable Law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 

(b)         Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement or any other Transaction Document by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects with reasonable care.

 

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(c)         Administrative Agent's Reliance, Etc. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as Administrative Agent under or in connection with this Agreement or any of the other Transaction Documents, except, subject to Section 9.01(b), for its or their own gross negligence or willful misconduct (each as determined in a final, non-appealable judgment by a court of competent jurisdiction). Each Secured Party hereby waives any and all claims against the Administrative Agent or any of its Affiliates for any action taken or omitted to be taken by the Administrative Agent or any of its Affiliates under or in connection with this Agreement or any of the other Transaction Documents, except, subject to Section 9.01(b), for its or their own gross negligence or willful misconduct (each as determined in a final, non-appealable judgment by a court of competent jurisdiction). Without limiting the foregoing, the Administrative Agent: (i) may consult with legal counsel (including counsel for the Borrower or the Originator), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation and shall not be responsible for any statements, warranties or representations made in or in connection with this Agreement; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any of the other Transaction Documents on the part of any Loan Party, the Originator or the Servicer or to inspect the property (including the books and records) of any Loan Party, the Originator or the Servicer; (iv) shall not be responsible for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any of the other Transaction Documents or any other instrument or document furnished pursuant hereto or thereto; (v) shall incur no liability under or in respect of this Agreement or any of the other Transaction Documents by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing believed by it to be genuine and signed or sent by the proper party or parties; (vi) shall not be responsible for or have any duty to ascertain or inquire into the contents of any certificate, report or other document delivered thereunder or in connection therewith; and (vii) shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.

 

(d)         Actions by Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Transaction Document in accordance with a request or consent of the Required Lenders; provided that, notwithstanding anything to the contrary herein, the Administrative Agent shall not be required to take any action hereunder if the taking of such action, in the reasonable determination of the Administrative Agent, shall be in violation of any Applicable Law or contrary to any provision of this Agreement or shall expose the Administrative Agent to liability hereunder or otherwise. In the event the Administrative Agent requests the consent of a Lender pursuant to the foregoing provisions and the Administrative Agent does not receive a consent (either positive or negative) from such Person within ten (10) Business Days of such Person's receipt of such request, then such Lender shall be deemed to have consented to the relevant action.

 

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(e)         Notice of Event of Default, Unmatured Event of Default or Servicer Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of an Event of Default, Unmatured Event of Default or Servicer Default, unless the Administrative Agent has received written notice from a Lender, the Borrower or the Servicer referring to this Agreement, describing such Event of Default, Unmatured Event of Default or Servicer Default and stating that such notice is a "Notice of Event of Default," "Notice of Unmatured Event of Default" or "Notice of Servicer Default," as applicable. The Administrative Agent shall (subject to Section 9.01(c)) take such action with respect to such Event of Default, Unmatured Event of Default or Servicer Default as may be requested by the Required Lenders acting jointly or as the Administrative Agent shall deem advisable or in the best interest of the Lenders.

 

(f)         Credit Decision with Respect to the Administrative Agent. Each Lender and each Secured Party acknowledges that none of the Administrative Agent or any of its Affiliates has made any representation or warranty to it, and that no act by the Administrative Agent hereinafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Loan Party, the Servicer, the Originator or any of their respective Affiliates or review or approval of any of the Collateral, shall be deemed to constitute any representation or warranty by any of the Administrative Agent or its Affiliates to any Lender as to any matter, including whether the Administrative Agent has disclosed material information in its possession. Each Lender and each Secured Party acknowledges that it has, independently and without reliance upon the Administrative Agent, or any of the Administrative Agent's Affiliates, and based upon such documents and information as it has deemed appropriate, made its own evaluation and decision to enter into this Agreement and the other Transaction Documents to which it is a party. Each Lender and each Secured Party also acknowledges that it will, independently and without reliance upon the Administrative Agent, or any of the Administrative Agent's Affiliates, and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement and the other Transaction Documents to which it is a party. Each Lender and each Secured Party hereby agrees that the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the any Loan Party, the Servicer, the Originator or their respective Affiliates which may come into the possession of the Administrative Agent or any of its Affiliates.

 

(g)         Indemnification of the Administrative Agent. Each Lender agrees to indemnify the Administrative Agent (to the extent not reimbursed by the Borrower or the Servicer), ratably in accordance with the Pro Rata Share of its related Lender, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative Agent in any way relating to or arising out of this Agreement or any of the other Transaction Documents, or any action taken or omitted by the Administrative Agent hereunder or thereunder. Without limitation of the foregoing, each Lender agrees to reimburse the Administrative Agent, ratably in accordance with the Pro Rata Share of its related Lender, promptly upon demand for any out-of-pocket expenses (including counsel fees) incurred by the Administrative Agent in connection with the administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement and the other Transaction Documents, to the extent that such expenses are incurred in the interests of or otherwise in respect of the Lenders hereunder and/or thereunder and to the extent that the Administrative Agent is not reimbursed for such expenses by the Borrower or the Servicer.

 

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(h)        Successor Administrative Agent. The Administrative Agent may resign at any time, effective upon the appointment and acceptance of a successor Administrative Agent as provided below, by giving at least five (5) days' written notice thereof to each Lender and the Borrower and may be removed at any time with cause by the Lenders acting jointly. Upon any such resignation or removal, the Required Lenders shall appoint a successor Administrative Agent, subject to the approval of the Borrower and the Originator (which approval shall not be (i) unreasonably withheld, conditioned or delayed or (ii) required at any time during the continuance of an Event of Default or after the declaration or automatic occurrence of the Facility Maturity Date). Each Lender agrees that it shall not unreasonably withhold or delay its approval of the appointment of a successor Administrative Agent. If no such successor Administrative Agent shall have been so appointed, and shall have accepted such appointment, within thirty (30) days after the retiring Administrative Agent's giving of notice of resignation or the removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Secured Parties, appoint a successor Administrative Agent which successor Administrative Agent shall be either (x) a commercial bank organized under the laws of the United States or of any state thereof and have a combined capital and surplus of at least $50,000,000 or (y) an Affiliate of such a bank. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Article IX shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.

 

(i)          Payments by the Administrative Agent. Unless specifically allocated to a specific Lender pursuant to the terms of this Agreement, all amounts received by the Administrative Agent on behalf of the Lenders shall be paid by the Administrative Agent to the Lenders in accordance with their respective Pro Rata Shares in the applicable Advances Outstanding, or if there are no Advances Outstanding in accordance with their related Lender's most recent Commitments, on the Business Day received by the Administrative Agent, unless such amounts are received after 12:00 noon on such Business Day, in which case the Administrative Agent shall use its reasonable efforts to pay such amounts to each Lender on such Business Day, but, in any event, shall pay such amounts to such Lender not later than the following Business Day.

 

(j)          The Administrative Agent shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce compliance with the provisions hereof relating to Disqualified Institutions. Without limiting the generality of the foregoing, the Administrative Agent shall not ‎(x) be obligated to ascertain, monitor or inquire as to whether any Lender or prospective Lender is a Disqualified ‎Institution or (y) have any liability with respect to or arising out of any assignment or participation of Loans, or disclosure of confidential information, to any ‎Disqualified Institution.

 

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ARTICLE X

 

COLLATERAL AGENT

 

Section 10.01      Designation of Collateral Agent.

 

(a)         Initial Collateral Agent. Each of the Borrowers, the Servicer, the Lenders and the Administrative Agent hereby designate and appoint the Collateral Agent to act as its agent for the purposes of perfection of a security interest in the Collateral and hereby authorizes the Collateral Agent to take such actions on its behalf and on behalf of each of the Secured Parties and to exercise such powers and perform such duties as are expressly granted to the Collateral Agent by this Agreement. The Collateral Agent hereby accepts such agency appointment to act as Collateral Agent pursuant to the terms of this Agreement, until its resignation or removal as Collateral Agent pursuant to the terms hereof.

 

(b)         Successor Collateral Agent. Upon the Collateral Agent's receipt of a Collateral Agent Termination Notice from the Administrative Agent of the designation of a successor Collateral Agent pursuant to the provisions of Section 10.05, the Collateral Agent agrees that it will terminate its activities as Collateral Agent hereunder.

 

(c)         Secured Party. The Administrative Agent and the Lenders hereby appoint Wells Fargo Bank, National Association, in its capacity as Collateral Agent hereunder, as their agent for the purposes of perfection of a security interest in the Collateral. Wells Fargo Bank, National Association, in its capacity as Collateral Agent hereunder, hereby accepts such appointment and agrees to perform the duties set forth in Section 10.02(b).

 

Section 10.02      Duties of Collateral Agent.

 

(a)        Appointment. The Borrowers, the Servicer, the Lenders and the Administrative Agent each hereby appoints Wells Fargo Bank, National Association to act as Collateral Agent, for the benefit of the Secured Parties. The Collateral Agent hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto set forth herein.

 

(b)         Duties. On or before the initial Advance Date, and until its removal pursuant to Section 10.05, the Collateral Agent shall perform, on behalf of the Secured Parties, the following duties and obligations:

 

(i)            The Collateral Agent shall calculate amounts to be remitted pursuant to Section 2.04 to the applicable parties and notify the Servicer and the Administrative Agent in the event of any discrepancy between the Collateral Agent's calculations and the Servicing Report (such dispute to be resolved in accordance with Section 2.05);

 

(ii)            The Collateral Agent shall make payments pursuant to the terms of the Servicing Report or as otherwise directed in accordance with Sections 2.04 or 2.05.

 

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(iii)           The Collateral Agent shall provide to the Servicer a copy of all written notices and communications identified as being sent to it in connection with the Loan Assets and the other Collateral held hereunder which it receives from the related Obligor, participating bank and/or agent bank. In no instance shall the Collateral Agent be under any duty or obligation to take any action on behalf of the Servicer in respect of the exercise of any voting or consent rights, or similar actions, unless it receives specific written instructions from the Servicer, prior to the occurrence of an Event of Default, or the Administrative Agent, after the occurrence of Event of Default, in which event the Collateral Agent shall vote, consent or take such other action in accordance with such instructions.

 

(iv)           The Collateral Agent shall create a database (the "Collateral Database") with respect to the Loan Assets held by the Borrower on the Closing Date, which Collateral Database shall include all information reasonably requested by the Administrative Agent with respect to the Loan Assets and the Collateral, on an individual Loan Asset basis and on a portfolio basis. The Collateral Agent shall permit access to the information in the Collateral Database by the Servicer, the Borrower and the Administrative Agent no later than the Closing Date. The Collateral Agent shall provide a daily report to the Servicer, the Borrower and the Administrative Agent, in an electronic format and in scope mutually acceptable to the Collateral Agent, the Servicer, the Borrower and the Administrative Agent, that summarizes the material information contained in the Collateral Database, including, without limitation, the Excess Concentration Amount (and details thereof), the Outstanding Balance of the Collateral and balances of the Controlled Accounts. The Collateral Agent shall update the Collateral Database promptly for Loan Assets and Permitted Investments acquired or sold or otherwise disposed of and for any amendments or changes to Loan Asset amounts or interest rates.

 

(v)            The Collateral Agent shall establish each Collection Account, each Eligible Currency Account and each Unfunded Exposure Account in the name of the Borrower or the applicable Securitization Subsidiary, as applicable, subject to the lien and control of the Collateral Agent for the benefit of the Secured Parties.

 

(vi)           The Collateral Agent shall track the receipt and daily allocation of cash to the Interest Collection Subaccount and Principal Collection Subaccount and any withdrawals therefrom and, on each Business Day, provide to the Servicer daily reports reflecting such actions to the Interest Collection Subaccount and Principal Collection Subaccount as of the close of business on the preceding Business Day.

 

(vii)          The Collateral Agent shall assist and reasonably cooperate with the independent certified public accountants in the preparation of those reports required under Section 6.10.

 

(viii)         The Collateral Agent shall provide the Servicer with such other information as may be reasonably requested in writing by the Servicer and as is within the possession of the Collateral Agent.

 

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(c)         (i) The Administrative Agent, each Lender and each Secured Party further authorizes the Collateral Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Transaction Documents as are expressly delegated to the Collateral Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. In furtherance, and without limiting the generality of the foregoing, each Secured Party hereby appoints the Collateral Agent (acting at the direction of the Administrative Agent) as its agent to execute and deliver all further instruments and documents, and take all further action that the Administrative Agent deems necessary or desirable in order to perfect, protect or more fully evidence the security interests granted by the Loan Parties hereunder, or to enable any of them to exercise or enforce any of their respective rights hereunder, including, the execution by the Collateral Agent as secured party/assignee of such financing or continuation statements, or amendments thereto or assignments thereof, relative to all or any of the Loan Assets now existing or hereafter arising, and such other instruments or notices, as may be necessary or appropriate for the purposes stated hereinabove. Nothing in this Section 10.02(c) shall be deemed to relieve any Loan Party or the Servicer of their respective obligations to protect the interest of the Collateral Agent (for the benefit of the Secured Parties) in the Collateral, including to file financing and continuation statements in respect of the Collateral in accordance with Section 5.01(u).

