UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period                      to                     
Commission File No. 814-00995
TCG BDC, INC.
(Exact name of Registrant as specified in its charter)
Maryland
 
80-0789789
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
 
 
 
520 Madison Avenue, 40th Floor, New York, NY 10022
 
(212) 813-4900
(Address of principal executive office) (Zip Code)
 
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
 
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  ☒    No  ☐
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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☐    No  ☐
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. (Check one):
Large accelerated filer
 
x
  
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.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   x
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common stock, $0.01 par value
CGBD
NASDAQ Global Select Market
The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding at  August 6, 2019  was  59,754,718 .



TCG BDC, INC.
INDEX
 
 
 
 
Part I.
Financial Information
 
Item 1.
Financial Statements
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
Part II.
Other Information
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 

2




TCG BDC, INC.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(dollar amounts in thousands, except per share data)
 
June 30, 2019
 
December 31, 2018
ASSETS
(unaudited)
 
 
Investments, at fair value
 
 
 
Investments—non-controlled/non-affiliated, at fair value (amortized cost of $1,912,346 and $1,799,751, respectively)
$
1,840,979

 
$
1,731,319

Investments—non-controlled/affiliated, at fair value (amortized cost of $14,270 and $13,839, respectively)
20,925

 
18,543

Investments—controlled/affiliated, at fair value (amortized cost of $225,701 and $230,001, respectively)
213,710

 
222,295

Total investments, at fair value (amortized cost of $2,152,317 and $2,043,591, respectively)
2,075,614

 
1,972,157

Cash and cash equivalents
62,324

 
87,186

Receivable for investment sold
14,854

 
8,060

Deferred financing costs
4,869

 
3,950

Interest receivable from non-controlled/non-affiliated investments
8,289

 
5,853

Interest receivable from non-controlled/affiliated investments
11

 
3

Interest and dividend receivable from controlled/affiliated investments
6,652

 
7,405

Prepaid expenses and other assets
143

 
129

Total assets
$
2,172,756

 
$
2,084,743

LIABILITIES
 
 
 
Secured borrowings (Note 6)
$
649,397

 
$
514,635

Notes payable, net of unamortized debt issuance costs of $3,034 and $3,157, respectively (Note 7)
446,166

 
446,043

Payable for investments purchased
—

 
1,870

Due to Investment Adviser
228

 
236

Interest and credit facility fees payable (Notes 6 and 7)
7,563

 
7,500

Dividend payable (Note 9)
27,082

 
35,497

Base management and incentive fees payable (Note 4)
13,846

 
13,834

Administrative service fees payable (Note 4)
128

 
94

Other accrued expenses and liabilities
1,754

 
1,816

Total liabilities
1,146,164

 
1,021,525

Commitments and contingencies (Notes 8 and 11)
 
 
 
NET ASSETS
 
 
 
Common stock, $0.01 par value; 200,000,000 shares authorized; 60,181,859 shares and 62,230,251 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
602

 
622

Paid-in capital in excess of par value
1,144,000

 
1,174,334

Offering costs
(1,633
)
 
(1,633
)
Total distributable earnings (loss)
(116,377
)
 
(110,105
)
Total net assets
$
1,026,592

 
$
1,063,218

NET ASSETS PER SHARE
$
17.06

 
$
17.09

The accompanying notes are an integral part of these consolidated financial statements.

3


TCG BDC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except per share data)
(unaudited)
 
For the three month periods ended
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Investment income:
 
 
 
 
 
 
 
From non-controlled/non-affiliated investments:
 
 
 
 
 
 
 
Interest income
$
47,224

 
$
41,717

 
$
92,466

 
$
80,986

Other income
2,266

 
3,590

 
4,294

 
4,485

Total investment income from non-controlled/non-affiliated investments
49,490

 
45,307

 
96,760

 
85,471

From non-controlled/affiliated investments:
 
 
 
 
 
 
 
Interest income
384

 
447

 
763

 
885

Total investment income from non-controlled/affiliated investments
384

 
447

 
763

 
885

From controlled/affiliated investments:
 
 
 
 
 
 
 
Interest income
3,243

 
3,198

 
6,781

 
5,829

Dividend income
3,750

 
3,500

 
7,750

 
7,750

Total investment income from controlled/affiliated investments
6,993

 
6,698

 
14,531

 
13,579

Total investment income
56,867

 
52,452

 
112,054

 
99,935

Expenses:
 
 
 
 
 
 
 
Base management fees (Note 4)
7,913

 
7,266

 
15,598

 
14,488

Incentive fees (Note 4)
5,933

 
5,984

 
11,779

 
11,314

Professional fees
600

 
959

 
1,345

 
1,721

Administrative service fees (Note 4)
165

 
185

 
381

 
371

Interest expense (Notes 6 and 7)
13,032

 
8,709

 
25,023

 
16,524

Credit facility fees (Note 6)
671

 
581

 
1,239

 
1,106

Directors’ fees and expenses
88

 
93

 
181

 
191

Other general and administrative
434

 
435

 
855

 
840

Total expenses
28,836

 
24,212

 
56,401

 
46,555

Net investment income (loss) before taxes
28,031

 
28,240

 
55,653

 
53,380

Excise tax expense
60

 
30

 
120

 
40

Net investment income (loss)
27,971

 
28,210

 
55,533

 
53,340

Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments:
 
 
 
 
 
 
 
Net realized gain (loss) from:
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
1,410

 
1,775

 
2,309

 
1,646

Controlled/affiliated investments
(9,091
)
 
—

 
(9,091
)
 
—

Net change in unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
(14,204
)
 
(15,282
)
 
(11,731
)
 
(21,326
)
Non-controlled/affiliated investments
(345
)
 
(136
)
 
1,951

 
1,296

Controlled/affiliated investments
4,016

 
(1,461
)
 
4,512

 
(761
)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments
(18,214
)
 
(15,104
)
 
(12,050
)
 
(19,145
)
Net increase (decrease) in net assets resulting from operations
$
9,757

 
$
13,106

 
$
43,483

 
$
34,195

Basic and diluted earnings per common share (Note 9)
$
0.16

 
$
0.21

 
$
0.71

 
$
0.55

Weighted-average shares of common stock outstanding—Basic and Diluted (Note 9)
60,596,402

 
62,568,651

 
61,191,926

 
62,534,740

The accompanying notes are an integral part of these consolidated financial statements.

4


TCG BDC, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(dollar amounts in thousands)
(unaudited)
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
Increase (decrease) in net assets resulting from operations:
 
 
 
Net investment income (loss)
$
55,533

 
$
53,340

Net realized gain (loss) on investments
(6,782
)
 
1,646

Net change in unrealized appreciation (depreciation) on investments
(5,268
)
 
(20,791
)
Net increase (decrease) in net assets resulting from operations
43,483

 
34,195

Capital transactions:
 
 
 
Common stock issued, net of offering and underwriting costs
—

 
(15
)
Reinvestment of dividends
—

 
6,629

Repurchase of common stock
(30,354
)
 
—

Dividends declared (Note 12)
(49,755
)
 
(46,301
)
Net increase (decrease) in net assets resulting from capital share transactions
(80,109
)
 
(39,687
)
Net increase (decrease) in net assets
(36,626
)
 
(5,492
)
Net assets at beginning of period
1,063,218

 
1,127,304

Net assets at end of period
$
1,026,592

 
$
1,121,812


The accompanying notes are an integral part of these consolidated financial statements.

5


TCG BDC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
(unaudited)
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
Cash flows from operating activities:
 
 
 
Net increase (decrease) in net assets resulting from operations
$
43,483

 
$
34,195

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Amortization of deferred financing costs
625

 
555

Net accretion of discount on investments
(6,146
)
 
(6,308
)
Paid-in-kind interest
(2,520
)
 
(429
)
Net realized (gain) loss on investments
6,782

 
(1,646
)
Net change in unrealized (appreciation) depreciation on investments
5,268

 
20,791

Cost of investments purchased and change in payable for investments purchased
(476,873
)
 
(397,804
)
Proceeds from sales and repayments of investments and change in receivable for investments sold
361,368

 
372,391

Changes in operating assets:
 
 
 
Interest receivable
(1,641
)
 
(851
)
Dividend receivable
(50
)
 
(660
)
Prepaid expenses and other assets
(14
)
 
(449
)
Changes in operating liabilities:
 
 
 
Due to Investment Adviser
(8
)
 
65

Interest and credit facility fees payable
63

 
813

Base management and incentive fees payable
12

 
154

Administrative service fees payable
34

 
18

Other accrued expenses and liabilities
(62
)
 
(67
)
Net cash provided by (used in) operating activities
(69,679
)
 
20,768

Cash flows from financing activities:
 
 
 
Proceeds from issuance of common stock, net of offering and underwriting costs
—

 
(15
)
Repurchase of common stock
(30,354
)
 
—

Borrowings on SPV Credit Facility and Credit Facility
402,950

 
423,050

Repayments of SPV Credit Facility and Credit Facility
(268,188
)
 
(400,838
)
Debt issuance costs paid
(1,421
)
 
(74
)
Dividends paid in cash
(58,170
)
 
(47,002
)
Net cash provided by (used in) financing activities
44,817

 
(24,879
)
Net increase (decrease) in cash and cash equivalents
(24,862
)
 
(4,111
)
Cash and cash equivalents, beginning of period
87,186

 
32,039

Cash and cash equivalents, end of period
$
62,324

 
$
27,928

Supplemental disclosures:
 
 
 
Interest paid during the period
$
24,860

 
$
15,710

Taxes, including excise tax, paid during the period
$
11

 
$
105

Dividends declared during the period
$
49,755

 
$
46,301

Reinvestment of dividends
$
—

 
$
6,629


The accompanying notes are an integral part of these consolidated financial statements.

6
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

 
Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost  (4)
 
Fair Value  (5)
 
% of  Net Assets
 
 
First Lien Debt (77.95%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advanced Instruments, LLC
 
^+*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
7.57%
 
11/1/2016
 
10/31/2022
 
$
19,866

 
$
19,642

 
$
19,782

 
1.93
 %
 
Aero Operating, LLC (Dejana Industries, Inc.)
 
^+*
 
(2) (3) (13)
 
Business Services
 
L + 7.25%
 
9.75%
 
1/5/2018
 
12/29/2022
 
3,314

 
3,283

 
3,267

 
0.32

 
Alpha Packaging Holdings, Inc.
 
+*
 
(2) (3)
 
Containers, Packaging & Glass
 
L + 4.25%
 
6.58%
 
6/26/2015
 
5/12/2020
 
2,851

 
2,850

 
2,849

 
0.28

 
Alpine SG, LLC
 
^*
 
(2) (3)
 
High Tech Industries
 
L + 5.50%
 
8.08%
 
2/2/2018
 
11/16/2022
 
15,301

 
15,170

 
15,241

 
1.48

 
American Physician Partners, LLC
 
^+*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 6.50%
 
8.83%
 
1/7/2019
 
12/21/2021
 
37,476

 
36,972

 
37,504

 
3.65

 
AMS Group HoldCo, LLC
 
^+*
 
(2) (3) (13)
 
Transportation: Cargo
 
L + 6.00%
 
8.33%
 
9/29/2017
 
9/29/2023
 
31,906

 
31,346

 
31,053

 
3.02

 
Analogic Corporation
 
^+*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 6.00%
 
8.40%
 
6/22/2018
 
6/22/2024
 
35,072

 
34,412

 
34,611

 
3.37

 
Anchor Hocking, LLC
 
^
 
(2) (3)
 
Durable Consumer Goods
 
L + 8.25%
 
10.83%
 
1/25/2019
 
1/25/2024
 
11,575

 
11,223

 
11,199

 
1.09

 
Apptio, Inc.
 
^
 
(2) (3) (13)
 
Software
 
L + 7.25%
 
9.67%
 
1/10/2019
 
1/10/2025
 
35,541

 
34,821

 
34,912

 
3.40

 
Avenu Holdings, LLC
 
+*
 
(2) (3)
 
Sovereign & Public Finance
 
L + 5.25%
 
7.65%
 
9/28/2018
 
9/28/2024
 
38,861

 
38,248

 
38,002

 
3.70

 
Brooks Equipment Company, LLC
 
+*
 
(2) (3)
 
Construction & Building
 
L + 5.00%
 
7.52%
 
6/26/2015
 
8/29/2020
 
2,502

 
2,495

 
2,501

 
0.24

 
Capstone Logistics Acquisition, Inc.
 
+*
 
(2) (3)
 
Transportation: Cargo
 
L + 4.50%
 
6.90%
 
6/26/2015
 
10/7/2021
 
13,976

 
13,914

 
13,948

 
1.36

 
Captive Resources Midco, LLC
 
^*
 
(2) (3) (13)
 
Banking, Finance, Insurance & Real Estate
 
L + 5.75%
 
7.95%
 
6/30/2015
 
5/31/2025
 
29,082

 
28,683

 
28,722

 
2.80

 
Central Security Group, Inc.
 
+*
 
(2) (3)
 
Consumer Services
 
L + 5.63%
 
8.03%
 
6/26/2015
 
10/6/2021
 
23,362

 
23,225

 
23,024

 
2.24

 
Chartis Holding, LLC
 
^
 
(2) (3) (13)
 
Business Services
 
L + 5.00%
 
7.52%
 
5/1/2019
 
4/1/2025
 
16,006

 
15,582

 
15,684

 
1.53

 
Chemical Computing Group ULC (Canada)
 
^*
 
(2) (3) (7) (13)
 
Software
 
L + 5.50%
 
7.90%
 
8/30/2018
 
8/30/2023
 
15,715

 
15,572

 
15,672

 
1.53

 
CIP Revolution Holdings, LLC
 
^+*
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 6.00%
 
8.35%
 
8/19/2016
 
8/19/2021
 
20,998

 
20,888

 
20,827

 
2.03

 
CircusTrix Holdings, LLC
 
^+*
 
(2) (3) (13)
 
Hotel, Gaming & Leisure
 
L + 5.50%
 
7.90%
 
2/2/2018
 
12/16/2021
 
9,166

 
9,108

 
9,068

 
0.88

 
Comar Holding Company, LLC
 
^*
 
(2) (3) (13)
 
Containers, Packaging & Glass
 
L + 5.25%
 
7.65%
 
6/18/2018
 
6/18/2024
 
27,182

 
26,598

 
26,815

 
2.61

 
Continuum Managed Services Holdco, LLC
 
^+*
 
(2) (3) (13)
 
High Tech Industries
 
L + 6.00%
 
8.41%
 
6/20/2017
 
6/8/2023
 
28,100

 
27,579

 
28,038

 
2.73

 
Dent Wizard International Corporation
 
+
 
(2) (3)
 
Automotive
 
L + 4.00%
 
6.40%
 
4/28/2015
 
4/7/2022
 
882

 
881

 
879

 
0.09

 
Derm Growth Partners III, LLC (Dermatology Associates)
 
^
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 7.25% (100% PIK)
 
9.58%
 
5/31/2016
 
5/31/2022
 
52,890

 
52,564

 
45,226

 
4.41

 
DermaRite Industries, LLC
 
^*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 7.00%
 
9.40%
 
3/3/2017
 
3/3/2022
 
22,849

 
22,645

 
22,371

 
2.18


7
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

 
Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost  (4)
 
Fair Value  (5)
 
% of  Net Assets
 
 
First Lien Debt (77.95%) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dimensional Dental Management, LLC
 
^
 
(2) (3) (9) (11)
 
Healthcare & Pharmaceuticals
 
L + 6.75%
 
9.07%
 
2/12/2016
 
2/12/2021
 
$
33,674

 
$
33,301

 
$
20,964

 
2.04
 %
 
Direct Travel, Inc.
 