 

(ii)            The Administrative Agent may direct the Collateral Agent to take any such incidental action hereunder. With respect to other actions which are incidental to the actions specifically delegated to the Collateral Agent hereunder, the Collateral Agent shall not be required to take any such incidental action hereunder, but shall be required to act or to refrain from acting (and shall be fully protected in acting or refraining from acting) upon the direction of the Administrative Agent; provided that the Collateral Agent shall not be required to take any action hereunder at the request of the Administrative Agent, any Secured Party or otherwise if the taking of such action, in the reasonable determination of the Collateral Agent, (x) shall be in violation of any Applicable Law or contrary to any provisions of this Agreement or (y) shall expose the Collateral Agent to liability hereunder or otherwise (unless it has received indemnity which it reasonably deems to be satisfactory with respect thereto). In the event the Collateral Agent requests the consent of the Administrative Agent and the Collateral Agent does not receive a consent (either positive or negative) from the Administrative Agent within ten (10) Business Days of its receipt of such request, then the Administrative Agent shall be deemed to have declined to consent to the relevant action.

 

(iii)           Except as expressly provided herein, the Collateral Agent shall not be under any duty or obligation to take any affirmative action to exercise or enforce any power, right or remedy available to it under this Agreement unless and until (and to the extent) expressly so directed by the Administrative Agent. The Collateral Agent shall not be liable for any action taken, suffered or omitted by it in accordance with the request or direction of any Secured Party, to the extent that this Agreement provides such Secured Party the right to so direct the Collateral Agent, or the Administrative Agent. The Collateral Agent shall not be deemed to have notice or knowledge of any matter hereunder, including an Event of Default, unless a Responsible Officer of the Collateral Agent has actual knowledge of such matter or written notice thereof is received by the Collateral Agent.

 

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(d)         If, in performing its duties under this Agreement, the Collateral Agent is required to decide between alternative courses of action, the Collateral Agent may request written instructions from the Administrative Agent as to the course of action desired by it. If the Collateral Agent does not receive such instructions within two (2) Business Days after it has requested them, the Collateral Agent may, but shall be under no duty to, take or refrain from taking any such courses of action. The Collateral Agent shall act in accordance with instructions received after such two (2) Business Day period except to the extent it has already, in good faith, taken or committed itself to take, action inconsistent with such instructions. The Collateral Agent shall be entitled to rely on the advice of legal counsel and independent accountants in performing its duties hereunder and shall be deemed to have acted in good faith if it acts in accordance with such advice.

 

(e)         Concurrently herewith, the Administrative Agent directs the Collateral Agent and the Collateral Agent is authorized to enter into the Control Agreement and the Pledge Agreement. For the avoidance of doubt, all of the Collateral Agent's rights, protections and immunities provided herein shall apply to the Collateral Agent for any actions taken or omitted to be taken under the Control Agreement in such capacity.

 

Section 10.03      Merger or Consolidation. Any Person (a) into which the Collateral Agent may be merged or consolidated, (b) that may result from any merger or consolidation to which the Collateral Agent shall be a party, or (c) that may succeed to the properties and assets of the Collateral Agent substantially as a whole or that may succeed to all or substantially all of the corporate trust business of the Collateral Agent, shall be the successor to the Collateral Agent under this Agreement (and shall be deemed to have expressly assumed all obligations of the Collateral Agent under this Agreement) without further act of any of the parties to this Agreement.

 

Section 10.04      Collateral Agent Compensation. As compensation for its Collateral Agent activities hereunder, the Collateral Agent shall be entitled to the Collateral Agent Fees and Collateral Agent Expenses from the Borrower as set forth in the Wells Fargo Fee Letter, payable to the extent of funds available therefor pursuant to the provisions of Section 2.04. The Collateral Agent's entitlement to receive the Collateral Agent Fees shall cease on the earlier to occur of: (a) its removal as Collateral Agent pursuant to Section 10.05 or (b) the termination of this Agreement.

 

Section 10.05      Collateral Agent Removal. The Collateral Agent may be removed, with or without cause, by the Administrative Agent by notice given in writing to the Collateral Agent (the "Collateral Agent Termination Notice"); provided that, notwithstanding its receipt of a Collateral Agent Termination Notice, the Collateral Agent shall continue to act in such capacity until a successor Collateral Agent has been appointed by the Administrative Agent (and consented to by each of the Borrower, the Originator and the Servicer) and has agreed to act as Collateral Agent hereunder; provided that the Collateral Agent shall continue to receive compensation of its fees and expenses in accordance with Section 10.04 above while so serving as the Collateral Agent prior to a successor Collateral Agent being appointed. In the case of a resignation or removal of the Collateral Agent, if no successor shall have been appointed and an instrument of acceptance by a successor shall not have been delivered to the Collateral Agent within ninety (90) days after the giving of such notice of resignation or removal, the Collateral Agent may petition any court of competent jurisdiction for the appointment of a successor Collateral Agent.

 

Section 10.06      Limitation on Liability.

 

(a)         The Collateral Agent may conclusively rely on and shall be fully protected in acting upon any certificate, instrument, opinion, notice, letter or other document delivered to it and that in good faith it reasonably believes to be genuine and that has been signed by the proper party or parties. The Collateral Agent may rely conclusively on and shall be fully protected in acting upon the written instructions of any designated officer of the Administrative Agent.

 

(b)         The Collateral Agent may consult counsel satisfactory to it and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(c)         The Collateral Agent shall not be liable for any error of judgment, or for any act done or step taken or omitted by it, in good faith, or for any mistakes of fact or law, or for anything that it may do or refrain from doing in connection herewith except in the case of its willful misconduct or grossly negligent performance or omission of its duties.

 

(d)         The Collateral Agent makes no warranty or representation and shall have no responsibility (except as expressly set forth in this Agreement) as to the content, enforceability, completeness, validity, sufficiency, value, genuineness, ownership or transferability of the Collateral, and will not be required to and will not make any representations as to the validity or value (except as expressly set forth in this Agreement) of any of the Collateral. The Collateral Agent shall not be obligated to take any legal action hereunder that might in its judgment be contrary to Applicable Law or involve any expense or liability unless it has been furnished with an indemnity reasonably satisfactory to it.

 

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(e)         The Collateral Agent shall have no duties or responsibilities except such duties and responsibilities as are specifically set forth in this Agreement and no covenants or obligations shall be implied in this Agreement against the Collateral Agent. Notwithstanding any provision to the contrary elsewhere in the Transaction Documents, the Collateral Agent shall not have any fiduciary relationship with any party hereto or any Secured Party in its capacity as such, and no implied covenants, functions, obligations or responsibilities shall be read into this Agreement, the other Transaction Documents or otherwise exist against the Collateral Agent. Without limiting the generality of the foregoing, it is hereby expressly agreed and stipulated by the other parties hereto that the Collateral Agent shall not be required to exercise any discretion hereunder and shall have no investment or management responsibility.

 

(f)          The Collateral Agent shall not be required to expend or risk its own funds in the performance of its duties hereunder.

 

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(g)         It is expressly agreed and acknowledged that the Collateral Agent is not overseeing or guaranteeing performance of or assuming any liability for the obligations of the other parties hereto or any parties to the Collateral.

 

(h)         Subject in all cases to the last sentence of Section 2.05, in case any reasonable question arises as to its duties hereunder, the Collateral Agent may, prior to the occurrence of an Event of Default or the Facility Maturity Date, request instructions from the Servicer and may, after the occurrence of an Event of Default or the Facility Maturity Date, request instructions from the Administrative Agent, and shall be entitled at all times to refrain from taking any action unless it has received instructions from the Servicer or the Administrative Agent, as applicable. The Collateral Agent shall in all events have no liability, risk or cost for any action taken pursuant to and in compliance with the instruction of the Administrative Agent. In no event shall the Collateral Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

(i)          The Collateral Agent shall not be liable for the acts or omissions of the Collateral Custodian under this Agreement and shall not be required to monitor the performance of the Collateral Custodian. Notwithstanding anything herein to the contrary, the Collateral Agent shall have no duty to perform any of the duties of the Collateral Custodian under this Agreement.

 

(j)          It is expressly acknowledged by the parties hereto that application and performance by the Collateral Agent of its various duties hereunder (including, without limitation, recalculations to be performed in respect of the matters contemplated hereby) shall be based upon, and in reliance upon, data, information and notice provided to it by the Servicer, the Administrative Agent, the Borrowers and/or any related bank agent, obligor or similar party, and the Collateral Agent shall have no responsibility for the accuracy of any such information or data provided to it by such persons and shall be entitled to update its records (as it may deem necessary or appropriate).

 

(k)         The Collateral Agent shall not be responsible for delays or failures in performance resulting from circumstances beyond its control (such circumstances include but are not limited to acts of God, strikes, lockouts, riots, acts of war, loss or malfunctions of utilities, computer (hardware or software) or communications services).

 

(l)          The parties acknowledge that in accordance with the Customer Identification Program (CIP) requirements under the Patriot Act and its implementing regulations, the Collateral Agent in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Collateral Agent. The Borrower hereby agrees that it shall provide the Collateral Agent with such information as it may reasonably request including, but not limited to, such Borrower’s name, physical address, tax identification number and other information that will help the Collateral Agent to identify and verify the identities of such Borrower such as organizational documents, certificate of good standing, license to do business, or other pertinent identifying information.

 

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Section 10.07      Collateral Agent Resignation. The Collateral Agent may resign at any time by giving not less than ninety (90) days' written notice thereof to the Administrative Agent and with the consent of the Administrative Agent, which consent shall not be unreasonably withheld. Upon receiving such notice of resignation, the Administrative Agent shall promptly appoint a successor collateral agent or collateral agents by written instrument, in duplicate, executed by the Administrative Agent, one copy of which shall be delivered to the Collateral Agent so resigning and one copy to the successor collateral agent or collateral agents, together with a copy to the Borrower, Servicer and Collateral Custodian. If no successor collateral agent shall have been appointed and an instrument of acceptance by a successor Collateral Agent shall not have been delivered to the Collateral Agent within forty-five (45) days after the giving of such notice of resignation, the resigning Collateral Agent may petition any court of competent jurisdiction for the appointment of a successor Collateral Agent. Notwithstanding anything herein to the contrary, the Collateral Agent may not resign prior to a successor Collateral Agent being appointed.

 

ARTICLE XI

 

COLLATERAL CUSTODIAN

 

Section 11.01      Designation of Collateral Custodian.

 

(a)         Initial Collateral Custodian. The role of Collateral Custodian with respect to the Required Loan Documents shall be conducted by the Person designated as Collateral Custodian hereunder from time to time in accordance with this Section 11.01. The Administrative Agent, the Borrowers, the Lenders and the Servicer hereby designates and appoints the Collateral Custodian to act as its agent and hereby authorizes the Collateral Custodian to take such actions on its behalf and to exercise such powers and perform such duties as are expressly granted to the Collateral Custodian by this Agreement. The Collateral Custodian hereby accepts such agency appointment to act as Collateral Custodian pursuant to the terms of this Agreement, until its resignation or removal as Collateral Custodian pursuant to the terms hereof.

 

(b)         Successor Collateral Custodian. Upon the Collateral Custodian's receipt of a Collateral Custodian Termination Notice from the Administrative Agent of the designation of a successor Collateral Custodian pursuant to the provisions of Section 11.05, the Collateral Custodian agrees that it will terminate its activities as Collateral Custodian hereunder.

 

Section 11.02      Duties of Collateral Custodian.

 

(a)         Appointment. The Administrative Agent, the Borrowers, the Lenders and the Servicer each hereby appoints Wells Fargo Bank, National Association to act as Collateral Custodian, for the benefit of the Secured Parties. The Collateral Custodian hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto set forth herein.