^+*
 
(2) (3) (13)
 
Hotel, Gaming & Leisure
 
L + 6.50%
 
8.90%
 
10/14/2016
 
12/1/2021
 
35,370

 
35,011

 
35,273

 
3.44

 
DTI Holdco, Inc.
 
*
 
(2) (3)
 
High Tech Industries
 
L + 4.75%
 
7.33%
 
12/18/2018
 
9/30/2023
 
1,985

 
1,869

 
1,815

 
0.18

 
EIP Merger Sub, LLC (Evolve IP)
 
^+*
 
(2) (3) (11)
 
Telecommunications
 
L + 5.75%
 
8.15%
 
6/7/2016
 
6/7/2022
 
38,021

 
37,409

 
37,800

 
3.68

 
Emergency Communications Network, LLC
 
^+*
 
(2) (3)
 
Telecommunications
 
L + 6.25%
 
8.65%
 
6/1/2017
 
6/1/2023
 
24,500

 
24,339

 
23,657

 
2.30

 
Ensono, LP
 
*
 
(2) (3)
 
Telecommunications
 
L + 5.25%
 
7.65%
 
4/30/2018
 
6/27/2025
 
8,580

 
8,495

 
8,527

 
0.83

 
Ethos Veterinary Health LLC
 
^+
 
(2) (3) (13)
 
Consumer Services
 
L + 4.75%
 
7.13%
 
5/17/2019
 
5/17/2026
 
10,906

 
10,776

 
10,835

 
1.06

 
Frontline Technologies Holdings, LLC
 
^
 
(2) (3) (13)
 
Software
 
L + 6.50%
 
8.82%
 
9/18/2017
 
9/18/2023
 
40,317

 
40,014

 
40,346

 
3.93

 
FWR Holding Corporation
 
^+*
 
(2) (3) (13)
 
Beverage, Food & Tobacco
 
L + 5.50%
 
7.90%
 
8/21/2017
 
8/21/2023
 
47,298

 
46,520

 
47,242

 
4.60

 
Green Energy Partners/Stonewall, LLC
 
+*
 
(2) (3)
 
Energy: Electricity
 
L + 5.50%
 
7.83%
 
6/26/2015
 
11/13/2021
 
19,650

 
19,426

 
19,290

 
1.88

 
GRO Sub Holdco, LLC (Grand Rapids)
 
^+*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 6.00%
 
8.33%
 
2/28/2018
 
2/22/2024
 
6,646

 
6,476

 
5,909

 
0.58

 
Hummel Station, LLC
 
+*
 
(2) (3)
 
Energy: Electricity
 
L + 6.00%
 
8.40%
 
2/3/2016
 
10/27/2022
 
14,400

 
13,787

 
12,864

 
1.25

 
Hydrofarm, LLC
 
^
 
(2) (3)
 
Wholesale
 
L+10.00% (30% cash/70% PIK)
 
12.44%
 
5/15/2017
 
5/12/2022
 
20,573

 
20,270

 
13,562

 
1.32

 
iCIMS, Inc.
 
^
 
(2) (3) (13)
 
Software
 
L + 6.50%
 
8.90%
 
9/12/2018
 
9/12/2024
 
23,930

 
23,471

 
23,628

 
2.30

 
Indra Holdings Corp. (Totes Isotoner)
 
^
 
(2) (3) (9)
 
Non-durable Consumer Goods
 
L + 4.25%
 
4.25%
 
4/29/2014
 
5/1/2021
 
18,965

 
17,667

 
7,618

 
0.74

 
Innovative Business Services, LLC
 
^*
 
(2) (3) (13)
 
High Tech Industries
 
L + 5.50%
 
8.09%
 
4/5/2018
 
4/5/2023
 
16,225

 
15,761

 
15,844

 
1.54

 
Kaseya Luxembourg Holdings S.C.A. (Luxembourg)
 
^
 
(2) (3) (7) (13)
 
High Tech Industries
 
L + 5.50%, 1.00% PIK
 
7.82%
 
5/3/2019
 
5/5/2025
 
18,314

 
17,883

 
17,901

 
1.74

 
Legacy.com, Inc.
 
^
 
(2) (3) (11)
 
High Tech Industries
 
L + 6.00%
 
8.33%
 
3/20/2017
 
3/20/2023
 
17,000

 
16,717

 
15,781

 
1.54

 
Liqui-Box Holdings, Inc.
 
^
 
(2) (3) (13)
 
Containers, Packaging & Glass
 
L + 4.50%
 
6.82%
 
6/3/2019
 
6/3/2024
 
—

 
(26
)
 
(13
)
 
(0.01
)
 
Mailgun Technologies, Inc.
 
^*
 
(2) (3) (13)
 
High Tech Industries
 
L + 6.00%
 
8.33%
 
3/26/2019
 
3/26/2025
 
11,497

 
11,253

 
11,374

 
1.11

 
Maravai Intermediate Holdings, LLC
 
^*
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.69%
 
8/2/2018
 
8/2/2025
 
19,850

 
19,680

 
19,783

 
1.93

 
Metrogistics, LLC
 
+*
 
(2) (3)
 
Transportation: Cargo
 
L + 6.25%
 
8.65%
 
12/13/2016
 
9/30/2022
 
17,190

 
17,040

 
17,157

 
1.67

 
National Carwash Solutions, Inc.
 
^+
 
(2) (3) (13)
 
Automotive
 
L + 6.00%
 
8.43%
 
8/7/2018
 
4/28/2023
 
8,452

 
8,287

 
8,269

 
0.81

 
National Technical Systems, Inc.
 
^+*
 
(2) (3) (13)
 
Aerospace & Defense
 
L + 6.25%
 
8.69%
 
6/26/2015
 
6/12/2021
 
28,096

 
27,895

 
28,081

 
2.74


8
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

 
Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost  (4)
 
Fair Value  (5)
 
% of  Net Assets
 
 
First Lien Debt (77.95%) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NES Global Talent Finance US, LLC (United Kingdom)
 
+*
 
(2) (3) (7)
 
Energy: Oil & Gas
 
L + 5.50%
 
8.08%
 
5/9/2018
 
5/11/2023
 
$
9,941

 
$
9,798

 
$
9,771

 
0.95
 %
 
Nexus Technologies, LLC
 
*
 
(2) (3)
 
High Tech Industries
 
L + 5.50%
 
7.83%
 
12/11/2018
 
12/5/2023
 
6,203

 
6,151

 
6,014

 
0.59

 
NMI AcquisitionCo, Inc.
 
^+*
 
(2) (3) (13)
 
High Tech Industries
 
L + 6.75%
 
9.15%
 
9/6/2017
 
9/6/2022
 
50,784

 
50,092

 
50,000

 
4.87

 
North American Dental Management, LLC
 
^
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
7.65%
 
10/26/2018
 
7/7/2023
 
5,037

 
4,948

 
4,966

 
0.48

 
Northland Telecommunications Corporation
 
^*
 
(2) (3) (13)
 
Media: Broadcast & Subscription
 
L + 5.75%
 
8.17%
 
10/1/2018
 
10/1/2025
 
21,530

 
21,210

 
21,181

 
2.06

 
Paramit Corporation
 
+
 
(2) (3)
 
Capital Equipment
 
L + 4.50%
 
6.82%
 
5/3/2019
 
5/3/2025
 
7,181

 
7,114

 
7,139

 
0.70

 
Plano Molding Company, LLC
 
^
 
(2) (3)
 
Hotel, Gaming & Leisure
 
L + 7.00%
 
9.40%
 
5/1/2015
 
5/12/2021
 
14,827

 
14,680

 
14,035

 
1.37

 
PPC Flexible Packaging, LLC
 
^+*
 
(2) (3) (13)
 
Containers, Packaging & Glass
 
L + 5.25%
 
7.65%
 
11/23/2018
 
11/23/2024
 
13,660

 
13,450

 
13,527

 
1.32

 
PPT Management Holdings, LLC
 
^
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L+ 7.50% (L+3.50% cash, 4.00% PIK)
 
10.19%
 
12/15/2016
 
12/16/2022
 
27,475

 
27,349

 
23,214

 
2.26

 
PricewaterhouseCoopers Public Sector LLP
 
^
 
(2) (3) (13)
 
Aerospace & Defense
 
L + 2.75%
 
5.07%
 
5/1/2018
 
5/1/2023
 
—

 
(125
)
 
(99
)
 
(0.01
)
 
Prime Risk Partners, Inc.
 
^
 
(2) (3) (11) (13)
 
Banking, Finance, Insurance & Real Estate
 
L + 5.38%
 
7.34%
 
8/15/2017
 
8/13/2023
 
27,720

 
27,219

 
27,699

 
2.70

 
Prime Risk Partners, Inc.
 
^
 
(2) (3) (13)
 
Banking, Finance, Insurance & Real Estate
 
L + 5.38%
 
7.73%
 
8/15/2017
 
8/13/2023
 
2,178

 
2,049

 
2,166

 
0.21

 
Product Quest Manufacturing, LLC
 
^
 
(2) (3) (9) (13)
 
Containers, Packaging & Glass
 
L + 6.75%
 
10.00%
 
9/21/2017
 
3/31/2019
 
1,793

 
1,793

 
1,793

 
0.17

 
Product Quest Manufacturing, LLC
 
^
 
(2) (3) (9) (11)
 
Containers, Packaging & Glass
 
L + 5.75%
 
5.75%
 
9/9/2015
 
9/9/2020
 
33,000

 
32,270

 
—

 
—

 
Propel Insurance Agency, LLC
 
^
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
6.83%
 
6/1/2018
 
6/1/2024
 
2,375

 
2,358

 
2,356

 
0.23

 
PSI Services, LLC
 
^
 
(2) (3)
 
Business Services
 
L + 5.00%
 
7.40%
 
9/19/2018
 
1/20/2023
 
4,516

 
4,464

 
4,516

 
0.44

 
QW Holding Corporation (Quala)
 
^+*
 
(2) (3) (13)
 
Environmental Industries
 
L + 5.75%
 
8.14%
 
8/31/2016
 
8/31/2022
 
39,329

 
38,768

 
39,040

 
3.80

 
Redwood Services Group, LLC
 
^*
 
(2) (3)
 
High Tech Industries
 
L + 6.00%
 
8.52%
 
11/13/2018
 
6/6/2023
 
7,727

 
7,674

 
7,618

 
0.74

 
Riveron Acquisition Holdings, Inc.
 
+
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 6.25%
 
8.57%
 
5/22/2019
 
5/22/2025
 
15,700

 
15,390

 
15,501

 
1.51

 
Sapphire Convention, Inc. (Smart City)
 
^+*
 
(2) (3) (13)
 
Telecommunications
 
L + 5.25%
 
7.77%
 
11/20/2018
 
11/20/2025
 
28,721

 
28,108

 
28,479

 
2.77

 
Smile Doctors, LLC
 
^+*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 5.75%
 
8.10%
 
10/6/2017
 
10/6/2022
 
20,068

 
19,965

 
19,773

 
1.93


9
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

 
Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost  (4)
 
Fair Value  (5)
 
% of  Net Assets
 
 
First Lien Debt (77.95%) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sovos Brands Intermediate, Inc.
 
^
 
(2) (3)
 
Beverage, Food & Tobacco
 
L + 5.00%
 
7.20%
 
11/16/2018
 
11/20/2025
 
$
20,000

 
$
19,814

 
$
19,828

 
1.93
 %
 
SPay, Inc.
 
^+*
 
(2) (3) (13)
 
Hotel, Gaming & Leisure
 
L + 5.75%
 
8.16%
 
6/15/2018
 
6/15/2024
 
20,512

 
19,994

 
18,386

 
1.79

 
Superior Health Linens, LLC
 
^+*
 
(2) (3) (13)
 
Business Services
 
L + 7.50%
 
9.82%
 
9/30/2016
 
9/30/2021
 
22,007

 
21,827

 
20,733

 
2.02

 
Surgical Information Systems, LLC
 
^+*
 
(2) (3) (11)
 
High Tech Industries
 
L + 4.85%
 
7.24%
 
4/24/2017
 
4/24/2023
 
26,168

 
25,984

 
25,948

 
2.53

 
T2 Systems Canada, Inc.
 
+
 
(2) (3)
 
Transportation: Consumer
 
L + 6.75%
 
9.08%
 
5/24/2017
 
9/28/2022
 
3,948

 
3,886

 
3,937

 
0.38

 
T2 Systems, Inc.
 
^+*
 
(2) (3) (13)
 
Transportation: Consumer
 
L + 6.75%
 
9.08%
 
9/28/2016
 
9/28/2022
 
32,905

 
32,384

 
32,810

 
3.20

 
Tank Holding Corp.
 
^
 
(2) (3) (13)
 
Capital Equipment
 
L + 4.00%
 
6.32%
 
3/26/2019
 
3/26/2024
 
—

 
—

 
—

 
—

 
The Hilb Group, LLC
 
^
 
(2) (3) (11) (13)
 
Banking, Finance, Insurance & Real Estate
 
L + 6.00%
 
8.33%
 
6/24/2015
 
6/24/2021
 
63,102

 
62,461

 
62,149

 
6.05

 
The Topps Company, Inc.
 
+*
 
(2) (3)
 
Non-durable Consumer Goods
 
L + 6.00%
 
8.33%
 
6/26/2015
 
10/2/2020
 
22,003

 
21,861

 
22,003

 
2.14

 
Transform SR Holdings, LLC
 
^
 
(2) (3) (11)
 
Retail
 
L + 7.25%
 
9.67%
 
2/11/2019
 
2/11/2024
 
19,050

 
18,870

 
18,860

 
1.84

 
Trump Card, LLC
 
^+*
 
(2) (3) (13)
 
Transportation: Cargo
 
L + 5.00%
 
7.33%
 
6/26/2018
 
4/21/2022
 
7,935

 
7,893

 
7,903

 
0.77

 
TSB Purchaser, Inc. (Teaching Strategies, LLC)
 
^+*
 
(2) (3) (13)
 
Media: Advertising, Printing & Publishing
 
L + 6.00%
 
8.33%
 
5/14/2018
 
5/14/2024
 
28,435

 
27,809

 
28,031

 
2.73

 
Tweddle Group, Inc.
 
^
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 4.50%
 
6.90%
 
9/17/2018
 
9/17/2023
 
2,080

 
2,053

 
2,052

 
0.20

 
U.S. Acute Care Solutions, LLC
 
+
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 5.00%
 
7.20%
 
2/21/2019
 
5/15/2021
 
4,288

 
4,237

 
4,065

 
0.40

 
USLS Acquisition, Inc.
 
^*
 
(2) (3) (13)
 
Business Services
 
L + 5.75%
 
8.16%
 
11/30/2018
 
11/30/2024
 
19,648

 
19,227

 
19,159

 
1.87

 
VRC Companies, LLC
 
^+*
 
(2) (3) (13)
 
Business Services
 
L + 6.50%
 
8.90%
 
3/31/2017
 
3/31/2023
 
56,820

 
56,140

 
56,478

 
5.50

 
Watchfire Enterprises, Inc.
 