 

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(b)         Duties. From the Closing Date until its removal pursuant to Section 11.05, the Collateral Custodian shall perform, on behalf of the Secured Parties, the following duties and obligations:

 

(i)            The Collateral Custodian shall take and retain custody of the Required Loan Documents delivered by the Borrower pursuant to Section 3.02(a) and Section 3.04(b) hereof in accordance with the terms and conditions of this Agreement, all for the benefit of the Secured Parties. Within five (5) Business Days of its receipt of any Required Loan Documents, the related Loan Asset Schedule and a hard copy of the Loan Asset Checklist, the Collateral Custodian shall review the Required Loan Documents to confirm that (A) such Required Loan Documents have been executed (either an original or a copy, as indicated on the Loan Asset Checklist) and have no mutilated pages, (B) filed stamped copies of the UCC and other filings (required by the Required Loan Documents) are included, (C) if listed on the Loan Asset Checklist, a copy of an Insurance Policy (or evidence thereof) with respect to any real or personal property constituting the Related Collateral is included, and (D) the related original balance (based on a comparison to the note or assignment agreement, as applicable), Loan Asset number and Obligor name, as applicable, with respect to such Loan Asset is referenced on the related Loan Asset Schedule (such items (A) through (D) collectively, the "Review Criteria"). In order to facilitate the foregoing review by the Collateral Custodian, in connection with each delivery of Required Loan Documents hereunder to the Collateral Custodian, the Servicer shall provide to the Collateral Custodian a hard copy (which may be preceded by an electronic copy, as applicable) of the related Loan Asset Checklist which contains the Loan Asset information with respect to the Required Loan Documents being delivered, identification number and the name of the Obligor with respect to such Loan Asset. Notwithstanding anything herein to the contrary, the Collateral Custodian's obligation to review the Required Loan Documents shall be limited to reviewing such Required Loan Documents based on the information provided on the Loan Asset Checklist. If, at the conclusion of such review, the Collateral Custodian shall determine that (I) the original balance of the Loan Asset with respect to which it has received Required Loan Documents is less than as set forth on the Loan Asset Schedule, the Collateral Custodian shall notify the Administrative Agent and the Servicer of such discrepancy within one (1) Business Day, or (II) any Review Criteria is not satisfied, the Collateral Custodian shall within one (1) Business Day notify the Servicer of such determination and provide the Servicer with a list of the non-complying Loan Assets and the applicable Review Criteria that they fail to satisfy. The Servicer shall have five (5) Business Days after notice or knowledge thereof to correct any non-compliance with any Review Criteria. In addition, if requested in writing (in the form of Exhibit J) by the Servicer and approved by the Administrative Agent within ten (10) Business Days of the Collateral Custodian's delivery of such report, the Collateral Custodian shall return any Loan Asset which fails to satisfy a Review Criteria to the Borrower. Other than the foregoing, the Collateral Custodian shall not have any responsibility for reviewing any Required Loan Documents. Notwithstanding anything to the contrary contained herein, the Collateral Custodian shall have no duty or obligation with respect to any Loan Asset Checklist delivered to it in electronic form.

 

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(ii)          In taking and retaining custody of the Required Loan Documents, the Collateral Custodian shall be deemed to be acting as the agent of the Secured Parties; provided that the Collateral Custodian makes no representations as to the existence, perfection or priority of any Lien on the Required Loan Documents or the instruments therein; and provided further that the Collateral Custodian's duties shall be limited to those expressly contemplated herein.

 

(iii)         All Required Loan Documents shall be kept in fire resistant vaults, rooms or cabinets at the address of the Collateral Custodian located at 425 Hennepin Ave., Minneapolis, MN 55414, or at such other office as shall be specified to the Administrative Agent and the Servicer by the Collateral Custodian in a written notice delivered at least thirty (30) days prior to such change. All Required Loan Documents shall be placed together with an appropriate identifying label and maintained in such a manner so as to permit retrieval and access. The Collateral Custodian shall segregate the Required Loan Documents on its inventory system and will not commingle the physical Required Loan Documents with any other files of the Collateral Custodian other than those, if any, relating to the Originator and its Affiliates and subsidiaries.

 

(iv)          On the Reporting Date of each month, the Collateral Custodian shall provide a written report to the Administrative Agent and the Servicer (in a form mutually agreeable to the Administrative Agent and the Collateral Custodian) identifying each Loan Asset for which it holds Required Loan Documents and the applicable Review Criteria that any Loan Asset fails to satisfy.

 

(v)            Notwithstanding any provision to the contrary elsewhere in the Transaction Documents, the Collateral Custodian shall not have any fiduciary relationship with any party hereto or any Secured Party in its capacity as such, and no implied covenants, functions, obligations or responsibilities shall be read into this Agreement, the other Transaction Documents or otherwise exist against the Collateral Custodian. Without limiting the generality of the foregoing, it is hereby expressly agreed and stipulated by the other parties hereto that the Collateral Custodian shall not be required to exercise any discretion hereunder and shall have no investment or management responsibility.

 

(vi)            If, in performing its duties under this Agreement, the Collateral Custodian is required to decide between alternative courses of action, the Collateral Custodian may request written instructions from the Administrative Agent as to the course of action desired by the Administrative Agent. If the Collateral Custodian does not receive such instructions within two (2) Business Days after it has requested them, the Collateral Custodian may, but shall be under no duty to, take or refrain from taking any such courses of action. The Collateral Custodian shall act in accordance with instructions received after such two (2) Business Day period except to the extent it has already, in good faith, taken or committed itself to take, action inconsistent with such instructions. The Collateral Custodian shall be entitled to rely on the advice of legal counsel and independent accountants in performing its duties hereunder and shall be deemed to have acted in good faith if it acts in accordance with such advice.

 

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(c)         (i) The Collateral Custodian agrees to cooperate with the Administrative Agent and the Collateral Agent and deliver any Required Loan Documents to the Collateral Agent or Administrative Agent (pursuant to a written request in the form of Exhibit J), as applicable, as requested in order to take any action that the Administrative Agent deems necessary or desirable in order to perfect, protect or more fully evidence the security interests granted by the Borrower hereunder, or to enable any of them to exercise or enforce any of their respective rights hereunder, including any rights arising with respect to Article VII. In the event the Collateral Custodian receives instructions from the Collateral Agent, the Servicer or the Borrower which conflict with any instructions received by the Administrative Agent, the Collateral Custodian shall rely on and follow the instructions given by the Administrative Agent.

 

(ii)         The Administrative Agent may direct the Collateral Custodian to take any such incidental action hereunder. With respect to other actions which are incidental to the actions specifically delegated to the Collateral Custodian hereunder, the Collateral Custodian shall not be required to take any such incidental action hereunder, but shall be required to act or to refrain from acting (and shall be fully protected in acting or refraining from acting) upon the direction of the Administrative Agent; provided that the Collateral Custodian shall not be required to take any action hereunder at the request of the Administrative Agent, any Secured Party or otherwise if the taking of such action, in the reasonable determination of the Collateral Custodian, (x) shall be in violation of any Applicable Law or contrary to any provisions of this Agreement or (y) shall expose the Collateral Custodian to liability hereunder or otherwise (unless it has received indemnity which it reasonably deems to be satisfactory with respect thereto). In the event the Collateral Custodian requests the consent of the Administrative Agent and the Collateral Custodian does not receive a consent (either positive or negative) from the Administrative Agent within ten (10) Business Days of its receipt of such request, then the Administrative Agent shall be deemed to have declined to consent to the relevant action.

 

(iii)          The Collateral Custodian shall not be liable for any action taken, suffered or omitted by it in accordance with the request or direction of any Secured Party, to the extent that this Agreement provides such Secured Party the right to so direct the Collateral Custodian, or the Administrative Agent. The Collateral Custodian shall not be deemed to have notice or knowledge of any matter hereunder, including an Event of Default, unless a Responsible Officer of the Collateral Custodian has actual knowledge of such matter or written notice thereof is received by the Collateral Custodian.

 

Section 11.03        Merger or Consolidation. Any Person (a) into which the Collateral Custodian may be merged or consolidated, (b) that may result from any merger or consolidation to which the Collateral Custodian shall be a party, or (c) that may succeed to the properties and assets of the Collateral Custodian substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Collateral Custodian hereunder, shall be the successor to the Collateral Custodian under this Agreement without further act of any of the parties to this Agreement.

  

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Section 11.04      Collateral Custodian Compensation. As compensation for its Collateral Custodian activities hereunder, the Collateral Custodian shall be entitled to the Collateral Custodian Fees from the Borrower as set forth in the Wells Fargo Fee Letter, payable pursuant to the extent of funds available therefor pursuant to the provisions of Section 2.04. The Collateral Custodian's entitlement to receive the Collateral Custodian Fees shall cease on the earlier to occur of: (a) its removal as Collateral Custodian pursuant to Section 11.05, (b) its resignation as Collateral Custodian pursuant to Section 11.07 of this Agreement or (c) the termination of this Agreement.

 

Section 11.05      Collateral Custodian Removal. The Collateral Custodian may be removed, with or without cause, by the Administrative Agent by notice given in writing to the Collateral Custodian (the "Collateral Custodian Termination Notice"); provided that, notwithstanding its receipt of a Collateral Custodian Termination Notice, the Collateral Custodian shall continue to act in such capacity until a successor Collateral Custodian has been appointed and has agreed to act as Collateral Custodian hereunder. In the case of a resignation or removal of the Collateral Custodian, if no successor shall have been appointed and an instrument of acceptance by a successor shall not have been delivered to the Collateral Custodian within ninety (90) days after the giving of such notice of resignation or removal, the Collateral Custodian may petition any court of competent jurisdiction for the appointment of a successor Collateral Custodian.

 

Section 11.06      Limitation on Liability.

 

(a)         The Collateral Custodian may conclusively rely on and shall be fully protected in acting upon any certificate, instrument, opinion, notice, letter or other document delivered to it and that in good faith it reasonably believes to be genuine and that has been signed by the proper party or parties. The Collateral Custodian may rely conclusively on and shall be fully protected in acting upon the written instructions of any designated officer of the Administrative Agent.

 

(b)         The Collateral Custodian may consult counsel satisfactory to it and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(c)         The Collateral Custodian shall not be liable for any error of judgment, or for any act done or step taken or omitted by it, in good faith, or for any mistakes of fact or law, or for anything that it may do or refrain from doing in connection herewith except in the case of its willful misconduct or grossly negligent performance or omission of its duties.

 

(d)         The Collateral Custodian makes no warranty or representation and shall have no responsibility (except as expressly set forth in this Agreement) as to the content, enforceability, completeness, validity, sufficiency, value, genuineness, ownership or transferability of the Collateral, and will not be required to and will not make any representations as to the validity or value (except as expressly set forth in this Agreement) of any of the Collateral. The Collateral Custodian shall not be obligated to take any legal action hereunder that might in its judgment be contrary to Applicable Law or involve any expense or liability unless it has been furnished with an indemnity reasonably satisfactory to it.

 

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(e)         The Collateral Custodian shall have no duties or responsibilities except such duties and responsibilities as are specifically set forth in this Agreement and no covenants or obligations shall be implied in this Agreement against the Collateral Custodian.

 

(f)          The Collateral Custodian shall not be required to expend or risk its own funds in the performance of its duties hereunder.

 

(g)         It is expressly agreed and acknowledged that the Collateral Custodian is not overseeing or guaranteeing performance of or assuming any liability for the obligations of the other parties hereto or any parties to the Collateral.

 

(h)         Subject in all cases to the last sentence of Section 11.02(c)(i), in case any reasonable question arises as to its duties hereunder, the Collateral Custodian may, prior to the occurrence of an Event of Default or the Facility Maturity Date, request instructions from the Servicer and may, after the occurrence of an Event of Default or the Facility Maturity Date, request instructions from the Administrative Agent, and shall be entitled at all times to refrain from taking any action unless it has received instructions from the Servicer or the Administrative Agent, as applicable. The Collateral Custodian shall in all events have no liability, risk or cost for any action taken pursuant to and in compliance with the instruction of the Administrative Agent. In no event shall the Collateral Custodian be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Collateral Custodian has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

(i)          It is expressly acknowledged by the parties hereto that application and performance by the Collateral Custodian of its various duties hereunder (including, without limitation, recalculations to be performed in respect of the matters contemplated hereby) shall be based upon, and in reliance upon, data, information and notice provided to it by the Servicer, the Administrative Agent, the Borrowers and/or any related bank agent, obligor or similar party, and the Collateral Custodian shall have no responsibility for the accuracy of any such information or data provided to it by such persons and shall be entitled to update its records (as it may deem necessary or appropriate).

 

(j)          The Collateral Custodian shall not be responsible for delays or failures in performance resulting from circumstances beyond its control (such circumstances include but are not limited to acts of God, strikes, lockouts, riots, acts of war, loss or malfunctions of utilities, computer (hardware or software) or communications services).

 

(k)         The parties acknowledge that in accordance with the Customer Identification Program (CIP) requirements under the Patriot Act and its implementing regulations, the Collateral Custodian in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Collateral Custodian. The Borrower hereby agrees that it shall provide the Collateral Custodian with such information as it may request including, but not limited to, such Borrower’s name, physical address, tax identification number and other information that will help the Collateral Custodian to identify and verify such Borrower’s identity such as organizational documents, certificate of good standing, license to do business, or other pertinent identifying information.