^
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
6.58%
 
6/9/2017
 
10/2/2020
 
1,196

 
1,190

 
1,195

 
0.12

 
Westfall Technik, Inc.
 
^
 
(2) (3) (13)
 
Chemicals, Plastics & Rubber
 
L + 5.25%
 
7.58%
 
9/13/2018
 
9/13/2024
 
25,921

 
25,218

 
25,342

 
2.47

 
Zemax Software Holdings, LLC
 
^*
 
(2) (3) (13)
 
Software
 
L + 5.75%
 
8.08%
 
6/25/2018
 
6/25/2024
 
10,197

 
10,071

 
10,133

 
0.99

 
Zenith Merger Sub, Inc.
 
^+*
 
(2) (3) (13)
 
Business Services
 
L + 5.25%
 
7.85%
 
12/13/2017
 
12/13/2023
 
15,545

 
15,320

 
15,543

 
1.51

 
First Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,691,986

 
$
1,617,946

 
157.60
 %
 
Second Lien Debt (9.79%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Access CIG, LLC
 
*
 
(2) (3)
 
Business Services
 
L + 7.75%
 
10.19%
 
2/14/2018
 
2/27/2026
 
$
2,700

 
$
2,679

 
$
2,683

 
0.26
 %
 
Aimbridge Acquisition Co., Inc.
 
^*
 
(2) (3)
 
Hotel, Gaming & Leisure
 
L + 7.50%
 
9.94%
 
2/1/2019
 
2/1/2027
 
7,727

 
7,597

 
7,738

 
0.75


10
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

 
Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost  (4)
 
Fair Value  (5)
 
% of  Net Assets
 
 
Second Lien Debt (9.79%) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AQA Acquisition Holding, Inc.
 
^
 
(2) (3)
 
High Tech Industries
 
L + 8.00%
 
10.48%
 
10/1/2018
 
5/24/2024
 
$
40,000

 
$
39,649

 
$
39,796

 
3.88
 %
 
Argon Medical Devices Holdings, Inc.
 
^*
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 8.00%
 
10.40%
 
11/2/2017
 
1/23/2026
 
9,498

 
9,440

 
9,468

 
0.92

 
Brave Parent Holdings, Inc.
 
^*
 
(2) (3)
 
Software
 
L + 7.50%
 
10.08%
 
10/3/2018
 
4/19/2026
 
19,062

 
18,637

 
18,886

 
1.84

 
Jazz Acquisition, Inc.
 
^
 
(2) (3)
 
Aerospace & Defense
 
L + 8.00%
 
10.33%
 
6/13/2019
 
6/11/2027
 
23,450

 
23,099

 
23,098

 
2.25

 
Outcomes Group Holdings, Inc.
 
^*
 
(2) (3)
 
Business Services
 
L + 7.50%
 
10.02%
 
10/23/2018
 
10/26/2026
 
4,500

 
4,500

 
4,499

 
0.44

 
Pharmalogic Holdings Corp.
 
^
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 8.00%
 
10.40%
 
6/7/2018
 
12/11/2023
 
800

 
796

 
800

 
0.08

 
Quartz Holding Company (QuickBase, Inc.)
 
^
 
(2) (3)
 
Software
 
L + 8.00%
 
10.44%
 
4/2/2019
 
4/2/2027
 
11,900

 
11,668

 
11,733

 
1.14

 
Reladyne, Inc.
 
^+*
 
(2) (3) (13)
 
Wholesale
 
L + 9.50%
 
11.82%
 
4/19/2018
 
1/21/2023
 
12,242

 
12,060

 
12,260

 
1.19

 
Santa Cruz Holdco, Inc.
 
^
 
(2) (3)
 
Non-durable Consumer Goods
 
L + 8.25%
 
10.85%
 
12/15/2017
 
12/13/2024
 
17,138

 
16,992

 
17,078

 
1.66

 
Tank Holding Corp.
 
^
 
(2) (3)
 
Capital Equipment
 
L + 8.25%
 
10.57%
 
3/26/2019
 
3/26/2027
 
37,380

 
36,648

 
36,816

 
3.59

 
Ultimate Baked Goods MIDCO, LLC (Rise Baking)
 
^
 
(2) (3)
 
Beverage, Food & Tobacco
 
L + 8.00%
 
10.40%
 
8/9/2018
 
8/9/2026
 
8,333

 
8,182

 
8,215

 
0.80

 
Watchfire Enterprises, Inc.
 
^
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 8.00%
 
10.33%
 
10/2/2013
 
10/2/2021
 
7,000

 
6,956

 
6,976

 
0.68

 
Zywave, Inc.
 
^
 
(2) (3)
 
High Tech Industries
 
L + 9.00%
 
11.59%
 
11/18/2016
 
11/17/2023
 
3,141

 
3,107

 
3,141

 
0.31

 
Second Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
202,010

 
$
203,187

 
19.79
 %















11
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Type
 
Acquisition Date
 
Shares/ Units
 
Cost
 
Fair Value (5)
 
% of
 Net
Assets
Equity Investments (0.96%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANLG Holdings, LLC
 
^
 
(6)
 
Healthcare & Pharmaceuticals
 
Common stock
 
6/22/2018
 
879,689

 
$
880

 
$
880

 
0.09
%
Avenu Holdings, LLC
 
^
 
(6)
 
Sovereign & Public Finance
 
Common stock
 
9/28/2018
 
172,413

 
172

 
162

 
0.02

Chartis Holding, LLC
 
^
 
(6)
 
Business Services
 
Common stock
 
5/1/2019
 
432,900

 
433

 
433

 
0.04

CIP Revolution Holdings, LLC
 
^
 
(6)
 
Media: Advertising, Printing & Publishing
 
Common stock
 
8/19/2016
 
31,825

 
318

 
283

 
0.03

DecoPac, Inc.
 
^
 
(6)
 
Non-durable Consumer Goods
 
Common stock
 
9/29/2017
 
1,500,000

 
1,500

 
1,890

 
0.18

Derm Growth Partners III, LLC (Dermatology Associates)
 
^
 
(6)
 
Healthcare & Pharmaceuticals
 
Common stock
 
5/31/2016
 
1,000,000

 
1,000

 
—

 
—

GRO Sub Holdco, LLC (Grand Rapids)
 
^
 
(6)
 
Healthcare & Pharmaceuticals
 
Common stock
 
3/29/2018
 
500,000

 
500

 
180

 
0.02

Legacy.com, Inc.
 
^
 
(6)
 
High Tech Industries
 
Common stock
 
3/20/2017
 
1,500,000

 
1,500

 
780

 
0.08

Mailgun Technologies, Inc.
 
^
 
(6)
 
High Tech Industries
 
Common stock
 
3/26/2019
 
423,729

 
424

 
424

 
0.04

North Haven Goldfinch Topco, LLC
 
^
 
(6)
 
Containers, Packaging & Glass
 
Common stock
 
6/18/2018
 
2,314,815

 
2,315

 
2,361

 
0.23

Paramit Corporation
 
^
 
(6)
 
Capital Equipment
 
Common stock
 
6/17/2019
 
150,367

 
500

 
501

 
0.05

Power Stop Intermediate Holdings, LLC
 
^
 
(6)
 
Automotive
 
Common stock
 
5/29/2015
 
7,150

 
—

 
34

 
—

PPC Flexible Packaging, LLC
 
^
 
(6)
 
Containers, Packaging & Glass
 
Common stock
 
2/1/2019
 
964,854

 
965

 
965

 
0.09

Rough Country, LLC
 
^
 
(6)
 
Durable Consumer Goods
 
Common stock
 
5/25/2017
 
754,775

 
755

 
1,110

 
0.11

SiteLock Group Holdings, LLC
 
^
 
(6)
 
High Tech Industries
 
Common stock
 
4/5/2018
 
446,429

 
446

 
554

 
0.05

T2 Systems Parent Corporation
 
^
 
(6)
 
Transportation: Consumer
 
Common stock
 
9/28/2016
 
555,556

 
556

 
567

 
0.06

Tailwind HMT Holdings Corp.
 
^
 
(6)
 
Energy: Oil & Gas
 
Common stock
 
11/17/2017
 
20,000

 
2,000

 
2,516

 
0.25

Tank Holding Corp.
 
^
 
(6)
 
Capital Equipment
 
Common stock
 
3/26/2019
 
850

 
850

 
850

 
0.08

THG Acquisition, LLC (The Hilb Group, LLC)
 
^
 
(6)
 
Banking, Finance, Insurance & Real Estate
 
Common stock
 
6/24/2015
 
1,500,000

 
1,500

 
3,135

 
0.30

Tweddle Holdings, Inc.
 
^
 
(6)
 
Media: Advertising, Printing & Publishing
 
Common stock
 
9/17/2018
 
17,208

 
—

 
—

 
—

USLS Acquisition, Inc.
 
^
 
(6)
 
Business Services
 
Common stock
 
11/30/2018
 
640,569

 
641

 
641

 
0.06

Zenith American Holding, Inc.
 
^
 
(6)
 
Business Services
 
Preferred stock
 
12/13/2017
 
782,384

 
782

 
1,267

 
0.12

Zenith American Holding, Inc.
 
^
 
(6)
 
Business Services
 
Common stock
 
12/13/2017
 
782,384

 
—

 
—

 
—

Zillow Topco LP
 
^
 
(6)
 
Software
 
Common stock
 
6/25/2018
 
312,500

 
313

 
313

 
0.03

Equity Investments Total
 
 
 
 
 
 
 
 
 
 
 
 
 
$
18,350

 
$
19,846

 
1.93
%
Total investments—non-controlled/non-affiliated
 
 
 
 
 
 
 
 
 
$
1,912,346

 
$
1,840,979

 
179.32
%

12
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

Investments—non-controlled/affiliated
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost  (4)
 
Fair Value (5)
 
% of 
Net Assets
First Lien Debt (0.70%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TwentyEighty, Inc. - Revolver
 
^
 
(2) (3) (12) (13)
 
Business Services
 
L + 8.00%
 
10.33%
 
1/31/2017
 
3/21/2020
 
$
—

 
$
(2
)
 
$
—

 
—
%
TwentyEighty, Inc. - (Term A Loans)
 
^
 
(2) (3) (12)
 
Business Services
 
L + 8.00%
 
10.33%
 
1/31/2017
 
3/21/2020
 
163

 
163

 
163

 
0.02

TwentyEighty, Inc. - (Term B Loans)
 
^
 
(12)
 
Business Services
 
N/A
 
 8.00% (4.00%
cash, 4.00% PIK)
 
1/31/2017
 
3/21/2020
 
7,136

 
7,042

 
6,993

 
0.68

TwentyEighty, Inc. - (Term C Loans)
 
^
 
(12)
 
Business Services
 
N/A
 
9.00% (0.25%
cash, 8.75% PIK)
 
1/31/2017
 
3/21/2020
 
7,437

 
7,067

 
7,288

 
0.71

First Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
14,270

 
$
14,444

 
1.41
%
Investments—non-controlled/affiliated
 
 
 
Footnotes
 
Industry
 
Acquisition Date
 
Shares/ Units
 
Cost
 
Fair
Value  (5)
 
% of Net Assets
Equity Investments (0.31%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TwentyEighty Investors LLC
 
^
 
(6) (12)
 
Business Services
 
1/31/2017
 
69,786

 
$
—

 
$
6,481

 
0.63
%
Equity Investments Total
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
6,481

 
0.63
%
Total investments—non-controlled/affiliated
 
 
 
 
 
 
 
 
$
14,270

 
$
20,925

 
2.04
%
Investments—controlled/affiliated
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity
Date
 
Par Amount/ LLC Interest
 
Cost
 
Fair Value  (5)
 
% of 
Net Assets
Investment Fund (9.22%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Middle Market Credit Fund, LLC, Mezzanine Loan
 
^
 
(2) (7) (8) (10)
 
Investment Fund
 
L+9.00%
 
11.55%
 
6/30/2016
 
3/22/2020
 
$
80,000

 
$
80,000

 
$
80,000

 
7.79
%
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest
 
^
 
(7) (10)
 
Investment Fund
 
N/A
 
0.001%
 
2/29/2016
 
3/1/2021
 
123,501

 
123,501

 
111,386

 
10.85
%
Investment Fund Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
203,501

 
$
191,386

 
18.64
%
 


13
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

Investments—controlled/affiliated
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Cost
 
Fair
Value (5)
 
% of Net Assets
First Lien Debt (0.94%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SolAero Technologies Corp. (Priority Term Loan)
 
^
 
(2) (3) (10)
 
Telecommunications
 
L + 6.00%
 
8.32%
 
4/12/2019
 
10/12/2022
 
7,703

 
7,577

 
7,702

 
0.75
%
SolAero Technologies Corp. (A1 Term Loan)
 
^
 
(2) (3) (9) (10)
 
Telecommunications
 
L + 6.00%
 
8.32%
 
4/12/2019
 
10/12/2022
 
3,113

 
3,113

 
3,113

 
0.30
%
SolAero Technologies Corp. (A2 Term Loan)
 
^
 
(2) (3) (9) (10)
 
Telecommunications
 
L + 8.00% (100% PIK)
 
10.32%
 
4/12/2019
 
10/12/2022
 
8,695

 
8,695

 
8,694

 
0.85
%
First Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
19,385

 
$
19,509

 
1.90
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Investments (0.14%)
 
 
 
Footnotes
 
Industry
 
 
 
 
 
Acquisition Date
 
 
 
Shares/ Units
 
Cost
 
Fair
Value (5)
 
% of Net Assets
SolAero Technologies Corp.
 
^
 
(6) (10)
 
Telecommunications
 
 
 
 
 
4/12/2019
 
 
 
2,915

 
$
2,815

 
$
2,815

 
0.28
%
Equity Investments Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,815

 
$
2,815

 
0.28
%
Total investments—controlled/affiliated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
225,701

 
$
213,710

 
20.82
%
Total investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,152,317

 
$
2,075,614

 
202.18
%

^ Denotes that all or a portion of the assets are owned by TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the TCG BDC SPV LLC (the “SPV”) or Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”)).
+ Denotes that all or a portion of the assets are owned by the Company’s wholly owned subsidiary, the SPV. The SPV has entered into a senior secured revolving credit facility (as amended, the “SPV Credit Facility” and, together with the Credit Facility, the “Facilities”). The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the Company or the 2015-1 Issuer.
* Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the 2015-1 Issuer, and secure the notes issued in connection with a term debt securitization completed by the Company on June 26, 2015 (see Note 7, Notes Payable). Accordingly, such assets are not available to the creditors of the Company or the SPV.
(1)
Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of June 30, 2019 , the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of June 30, 2019 , the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)
Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2019 . As of June 30, 2019 , the reference rates for our variable rate loans were the 30-day LIBOR at 2.32% , the 90-day LIBOR at 2.40% and the 180-day LIBOR at 2.20% .
(3)
Loan includes interest rate floor feature, which is generally 1.00%.
(4)
Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)
Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment fund was determined using significant unobservable inputs.
(6)
Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act, unless otherwise noted. As of June 30, 2019 , the aggregate fair value of these securities is $29,142 , or 2.84% of the Company’s net assets.

14
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

(7)
The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.
(8)
Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.
(9)
Loan was on non-accrual status as of June 30, 2019 .
(10)
Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC, for more details. Transactions related to investments in controlled affiliates for the six month period ended June 30, 2019 , were as follows:
Investments—controlled/affiliated
Fair Value as of December 31, 2018
 
Additions/Purchases
 
Reductions/Sales/ Paydowns
 
Net Realized Gain (Loss)
 
Net Change in Unrealized Appreciation (Depreciation)
 
Fair Value as of June 30, 2019
 
Dividend and Interest Income
Middle Market Credit Fund, LLC, Mezzanine Loan
$
112,000

 
$
50,700

 
$
(82,700
)
 
$
—

 
$
—

 
$
80,000

 
$
3,243

Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest  
110,295

 
5,500

 
—

 
—

 
(4,409
)
 
111,386

 
3,750

Total investments—controlled/affiliated
$
222,295

 
$
56,200

 
$
(82,700
)
 
$
—

 
$
(4,409
)
 
$
191,386

 
$
6,993

Investments—controlled/affiliated
Fair Value as of December 31, 2018
 
Additions/Purchases
 
Reductions/Sales/ Paydowns
 
Net Realized Gain (Loss)
 
Net Change in Unrealized Appreciation (Depreciation)
 
Fair Value as of June 30, 2019
 
Dividend and Interest Income
SolAero Technologies Corp.
$
17,968

 
$
—

 
$
(18,318
)
 
$
(9,092
)
 
$
9,442

 
$
—

 
$
—

SolAero Technologies Corp. (Priority Term Loan)
—

 
7,579

 
—

 
—

 
123

 
7,702

 
14

SolAero Technologies Corp. (A1 Term Loan)
—

 
3,113

 
—

 
—

 
—

 
3,113

 
—

SolAero Technologies Corp. (A2 Term Loan)
—

 
8,694

 
—

 
—

 
—

 
8,694

 
—

Solaero Technology Corp. (Equity)
—

 
2,815

 
—

 
—

 
—

 
2,815

 
—

Total investments—controlled/affiliated
$
17,968

 
$
22,201

 
$
(18,318
)
 
$
(9,092
)
 
$
9,565

 
$
22,324

 
$
14


(11)
In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: Dimensional Dental Management, LLC ( 4.87% ), EIP Merger Sub, LLC (Evolve IP) ( 3.49% ), Legacy.com Inc. ( 3.73% ), Prime Risk Partners, Inc. ( 2.57% ), Product Quest Manufacturing, LLC ( 3.54% ), Surgical Information Systems, LLC ( 1.13% ), Transform SR Holdings, LLC (nil) and The Hilb Group, LLC ( 3.94% ). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.

(12)
Under the Investment Company Act, the Company is deemed an “affiliated person” of this portfolio company because the Company owns 5% or more of the portfolio company’s outstanding voting securities. Transactions related to investments in non-controlled affiliates for the six month period ended June 30, 2019 , were as follows:

15
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

Investments—non-controlled/affiliated
Fair Value as of December 31, 2018

Purchases/ Paid-in-kind interest

Sales/ Paydowns

Net Accretion of Discount

Net Realized Gain (Loss)

Net Change in Unrealized Appreciation (Depreciation)

Fair value as of June 30,
2019

Interest Income
TwentyEighty, Inc. - Revolver
$
—

 
$
—

 
$
—

 
$
1

 
$
—

 
$
(1
)
 
$
—

 
$
—

TwentyEighty, Inc. - (Term A Loans)
316

 
—

 
(152
)
 
—

 
—

 
(1
)
 
163

 
19

TwentyEighty, Inc. - (Term B Loans)
6,855

 
141

 
—

 
48

 
—

 
(51
)
 
6,993

 
329

TwentyEighty, Inc. - (Term C Loans)
6,981

 
313

 
—

 
80

 
—

 
(86
)
 
7,288

 
415

TwentyEighty Investors LLC (Equity)
4,391

 
—

 
—

 
—

 
—

 
2,090

 
6,481

 
—

Total investments—non-controlled/affiliated
$
18,543

 
$
454

 
$
(152
)
 
$
129

 
$
—

 
$
1,951

 
$
20,925

 
$
763


(13)
As of June 30, 2019 , the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:

Investments—non-controlled/non-affiliated
Type
 
Unused Fee
 
Par/ Principal Amount
 
Fair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
 
 
 
 
Advanced Instruments, LLC
Revolver
 
0.50%
 
$
1,167

 
$
(5
)
Aero Operating, LLC (Dejana Industries, Inc.)
Revolver
 
1.00
 
405

 
(5
)
American Physician Partners, LLC
Delayed Draw
 
0.50
 
2,100

 
1

American Physician Partners, LLC
Revolver
 
0.50
 
1,275

 
1

AMS Group HoldCo, LLC
Delayed Draw
 
1.00
 
4,009

 
(92
)
AMS Group HoldCo, LLC
Revolver
 
0.50
 
1,366

 
(31
)
Analogic Corporation
Revolver
 
0.50
 
3,365

 
(40
)
Apptio, Inc.
Revolver
 
0.50
 
2,367

 
(39
)
Captive Resources Midco, LLC
Delayed Draw
 
1.25
 
3,009

 
(32
)
Captive Resources Midco, LLC
Revolver
 
0.50
 
2,143

 
(22
)
Chartis Holding, LLC
Delayed Draw
 
0.50
 
6,402

 
(83
)
Chartis Holding, LLC
Revolver
 
0.50
 
2,401

 
(31
)
Chemical Computing Group ULC (Canada)
Revolver
 
0.50
 
903

 
(2
)
CircusTrix Holdings, LLC
Delayed Draw
 
1.00
 
1,115

 
(11
)
Comar Holding Company, LLC
Delayed Draw
 
1.00
 
5,136

 
(55
)
Comar Holding Company, LLC
Revolver
 
0.50
 
1,901

 
(20
)
Continuum Managed Services Holdco, LLC
Revolver
 
0.50
 
2,500

 
(5
)
DermaRite Industries, LLC
Revolver
 
0.50
 
703

 
(14
)
Direct Travel, Inc.
Delayed Draw
 
1.00
 
1,615

 
(4
)
Ethos Veterinary Health LLC
Delayed Draw
 
1.00
 
2,696

 
(14
)
Frontline Technologies Holdings, LLC
Delayed Draw
 
1.00
 
5,991

 
4

FWR Holding Corporation
Delayed Draw
 
1.00
 
203

 
—


16
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

Investments—non-controlled/non-affiliated
Type
 
Unused Fee
 
Par/ Principal Amount
 
Fair Value
FWR Holding Corporation
Revolver
 
0.50%
 
$
2,111

 
$
(2
)
GRO Sub Holdco, LLC (Grand Rapids)
Delayed Draw
 
1.00
 
7,000

 
(83
)
GRO Sub Holdco, LLC (Grand Rapids)
Revolver
 
0.50
 
1,071

 
(13
)
iCIMS, Inc.
Revolver
 
0.50
 
1,252

 
(15
)
Innovative Business Services, LLC
Delayed Draw
 
1.00
 
3,886

 
(66
)
Innovative Business Services, LLC
Revolver
 
0.50
 
2,232

 
(38
)
Kaseya Luxembourg Holdings S.C.A. (Luxembourg)
Delayed Draw
 
0.25
 
2,205

 
(41
)
Kaseya Luxembourg Holdings S.C.A. (Luxembourg)
Revolver
 
0.50
 
1,543

 
(29
)
Liqui-Box Holdings
Revolver
 
0.50
 
2,630

 
(13
)
Mailgun Technologies, Inc.
Revolver
 
0.50
 
1,342

 
(13
)
National Carwash Solutions, Inc.
Delayed Draw
 
1.00
 
1,494

 
(27
)
National Carwash Solutions, Inc.
Revolver
 
0.50
 
310

 
(6
)
National Technical Systems, Inc.
Revolver
 
0.50
 
2,500

 
(1
)
NMI AcquisitionCo, Inc.
Revolver
 
0.50
 
820

 
(12
)
Northland Telecommunications Corporation
Revolver
 
0.50
 
1,702

 
(26
)
PPC Flexible Packaging, LLC
Revolver
 
0.50
 
1,957

 
(17
)
PricewaterhouseCoopers Public Sector LLP
Revolver
 
0.50
 
6,250

 
(99
)
Prime Risk Partners, Inc.
Delayed Draw
 
0.50
 
190

 
(1
)
Prime Risk Partners, Inc.
Delayed Draw
 
0.50
 
2,364

 
(2
)
Product Quest Manufacturing, LLC
Revolver
 
1.00
 
4,164

 
—

QW Holding Corporation (Quala)
Delayed Draw
 
1.00
 
5,050

 
(33
)
Reladyne, Inc.
Delayed Draw
 
1.00
 
897

 
1

Sapphire Convention, Inc. (Smart City)
Revolver
 
0.50
 
4,528

 
(33
)
Smile Doctors, LLC
Delayed Draw
 
1.00
 
3,480

 
(42
)
Smile Doctors, LLC
Revolver
 
0.50
 
964

 
(12
)
SolAero Technologies Corp.
Delayed Draw
 
6.00
 
1,806

 
—

SolAero Technologies Corp.
Revolver
 
6.00
 
542

 
—

SPay, Inc.
Delayed Draw
 
1.00
 
9,545

 
(167
)
SPay, Inc.
Revolver
 
0.50
 
682

 
(63
)
Superior Health Linens, LLC
Revolver
 
0.50
 
700

 
(39
)
T2 Systems, Inc.
Revolver
 
0.50
 
1,026

 
(3
)
Tank Holding Corp.
Revolver
 
0.50
 
47

 
—

The Hilb Group, LLC
Delayed Draw
 
1.00
 
15,118

 
(184
)
Trump Card, LLC
Revolver
 
0.50
 
620

 
(2
)
TSB Purchaser, Inc. (Teaching Strategies, LLC)
Revolver
 
0.50
 
1,342

 
(18
)
TwentyEighty, Inc. - Revolver
Revolver
 
0.50
 
607

 
—

USLS Acquisition, Inc.
Delayed Draw
 
0.50
 
2,600

 
(55
)

17
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

Investments—non-controlled/non-affiliated
Type
 
Unused Fee
 
Par/ Principal Amount
 
Fair Value
USLS Acquisition, Inc.
Revolver
 
0.50%
 
$
946

 
$
(20
)
VRC Companies, LLC
Delayed Draw
 
0.75
 
242

 
(1
)
VRC Companies, LLC
Revolver
 
0.50
 
1,085

 
(6
)
Westfall Technik, Inc.
Delayed Draw
 
1.00
 
13,287

 
(189
)
Westfall Technik, Inc.
Revolver
 
0.50
 
1,509

 
(21
)
Zemax Software Holdings, LLC
Revolver
 
0.50
 
1,284

 
(7
)
Zenith Merger Sub, Inc.
Delayed Draw
 
1.00
 
4,252

 
—

Zenith Merger Sub, Inc.
Revolver
 
0.50
 
3,180

 
—

Total unfunded commitments
 
 
 
 
$
175,134

 
$
(1,897
)
 
As of June 30, 2019 , investments at fair value consisted of the following:
Type
 
Amortized Cost
 
Fair Value
 
% of Fair Value
First Lien Debt (excluding First Lien/Last Out)
 
$
1,471,410

 
$
1,442,698

 
69.51
%
First Lien/Last Out Unitranche
 
254,231

 
209,201

 
10.08

Second Lien Debt
 
202,010

 
203,187

 
9.79

Equity Investments
 
21,165

 
29,142

 
1.40

Investment Fund
 
203,501

 
191,386

 
9.22

Total
 
$
2,152,317

 
$
2,075,614

 
100.00
%
The rate type of debt investments at fair value as of June 30, 2019 was as follows:
Rate Type
 
Amortized Cost
 
Fair Value
 
% of Fair Value of First and Second Lien Debt
Floating Rate
 
$
1,913,542

 
$
1,840,805

 
99.23
%
Fixed Rate
 
14,109

 
14,281

 
0.77

Total
 
$
1,927,651

 
$
1,855,086

 
100.00
%

The industry composition of investments at fair value as of June 30, 2019 was as follows:
Industry
Amortized Cost
 
Fair Value
 
% of Fair Value
Aerospace & Defense
$
50,869

 
$
51,080

 
2.46
%
Automotive
9,168

 
9,182

 
0.44

Banking, Finance, Insurance & Real Estate
139,660

 
141,728

 
6.83

Beverage, Food & Tobacco
74,516

 
75,285

 
3.63

Business Services
159,148

 
165,828

 
7.99

Capital Equipment
45,112

 
45,306

 
2.18

Chemicals, Plastics & Rubber
25,218

 
25,342

 
1.22


18
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of June 30, 2019
(dollar amounts in thousands)
(unaudited)

Industry
Amortized Cost
 
Fair Value
 
% of Fair Value
Construction & Building
$
2,495

 
$
2,501

 
0.12
%
Consumer Services
34,001

 
33,859

 
1.63

Containers, Packaging & Glass
80,215

 
48,297

 
2.33

Durable Consumer Goods
11,978

 
12,309

 
0.59

Energy: Electricity
33,213

 
32,154

 
1.55

Energy: Oil & Gas
11,798

 
12,287

 
0.59

Environmental Industries
38,768

 
39,040

 
1.88

Healthcare & Pharmaceuticals
294,807

 
269,496

 
12.98

High Tech Industries
241,259

 
240,269

 
11.58

Hotel, Gaming & Leisure
86,390

 
84,500

 
4.07

Investment Fund
203,501

 
191,386

 
9.22

Media: Broadcast & Subscription
21,210

 
21,181

 
1.02

Media: Advertising, Printing & Publishing
59,214

 
59,364

 
2.86

Non-durable Consumer Goods
58,020

 
48,589

 
2.34

Retail
18,870

 
18,860

 
0.91

Software
154,567

 
155,623

 
7.50

Sovereign & Public Finance
38,420

 
38,164

 
1.84

Telecommunications
120,551

 
120,787

 
5.82

Transportation: Cargo
70,193

 
70,061

 
3.38

Transportation: Consumer
36,826

 
37,314

 
1.80

Wholesale
32,330

 
25,822

 
1.24

Total
$
2,152,317

 
$
2,075,614

 
100.00
%
The geographical composition of investments at fair value as of June 30, 2019 was as follows:
Geography
Amortized Cost
 
Fair Value
 
% of Fair Value
Canada
$
15,572

 
$
15,672

 
0.76
%
Luxembourg
17,883

 
17,901

 
0.86

United Kingdom
9,798

 
9,771

 
0.47

United States
2,109,064

 
2,032,270

 
97.91

Total
$
2,152,317

 
$
2,075,614

 
100.00
%


The accompanying notes are an integral part of these consolidated financial statements.

19
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2018
(dollar amounts in thousands)

 
Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost  (4)
 
Fair Value  (5)
 
% of Net Assets
 
 
First Lien Debt (77.62%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advanced Instruments, LLC
 
^+*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
7.63%
 
11/1/2016
 
10/31/2022
 
$
19,967

 
$
19,716

 
$
19,804

 
1.86
 %
 
Aero Operating, LLC (Dejana Industries, Inc.)
 