 

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Section 11.07      Collateral Custodian Resignation. Collateral Custodian may resign and be discharged from its duties or obligations hereunder, not earlier than ninety (90) days after delivery to the Administrative Agent of written notice of such resignation specifying a date when such resignation shall take effect. Upon the effective date of such resignation, or if the Administrative Agent gives Collateral Custodian written notice of an earlier termination hereof, Collateral Custodian shall (i) be reimbursed for any costs and expenses Collateral Custodian shall incur in connection with the termination of its duties under this Agreement and (ii) deliver all of the Required Loan Documents in the possession of Collateral Custodian to the Administrative Agent or to such Person as the Administrative Agent may designate to Collateral Custodian in writing upon the receipt of a request in the form of Exhibit J. Notwithstanding anything herein to the contrary, the Collateral Custodian may not resign prior to a successor Collateral Custodian being appointed.

 

Section 11.08      Release of Documents.

 

(a)         Release for Servicer. From time to time and as appropriate for the enforcement or servicing of any of the Collateral, the Collateral Custodian is hereby authorized (unless and until such authorization is revoked by the Administrative Agent), upon written receipt from the Servicer of a request for release of documents and receipt in the form annexed hereto as Exhibit J, to release to the Servicer within two (2) Business Days of receipt of such request, the related Required Loan Documents or the documents set forth in such request and receipt to the Servicer. All documents so released to the Servicer shall be held by the Servicer in trust for the benefit of the Collateral Agent, on behalf of the Secured Parties in accordance with the terms of this Agreement. The Servicer shall return to the Collateral Custodian the Required Loan Documents or other such documents (i) promptly upon the request of the Administrative Agent, or (ii) when the Servicer's need therefor in connection with such foreclosure or servicing no longer exists, unless the Loan Asset shall be liquidated, in which case, the Servicer shall deliver an additional request for release of documents to the Collateral Custodian and receipt certifying such liquidation from the Servicer to the Collateral Agent, all in the form annexed hereto as Exhibit J.

 

(b)        Limitation on Release. The foregoing provision with respect to the release to the Servicer of the Required Loan Documents and documents by the Collateral Custodian upon request by the Servicer shall be operative only to the extent that the Administrative Agent has consented to such release. Promptly after delivery to the Collateral Custodian of any request for release of documents, the Servicer shall provide notice of the same to the Administrative Agent. Any additional Required Loan Documents or documents requested to be released by the Servicer may be released only upon written authorization of the Administrative Agent. The limitations of this paragraph shall not apply to the release of Required Loan Documents to the Servicer pursuant to the immediately succeeding subsection.

 

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(c)         Release for Payment. Upon receipt by the Collateral Custodian of the Servicer's request for release of documents and receipt in the form annexed hereto as Exhibit J (which certification shall include a statement to the effect that all amounts received) in connection with such payment or repurchase have been credited to the Collection Account, the Collateral Custodian shall promptly release the related Required Loan Documents to the Servicer.

 

Section 11.09      Return of Required Loan Documents. The Borrower may, with the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld), require that the Collateral Custodian return each Required Loan Document (a) delivered to the Collateral Custodian in error or (b) released from the Lien of the Collateral Agent hereunder pursuant to Section 2.14, in each case by submitting to the Collateral Custodian and the Administrative Agent a written request in the form of Exhibit J hereto (signed by both the Borrower and the Administrative Agent) specifying the Collateral to be so returned and reciting that the conditions to such release have been met (and specifying the Section or Sections of this Agreement being relied upon for such release). The Collateral Custodian shall upon its receipt of each such request for return executed by the Borrower and the Administrative Agent promptly, but in any event within five (5) Business Days, return the Required Loan Documents so requested to the Borrower.

 

Section 11.10       Access to Certain Documentation and Information Regarding the Collateral. The Collateral Custodian shall provide to the Administrative Agent and each Lender access to the Required Loan Documents and all other documentation regarding the Collateral including in such cases where the Administrative Agent and each Lender is required in connection with the enforcement of the rights or interests of the Secured Parties, or by applicable statutes or regulations, to review such documentation, such access being afforded without charge but only (a) upon two (2) Business Days prior written request, (b) during normal business hours and (c) subject to the Servicer's and the Collateral Custodian's normal security and confidentiality procedures. Without limiting the foregoing provisions of this Section 11.10, from time to time on request of the Administrative Agent, the Collateral Custodian shall permit certified public accountants or other auditors acceptable to the Administrative Agent to conduct, at the expense of the Servicer (on behalf of the Borrower), a review of the Required Loan Documents and all other documentation regarding the Collateral; provided that, prior to the occurrence of an Event of Default, such review shall be conducted no more than two times in any calendar year.

 

Section 11.11      Bailment. The Collateral Custodian agrees that, with respect to any Required Loan Documents at any time or times in its possession or held in its name, the Collateral Custodian shall be the agent and bailee of the Collateral Agent, for the benefit of the Secured Parties, for purposes of perfecting (to the extent not otherwise perfected) the Collateral Agent's security interest in the Collateral and for the purpose of ensuring that such security interest is entitled to first priority status under the UCC.

 

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ARTICLE XII

 

MISCELLANEOUS

 

Section 12.01      Amendments and Waivers.

 

(a)         (i) No amendment or modification of any provision of this Agreement or any other Transaction Document, or consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower, the Servicer, the Required Lenders (or the Administrative Agent on their behalf), the Administrative Agent and, solely if such amendment or modification would adversely affect the rights and obligations of the Originator, the Collateral Agent, the Account Bank or the Collateral Custodian, the written agreement of the Originator, the Collateral Agent, the Account Bank or the Collateral Custodian, as applicable; and (ii) no termination or waiver of any provision of this Agreement or consent to any departure therefrom by the Borrower or the Servicer shall be effective without the written consent of the Administrative Agent and the Required Lenders. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

(b)         Notwithstanding the provisions of Section 12.01(a) but subject to the other provisions hereof, the written consent of all of the Lenders (unless otherwise noted) shall be required for any amendment, modification or waiver:

 

(i)           reducing the principal amount of the Advances Outstanding or the Yield (or the rate of the Yield) thereon;

 

(ii)          solely with the consent of each Lender affected thereby, increasing the aggregate Commitments or the Facility Amount;

 

(iii)          solely with the consent of each Lender affected thereby, extending, waiving or postponing any date for any payment of any Advance, all or any portion of the Yield thereon or any fees or other amounts due to the Lenders (or any of them);

 

(iv)          modifying, amending or waiving the provisions of this Section 12.01 or the definition of “Amortization Period”, “Required Lenders”, “Collateral”, “Concentration Limitations”, “Advance Rate”, or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder;

 

(v)          solely to the extent any such modification would reasonably be expected to adversely affect the Lenders, modifying the provisions of Section 2.04 or any related definitions or provisions that would alter the order of application of proceeds or would alter the pro rata sharing of payments required thereby;

 

(vi)          extending the Stated Maturity or clause (a) of the definition of "Commitment Termination Date";

 

(vii)         making any modification to the defined term of “Eligible Currency” that would add a currency;

 

(viii)        except as permitted by the Transaction Documents, releasing all or substantially all of the Collateral; or

 

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(ix)           waive the occurrence of an Event of Default set forth under Sections 7.01(a), 7.01(b) and 7.01(r).

 

Section 12.02      Notices, Etc. Except as otherwise provided herein, all notices and other communications hereunder to any party shall be in writing and sent by certified or registered mail, return receipt requested, by overnight delivery service, with all charges paid, by electronic mail ("email") or by hand delivery, to such party's address set forth below:

 

BORROWER:                                                               Golub Capital BDC Funding II LLC

c/o Golub Capital BDC, Inc.

200 Park Avenue, 25th Floor

New York, New York 10166

Attention: Structured Products

Email: structuredproducts@golubcapital.com

 

SERVICER AND ORIGINATOR:                               c/o Golub Capital BDC, Inc.

200 Park Avenue, 25th Floor

New York, New York 10166

Attention: Structured Products

Email: structuredproducts@golubcapital.com

 

SECURITIZATION SUBSIDIARIES:                         NONE

 

ADMINISTRATIVE AGENT:                                     Morgan Stanley Senior Funding, Inc.

1585 Broadway, 24th Floor

New York, New York 10036

Attention: FID Secured Lending Group

Email: (for borrowing requests) mmborrowingrequests@morganstanley.com

(for all other purposes) mmloanapprovals@morganstanley.com

 

With a copy to:

 

Morgan Stanley Bank, N.A.

1300 Thames Street Wharf

Baltimore, MD 21231

Attention: CLO Team

Email: (for borrowing requests) mmborrowingrequests@morganstanley.com

(for all other purposes) mmloanapprovals@morganstanley.com

 

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COLLATERAL AGENT:                                             Wells Fargo Bank, National Association

Corporate Trust Services Division

9062 Old Annapolis Rd.

Columbia, MD 21045

Attn: CDO Trust Services – Golub Capital

Financing Funding III LLC

Email: golubcapital@wellsfargo.com

Phone: 410-884-2000

 

ACCOUNT BANK:                                                      Wells Fargo Bank, National Association

Corporate Trust Services Division

9062 Old Annapolis Rd.

Columbia, MD 21045

Attn: CDO Trust Services – Golub Capital BDC

Funding LLC

Email: golubcapital@wellsfargo.com

Phone: 410-884-2000

 

LENDER:                                                                      Morgan Stanley Bank, N.A.

201 South Main Street

Salt Lake City, Utah 84111-2215

Email: (for borrowing requests) mmborrowingrequests@morganstanley.com

(for all other purposes) mmloanapprovals@morganstanley.com

 

With copies to:

 

Morgan Stanley Bank, N.A.

1585 Broadway, 24th Floor

New York, New York 10036

Attention:         FID Secured Lending Group

Email: (for borrowing requests) mmborrowingrequests@morganstanley.com

(for all other purposes) mmloanapprovals@morganstanley.com

 

Morgan Stanley Bank, N.A.

1300 Thames Street, Thames Street Wharf

Baltimore, Maryland 21231

Email: (for borrowing requests) mmborrowingrequests@morganstanley.com

(for all other purposes) mmloanapprovals@morganstanley.com

 

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or at such other address as such party may hereafter specify in a notice given in the manner required under this Section 12.02. All such notices and correspondence shall be deemed given (a) if sent by certified or registered mail, three (3) Business Days after being postmarked, (b) if sent by overnight delivery service or by hand delivery, when received at the above stated addresses or when delivery is refused and (c) if sent by email, when received.

 

Section 12.03      No Waiver; Remedies. No failure on the part of the Administrative Agent, the Collateral Agent or any Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

 

Section 12.04      Binding Effect; Assignability; Multiple Lenders.

 

(a)         This Agreement shall be binding upon and inure to the benefit of each Loan Party, the Servicer, the Administrative Agent, each Lender, the Collateral Agent, the Account Bank, the Collateral Custodian and their respective successors and permitted assigns. With the prior written consent of the Administrative Agent (unless such assignment is to an Affiliate of a Lender or is otherwise required by Applicable Law), each Lender and their respective successors and assigns may assign, grant a security interest or sell a participation interest in, (i) this Agreement and such Lender's rights and obligations hereunder and interest herein in whole or in part (including by way of the sale of participation interests therein) and/or (ii) any Advance (or portion thereof) to any Person; provided that, so long as no Default or Event of Default has occurred, the Borrower has provided its written consent (such consent not to be unreasonably withheld, conditioned or delayed) to such assignment to any Person that is a Disqualified Institution, or is not a Lender or an Affiliate of a Lender (but, for the avoidance of doubt, no such consent of the Borrower shall be required for any grant of a security interest or sale of a participation interest to any Person, an assignment to a Lender or an Affiliate of a Lender, an assignment to a Person that is not a Disqualified Institution or an assignment that is required by Applicable Law). Any such assignee shall execute and deliver to the Servicer, the Borrower and the Administrative Agent a fully-executed assignment and acceptance agreement in the form of Exhibit K hereto (a "Assignment and Acceptance"). The parties to any such assignment, grant or sale of a participation interest shall execute and deliver to the related Lender for its acceptance and recording in its books and records, such agreement or document as may be satisfactory to such parties and the applicable Lender. None of any Loan Party, the Originator or the Servicer may assign, or permit any Lien to exist upon, any of its rights or obligations hereunder or under any Transaction Document or any interest herein or in any Transaction Document without the prior written consent of each Lender and the Administrative Agent. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Advances or other obligations under the Transaction Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans, letters of credit or its other obligations under any Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

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(b)        Notwithstanding any other provision of this Section 12.04, any Lender may at any time pledge or grant a security interest in all or any portion of its rights (including, rights to payment of principal and interest) under this Agreement to secure obligations of such Lender to a Federal Reserve Bank, without notice to or consent of the Borrower or the Administrative Agent; provided that no such pledge or grant of a security interest shall release such Lender from any of its obligations hereunder, or substitute any such pledgee or grantee for such Lender as a party hereto.

 

(c)         Each Affected Party and each Indemnified Party shall be an express third party beneficiary of this Agreement.

 

(d)        Upon the effectiveness of any assignment by any Lender of all or any of its rights and obligations under the Transaction Documents pursuant to Section 12.04(a) and the delivery to the Administrative Agent of all assignment documentation and the Assignment and Acceptance, the Administrative Agent shall revise Annex A to reflect such assignment.

 

Section 12.05      Term of This Agreement. This Agreement, including, each Loan Party's representations and covenants set forth in Articles IV and V and the Servicer's representations, covenants and duties set forth in Articles IV, V and VI, shall remain in full force and effect until the Collection Date; provided that the rights and remedies with respect to any breach of any representation and warranty made or deemed made by any Loan Party or the Servicer pursuant to Articles III and IV and the indemnification and payment provisions of Article VIII, IX and Article XII and the provisions of Section 2.10, Section 2.11, Section 12.07 and Section 12.09 shall be continuing and shall survive any termination of this Agreement.

 

Section 12.06      GOVERNING LAW; JURY WAIVER.

 

(a)         THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

(b)         BY EXECUTION AND DELIVERY OF EACH TRANSACTION DOCUMENT TO WHICH IT IS A PARTY, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

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(c)         EACH LOAN PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (A) OF THIS Section 12.06. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)         EACH OF THE PARTIES (OTHER THAN THE COLLATERAL AGENT, COLLATERAL CUSTODIAN, AND ACCOUNT BANK) HERETO WAIVES PERSONAL SERVICE OF PROCESS AND IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN Section 12.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

(e)         JURY WAIVER. EACH OF THE PARTIES HERETO HEREBY (i) WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO (1) THIS AGREEMENT; (2) ANY OTHER TRANSACTION DOCUMENT; OR (3) ANY CONDUCT, ACTS OR OMISSIONS UNDER THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OF ANY LOAN PARTY, THE ADMINISTRATIVE AGENT, A LENDER OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, ADMINISTRATIVE AGENTS, ATTORNEYS OR OTHER AFFILIATES, IN EACH CASE WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, AND (ii) AGREES AND CONSENTS THAT ANY SUCH CLAIM OR CAUSE OF ACTION UNDER THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES TO THE WAIVER OF THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY

 

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Section 12.07      Costs, Expenses and Taxes.

 

(a)         In addition to the rights of indemnification granted to the Indemnified Parties under Section 8.01 and Section 8.02 hereof, each of the Borrower, the Servicer and the Originator agrees to pay (i) with respect to the Borrower, on the Payment Date pertaining to the Remittance Period in which such cost is incurred and (ii) with respect to the Servicer and the Originator, on demand to the extent not paid by the Borrower on the Payment Date pertaining to the Remittance Period in which such cost is incurred, in each case, all costs and expenses of the Administrative Agent, the Lenders, the Collateral Agent, the Account Bank and the Collateral Custodian incurred in connection with (x) the preparation, execution, delivery, administration, amendment or modification of, any waiver or consent issued in connection with, this Agreement, the Transaction Documents and the other documents to be delivered hereunder or in connection herewith, including, the fees and expenses of counsel for the Administrative Agent, the Lenders, the Collateral Agent, the Account Bank and the Collateral Custodian with respect thereto and with respect to advising the Administrative Agent, the Lenders, the Collateral Agent, the Account Bank and the Collateral Custodian as to their respective rights and remedies under this Agreement and the other documents to be delivered hereunder or in connection herewith, and (y) the enforcement or potential enforcement of this Agreement or any Transaction Document by such Person and the other documents to be delivered hereunder or in connection herewith.

 

(b)        The Borrower shall pay, on the Payment Date pertaining to a Remittance Period, all other costs and expenses described in clause (a) above incurred by the Administrative Agent, the Lenders, the Collateral Agent, the Collateral Custodian and the Account Bank during such Remittance Period or any prior Remittance Period to the extent not previously paid.

 

(c)         Nothing contained in this Section 12.07 shall relate to the payment of Taxes under the Transaction Documents.

 

Section 12.08      Further Assurances. Each Loan Party shall promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, financing statements, deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to (i) to the fullest extent permitted by applicable law, subject any of any Loan Party's properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the security documents, (ii) perfect and maintain the validity, effectiveness and priority of any of the security documents and any of the Liens intended to be created thereunder and (iii) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Transaction Document or under any other instrument executed in connection with any Transaction Document to which a Loan Party is or is to be a party.

 

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Section 12.09      Recourse Against Certain Parties.

 

(a)         Notwithstanding any contrary provision set forth herein, no claim may be made by any Loan Party, the Originator or the Servicer or any other Person against the Administrative Agent or any Secured Party or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect to any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each Loan Party, the Originator and the Servicer each hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected.

 

(b)         No obligation or liability to any Obligor under any of the Loan Assets is intended to be assumed by the Administrative Agent, the Lenders or any Secured Party under or as a result of this Agreement and the transactions contemplated hereby.

 

(c)         The provisions of this Section 12.09 shall survive the termination of this Agreement.

 

Section 12.10      Execution in Counterparts; Severability; Integration. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by email in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement. In the event that any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. This Agreement and any agreements or letters (including fee letters) executed in connection herewith contains the final and complete integration of all prior and contemporaneous expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior and contemporaneous oral or written understandings other than any fee letter delivered by the Servicer to the Administrative Agent and the Lenders. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. Moreover, the parties to this Agreement waive reliance on any representation made by any other party, whether orally or in writing, prior to the execution of this Agreement.

 

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Section 12.11      Characterization of Conveyances Pursuant to each Purchase and Sale Agreement.

 

(a)         It is the express intent of the parties hereto that the conveyance of the Eligible Loan Assets by the Originator to the Borrower and the Borrower to a Securitization Subsidiary, as applicable, as contemplated by the applicable Purchase and Sale Agreement be, and be treated for all purposes as, a sale by the Originator or the Borrower, as applicable, of such Eligible Loan Assets. It is, further, not the intention of the parties that such conveyance be deemed a pledge of the Eligible Loan Assets by the Originator or Borrower, as applicable, to the Borrower or a Securitization Subsidiary, as applicable, to secure a debt or other obligation of the Originator or the Borrower, as applicable. However, in the event that, notwithstanding the intent of the parties, the Eligible Loan Assets are held to continue to be property of the Originator or the Borrower, as applicable, then the parties hereto agree that: (i) the applicable Purchase and Sale Agreement shall also be deemed to be a security agreement under Applicable Law; (ii) as set forth in such Purchase and Sale Agreement, the transfer of the Eligible Loan Assets provided for in such Purchase and Sale Agreement shall be deemed to be a grant by the Originator or the Borrower, as applicable, to the Borrower or the applicable Securitization Subsidiary of a first priority security interest (subject only to Permitted Liens) in all of the Originator's or Borrower’s, as applicable, right, title and interest in and to the Eligible Loan Assets and all amounts payable to the holders of the Eligible Loan Assets in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, including, all amounts from time to time held or invested in the Controlled Accounts, whether in the form of cash, instruments, securities or other property; (iii) the possession by a Loan Party (or the Collateral Custodian on its behalf) of Loan Assets and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be, subject to clause (iv) below, for purposes of perfecting the security interest pursuant to the UCC; and (iv) acknowledgements from Persons holding such property shall be deemed acknowledgements from custodians, bailees or agents (as applicable) of the applicable Loan Party for the purpose of perfecting such security interest under Applicable Law. The parties further agree that any assignment of the interest of a Loan Party pursuant to any provision hereof shall also be deemed to be an assignment of any security interest created pursuant to the terms of the applicable Purchase and Sale Agreement. Each Loan Party shall, to the extent consistent with this Agreement and the other Transaction Documents, take such actions as may be necessary to ensure that, if a Purchase and Sale Agreement was deemed to create a security interest in the Eligible Loan Assets, such security interest would be deemed to be a perfected security interest of first priority (subject only to Permitted Liens) under Applicable Law and will be maintained as such throughout the term of this Agreement.

  

(b)         It is the intention of each of the parties hereto that the Eligible Loan Assets conveyed by the Originator to the Borrower or the Borrower to a Securitization Subsidiary, as applicable, pursuant to a Purchase and Sale Agreement shall constitute assets owned by the Borrower or such Securitization Subsidiary, as applicable, and shall not be part of the Originator's or Borrower’s, as applicable, estate in the event of the filing of a bankruptcy petition by or against the Originator or Borrower, as applicable, under any bankruptcy or similar law.

 

(c)         Each Loan Party agrees to treat, and shall cause the Originator and the Borrower, as applicable, to treat, for all purposes, the transactions effected by the Purchase and Sale Agreements as sales of assets to the Borrower or a Securitization Subsidiary, as applicable. Each Loan Party and the Servicer each hereby agree to cause the Originator to reflect in the Originator's financial records and to include a note in the publicly filed annual and quarterly financial statements of the Originator indicating that assets sold to a Loan Party under a Purchase and Sale Agreement are owned by such Loan Party that is consolidated in the Originator's financial statements, the creditors of such Loan Party have received security interests in such assets and such assets are not intended to be available to the creditors of the Originator (or any other affiliate of the Originator).

 

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Section 12.12      Confidentiality.

 

(a)         Each of the Administrative Agent, the Lenders, the Servicer, the Collateral Agent, each Loan Party, the Account Bank, the Originator and the Collateral Custodian shall maintain and shall cause each of its employees and officers to maintain the confidentiality of the Agreement (and the terms thereof) and all information with respect to the other parties, including all information regarding the Loan Assets, the related Obligors, each Loan Party and the Originator (including any Affiliated thereof) and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that each such party and its officers and employees may (i) disclose such information to its external accountants, investigators, auditors, attorneys or other agents, including any valuation firm engaged by such party in connection with any due diligence or comparable activities with respect to the transactions and Loan Assets contemplated herein and the agents of such Persons ("Excepted Persons"); provided that each Excepted Person shall, as a condition to any such disclosure, agree for the benefit of the Administrative Agent, the Lenders, the Servicer, the Collateral Agent, each Loan Party, the Account Bank, the Originator and the Collateral Custodian (A) to maintain the confidentiality of the Agreement (and the terms thereof) and all information with respect to the other parties, including all information regarding the Loan Assets and each Loan Party and the Servicer hereto and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, and (B) that such information shall be used solely in connection with such Excepted Person's evaluation of, or relationship with, each Loan Party and its affiliates, (ii) disclose the existence of the Agreement, but not the terms thereof, (iii) disclose such information as is required by Applicable Law (including disclosures which such party determines are required or advisable under applicable federal securities or banking laws, rules or regulations) and (iv) disclose the Agreement and such information in any suit, action, proceeding or investigation (whether in law or in equity or pursuant to arbitration) involving any of the Transaction Documents for the purpose of defending itself, reducing its liability, or protecting or exercising any of its claims, rights, remedies, or interests under or in connection with any of the Transaction Documents. It is understood that the financial terms that may not be disclosed except in compliance with this Section 12.12(a) include, all fees and other pricing terms, and all Events of Default, Servicer Defaults, and priority of payment provisions.

  

(b)         Anything herein to the contrary notwithstanding, each Loan Party and the Servicer each hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Administrative Agent, the Lenders, the Account Bank, the Collateral Agent or the Collateral Custodian by each other, or (ii) by the Administrative Agent, the Lenders, the Account Bank, the Collateral Agent and the Collateral Custodian to any prospective or actual assignee or participant of any of them provided such Person agrees to hold such information confidential, and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided each such Person is informed of the confidential nature of such information. In addition, the Lenders, the Administrative Agent, the Collateral Agent, the Account Bank and the Collateral Custodian may disclose any such nonpublic information as required pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).