^+*
 
(2) (3) (13)
 
Business Services
 
L + 7.25%
 
9.60%
 
1/5/2018
 
12/29/2022
 
3,556

 
3,520

 
3,512

 
0.33

 
Alpha Packaging Holdings, Inc.
 
+*
 
(2) (3)
 
Containers, Packaging & Glass
 
L + 4.25%
 
7.05%
 
6/26/2015
 
5/12/2020
 
2,866

 
2,865

 
2,858

 
0.27

 
Alpine SG, LLC
 
^*
 
(2) (3)
 
High Tech Industries
 
L + 6.00%
 
8.52%
 
2/2/2018
 
11/16/2022
 
9,695

 
9,607

 
9,659

 
0.91

 
AMS Group HoldCo, LLC
 
^+*
 
(2) (3) (13)
 
Transportation: Cargo
 
L + 6.00%
 
8.80%
 
9/29/2017
 
9/29/2023
 
32,612

 
31,996

 
31,721

 
2.98

 
Analogic Corporation
 
^+*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 6.00%
 
8.52%
 
6/22/2018
 
6/22/2024
 
35,249

 
34,536

 
34,414

 
3.23

 
Avenu Holdings, LLC
 
+*
 
(2) (3)
 
Sovereign & Public Finance
 
L + 5.25%
 
8.05%
 
9/28/2018
 
9/28/2024
 
39,057

 
38,396

 
38,354

 
3.60

 
Brooks Equipment Company, LLC
 
+*
 
(2) (3)
 
Construction & Building
 
L + 5.00%
 
7.71%
 
6/26/2015
 
8/29/2020
 
2,502

 
2,492

 
2,496

 
0.23

 
Capstone Logistics Acquisition, Inc.
 
+*
 
(2) (3)
 
Transportation: Cargo
 
L + 4.50%
 
7.02%
 
6/26/2015
 
10/7/2021
 
14,306

 
14,234

 
14,262

 
1.34

 
Captive Resources Midco, LLC
 
^+*
 
(2) (3) (13)
 
Banking, Finance, Insurance & Real Estate
 
L + 5.75%
 
8.27%
 
6/30/2015
 
12/18/2021
 
29,441

 
29,212

 
29,139

 
2.74

 
Central Security Group, Inc.
 
+*
 
(2) (3)
 
Consumer Services
 
L + 5.63%
 
8.15%
 
6/26/2015
 
10/6/2021
 
30,349

 
30,142

 
29,742

 
2.80

 
Chemical Computing Group ULC (Canada)
 
^*
 
(2) (3) (7) (13)
 
Software
 
L + 5.50%
 
8.02%
 
8/30/2018
 
8/30/2023
 
15,794

 
15,636

 
15,617

 
1.47

 
CIP Revolution Holdings, LLC
 
^+*
 
(2) (3) (13)
 
Media: Advertising, Printing & Publishing
 
L + 6.00%
 
8.80%
 
8/19/2016
 
8/19/2021
 
20,592

 
20,463

 
20,358

 
1.91

 
CircusTrix Holdings, LLC
 
^+*
 
(2) (3) (13)
 
Hotel, Gaming & Leisure
 
L + 5.50%
 
8.02%
 
2/2/2018
 
12/16/2021
 
9,212

 
9,001

 
8,972

 
0.84

 
Comar Holding Company, LLC
 
^*
 
(2) (3) (13)
 
Containers, Packaging & Glass
 
L + 5.25%
 
7.77%
 
6/18/2018
 
6/18/2024
 
27,086

 
26,452

 
26,505

 
2.49

 
Continuum Managed Services Holdco, LLC
 
^+*
 
(2) (3) (13)
 
High Tech Industries
 
L + 6.25%
 
8.53%
 
6/20/2017
 
6/8/2023
 
28,243

 
27,621

 
27,711

 
2.60

 
Dade Paper & Bag, LLC
 
^+*
 
(2) (3)
 
Forest Products & Paper
 
L + 7.50%
 
10.02%
 
6/9/2017
 
6/10/2024
 
49,250

 
48,464

 
47,798

 
4.49

 
Datto, Inc.
 
^*
 
(2) (3) (13)
 
High Tech Industries
 
L + 8.00%
 
10.46%
 
12/7/2017
 
12/7/2022
 
35,622

 
35,178

 
35,280

 
3.31

 
Dent Wizard International Corporation
 
+
 
(2) (3)
 
Automotive
 
L + 4.00%
 
6.51%
 
4/28/2015
 
4/7/2020
 
886

 
885

 
881

 
0.08

 
Derm Growth Partners III, LLC (Dermatology Associates)
 
^+*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 6.25%
 
9.05%
 
5/31/2016
 
5/31/2022
 
51,599

 
51,203

 
50,946

 
4.78

 
DermaRite Industries, LLC
 
^*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 7.00%
 
9.52%
 
3/3/2017
 
3/3/2022
 
22,328

 
22,097

 
21,399

 
2.01

 
Dimensional Dental Management, LLC
 
^
 
(2) (3) (11)
 
Healthcare & Pharmaceuticals
 
L + 6.75%
 
9.28%
 
2/12/2016
 
2/12/2021
 
33,674

 
33,276

 
28,172

 
2.65

 
Direct Travel, Inc.
 
^+*
 
(2) (3) (13)
 
Hotel, Gaming & Leisure
 
L + 6.50%
 
9.30%
 
10/14/2016
 
12/1/2021
 
35,292

 
34,878

 
34,975

 
3.28

 
DTI Holdco, Inc.
 
^*
 
(2) (3)
 
High Tech Industries
 
L + 4.75%
 
7.28%
 
12/18/2018
 
9/30/2023
 
1,995

 
1,870

 
1,860

 
0.17


20
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2018
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost  (4)
 
Fair Value  (5)
 
% of Net Assets
First Lien Debt (77.62%) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EIP Merger Sub, LLC (Evolve IP)
 
^+*
 
(2) (3) (11)
 
Telecommunications
 
L + 5.75%
 
8.27%
 
6/7/2016
 
6/7/2022
 
$
36,093

 
$
35,433

 
$
35,169

 
3.30
 %
Emergency Communications Network, LLC
 
^+*
 
(2) (3)
 
Telecommunications
 
L + 6.25%
 
8.75%
 
6/1/2017
 
6/1/2023
 
24,625

 
24,452

 
24,133

 
2.27

Ensono, LP
 
*
 
(2) (3)
 
Telecommunications
 
L + 5.25%
 
7.77%
 
4/30/2018
 
6/27/2025
 
8,623

 
8,618

 
8,450

 
0.79

Frontline Technologies Holdings, LLC
 
^
 
(2) (3) (13)
 
Software
 
L + 6.50%
 
9.02%
 
9/18/2017
 
9/18/2023
 
38,804

 
38,456

 
38,450

 
3.61

FWR Holding Corporation
 
^+*
 
(2) (3) (13)
 
Beverage, Food & Tobacco
 
L + 5.75%
 
8.26%
 
8/21/2017
 
8/21/2023
 
46,755

 
45,782

 
46,393

 
4.36

Green Energy Partners/Stonewall, LLC
 
+*
 
(2) (3)
 
Energy: Electricity
 
L + 5.50%
 
8.30%
 
6/26/2015
 
11/13/2021
 
19,750

 
19,494

 
19,536

 
1.83

GRO Sub Holdco, LLC (Grand Rapids)
 
^+*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 6.00%
 
8.80%
 
2/28/2018
 
2/22/2024
 
6,661

 
6,466

 
6,209

 
0.58

Hummel Station, LLC
 
+*
 
(2) (3)
 
Energy: Electricity
 
L + 6.00%
 
8.52%
 
2/3/2016
 
10/27/2022
 
14,790

 
14,164

 
14,422

 
1.35

Hydrofarm, LLC
 
^
 
(2) (3)
 
Wholesale
 
L+10.00% (30% cash/70% PIK)
 
12.50%
 
5/15/2017
 
5/12/2022
 
20,306

 
19,958

 
13,989

 
1.31

iCIMS, Inc.
 
^
 
(2) (3) (13)
 
Software
 
L + 6.50%
 
8.94%
 
9/12/2018
 
9/12/2024
 
20,025

 
19,616

 
19,297

 
1.81

Indra Holdings Corp. (Totes Isotoner)
 
^
 
(2) (3)
 
Non-durable Consumer Goods
 
L + 4.25%
 
6.77%
 
4/29/2014
 
5/1/2021
 
18,965

 
17,561

 
9,483

 
0.89

Innovative Business Services, LLC
 
^*
 
(2) (3) (13)
 
High Tech Industries
 
L + 5.50%
 
7.91%
 
4/5/2018
 
4/5/2023
 
16,307

 
15,789

 
15,948

 
1.50

Legacy.com, Inc.
 
^
 
(2) (3) (11)
 
High Tech Industries
 
L + 6.00%
 
8.79%
 
3/20/2017
 
3/20/2023
 
17,000

 
16,696

 
16,827

 
1.58

Maravai Intermediate Holdings, LLC
 
^*
 
(2)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.81%
 
8/2/2018
 
8/2/2025
 
19,950

 
19,766

 
19,719

 
1.85

Metrogistics, LLC
 
+*
 
(2) (3)
 
Transportation: Cargo
 
L + 6.50%
 
9.00%
 
12/13/2016
 
9/30/2022
 
17,517

 
17,349

 
17,424

 
1.65

Moxie Liberty, LLC
 
+*
 
(2) (3)
 
Energy: Electricity
 
L + 6.50%
 
9.30%
 
10/16/2017
 
8/21/2020
 
9,873

 
9,208

 
8,964

 
0.84

National Carwash Solutions, Inc.
 
^+
 
(2) (3) (13)
 
Automotive
 
L + 6.00%
 
8.35%
 
8/7/2018
 
4/28/2023
 
5,843

 
5,662

 
5,688

 
0.53

National Technical Systems, Inc.
 
^+*
 
(2) (3) (13)
 
Aerospace & Defense
 
L + 6.25%
 
8.87%
 
6/26/2015
 
6/12/2021
 
28,237

 
27,990

 
28,160

 
2.64

NES Global Talent Finance US, LLC (United Kingdom)
 
+*
 
(2) (3) (8)
 
Energy: Oil & Gas
 
L + 5.50%
 
8.03%
 
5/9/2018
 
5/11/2023
 
9,992

 
9,833

 
9,695

 
0.91

Nexus Technologies, LLC
 
^
 
(2) (3)
 
High Tech Industries
 
L + 5.50%
 
8.30%
 
12/11/2018
 
12/5/2023
 
6,234

 
6,177

 
6,158

 
0.58

NMI AcquisitionCo, Inc.
 
^+*
 
(2) (3) (13)
 
High Tech Industries
 
L + 6.75%
 
9.27%
 
9/6/2017
 
9/6/2022
 
51,424

 
50,646

 
49,501

 
4.65

North American Dental Management, LLC
 
^
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
8.04%
 
10/26/2018
 
7/7/2023
 
2,060

 
1,962

 
1,973

 
0.19

Northland Telecommunications Corporation
 
^*
 
(2) (3) (13)
 
Media: Broadcast & Subscription
 
L + 5.75%
 
8.10%
 
10/1/2018
 
10/1/2025
 
21,638

 
21,297

 
21,311

 
2.00


21
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2018
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost  (4)
 
Fair Value  (5)
 
% of Net Assets
First Lien Debt (77.62%) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payment Alliance International, Inc.
 
^
 
(2) (3) (11)
 
Business Services
 
L + 6.05%
 
8.13%
 
9/15/2017
 
9/15/2021
 
$
23,723

 
$
23,324

 
$
23,588

 
2.22
 %
Plano Molding Company, LLC
 
^
 
(2) (3)
 
Hotel, Gaming & Leisure
 
L + 7.50%
 
9.98%
 
5/1/2015
 
5/12/2021
 
14,902

 
14,726

 
13,729

 
1.29

PPC Flexible Packaging, LLC
 
^+
 
(2) (3) (13)
 
Containers, Packaging & Glass
 
L + 5.25%
 
7.77%
 
11/23/2018
 
11/23/2024
 
11,962

 
11,761

 
11,839

 
1.11

PPT Management Holdings, LLC
 
^
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L+7.50% (100% PIK)
 
9.85%
 
12/15/2016
 
12/16/2022
 
26,820

 
26,675

 
22,194

 
2.08

PricewaterhouseCoopers Public Sector LLP
 
^
 
(2) (3) (13)
 
Aerospace & Defense
 
L + 2.75%
 
5.25%
 
5/1/2018
 
5/1/2023
 
—

 
(131
)
 
(160
)
 
(0.02
)
Prime Risk Partners, Inc.
 
^
 
(2) (3) (11) (13)
 
Banking, Finance, Insurance & Real Estate
 
L + 5.00%
 
7.80%
 
8/15/2017
 
8/13/2023
 
24,389

 
23,906

 
23,466

 
2.20

Prime Risk Partners, Inc.
 
^
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 5.00%
 
7.44%
 
8/15/2017
 
8/13/2023
 
1,925

 
1,887

 
1,871

 
0.18

Product Quest Manufacturing, LLC
 
^
 
(2) (3) (13)
 
Containers, Packaging & Glass
 
L + 6.75%
 
10.00%
 
9/21/2017
 
3/31/2019
 
4,051

 
4,051

 
4,051

 
0.38

Product Quest Manufacturing, LLC
 
^
 
(2) (3) (9) (11)
 
Containers, Packaging & Glass
 
L + 5.75%
 
8.09%
 
9/9/2015
 
9/9/2020
 
33,000

 
32,270

 
—

 
—

Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)
 
+*
 
(2) (3)
 
Wholesale
 
L + 4.50%
 
7.30%
 
12/1/2017
 
1/28/2020
 
14,752

 
14,396

 
14,663

 
1.38

PSI Services, LLC
 
^
 
(2) (3)
 
Business Services
 
L + 5.00%
 
7.52%
 
9/19/2018
 
1/20/2023
 
4,546

 
4,487

 
4,445

 
0.42

QW Holding Corporation (Quala)
 
^+*
 
(2) (3)
 
Environmental Industries
 
L + 6.75%
 
9.22%
 
8/31/2016
 
8/31/2022
 
36,179

 
35,604

 
35,835

 
3.37

Redwood Services Group, LLC
 
*
 
(2) (3)
 
High Tech Industries
 
L + 6.00%
 
8.71%
 
11/13/2018
 
6/6/2023
 
5,323

 
5,277

 
5,242

 
0.49

Sapphire Convention, Inc. (Smart City)
 
^*
 
(2) (3) (13)
 
Telecommunications
 
L + 5.25%
 
7.89%
 
11/20/2018
 
11/20/2025
 
28,866

 
28,207

 
28,264

 
2.65

Smile Doctors, LLC
 
^+*
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 5.75%
 
8.55%
 
10/6/2017
 
10/6/2022
 
18,155

 
18,037

 
17,782

 
1.67

SolAero Technologies Corp.
 
^
 
(2) (3) (9)
 
Telecommunications
 
L + 5.25%
 
7.75%
 
5/24/2016
 
12/10/2020
 
24,362

 
23,787

 
14,327

 
1.35

SolAero Technologies Corp.
 