 

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(c)         Notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) disclosure of any and all information that is or becomes publicly known (after such information becomes publicly known); (ii) disclosure of any and all information (A) if required to do so by any applicable statute, law, rule or regulation, (B) following a request from any government agency or regulatory body having or claiming authority to regulate or oversee any aspects of the Lenders', the Administrative Agent's, the Collateral Agent's, the Account Bank's or the Collateral Custodian's business or that of their affiliates; provided that to the extent reasonably practicable and permitted by Applicable Law, such Person shall use reasonable efforts to inform the Borrower and Golub Capital BDC, Inc. of such request, (C) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which the Administrative Agent, any Lender, the Collateral Agent, the Collateral Custodian or the Account Bank or an officer, director, employer, shareholder or affiliate of any of the foregoing is a party; provided that to the extent reasonably practicable and permitted by Applicable Law, such Person shall use reasonable efforts to inform the Borrower and Golub Capital BDC, Inc. of such request, (D) in any preliminary or final offering circular, registration statement or contract or other document approved in advance by the Borrower, the Servicer or the Originator or (E) to any affiliate, independent or internal auditor, agent, employee or attorney of the Administrative Agent, the Lenders, the Collateral Agent or the Collateral Custodian having a need to know the same, provided that the disclosing party advises such recipient of the confidential nature of the information being disclosed; or (iii) any other disclosure authorized by the Borrower, Servicer (so long as the Servicer is Golub Capital BDC, Inc. or an Affiliate thereof) or the Originator.

 

Section 12.13      Waiver of Set Off. Each of the parties hereto hereby waives any right of setoff it may have or to which it may be entitled under this Agreement from time to time against the Administrative Agent, the Lenders or their respective assets.

 

Section 12.14      Headings and Exhibits. The headings herein are for purposes of references only and shall not otherwise affect the meaning or interpretation of any provision hereof. The schedules and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement for all purposes.

 

Section 12.15      Ratable Payments. If any Lender, whether by setoff or otherwise, shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of Advances owing to it (other than pursuant to Breakage Fees, Section 2.10 or Section 2.11) in excess of its ratable share of payments on account of the Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Advances owing to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided that, if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (a) the amount of such Lender's required repayment to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.

 

Section 12.16      Failure of any Loan Party or Servicer to Perform Certain Obligations. If any Loan Party or the Servicer, as applicable, fails to perform any of its agreements or obligations under Section 5.01(u), Section 5.02(p) or Section 5.03(e), the Administrative Agent may (but shall not be required to) itself perform, or cause performance of, such agreement or obligation, and the expenses of the Administrative Agent incurred in connection therewith shall be payable by the Borrower upon the Administrative Agent's demand therefor.

 

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Section 12.17      Power of Attorney. Each Loan Party irrevocably authorizes the Administrative Agent and appoints the Administrative Agent as its attorney-in-fact to act on behalf of such Loan Party (a) to file financing statements necessary or desirable in the Administrative Agent's sole discretion to perfect and to maintain the perfection and priority of the interest of the Secured Parties in the Collateral and (b) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Collateral as a financing statement in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Secured Parties in the Collateral. This appointment is coupled with an interest and is irrevocable.

 

Section 12.18      Delivery of Termination Statements, Releases, etc. Upon payment in full of all of the Obligations (other than unmatured contingent obligations for which no claim has been made) and the termination of this Agreement, the Collateral Agent shall deliver to the Borrower termination statements, reconveyances, releases and other documents the Borrower deems reasonably necessary or appropriate to evidence the termination of the Grant and other Liens securing the Obligations, all at the expense of the Borrower.

 

Section 12.19      Non-Petition.

 

(a)        Each of the parties hereto (other than the Administrative Agent and the Lenders) hereby agrees for the benefit of the Borrower, the Administrative Agent and the Lenders that it will not institute against, or join any other Person in instituting against, any Loan Party any Bankruptcy Proceeding so long as there shall not have elapsed one (1) year, or if longer, the applicable preference period then in effect, and one (1) day since the Collection Date. The applicable Loan Party shall file a timely objection to, and promptly and timely move to dismiss and diligently prosecute such objection and/or motion to dismiss, any Bankruptcy Proceeding commenced by any Person in violation of this Section 12.19(a). Each Loan Party hereby expressly consents to, and agrees not to raise any objection in respect of, each of the Administrative Agent and the Lenders having creditor derivative standing in any Bankruptcy Proceeding to enforce each and every covenant contained in this Section 12.19(a).

 

(b)         Each Loan Party, the Servicer and the Originator further agrees that (i) a breach of any of their respective covenants contained in Section 12.19(a) will cause irreparable injury to the Administrative Agent and the Lenders, (ii) the Administrative Agent and the Lenders have no adequate remedy at law in respect of such breach, and (iii) each and every covenant contained in Section 12.19(a) shall be specifically enforceable against each Loan Party, the Servicer and the Originator, and each Loan Party, the Servicer and the Originator hereby waives and agrees not to object, or assert any defenses to an action for specific performance, or injunction in respect of any breach of such covenants.

 

(c)        Each Loan Party hereby irrevocably appoints the Administrative Agent its true and lawful attorney (with full power of substitution) in its name, place and stead and at its expense, in connection with the enforcement of the covenants provided for in this Section 12.19, including without limitation the following powers: (i) to object to and seek to dismiss any Bankruptcy Proceeding relating to a Bankruptcy Event described in clause (i) of the definition thereof, and (ii) all powers and rights incidental thereto. This appointment is coupled with an interest and is irrevocable.

 

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(d)        The provisions of this Section 12.19 shall survive the termination of this Agreement.

  

[Signature pages to follow.]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

  BORROWER:
   
  GOLUB CAPITAL BDC FUNDING II LLC
   
  By:           
    Name:
    Title:

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

[Signature Page to Loan and Servicing Agreement]

 

 

 

  ORIGINATOR AND SERVICER:
   
  GOLUB CAPITAL BDC, INC.
   
  By:           
    Name:
    Title:

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

[Signature Page to Loan and Servicing Agreement]

 

 

 

ADMINISTRATIVE AGENT:
   
  MORGAN STANLEY SENIOR FUNDING, INC.
   
  By:                
    Name:
    Title:

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

[Signature Page to Loan and Servicing Agreement]

 

 

 

  LENDER:
   
  MORGAN STANLEY BANK, N.A.
   
  By:        
    Name:
    Title:

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

[Signature Page to Loan and Servicing Agreement]

 

 

 

  COLLATERAL AGENT:
   
  WELLS FARGO BANK, NATIONAL ASSOCIATION
   
   
  By:  
    Name:
    Title:

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

[Signature Page to Loan and Servicing Agreement]

 

 

 

 

  ACCOUNT BANK:
   
  WELLS FARGO BANK, NATIONAL ASSOCIATION
   
   
  By:  
    Name:
    Title:

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

[Signature Page to Loan and Servicing Agreement]

 

 

 

 

  COLLATERAL CUSTODIAN:
   
  WELLS FARGO BANK, NATIONAL ASSOCIATION
   
   
  By:  
    Name:
    Title:

 

[Signature Page to Loan and Servicing Agreement]

 

 

 

 

SCHEDULE I

 

CONDITIONS PRECEDENT DOCUMENTS

 

As required by Section 3.01 of this Agreement, each of the following items must be delivered to the Administrative Agent and the Lenders prior to the effectiveness of the Agreement:

 

(a)            A copy of this Agreement duly executed by each of the parties hereto;

 

(b)            A certificate of the Secretary or Assistant Secretary of each of the Borrower, each then-existing Securitization Subsidiary, the Servicer and the Originator, dated as of the Closing Date, certifying (i) the names and true signatures of the incumbent officers of such Person authorized to sign on behalf of such Person the Transaction Documents to which it is a party (on which certificate the Administrative Agent, the Lenders and the Lenders may conclusively rely until such time as the Administrative Agent and the Lenders shall receive from the Borrower, and the Servicer or the Originator, as applicable, a revised certificate meeting the requirements of this paragraph (b)(i)), (ii) that the copy of the certificate of formation, certificate of incorporation, articles of incorporation or articles of organization, as applicable, of such Person attached to such certificate is a complete and correct copy and that such certificate of formation has not been amended, modified or supplemented and is in full force and effect, (iii) that the copy of the bylaws, limited liability company agreement or limited partnership agreement, as applicable, of such Person attached to such certificate is a complete and correct copy, and that such bylaws, limited liability company agreement or limited partnership agreement, as applicable, has not been amended, modified or supplemented and are in full force and effect, and (iv) that the copy of the resolutions of the board of directors or managers of such Person attached to such certificate, approving and authorizing the execution, delivery and performance by such Person of the Transaction Documents to which it is a party, is a complete and correct copy and such resolutions have not been amended, modified or supplemented and are in full force and effect;

 

(c)           A good standing certificate, dated as of a recent date for each of the Borrower, each then-existing Securitization Subsidiary, the Servicer and the Originator, issued by the Secretary of State of such Person's State of formation, incorporation or organization, as applicable;

 

(d)           Financing statements (the "Facility Financing Statements") describing the Collateral, and (i) naming the Borrower or each then-existing Securitization Subsidiary, as applicable, as debtor and the Collateral Agent, on behalf of the Secured Parties, as secured party, (ii) naming the Originator as debtor, the Borrower as assignor and the Collateral Agent, on behalf of the Secured Parties, as secured party/total assignee and (iii) other, similar instruments or documents, as may be necessary or, in the opinion of the Administrative Agent, desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect each Loan Party's interest and the Collateral Agent's, on behalf of the Secured Parties, interests, respectively, in all Collateral;

 

(e)            Financing statements, if any, necessary to release all security interests and other rights of any Person in the Collateral previously granted by the Originator;

 

Sch. I- 1

 

 

(f)             Copies of tax and judgment lien searches in all jurisdictions reasonably requested by the Administrative Agent and requests for information (or a similar UCC search report certified by a party acceptable to the Administrative Agent), dated a date reasonably near to the Closing Date, and with respect to such requests for information or UCC searches, listing all effective financing statements which name the Borrower and any then-existing Securitization Subsidiary (under its present name and any previous name) and the Originator (under its present name and any previous name) as debtor(s) and which are filed in the jurisdiction of Delaware, as applicable, together with copies of such financing statements (none of which shall cover any Collateral);

 

(g)           One or more favorable Opinions of Counsel of counsel to the Borrower, each then-existing Securitization Subsidiary, the Servicer and the Originator acceptable to the Administrative Agent and addressed to the Administrative Agent, the Lenders and the Collateral Agent, with respect to such matters as the Administrative Agent may request (including an opinion, with respect to the first priority perfected security interest of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral and the membership interests of each then-existing Securitization Subsidiary under the UCC laws of the State of New York, the due authorization, execution and delivery of, and enforceability of, the Agreement and the other Transaction Documents, true sale and non-consolidation matters, and other matters);

 

(h)            Duly completed copies of IRS Form W-9 (or any successor forms or other certificates or statements that may be required from time to time by the relevant United States taxing authorities or Applicable Law) for the Borrower and each then-existing Subsidiary; and

 

(i)             A copy of each of the other Transaction Documents duly executed by the parties thereto.

 

Sch. I- 2

 

 

SCHEDULE II

 

ELIGIBILITY CRITERIA

 

The representations and warranties set forth in this Schedule II are made by each Loan Party and the Servicer under this Agreement and the Originator under the Originator Purchase and Sale Agreement, with respect to all Loan Assets which are designated as being Eligible Loan Assets on any Borrowing Base Certificate or are otherwise represented to the Administrative Agent or the Lenders as being Eligible Loan Assets, or are included as Eligible Loan Assets in any calculation set forth in this Agreement to which this Schedule II is attached; provided that, if any asset does not satisfy any criterion below, the Administrative Agent may expressly consent in its sole discretion to the treatment of such asset as an Eligible Loan Asset; provided, further, that the Administrative Agent will only be considered to have consented to such inclusion if the applicable Loan Party and the Servicer have expressly acknowledged that the applicable criterion is not satisfied with respect to such Loan and each such applicable criterion is accurately identified on Schedule 1 of the related Approval Notice; provided, further, that, if an asset does not satisfy the representations and warranties below and the applicable Loan Party or the Servicer requests in writing that the Administrative Agent consent to the acquisition of such asset, such Loan Party may acquire such asset (a “Non-Levered Loan Asset”) on the conditions that: (a) such asset will be acquired by the applicable Loan Party by contribution from the Originator or its Affiliates or by using the proceeds of equity contributions made by the Originator or amounts available for distribution pursuant to Section 2.04(a)(ix), Section 2.04(b)(vi) or Section 2.04(c)(ix), (b) the applicable Loan Party (or the Servicer on its behalf) shall have provided such information to the Administrative Agent regarding such asset as may be requested by the Administrative Agent and (c) the Administrative Agent has approved such acquisition in writing or not objected in writing within seven (7) Business Days of receipt of the Administrative Agent of such information described in clause (b) above.

 

1.              As of the related Cut-Off Date, each such Loan Asset has been approved in writing by the Administrative Agent in its sole discretion.