^
 
(2) (3)
 
Telecommunications
 
L+ 7.25%, 4.00% PIK
 
10.25%
 
9/6/2018
 
3/31/2019
 
3,641

 
3,623

 
3,641

 
0.34

Sovos Brands Intermediate, Inc.
 
^
 
(2)
 
Beverage, Food & Tobacco
 
L + 5.00%
 
7.64%
 
11/16/2018
 
11/20/2025
 
20,100

 
19,903

 
19,782

 
1.86

SPay, Inc.
 
^+*
 
(2) (3) (13)
 
Hotel, Gaming & Leisure
 
L + 5.75%
 
8.22%
 
6/15/2018
 
6/15/2024
 
19,909

 
19,347

 
19,009

 
1.79

Superior Health Linens, LLC
 
^+*
 
(2) (3) (13)
 
Business Services
 
L + 7.00%
 
9.52%
 
9/30/2016
 
9/30/2021
 
21,100

 
20,891

 
20,840

 
1.96

Surgical Information Systems, LLC
 
^+*
 
(2) (3) (11)
 
High Tech Industries
 
L + 4.85%
 
7.37%
 
4/24/2017
 
4/24/2023
 
27,708

 
27,497

 
27,171

 
2.55

T2 Systems Canada, Inc.
 
*
 
(2) (3)
 
Transportation: Consumer
 
L + 6.75%
 
9.34%
 
5/24/2017
 
9/28/2022
 
3,969

 
3,899

 
3,946

 
0.37

T2 Systems, Inc.
 
^+*
 
(2) (3) (13)
 
Transportation: Consumer
 
L + 6.75%
 
9.34%
 
9/28/2016
 
9/28/2022
 
32,331

 
31,756

 
32,133

 
3.02

The Hilb Group, LLC
 
^
 
(2) (3) (11)
 
Banking, Finance, Insurance & Real Estate
 
L + 6.00%
 
8.80%
 
6/24/2015
 
6/24/2021
 
49,451

 
48,861

 
48,456

 
4.55

The Topps Company, Inc.
 
+*
 
(2) (3)
 
Non-durable Consumer Goods
 
L + 6.00%
 
8.80%
 
6/26/2015
 
10/2/2020
 
22,127

 
21,951

 
22,127

 
2.08


22
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2018
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate  (2)
 
Acquisition Date
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost  (4)
 
Fair Value  (5)
 
% of Net Assets
First Lien Debt (77.62%) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trump Card, LLC
 
^+*
 
(2) (3) (13)
 
Transportation: Cargo
 
L + 5.00%
 
7.80%
 
6/26/2018
 
4/21/2022
 
$
8,157

 
$
8,107

 
$
8,036

 
0.75
 %
TSB Purchaser, Inc. (Teaching Strategies, LLC)
 
^+*
 
(2) (3) (13)
 
Media: Advertising, Printing & Publishing
 
L + 6.00%
 
8.80%
 
5/14/2018
 
5/14/2024
 
28,028

 
27,352

 
27,462

 
2.58

Tweddle Group, Inc.
 
^
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 4.50%
 
6.97%
 
9/17/2018
 
9/17/2023
 
2,400

 
2,366

 
2,386

 
0.22

USLS Acquisition, Inc.
 
^
 
(2) (3) (13)
 
Business Services
 
L + 5.75%
 
8.46%
 
11/30/2018
 
11/30/2024
 
17,730

 
17,282

 
17,178

 
1.61

VRC Companies, LLC
 
^+*
 
(2) (3) (13)
 
Business Services
 
L + 6.50%
 
9.02%
 
3/31/2017
 
3/31/2023
 
54,181

 
53,345

 
53,410

 
5.03

Watchfire Enterprises, Inc.
 
*
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 4.00%
 
6.80%
 
6/9/2017
 
10/2/2020
 
1,248

 
1,241

 
1,248

 
0.12

Westfall Technik, Inc.
 
^
 
(2) (3) (13)
 
Chemicals, Plastics & Rubber
 
L + 5.00%
 
7.79%
 
9/13/2018
 
9/13/2024
 
10,585

 
10,218

 
9,902

 
0.93

Zemax Software Holdings, LLC
 
^*
 
(2) (3) (13)
 
Software
 
L + 5.75%
 
8.55%
 
6/25/2018
 
6/25/2024
 
10,248

 
10,111

 
10,144

 
0.95

Zenith Merger Sub, Inc.
 
^+*
 
(2) (3) (13)
 
Business Services
 
L + 5.50%
 
8.30%
 
12/13/2017
 
12/13/2023
 
10,881

 
10,732

 
10,778

 
1.01

First Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,602,861

 
$
1,532,119

 
143.88
 %
Second Lien Debt (9.07%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Access CIG, LLC
 
^
 
(2)
 
Business Services
 
L + 7.75%
 
10.46%
 
2/14/2018
 
2/27/2026
 
$
2,701

 
$
2,678

 
$
2,650

 
0.25
 %
AmeriLife Group, LLC
 
^*
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 8.75%
 
11.27%
 
7/9/2015
 
1/10/2023
 
22,000

 
21,712

 
21,910

 
2.06

AQA Acquisition Holding, Inc.
 
^
 
(2) (3)
 
High Tech Industries
 
L + 8.00%
 
10.40%
 
10/1/2018
 
5/24/2024
 
40,000

 
39,623

 
39,336

 
3.69

Argon Medical Devices Holdings, Inc.
 
^*
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 8.00%
 
10.52%
 
11/2/2017
 
1/23/2026
 
7,500

 
7,468

 
7,446

 
0.70

Brave Parent Holdings, Inc.
 
^*
 
(2) (3)
 
Software
 
L + 7.50%
 
10.02%
 
10/3/2018
 
4/19/2026
 
19,062

 
18,616

 
18,301

 
1.72

Drew Marine Group Inc.
 
^+*
 
(2) (3)
 
Chemicals, Plastics & Rubber
 
L + 7.00%
 
9.52%
 
11/19/2013
 
5/19/2021
 
12,500

 
12,487

 
12,396

 
1.16

Outcomes Group Holdings, Inc.
 
^*
 
(2)
 
Business Services
 
L + 7.50%
 
10.28%
 
10/23/2018
 
10/26/2026
 
4,500

 
4,500

 
4,447

 
0.42

Pharmalogic Holdings Corp.
 
^
 
(2) (3) (13)
 
Healthcare & Pharmaceuticals
 
L + 8.00%
 
10.52%
 
6/7/2018
 
12/11/2023
 
563

 
560

 
563

 
0.05

Project Accelerate Parent, LLC
 
^*
 
(2) (3)
 
Software
 
L + 8.50%
 
10.89%
 
1/2/2018
 
1/2/2026
 
22,500

 
21,986

 
22,109

 
2.08

Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)
 
^
 
(2) (3)
 
Wholesale
 
L + 8.50%
 
11.30%
 
1/24/2014
 
7/28/2020
 
3,000

 
2,972

 
2,939

 
0.28

Reladyne, Inc.
 
^+*
 
(2) (3)
 
Wholesale
 
L + 9.50%
 
12.30%
 
4/19/2018
 
1/21/2023
 
10,000

 
9,830

 
9,915

 
0.93

Santa Cruz Holdco, Inc.
 
^
 
(2) (3)
 
Non-durable Consumer Goods
 
L + 8.25%
 
10.69%
 
12/15/2017
 
12/13/2024
 
17,138

 
16,984

 
16,903

 
1.59

Ultimate Baked Goods MIDCO, LLC (Rise Baking)
 
^
 
(2) (3)
 
Beverage, Food & Tobacco
 
L + 8.00%
 
10.52%
 
8/9/2018
 
8/9/2026
 
8,333

 
8,176

 
8,108

 
0.76

Watchfire Enterprises, Inc.
 
^
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 8.00%
 
10.80%
 
10/2/2013
 
10/2/2021
 
7,000

 
6,950

 
6,996

 
0.66

Zywave, Inc.
 
^
 
(2) (3)
 
High Tech Industries
 
L + 9.00%
 
11.65%
 
11/18/2016
 
11/17/2023
 
4,950

 
4,892

 
4,939

 
0.46

Second Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
179,434

 
$
178,958

 
16.81
 %
 

23
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2018
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated (1)
 
 
 
Footnotes
 
Industry
 
Acquisition Date
 
Shares/ Units
 
Cost
 
Fair Value (5)
 
Percentage of Net Assets
Equity Investments (1.03%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANLG Holdings, LLC
 
^
 
(6)
 
Healthcare & Pharmaceuticals
 
6/22/2018
 
879,689

 
$
880

 
$
880

 
0.08
%
Avenu Holdings, LLC
 
^
 
(6)
 
Sovereign & Public Finance
 
9/28/2018
 
172,413

 
172

 
172

 
0.02

CIP Revolution Holdings, LLC
 
^
 
(6)
 
Media: Advertising, Printing & Publishing
 
8/19/2016
 
31,825

 
318

 
262

 
0.03

Dade Paper & Bag, LLC
 
^
 
(6)
 
Forest Products & Paper
 
6/9/2017
 
1,500,000

 
1,500

 
1,639

 
0.15

DecoPac, Inc.
 
^
 
(6)
 
Non-durable Consumer Goods
 
9/29/2017
 
1,500,000

 
1,500

 
1,434

 
0.13

Derm Growth Partners III, LLC (Dermatology Associates)
 
^
 
(6)
 
Healthcare & Pharmaceuticals
 
5/31/2016
 
1,000,000

 
1,000

 
1,415

 
0.13

GRO Sub Holdco, LLC (Grand Rapids)
 
^
 
(6)
 
Healthcare & Pharmaceuticals
 
3/29/2018
 
500,000

 
500

 
219

 
0.02

Legacy.com, Inc.
 
^
 
(6)
 
High Tech Industries
 
3/20/2017
 
1,500,000

 
1,500

 
1,227

 
0.12

North Haven Goldfinch Topco, LLC
 
^
 
(6)
 
Containers, Packaging & Glass
 
6/18/2018
 
2,314,815

 
2,315

 
2,103

 
0.20

Power Stop Intermediate Holdings, LLC
 
^
 
(6)
 
Automotive
 
5/29/2015
 
7,150

 
—

 
34

 
—

Rough Country, LLC
 
^
 
(6)
 
Durable Consumer Goods
 
5/25/2017
 
754,775

 
755

 
988

 
0.09

SiteLock Group Holdings, LLC
 
^
 
(6)
 
High Tech Industries
 
4/5/2018
 
446,429

 
446

 
446

 
0.04

T2 Systems Parent Corporation
 
^
 
(6)
 
Transportation: Consumer
 
9/28/2016
 
555,556

 
555

 
483

 
0.05

Tailwind HMT Holdings Corp.
 
^
 
(6)
 
Energy: Oil & Gas
 
11/17/2017
 
20,000

 
2,000

 
2,373

 
0.22

THG Acquisition, LLC (The Hilb Group, LLC)
 
^
 
(6)
 
Banking, Finance, Insurance & Real Estate
 
6/24/2015
 
1,500,000

 
1,500

 
3,100

 
0.29

Tweddle Holdings, Inc.
 
^
 
(6)
 
Media: Advertising, Printing & Publishing
 
9/17/2018
 
17,208

 
—

 
—

 
—

USLS Acquisition, Inc.
 
^
 
(6)
 
Business Services
 
11/30/2018
 
640,569

 
640

 
641

 
0.06

Zenith American Holding, Inc.
 
^
 
(6)
 
Business Services
 
12/13/2017
 
1,561,644

 
1,562

 
2,513

 
0.24

Zillow Topco LP
 
^
 
(6)
 
Software
 
6/25/2018
 
312,500

 
313

 
313

 
0.03

Equity Investments Total
 
 
 
 
 
 
 
 
 
 
 
$
17,456

 
$
20,242

 
1.90
%
Total investments—non-controlled/non-affiliated
 
 
 
 
 
$
1,799,751

 
$
1,731,319

 
162.59
%

24
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2018
(dollar amounts in thousands)

Investments—non-controlled/affiliated
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate (2)
 
Acquisition Date
 
Maturity Date
 
Par/
Principal Amount
 
Amortized Cost  (4)
 
Fair Value
(5)
 
% of 
Net Assets
First Lien Debt (0.72%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TwentyEighty, Inc. - Revolver
 
^
 
(2) (3) (12) (13)
 
Business Services
 
L + 8.00%
 
10.90%
 
1/31/2017
 
3/21/2020
 
$
—

 
$
(3
)
 
$
—

 
—
%
TwentyEighty, Inc. - (Term A Loans)
 
^
 
(2) (3) (12)
 
Business Services
 
L + 8.00%
 
11.06%
 
1/31/2017
 
3/21/2020
 
316

 
315

 
316

 
0.03

TwentyEighty, Inc. - (Term B Loans)
 
^
 
(12)
 
Business Services
 
N/A
 
 8.00% (4.00%
cash, 4.00% PIK)
 
1/31/2017
 
3/21/2020
 
6,995

 
6,853

 
6,855

 
0.64

TwentyEighty, Inc. - (Term C Loans)
 
^
 
(12)
 
Business Services
 
N/A
 
9.00% (0.25%
cash, 8.75% PIK)
 
1/31/2017
 
3/21/2020
 
7,123

 
6,674

 
6,981

 
0.66

First Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
13,839

 
$
14,152

 
1.33
%
 
Investments—non-controlled/affiliated
 
 
 
Footnotes
 
Industry
 
Acquisition Date
 
Shares/ Units
 
Cost
 
Fair Value (5)
 
% of Net Assets
Equity Investments (0.22%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TwentyEighty Investors LLC
 
^
 
(6) (12)
 
Business Services
 
1/31/2017
 
69,786

 
$
—

 
$
4,391

 
0.41
%
Equity Investments Total
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
4,391

 
0.41
%
Total investments—non-controlled/affiliated

 
 
 
 
 
$
13,839

 
$
18,543

 
1.74
%
Investments—controlled/affiliated
 
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate (2)
 
Acquisition Date
 
Maturity Date
 
Par Amount/ LLC Interest
 
Cost
 
Fair Value (5)
 
% of Net Assets
Investment Fund (11.34%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Middle Market Credit Fund, LLC, Mezzanine Loan
 
^
 
(2) (7) (8) (10)
 
Investment Fund
 
L+9.00%
 
11.47
%
 
6/30/2016
 
3/22/2019
 
$
112,000

 
$
112,000

 
$
112,000

 
10.53
%
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest
 
^
 
(7) (10)
 
Investment Fund
 
N/A
 
0.001
%
 
2/29/2016
 
3/1/2021
 
118,001

 
118,001

 
110,295

 
10.37

Investment Fund Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
230,001

 
$
222,295

 
20.90
%
Total investments—controlled/affiliated
 
 
 
 
 
 
 
 
 
 
 
 
 
$
230,001

 
$
222,295

 
20.90
%
Total investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,043,591

 
$
1,972,157

 
185.23
%

^ Denotes that all or a portion of the assets are owned by the Company. The Company has entered into the Credit Facility. The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the SPV or the 2015-1 Issuer.
+ Denotes that all or a portion of the assets are owned by the SPV. The SPV has entered into the SPV Credit Facility. The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the Company or the 2015-1 Issuer.
* Denotes that all or a portion of the assets are owned by the 2015-1 Issuer and secure the notes issued in connection with a term debt securitization completed by the Company on June 26, 2015 (see Note 7, Notes Payable). Accordingly, such assets are not available to the creditors of the Company or the SPV.