 

2.             As of the related Cut-Off Date, each such Loan Asset is a First Lien Loan, Second Lien Loan, Unitranche Loan or FLLO Loan, evidenced by a note or a credit document and an assignment document, as applicable, in the form specified in the applicable credit agreement or, if no such specification, on a form acceptable to the agent in respect of such Loan Asset. Each such Loan Asset and the Related Asset is subject to a valid, subsisting and enforceable first priority perfected security interest (subject only to Permitted Liens) in favor of the Collateral Agent, on behalf of the Secured Parties, and the applicable Loan Party has good and marketable title to, and is the sole owner of, such Loan Asset and the Related Asset, free and clear of all Liens other than any Permitted Liens.

 

3.             The Obligor with respect to each such Loan Asset is organized under the laws of (i) the United States or any state thereof, (ii) Canada or any territory thereof or (iii) any of Antilles, Australia, Belgium, Bermuda, the British Virgin Islands, the Cayman Islands, Cyprus, Denmark, Estonia, Finland, Guernsey, Ireland, Jersey, the Isle of Man, Luxembourg, Malta, Netherlands, Antilles, Russia, Serbia, Spain, Sweden, Switzerland and the United Kingdom or any other country that has a Moody's foreign currency rating of at least "Aa3" and an S&P foreign issuer credit rating of at least "AA-" (or, in each case, any territory thereof) or (iv), another jurisdiction consented to by the Administrative Agent (any such country, an “Eligible Country”).

 

Sch. II- 1

 

 

4.              Each such Loan Asset is denominated and payable only in an Eligible Currency and does not permit the currency (unless such permitted currency is another Eligible Currency) or country in which such Loan Asset is payable to be changed.

 

5.              As of the Cut-Off Date, no such Loan Asset is Margin Stock.

 

6.              The acquisition of such Loan Asset does not cause the applicable Loan Party or the assets constituting the Collateral to be required to be registered as an investment company under the 1940 Act.

 

7.              As of the Cut-Off Date, each such Loan Asset is not a DIP Loan.

 

8.              No such Loan Asset is principally secured by interests in real property.

 

9.              Each such Loan Asset constitutes a legal, valid, binding and enforceable obligation of the Obligor thereunder and each guarantor thereof, enforceable against each such Person in accordance with its terms, subject to usual and customary bankruptcy, insolvency and equity limitations, and there are no conditions precedent to the enforceability or validity of the Loan Asset that have not been satisfied or validly waived.

 

10.            [Reserved].

 

11.            As of the related Cut-Off Date, such Loan Asset is not a Defaulted Loan.

 

12.            Neither the Originator nor the Servicer are Affiliates of the Obligor with respect to such Loan Asset.

 

13.           The acquisition of any such Loan Asset by the applicable Loan Party and the Grant thereof would not (a) violate any Applicable Law or (b) as of the Cut-Off Date, cause the Administrative Agent or the Lenders to fail to comply with any request or directive (whether or not having the force of law) from any banking or other Governmental Authority having jurisdiction over the Administrative Agent or the Lenders.

 

14.           Pursuant to the Underlying Instruments with respect to such Loan Asset, (a) either (i) such Loan Asset is freely assignable to the applicable Loan Party and able to be Granted to the Collateral Agent, on behalf of the Secured Parties, without the consent of the Obligor or (ii) all consents necessary for assignment of such Loan Asset to the applicable Loan Party and Grant to the Collateral Agent for the benefit of the Secured Parties have been obtained and (b) the Underlying Instruments requires only usually and customary consents and provides that any consents necessary for future assignments (other than customary restrictions against assignments to persons that are disqualified lenders) shall not be unreasonably withheld by the applicable Obligor and/or agent, and the rights to enforce rights and remedies in respect of the same under the applicable Underlying Instruments inure to the benefit of the holder of such Loan Asset (subject to the rights of any applicable agent or other lenders).

 

Sch. II- 2

 

 

15.            The funding obligations for each such Loan Asset and the Underlying Instruments under which such Loan Asset was created have been fully satisfied and all sums available thereunder (other than customary protective advances permitted to be made thereunder which represent a de-minimus amount relative to the outstanding balance of such Loan as determined by the Servicer in its commercially reasonable judgment) have been fully advanced, or if such Loan Asset is a Delayed Draw Loan Asset, either (i) the applicable Loan Party shall have or have caused to be, at the time of the sale of such Loan Asset to such Loan Party, deposited into the Unfunded Exposure Account an amount in Dollars equal to the Unfunded Exposure Equity Amount or (ii) the Unfunded Exposure Equity Amount with respect to such Loan Asset shall not create a Borrowing Base Deficiency.

 

16.            As of the related Cut-Off Date, no such Loan Asset is the subject of any assertions in respect of, any litigation, right of rescission, set-off, counterclaim or defense, including the defense of usury, by the related Obligor, nor will the operation of any of the terms of the Underlying Instruments, or the exercise of any right thereunder, render the Underlying Instruments unenforceable in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and the Underlying Instruments with respect to the Loan Asset provide for an affirmative waiver by the related Obligor of all rights of rescission, set-off and counterclaim against the Originator and its assignees.

 

17.            With respect to each such Loan Asset acquired by the Borrower from the Originator under the Originator Purchase and Sale Agreement, by the Cut-Off Date on which such Loan Asset is Granted under this Agreement and on each day thereafter, the Originator will have caused its master computer records relating to such Loan Asset to be clearly and unambiguously marked to show that such Loan Asset has been sold or contributed to the Borrower.

 

18.            No such Loan Asset has been repaid, prepaid, satisfied or rescinded, in each case, in full.

 

19.            No such Loan Asset has been sold, transferred, assigned or pledged by a Loan Party to any Person other than the Collateral Agent for the benefit of the Secured Parties.

 

20.            Such Loan Asset is not subject to United States or foreign withholding tax unless the Obligor thereon is required under the terms of the related Underlying Instruments to make "gross-up" payments that cover the full amount of such withholding tax on an after-tax basis in the event of a Change in Law. The transfer, assignment and conveyance of such Loan Asset (and the Related Asset) from the Originator to the Borrower or the Borrower to a Securitization Subsidiary pursuant to a Purchase and Sale Agreement, is not subject to and will not result in any fee or governmental charge (other than income taxes) payable by a Loan Party or any other Person to any federal, state or local government.

 

21.          To the knowledge of the applicable Loan Party and the Servicer, as of the Cut-Off Date, the Obligor with respect to such Loan Asset (and any guarantor of such Obligor's obligations thereunder), had full legal capacity to execute and deliver the Underlying Instruments which creates such Loan Asset and any other documents related thereto.

 

Sch. II- 3

 

 

22.            As of the Cut-Off Date, the Obligor of each such Loan Asset is not a Governmental Authority.

 

23.            Each such Loan Asset (a) was originated and/or funded by the Originator or its Affiliates (including the Borrower) or acquired by the applicable Loan Party, the Originator or their respective Affiliates in the ordinary course of such Person’s business and, to the extent required by Applicable Law, the Originator has all necessary consents, licenses, approvals, authorizations and permits to originate or acquire such Loan Asset in the State where the Obligor was located (to the extent required by Applicable Law), and (b) other than with respect to a Loan Asset originated and / or funded or acquired directly by a Loan Party, was sold or contributed to the Borrower or was sold or contributed by the Borrower to a Securitization Subsidiary, as applicable, under the applicable Purchase and Sale Agreement and the assignment and acceptance agreement under such Loan Asset, acquired from another special purpose vehicle Affiliate of the Originator or acquired directly by the applicable Loan Party from a third party in a transaction underwritten by the Originator or any transaction in which such Loan Party is the designee of the Originator under the instruments of conveyance relating to the applicable Loan Asset and, to the extent required by Applicable Law, such Loan Party has all necessary consents, licenses, approvals, authorizations and permits to purchase and own such Loan Assets and enter into Underlying Instruments pursuant to which such Loan Asset was created, in the State where the Obligor is located (to the extent required by Applicable Law).

 

24.            There are no proceedings pending or, to the applicable Loan Party's knowledge, threatened (a) asserting insolvency of the Obligor of such Loan Asset, or (b) wherein the Obligor of such Loan Asset, any other obligated party or any Governmental Authority has alleged that such Loan Asset or the Underlying Instruments which creates such Loan Asset is illegal or unenforceable.

 

25.            Each such Loan Asset requires the related Obligor to pay all material maintenance, repair, insurance and taxes, together with all other material ancillary costs and expenses, with respect to the Related Collateral.

 

26.           To the knowledge of the applicable Loan Party and the Servicer, the Related Collateral to each such Loan Asset has not, and will not, be used by the related Obligor in any manner or for any purpose which would result in any material risk of liability being imposed upon the Originator, any Loan Party, the Administrative Agent or the Lenders under any federal, state, local or foreign laws, common laws, statutes, codes, ordinances, rules, regulations, permits, judgments, agreements or order related to or addressing the environment, health or safety.

 

27.            With respect to First Lien Loans and Unitranche Loans, such Loan Asset has an original term to maturity of not greater than seven (7) years. With respect to Second Lien Loans, such Loan Asset has an original term to maturity of not greater than eight (8) years.

 

28.            Each such Loan Asset does not contain confidentiality restrictions that would prohibit the Administrative Agent or the Lenders from accessing all necessary information (as required to be provided pursuant to the Transaction Documents) with regards to such Loan Asset.

 

Sch. II- 4

 

 

29.          Each such Loan Asset (a) was originated and underwritten, or purchased and re-underwritten, by the Originator or the Servicer, or an Affiliate of the foregoing (including the Borrower), as applicable, including, without limitation, the completion of a due diligence and, if applicable, a collateral assessment and (b) is being serviced by the Servicer in accordance with the Servicing Standard.

 

30.            Each such Loan Asset is not an extension of credit by the Originator to the Obligor for the purpose of (a) making any past due principal, interest or other payments due on such Loan Asset, (b) preventing such Loan Asset or any other loan to the related Obligor from becoming past due or (c) preventing such Loan Asset from becoming defaulted.

 

31.            To the knowledge of the applicable Loan Party and the Servicer, the Obligor with respect to such Loan Asset, on the applicable date of determination, (a) is a business organization (and not a natural person) duly organized and validly existing under the laws of its jurisdiction of organization; (b) is a legal operating entity or holding company; (c) has not entered into the Loan Asset primarily for personal, family or household purposes; and (d) as of the related Cut-Off Date, is not the subject of a Bankruptcy Event, and, as of the related Cut-Off Date, such Obligor is not in financial distress and has not experienced a material adverse change in its condition, financial or otherwise, in each case, as determined by the Servicer in accordance with the Servicing Standard unless approved in writing by the Administrative Agent.

 

32.            Each such Loan Asset is not an Equity Security and does not provide for the conversion into an Equity Security.

 

33.            As of the Cut-Off Date, no selection procedure adverse to the interests of the Secured Parties was utilized by a Loan Party or the Servicer in the selection of such Loan Asset for inclusion in the Collateral.

 

34.            Each such Loan Asset is not a participation interest.

 

35.           No such Loan Asset is a high-yield bond, a Bridge Loan, a Zero-Coupon Obligation, a Revolving Loan, an unsecured loan, a commercial real estate loan, a letter of credit or in support of a letter of credit, a lease, a Synthetic Security, an interest in a grantor trust, a step-down obligation or a Structured Finance Obligation.

 

36.            As of the related Cut-Off Date, no such Loan Asset is subject to substantial non-credit related risk, as reasonably determined by the Servicer in accordance with the Servicing Standard.

 

37.            Each such Loan Asset is Registered.

 

38.            As of the related Cut-Off Date, no such Loan Asset is the subject of an offer, exchange or tender by the related Obligor.

 

Sch. II- 5

 

 

SCHEDULE III

 

AGREED-UPON PROCEDURES FOR
INDEPENDENT PUBLIC ACCOUNTANTS

 

[to be provided]

 

Sch. III- 1

 

 

SCHEDULE IV

 

LOAN ASSET SCHEDULE

 

For each Loan Asset, the applicable Loan Party shall provide, as applicable, the following information:

 

(a) Loan Asset Number

 

(b) Obligor Information

 

(c) The currency denomination of such Loan Asset

 

(d) Loan Asset Type (Broadly Syndicated Loan, First Lien Loan, Second Lien Loan, FLLO Loan, Unitranche Loan, Recurring Revenue Loan)

 

(e) Whether such Loan Asset is a term loan or a Delayed Draw Loan Asset

 

(f) Whether such Loan Asset is a Cov-Lite Loan Asset

 

(g) Whether the rate of interest is floating or fixed

 

(h) Rate of interest (and reference rate)

 

(i) LIBOR floor (if applicable)

 

(j) PIK Percentage

 

(k) Industry Classification

 

(l) S&P's Facility Rating and Corporate Family Rating of such Loan Asset

 

(m) The Servicer's internal rating (1-5 or whichever is the Servicer's current rating system) of the Loan Asset as of the applicable Cut-Off Date and as of the date of such Loan Asset Schedule

 

(n) Outstanding Balance

 

(o) Any Unfunded Exposure Amount (if applicable)

 

(p) Par Amount

 

(q) Tranche size

 

(r) Scheduled maturity date

 

(s) The Cut-Off Date for such Loan Asset

 

(t) Date of the last delivered Obligor financials

 

Sch. IV- 1

 

 

(u) Total first lien senior secured Indebtedness and total Indebtedness as of the applicable Cut-Off Date and the most recent period for such Loan Asset

 

(v) Calculation of the Senior Leverage Ratio as of the applicable Cut-Off Date and the most recent period

 

(w) Calculation of the Total Leverage Ratio as of the applicable Cut-Off Date and the most recent period

 

(x) Calculation of the Cash Interest Coverage Ratio as of the applicable Cut-Off Date and the most recent period

 

(y) Trailing twelve month EBITDA and Adjusted EBITDA as of the applicable Cut-Off Date and the most recent period

 

(z) Whether such Loan Asset has been subject to a Value Adjustment Event (and of what type)

 

(aa) Whether such Loan Asset has been subject to a Material Modification

 

(bb) Purchase Price

 

(cc) Assigned Value as of the applicable Cut-Off Date for such Loan Asset and as of the date of such Loan Asset Schedule

 

(dd) Advance Rate

 

(ee) Adjusted Borrowing Value

 

(ff) Debt-to-Recurring-Revenue Ratio for Recurring Revenue Loans

 

(gg) Recurring Revenue for Recurring Revenue Loans

 

Sch. IV- 2

 

 

SCHEDULE V

 

INDUSTRY CLASSIFICATION

 

1020000 Energy Equipment & Services
1030000 Oil, Gas & Consumable Fuels
1033403 Mortgage Real Estate Investment Trusts (REITs)
2020000 Chemicals
2030000 Construction Materials
2040000 Containers & Packaging
2050000 Metals & Mining
2060000 Paper & Forest Products
3020000 Aerospace & Defense
3030000 Building Products
3040000 Construction & Engineering
3050000 Electrical Equipment
3060000 Industrial Conglomerates
3070000 Machinery
3080000 Trading Companies & Distributors
3110000 Commercial Services & Supplies
3210000 Air Freight & Logistics
3220000 Airlines
3230000 Marine
3240000 Road & Rail
3250000 Transportation Infrastructure
4011000 Auto Components
4020000 Automobiles
4110000 Household Durables
4120000 Leisure Products
4130000 Textiles, Apparel & Luxury Goods
4210000 Hotels, Restaurants & Leisure
4310000 Media
43100001 Entertainment
43100002 Interactive Media and Services
4410000 Distributors
4420000 Internet and Catalog Retail
4430000 Multiline Retail
4440000 Specialty Retail
5020000 Food & Staples Retailing
5110000 Beverages
5120000 Food Products
5130000 Tobacco

 

Sch. V- 1

 

 

5210000 Household Products
5220000 Personal Products
6020000 Healthcare Equipment & Supplies
6030000 Healthcare Providers & Services
6110000 Biotechnology
6120000 Pharmaceuticals
7011000 Banks
7020000 Thrifts & Mortgage Finance
7110000 Diversified Financial Services
7120000 Consumer Finance
7130000 Capital Markets
7210000 Insurance
7310000 Real Estate Management & Development
7311000 Real Estate Investment Trusts (REITs)
8020000 IT Services
8040000 Software
8110000 Communications Equipment
8120000 Technology Hardware, Storage & Peripherals
8130000 Electronic Equipment, Instruments & Components
8210000 Semiconductors & Semiconductor Equipment
9020000 Diversified Telecommunication Services
9030000 Wireless Telecommunication Services
9520000 Electric Utilities
9530000 Gas Utilities
9540000 Multi-Utilities
9550000 Water Utilities
9551701 Diversified Consumer Services
9551702 Independent Power and Renewable Electricity Producers
9551727 Life Sciences Tools & Services
9551729 Healthcare Technology
9612010 Professional Services

 

Sch. V- 2

 

 

SCHEDULE VI

 

DIVERSITY SCORE

 

Diversity Score Calculations

 

Diversity Score

 

Calculated as follows:

 

(a) An “Obligor Par Amount” is calculated for each Obligor of a Loan Asset, and is equal to the outstanding principal amount of Loan Assets issued by such Obligor and its Affiliates.

 

(b) An “Average Par Amount” is calculated by summing the Obligor Par Amounts for all Obligors, and dividing by the aggregate number of Obligors.

 

(c) An “Equivalent Unit Score” is calculated for each Obligor, and is equal to the lesser of (a) one and (b) the Obligor Par Amount for such Obligor divided by the Average Par Amount.

 

(d) An “Aggregate Industry Equivalent Unit Score” is then calculated for each Industry Classification and is equal to the sum of the Equivalent Unit Scores for each Obligor in such Industry Classification.

 

(e) An “Industry Diversity Score” is then established for each Industry Classification by reference to the following table for the related Aggregate Industry Equivalent Unit Score; provided, that if any Aggregate Industry Equivalent Unit Score falls between any two such scores, the applicable Industry Diversity Score will be the lower of the two Industry Diversity Scores:

 

Aggregate
Industry
Equivalent
Unit Score 		    Industry
Diversity Score 		    Aggregate
Industry
Equivalent
Unit Score 		    Industry
Diversity Score 		    Aggregate
Industry
Equivalent
Unit Score 		    Industry
Diversity Score 		    Aggregate
Industry
Equivalent
Unit Score 		    Industry
Diversity Score 		 
  0.0000       0.0000       5.0500       2.7000       10.1500       4.0200       15.2500       4.5300  
  0.0500       0.1000       5.1500       2.7333       10.2500       4.0300       15.3500       4.5400  
  0.1500       0.2000       5.2500       2.7667       10.3500       4.0400       15.4500       4.5500  
  0.2500       0.3000       5.3500       2.8000       10.4500       4.0500       15.5500       4.5600  
  0.3500       0.4000       5.4500       2.8333       10.5500       4.0600       15.6500       4.5700  
  0.4500       0.5000       5.5500       2.8667       10.6500       4.0700       15.7500       4.5800  
  0.5500       0.6000       5.6500       2.9000       10.7500       4.0800       15.8500       4.5900  
  0.6500       0.7000       5.7500       2.9333       10.8500       4.0900       15.9500       4.6000  
  0.7500       0.8000       5.8500       2.9667       10.9500       4.1000       16.0500       4.6100  
  0.8500       0.9000       5.9500       3.0000       11.0500       4.1100       16.1500       4.6200  
  0.9500       1.0000       6.0500       3.0250       11.1500       4.1200       16.2500       4.6300  
  1.0500       1.0500       6.1500       3.0500       11.2500       4.1300       16.3500       4.6400  
  1.1500       1.1000       6.2500       3.0750       11.3500       4.1400       16.4500       4.6500  
  1.2500       1.1500       6.3500       3.1000       11.4500       4.1500       16.5500       4.6600  
  1.3500       1.2000       6.4500       3.1250       11.5500       4.1600       16.6500       4.6700  
  1.4500       1.2500       6.5500       3.1500       11.6500       4.1700       16.7500       4.6800  
  1.5500       1.3000       6.6500       3.1750       11.7500       4.1800       16.8500       4.6900  
  1.6500       1.3500       6.7500       3.2000       11.8500       4.1900       16.9500       4.7000  
  1.7500       1.4000       6.8500       3.2250       11.9500       4.2000       17.0500       4.7100  
  1.8500       1.4500       6.9500       3.2500       12.0500       4.2100       17.1500       4.7200  
  1.9500       1.5000       7.0500       3.2750       12.1500       4.2200       17.2500       4.7300  
  2.0500       1.5500       7.1500       3.3000       12.2500       4.2300       17.3500       4.7400  
  2.1500       1.6000       7.2500       3.3250       12.3500       4.2400       17.4500       4.7500  
  2.2500       1.6500       7.3500       3.3500       12.4500       4.2500       17.5500       4.7600  
  2.3500       1.7000       7.4500       3.3750       12.5500       4.2600       17.6500       4.7700  
  2.4500       1.7500       7.5500       3.4000       12.6500       4.2700       17.7500       4.7800  
  2.5500       1.8000       7.6500       3.4250       12.7500       4.2800       17.8500       4.7900  
  2.6500       1.8500       7.7500       3.4500       12.8500       4.2900       17.9500       4.8000  
  2.7500       1.9000       7.8500       3.4750       12.9500       4.3000       18.0500       4.8100  
  2.8500       1.9500       7.9500       3.5000       13.0500       4.3100       18.1500       4.8200  
  2.9500       2.0000       8.0500       3.5250       13.1500       4.3200       18.2500       4.8300  
  3.0500       2.0333       8.1500       3.5500       13.2500       4.3300       18.3500       4.8400  
  3.1500       2.0667       8.2500       3.5750       13.3500       4.3400       18.4500       4.8500  
  3.2500       2.1000       8.3500       3.6000       13.4500       4.3500       18.5500       4.8600  
  3.3500       2.1333       8.4500       3.6250       13.5500       4.3600       18.6500       4.8700  
  3.4500       2.1667       8.5500       3.6500       13.6500       4.3700       18.7500       4.8800  
  3.5500       2.2000       8.6500       3.6750       13.7500       4.3800       18.8500       4.8900  
  3.6500       2.2333       8.7500       3.7000       13.8500       4.3900       18.9500       4.9000  
  3.7500       2.2667       8.8500       3.7250       13.9500       4.4000       19.0500       4.9100  
  3.8500       2.3000       8.9500       3.7500       14.0500       4.4100       19.1500       4.9200  
  3.9500       2.3333       9.0500       3.7750       14.1500       4.4200       19.2500       4.9300  
  4.0500       2.3667       9.1500       3.8000       14.2500       4.4300       19.3500       4.9400  
  4.1500       2.4000       9.2500       3.8250       14.3500       4.4400       19.4500       4.9500  
  4.2500       2.4333       9.3500       3.8500       14.4500       4.4500       19.5500       4.9600  
  4.3500       2.4667       9.4500       3.8750       14.5500       4.4600       19.6500       4.9700  
  4.4500       2.5000       9.5500       3.9000       14.6500       4.4700       19.7500       4.9800  
  4.5500       2.5333       9.6500       3.9250       14.7500       4.4800       19.8500       4.9900  
  4.6500       2.5667       9.7500       3.9500       14.8500       4.4900       19.9500       5.0000  
  4.7500       2.6000       9.8500       3.9750       14.9500       4.5000                  
  4.8500       2.6333       9.9500       4.0000       15.0500       4.5100                  
  4.9500       2.6667       10.0500       4.0100       15.1500       4.5200                  

 

Sch. VI- 1

 

 

(f) The Diversity Score is then calculated by summing each of the Industry Diversity Scores for each Industry Classification.

 

For purposes of calculating the Diversity Score, Affiliates of an Obligor in the same industry are deemed to be a single Obligor, except as otherwise agreed to in writing by the Administrative Agent.

 

Sch. VI- 2

 

 

SCHEDULE VII

 

EXISTING GOLUB BDC CLOS

 

Golub Capital BDC CLO III LLC

 

Sch. VII- 1

 

 

ANNEX A

 

Lender   Commitment  
Morgan Stanley Bank, N.A.   $ 400,000,000  

 

Annex A- 1

 

 

EXHIBITS

 

[attached]

 

 


Exhibit 31.1

Certification of Chief Executive Officer
of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a)


I, David B. Golub, Chief Executive Officer, certify that:

1) I have reviewed this Quarterly Report on Form 10-Q of Golub Capital BDC, Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date:     February 8, 2021

/s/ David B. Golub                        
David B. Golub
Chief Executive Officer
(Principal Executive Officer)



Exhibit 31.2

Certification of Chief Financial Officer
of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a)


I, Ross A. Teune, Chief Financial Officer, certify that:

1) I have reviewed this Quarterly Report on Form 10-Q of Golub Capital BDC, Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:    February 8, 2021

/s/ Ross A. Teune                        
Ross A. Teune
Chief Financial Officer
(Principal Financial Officer)



Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Golub Capital BDC, Inc. (the “Company”), for the quarterly period ended December 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, David B. Golub and Ross A. Teune, Chief Executive Officer and Chief Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

  (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and

  (2) The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.


Date: February 8, 2021 /s/ David B. Golub                     
 
David B. Golub
Chief Executive Officer
   
  /s/ Ross A. Teune                    
 
Ross A. Teune
Chief Financial Officer