(1)
Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act, the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of

25
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2018
(dollar amounts in thousands)

December 31, 2018 , the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities.
(2)
Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2018 . As of December 31, 2018 , the reference rates for our variable rate loans were the 30-day LIBOR at 2.50% , the 90-day LIBOR at 2.81% and the 180-day LIBOR at 2.88% .
(3)
Loan includes interest rate floor feature, which is generally 1.00%.
(4)
Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)
Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment fund was determined using significant unobservable inputs.
(6)
Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act, unless otherwise noted. As of December 31, 2018 , the aggregate fair value of these securities is $24,633, or 2.32% of the Company’s net assets.
(7)
The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.
(8)
Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.
(9)
Loan was on non-accrual status as of December 31, 2018 .
(10)
Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC, for more details. Transactions related to investments in controlled affiliates for the year ended December 31, 2018 were as follows:
Investments—controlled/affiliated
Fair Value as of December 31, 2017
 
Additions/ Purchases
 
Reductions/ Sales/ Paydowns
 
Net Realized Gain (Loss)
 
Net Change in Unrealized Appreciation (Depreciation)
 
Fair Value as of December 31, 2018
 
Dividend and Interest Income
Middle Market Credit Fund, LLC, Mezzanine Loan
$
85,750

 
$
120,150

 
$
(93,900
)
 
$
—

 
$
—

 
$
112,000

 
$
13,240

Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest  
86,766

 
31,500

 
—

 
—

 
(7,971
)
 
110,295

 
15,250

Total investments—controlled/affiliated
$
172,516

 
$
151,650

 
$
(93,900
)
 
$
—

 
$
(7,971
)
 
$
222,295

 
$
28,490


(11)
In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: Dimensional Dental Management, LLC (4.51%), EIP Merger Sub, LLC (Evolve IP) (3.75%), Legacy.com Inc. (4.00%), Payment Alliance International Inc. (3.06%), Prime Risk Partners, Inc. (2.88%), Product Quest Manufacturing, LLC (3.54%), Surgical Information Systems, LLC (0.89%) and The Hilb Group, LLC (3.33%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.


















26
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2018
(dollar amounts in thousands)

(12)
Under the Investment Company Act, the Company is deemed an “affiliated person” of this portfolio company because the Company owns 5% or more of the portfolio company’s outstanding voting securities. Transactions related to investments in non-controlled affiliates for the year ended December 31, 2018 were as follows:
Investments—non-controlled/affiliated
Fair Value as of December 31, 2017
 
Purchases/ Paid-in-kind interest
 
Sales/ Paydowns
 
Net Accretion of Discount
 
Net Realized Gain (Loss)
 
Net Change in Unrealized Appreciation (Depreciation)
 
Fair value as of December 31, 2018
 
Interest Income
TwentyEighty, Inc. - Revolver
$
(20
)
 
$
—

 
$
—

 
$
3

 
$
—

 
$
17

 
$
—

 
$
3

TwentyEighty, Inc. - (Term A Loans)
3,760

 
—

 
(3,574
)
 
18

 
—

 
112

 
316

 
264

TwentyEighty, Inc. - (Term B Loans)
6,360

 
240

 
—

 
119

 
—

 
136

 
6,855

 
654

TwentyEighty, Inc. - (Term C Loans)
5,331

 
602

 
—

 
158

 
—

 
890

 
6,981

 
759

TwentyEighty Investors LLC (Equity)
—

 
—

 
—

 
—

 
—

 
4,391

 
4,391

 
—

Total investments—non-controlled/affiliated
$
15,431

 
$
842

 
$
(3,574
)
 
$
298

 
$
—

 
$
5,546

 
$
18,543

 
$
1,680


(13)
As of December 31, 2018 , the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
Investments—non-controlled/affiliated
Type
 
Unused Fee
 
Par/ Principal Amount
 
Fair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
Advanced Instruments, LLC
Revolver
 
0.50%
 
$
1,167

 
$
(9
)
Aero Operating LLC (Dejana Industries, Inc.)
Revolver
 
1.00
 
202

 
(2
)
AMS Group HoldCo, LLC
Delayed Draw
 
1.00
 
4,009

 
(95
)
AMS Group HoldCo, LLC
Revolver
 
0.50
 
810

 
(19
)
Analogic Corporation
Revolver
 
0.50
 
3,365

 
(73
)
Captive Resources Midco, LLC
Delayed Draw
 
1.25
 
3,572

 
(31
)
Captive Resources Midco, LLC
Revolver
 
0.50
 
2,143

 
(18
)
Chemical Computing Group ULC
Revolver
 
0.50
 
903

 
(10
)
CIP Revolution Holdings, LLC
Revolver
 
0.50
 
532

 
(6
)
CircusTrix Holdings, LLC
Delayed Draw
 
1.00
 
1,115

 
(26
)
Comar Holding Company, LLC
Delayed Draw
 
1.00
 
5,136

 
(87
)
Comar Holding Company, LLC
Revolver
 
0.50
 
2,129

 
(36
)
Continuum Managed Services HoldCo, LLC
Revolver
 
0.50
 
2,500

 
(43
)
Datto, Inc.
Revolver
 
0.50
 
726

 
(7
)
DermaRite Industries LLC
Revolver
 
0.50
 
1,324

 
(52
)
Derm Growth Partners III, LLC (Dermatology Associates)
Revolver
 
0.50
 
968

 
(12
)
Direct Travel, Inc.
Delayed Draw
 
1.00
 
1,872

 
(16
)
FWR Holding Corporation
Revolver
 
0.50
 
2,778

 
(20
)
Frontline Technologies Holdings, LLC
Delayed Draw
 
1.00
 
7,705

 
(59
)
GRO Sub Holdco, LLC (Grand Rapids)
Delayed Draw
 
1.00
 
7,000

 
(85
)
GRO Sub Holdco, LLC (Grand Rapids)
Revolver
 
0.50
 
1,071

 
(13
)
iCIMS, Inc.
Revolver
 
0.50
 
1,252

 
(43
)

27
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2018
(dollar amounts in thousands)

Investments—non-controlled/affiliated
Type
 
Unused Fee
 
Par/ Principal Amount
 
Fair Value
Innovative Business Services, LLC
Delayed Draw
 
1.00%
 
$
3,886

 
$
(62
)
Innovative Business Services, LLC
Revolver
 
0.50
 
2,232

 
(36
)
National Carwash Solutions, Inc.
Delayed Draw
 
1.00
 
3,817

 
(57
)
National Carwash Solutions, Inc.
Revolver
 
0.50
 
632

 
(9
)
National Technical Systems, Inc.
Revolver
 
0.50
 
2,500

 
(6
)
NMI AcquisitionCo, Inc.
Revolver
 
0.50
 
435

 
(16
)
North American Dental Management, LLC
Delayed Draw
 
1.00
 
3,002

 
(52
)
Northland Telecommunications Corporation
Revolver
 
0.50
 
1,702

 
(24
)
Pharmalogic Holdings Corp.
Delayed Draw
 
1.00
 
237

 
—

PPC Flexible Packaging, LLC
Revolver
 
0.50
 
1,737

 
(16
)
Prime Risk Partners, Inc.
Delayed Draw
 
0.50
 
457

 
(10
)
Prime Risk Partners, Inc.
Delayed Draw
 
0.50
 
5,694

 
(175
)
Product Quest Manufacturing, LLC
Revolver
 
0.50
 
1,906

 
—

PricewaterhouseCoopers Public Sector LLP
Revolver
 
0.50
 
6,250

 
(160
)
SPay, Inc.
Delayed Draw
 
1.00
 
10,227

 
(197
)
SPay, Inc.
Revolver
 
0.50
 
546

 
(19
)
Sapphire Convention, Inc.
Revolver
 
0.50
 
4,528

 
(81
)
Smile Doctors, LLC
Delayed Draw
 
1.00
 
6,394

 
(97
)
Smile Doctors, LLC
Revolver
 
0.50
 
51

 
(1
)
Superior Health Linens, LLC
Revolver
 
0.50
 
1,867

 
(21
)
T2 Systems, Inc.
Revolver
 
0.50
 
1,760

 
(10
)
TSB Purchaser, Inc. (Teaching Strategies, LLC)
Revolver
 
0.50
 
1,891

 
(36
)
The Hilb Group, LLC
Delayed Draw
 
1.00
 
11,262

 
(185
)
Trump Card, LLC
Revolver
 
0.50
 
635

 
(9
)
TwentyEighty, Inc. (f/k/a Miller Heiman, Inc.)
Revolver
 
0.50
 
607

 
—

USLS Acquisition, Inc.
Delayed Draw
 
1.00
 
4,137

 
(98
)
USLS Acquisition, Inc.
Revolver
 
0.50
 
1,418

 
(34
)
VRC Companies, LLC
Delayed Draw
 
1.00
 
2,481

 
(33
)
VRC Companies, LLC
Revolver
 
0.50
 
1,227

 
(16
)
Westfall Technik, Inc.
Delayed Draw
 
1.00
 
15,259

 
(372
)
Westfall Technik, Inc.
Revolver
 
0.50
 
2,155

 
(53
)
Zemax Software Holdings, LLC
Revolver
 
0.50
 
1,284

 
(12
)
Zenith Merger Sub, Inc.
Revolver
 
0.50
 
2,622

 
(20
)
Total unfunded commitments
 
 
 
 
$
157,117

 
$
(2,679
)



28
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2018
(dollar amounts in thousands)

As of December 31, 2018 , investments at fair value consisted of the following:
Type
 
Amortized Cost
 
Fair Value
 
% of Fair Value
First Lien Debt (excluding First Lien/Last Out)
 
$
1,375,437

 
$
1,343,422

 
68.12
%
First Lien/Last Out Unitranche
 
241,263

 
202,849

 
10.29

Second Lien Debt
 
179,434

 
178,958

 
9.07

Equity Investments
 
17,456

 
24,633

 
1.25

Investment Fund
 
230,001

 
222,295

 
11.27

Total
 
$
2,043,591

 
$
1,972,157

 
100.00
%
The rate type of debt investments at fair value as of December 31, 2018 was as follows:
Rate Type
 
Amortized Cost
 
Fair Value
 
% of Fair Value of First and Second Lien Debt
Floating Rate
 
$
1,782,607

 
$
1,711,393

 
99.20
%
Fixed Rate
 
13,527

 
13,836

 
0.80

Total
 
$
1,796,134

 
$
1,725,229

 
100.00
%

29
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2018
(dollar amounts in thousands)

The industry composition of investments at fair value as of December 31, 2018 was as follows:
Industry
Amortized Cost
 
Fair Value
 
% of Fair Value
Aerospace & Defense
$
27,859

 
$
28,000

 
1.42
%
Automotive
6,547

 
6,603

 
0.33

Banking, Finance, Insurance & Real Estate
127,078

 
127,942

 
6.49

Beverage, Food & Tobacco
73,861

 
74,283

 
3.77

Business Services
156,800

 
162,545

 
8.24

Chemicals, Plastics & Rubber
22,705

 
22,298

 
1.13

Construction & Building
2,492

 
2,496

 
0.13

Consumer Services
30,142

 
29,742

 
1.51

Containers, Packaging & Glass
79,714

 
47,356

 
2.40

Durable Consumer Goods
755

 
988

 
0.05

Energy: Electricity
42,866

 
42,922

 
2.18

Energy: Oil & Gas
11,833

 
12,068

 
0.61

Environmental Industries
35,604

 
35,835

 
1.82

Forest Products & Paper
49,964

 
49,437

 
2.51

Healthcare & Pharmaceuticals
244,142

 
233,135

 
11.82

High Tech Industries
242,819

 
241,305

 
12.24

Hotel, Gaming & Leisure
77,952

 
76,685

 
3.89

Investment Fund
230,001

 
222,295

 
11.27

Media: Broadcast & Subscription
21,297

 
21,311

 
1.08

Media: Advertising, Printing & Publishing
58,690

 
58,712

 
2.98

Non-durable Consumer Goods
57,996

 
49,947

 
2.53

Software
124,734

 
124,231

 
6.30

Sovereign & Public Finance
38,568

 
38,526

 
1.95

Telecommunications
124,120

 
113,984

 
5.78

Transportation: Cargo
71,686

 
71,443

 
3.62

Transportation: Consumer
36,210

 
36,562

 
1.85

Wholesale
47,156

 
41,506

 
2.10

Total
$
2,043,591

 
$
1,972,157

 
100.00
%
The geographical composition of investments at fair value as of December 31, 2018 was as follows:
Geography
Amortized Cost
 
Fair Value
 
% of Fair Value
Canada
$
15,636

 
$
15,617

 
0.79
%
United Kingdom
9,833

 
9,695

 
0.49

United States
2,018,122

 
1,946,845

 
98.72

Total
$
2,043,591

 
$
1,972,157

 
100.00
%

The accompanying notes are an integral part of these consolidated financial statements.

30



TCG BDC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
As of June 30, 2019
(dollar amounts in thousands, except per share data)
1. ORGANIZATION
TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”) is a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. The Company is managed by its investment adviser, Carlyle Global Credit Investment Management L.L.C. (“CGCIM” or “Investment Adviser”), a wholly owned subsidiary of The Carlyle Group L.P. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). In addition, the Company has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).
The Company’s investment objective is to generate current income and capital appreciation primarily through debt investments. The Company primarily invest’s in U.S. middle market companies, which the Company defines as companies with approximately $10 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), which the Company believes is a useful proxy for cash flow. The Company seeks to achieve its investment objective primarily through direct originations of secured debt, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with the balance of its assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, the Company expects that between 70% and 80% of the value of its assets will be invested in Middle Market Senior Loans. However, the Company may from time to time invest in larger or smaller companies. The Company expects that the composition of its portfolio will change over time given the Investment Adviser’s view on, among other things, the economic and credit environment (including with respect to interest rates) in which the Company is operating.
The Company invests primarily in loans to middle market companies whose debt, if rated, is rated below investment grade, and, if not rated, would likely be rated below investment grade if it were rated (that is, below BBB- or Baa3, which is often referred to as “junk”). Exposure to below investment grade instruments involves certain risks, including speculation with respect to the borrower’s capacity to pay interest and repay principal.
On May 2, 2013, the Company completed its initial closing of capital commitments (the “Initial Closing”) and subsequently commenced substantial investment operations. Effective March 15, 2017, the Company changed its name from “Carlyle GMS Finance, Inc.” to “TCG BDC, Inc.” On June 19, 2017, the Company closed its initial public offering (“IPO”), issuing 9,454,200 shares of its common stock (including shares issued pursuant to the exercise of the underwriters’ over-allotment option on July 5, 2017) at a public offering price of $18.50 per share. Net of underwriting costs, the Company received cash proceeds of $169,488. Shares of common stock of TCG BDC began trading on the NASDAQ Global Select Market under the symbol “CGBD” on June 14, 2017.
Until December 31, 2017, the Company was an “emerging growth company,” as that term is used in the Jumpstart Our Business Startups Act of 2012. As of June 30, 2017, the market value of the common stock held by non-affiliates exceeded $700,000. Accordingly, the Company ceased to be an emerging growth company as of December 31, 2017.
The Company is externally managed by the Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. Carlyle Global Credit Administration L.L.C. (the “Administrator”) provides the administrative services necessary for the Company to operate. Both the Investment Adviser and the Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C. (“CIM”), a subsidiary of The Carlyle Group L.P. “Carlyle” refers to The Carlyle Group L.P. and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds), a global investment firm publicly traded on NASDAQ Global Select Market under the symbol “CG”. Refer to the sec.gov website for further information on Carlyle.
TCG BDC SPV LLC (the “SPV”) is a Delaware limited liability company that was formed on January 3, 2013. The SPV invests in first and second lien senior secured loans. The SPV is a wholly owned subsidiary of the Company and is

31


consolidated in these consolidated financial statements commencing from the date of its formation, January 3, 2013. Effective March 15, 2017, the SPV changed its name from “Carlyle GMS Finance SPV LLC” to “TCG BDC SPV LLC”.
On June 9, 2017, pursuant to the Agreement and Plan of Merger, dated May 3, 2017 (the “Agreement”), by and between the Company and NF Investment Corp. (“NFIC”), NFIC merged with and into the Company (the “NFIC Acquisition”), with the Company as the surviving entity. The NFIC Acquisition was accounted for as an asset acquisition. NFIC SPV LLC (the “NFIC SPV” and, together with the SPV, the “SPVs”) is a Delaware limited liability company that was formed on June 18, 2013. Upon the consummation of the NFIC Acquisition, the NFIC SPV became a wholly owned subsidiary of the Company and is consolidated in these consolidated financial statements commencing from the closing date of the NFIC Acquisition, June 9, 2017.
On June 26, 2015, the Company completed a $400,000 term debt securitization (the “2015-1 Debt Securitization”). The notes offered in the 2015-1 Debt Securitization (the “2015-1 Notes”) were issued by Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of the Company. On August 30, 2018, the 2015-1 Issuer refinanced the 2015-1 Debt Securitization (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. Refer to Note 7 for details. The 2015-1 Issuer is consolidated in these consolidated financial statements commencing from the date of its formation, May 8, 2015.
On February 29, 2016, the Company and Credit Partners USA LLC (“Credit Partners”) entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016 (as amended, the “Limited Liability Company Agreement”) to co-manage Middle Market Credit Fund, LLC (“Credit Fund”). Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400,000 each. Refer to Note 5, Middle Market Credit Fund, LLC, for details.
As a BDC, the Company is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire any assets other than “qualifying assets” specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).
To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, the Company generally does not have to pay corporate level taxes on any income that it distributes to stockholders, provided that the Company satisfies those requirements.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company is an investment company for the purposes of accounting and financial reporting in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies (“ASC 946”) . The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the SPVs and the 2015-1 Issuer. All significant intercompany balances and transactions have been eliminated. U.S. GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair value.
The interim financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the interim periods presented have been included. These adjustments are of a normal, recurring nature. This Form 10-Q should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2018 . The results of operations for the three month and six month periods ended June 30, 2019 are not necessarily indicative of the operating results to be expected for the full year.
Use of Estimates

32


The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the accompanying Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. See Note 3 for further information about fair value measurements.
Cash and Cash Equivalents
Cash and cash equivalents consist of demand deposits and highly liquid investments (e.g., money market funds, U.S. treasury notes) with original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value. The Company’s cash and cash equivalents are held with two large financial institutions and cash held in such financial institutions may, at times, exceed the Federal Deposit Insurance Corporation insured limit.
Revenue Recognition
Interest from Investments and Realized Gain/Loss on Investments
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit using the specific identification method.
The Company has loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in interest income in the Consolidated Statements of Operations. As of June 30, 2019 and December 31, 2018 , the fair value of the loans in the portfolio with PIK provisions was $122,878 and $53,660 , respectively, which represents approximately 5.9% and 2.7% of total investments at fair value, respectively. For the three month and six month periods ended June 30, 2019 , the Company earned $2,140 and $3,290 in PIK income, respectively. For the three month and six month periods ended June 30, 2018 , the Company earned $216 and $429 in PIK income, respectively included in interest income in the accompanying Consolidated Statements of Operations.
Dividend Income
Dividend income from the investment fund is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment fund and are expected to be collected.
Other Income
Other income may include income such as consent, waiver, amendment, unused, underwriting, arranger and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the three month and six month periods ended June 30,

33


2019 , the Company earned $2,266 and $4,294 , respectively, in other income, primarily from underwriting and prepayment fees. For the three month and six month periods ended June 30, 2018 , the Company earned $3,590 and $4,485 , respectively, in other income, primarily from underwriting and prepayment fees.
Non-Accrual Income
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a 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 regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of June 30, 2019 and December 31, 2018 , the fair value of the loans in the portfolio on non-accrual status was $42,182 and $14,327 , respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2019 and December 31, 2018 .
SPV Credit Facility, Credit Facility, 2015-1R Notes Related Costs, Expenses and Deferred Financing Costs (See Note 6, Borrowings, and Note 7, Notes Payable)
Interest expense and unused commitment fees on the SPV Credit Facility and Credit Facility are recorded on an accrual basis. Unused commitment fees are included in credit facility fees in the accompanying Consolidated Statements of Operations.
The SPV Credit Facility and Credit Facility are recorded at carrying value, which approximates fair value.
Deferred financing costs include capitalized expenses related to the closing or amendments of the SPV Credit Facility and Credit Facility. Amortization of deferred financing costs for each credit facility is computed on the straight-line basis over the respective term of each credit facility. The unamortized balance of such costs is included in deferred financing costs in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in credit facility fees in the accompanying Consolidated Statements of Operations.
Debt issuance costs include capitalized expenses including structuring and arrangement fees related to the offering of the 2015-1R Notes. Amortization of debt issuance costs for the notes is computed on the effective yield method over the term of the notes. The unamortized balance of such costs is presented as a direct deduction to the carrying amount of the notes in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense in the accompanying Consolidated Statements of Operations.
The notes are recorded at carrying value, which approximates fair value.
Offering Costs
Offering costs consist primarily of fees and expenses incurred in connection with the offering of shares, including legal, underwriting, printing and other costs, as well as costs associated with the preparation and filing of applicable registration statements. Offering costs are charged against equity when incurred. During the three month and six month periods ended June 30, 2019 , $0 of offering costs were incurred. During the three month and six month periods ended June 30, 2018 , $30 of offering costs were incurred, 50% of which were paid by the Investment Adviser.
Income Taxes
For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next

34


tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely than not” to be sustained by the applicable tax authority. The SPVs and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company. All penalties and interest associated with income taxes, if any, are included in income tax expense. For the three month and six month periods ended June 30, 2019 , the Company incurred $60 and $120 , respectively, in excise tax expense. For the three month and six month periods ended June 30, 2018 , the Company incurred $30 and $40 , respectively, in excise tax expense.
Dividends and Distributions to Common Stockholders
To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to retain such capital gains for investment.

Prior to July 5, 2017, the Company had an “opt in” dividend reinvestment plan. Effective on July 5, 2017, the Company converted the “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of dividends and other distributions on behalf of the stockholders, other than those stockholders who have “opted out” of the plan. As a result of adopting the plan, if the Board of Directors authorizes, and the Company declares, a cash dividend or distribution, the stockholders who have not elected to “opt out” of the dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash. Each registered stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, the Company’s plan administrator, in additional shares. The number of shares to be issued to the stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes. The Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.
Functional Currency
The functional currency of the Company is the U.S. Dollar and all transactions were in U.S. Dollars.
Recent Accounting Standards Updates
    
The FASB issued Accounting Standards Update (“ASU”) ASU 2018-13,  Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement in August 2018 ,  which modifies disclosure requirements pertaining to fair value measurement of Level 3 securities for public companies. Under the new standard, reporting entities can remove the disclosures no longer required and amend the disclosures immediately with retrospective application. The effective date for the additional disclosures for all public and nonpublic companies is for fiscal years, and interim periods within those years, beginning after December 15, 2019. An entity is permitted to early adopt any removed or modified disclosures immediately and delay adoption of the additional disclosures until their effective date. The Company has elected to early adopt ASU 2018-13 in 2018. No significant changes were made to the Company’s fair value disclosures in the notes to the consolidated financial statements in order to comply with ASU 2018-13.

35



In September 2018, related to the Disclosure Update and Simplification release (“the DUS Release”), the FASB issued Compliance and Disclosure Interpretation 105.09 guidance (“CDI 105.09”) on compliance with the new requirement to present changes in shareholders’ equity in interim financial statements within Form 10-Q filings . The DUS Release requires disclosure of changes in shareholders’ equity within a registrant’s Form 10-Q filing on a quarter-to-date and year-to-date basis for both the current year and prior year comparative periods. CDI 105.09 notes that the SEC would not object if a registrant first discloses the changes in shareholders’ equity in its Form 10-Q for the quarter that begins after November 5, 2018. The Company has adopted the new requirement starting with the quarter that began on January 1, 2019, which did not have a material impact on the Company’s financial statements.
3. FAIR VALUE MEASUREMENTS
The Company applies fair value accounting in accordance with the terms of FASB ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Company determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.
Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Company’s Board of Directors, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the “Audit Committee”) reviews the assessments of the Investment Adviser and the third-party valuation firm and provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
 
•
the nature and realizable value of any collateral;
•
call features, put features and other relevant terms of debt;
•
the portfolio company’s leverage and ability to make payments;
•
the portfolio company’s public or private credit rating;
•
the portfolio company’s actual and expected earnings and discounted cash flow;
•
prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
•
the markets in which the portfolio company does business and recent economic and/or market events; and
•
comparisons to comparable transactions and publicly traded securities.

36


Investment performance data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.
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 Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of June 30, 2019 and December 31, 2018 .
U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:
 
•
Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. Financial instruments in in this category generally include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
•
Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. Financial instruments in this category generally include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.
•
Level 3—inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments in this category generally include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Adviser’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 investment.
Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur. For the three month and six month periods ended June 30, 2019 and 2018 , there were no transfers between levels.
The following tables summarize the Company’s investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of June 30, 2019 and December 31, 2018 :
 
June 30, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
First Lien Debt
$
—

 
$
—

 
$
1,651,899

 
$
1,651,899

Second Lien Debt
—

 
—

 
203,187

 
203,187

Equity Investments
—

 
—

 
29,142

 
29,142

Investment Fund
 
 
 
 
 
 
 
Mezzanine Loan
—

 
—

 
80,000

 
80,000

Subordinated Loan and Member's Interest

—

 
—

 
111,386

 
111,386

Total
$
—

 
$
—

 
$
2,075,614

 
$
2,075,614


37


 
December 31, 2018
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
First Lien Debt
$
—

 
$
—

 
$
1,546,271

 
$
1,546,271

Second Lien Debt
—

 
—

 
178,958

 
178,958

Equity Investments
—

 
—

 
24,633

 
24,633

Investment Fund
 
 
 
 
 
 
 
Mezzanine Loan
—

 
—

 
112,000

 
112,000

Subordinated Loan and Member's Interest

—

 
—

 
110,295

 
110,295

Total
$
—

 
$
—

 
$
1,972,157

 
$
1,972,157


The changes in the Company’s investments at fair value for which the Company has used Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows:
 
Financial Assets
For the three month period ended June 30, 2019
 
First Lien Debt
 
Second Lien Debt
 
Equity Investments
 
Investment Fund - Mezzanine Loan
 
Investment Fund - Subordinated Loan and Member's Interest
 
Total
Balance, beginning of period
$
1,663,301

 
$
228,851

 
$
28,466

 
$
123,800

 
$
110,791

 
$
2,155,209

Purchases
166,198

 
35,247

 
3,748

 
20,200

 
5,500

 
230,893

Sales
(8,986
)
 
—

 
(3,198
)
 
—

 
—

 
(12,184
)
Paydowns
(157,981
)
 
(62,059
)
 
—

 
(64,000
)
 
—

 
(284,040
)
Accretion of discount
3,070

 
914

 
—

 
—

 
—

 
3,984

Net realized gains (losses)
(9,413
)
 
—

 
1,698

 
—

 
—

 
(7,715
)
Net change in unrealized appreciation (depreciation)
(4,290
)
 
234

 
(1,572
)
 
—

 
(4,905
)
 
(10,533
)
Balance, end of period
$
1,651,899

 
$
203,187

 
$
29,142

 
$
80,000

 
$
111,386

 
$
2,075,614

Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of June 30, 2019 included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations
$
(12,009
)
 
$
637

 
$
(169
)
 
$
—

 
$
(4,905
)
 
$
(16,446
)

38


 
Financial Assets
For the six month period ended June 30, 2019
 
First Lien Debt
 
Second Lien Debt
 
Equity Investments
 
Investment Fund - Mezzanine Loan
 
Investment Fund - Subordinated Loan and Member's Interest
 
Total
Balance, beginning of period
$
1,546,271

 
$
178,958

 
$
24,633

 
$
112,000

 
$
110,295

 
$
1,972,157

Purchases
331,274

 
83,652

 
5,988

 
50,700

 
5,500

 
477,114

Sales
(15,801
)
 
—

 
(4,936
)
 
—

 
—

 
(20,737
)
Paydowns
(202,222
)
 
(62,059
)
 
—

 
(82,700
)
 
—

 
(346,981
)
Accretion of discount
5,162

 
983

 
—

 
—

 
—

 
6,145

Net realized gains (losses)
(9,473
)
 
—

 
2,657

 
—

 
—

 
(6,816
)
Net change in unrealized appreciation (depreciation)
(3,312
)
 
1,653

 
800

 
—

 
(4,409
)
 
(5,268
)
Balance, end of period
$
1,651,899

 
$
203,187

 
$
29,142

 
$
80,000

 
$
111,386

 
$
2,075,614

Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of June 30, 2019 included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations
$
(13,051
)
 
$
1,850

 
$
1,172

 
$
—

 
$
(4,409
)
 
$
(14,438
)

 
Financial Assets
For the three month period ended June 30, 2018
 
First Lien Debt
 
Second Lien Debt
 
Equity Investments
 
Investment Fund - Mezzanine Loan
 
Total
Balance, beginning of period
$
1,475,874

 
$
217,707

 
$
18,812

 
$
107,600

 
$
1,819,993

Purchases
237,592

 
9,098

 
3,953

 
25,300

 
275,943

Sales
(40,077
)
 
—

 
(2,775
)
 
—

 
(42,852
)
Paydowns
(104,997
)
 
(66,675
)
 
—

 
(18,900
)
 
(190,572
)
Accretion of discount
2,422

 
1,496

 
—

 
—

 
3,918

Net realized gains (losses)
—

 
—

 
1,775

 
—

 
1,775

Net change in unrealized appreciation (depreciation)
(15,286
)
 
(721
)
 
589

 
—

 
(15,418
)
Balance, end of period
$
1,555,528

 
$
160,905

 
$
22,354

 
$
114,000

 
$
1,852,787

Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of June 30, 2018 included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations
$
(14,619
)
 
$
1,105

 
$
1,188

 
$
—

 
$
(12,326
)


39


 
Financial Assets
For the six month period ended June 30, 2018
 
First Lien Debt
 
Second Lien Debt
 
Equity Investments
 
Investment Fund - Mezzanine Loan
 
Total
Balance, beginning of period
$
1,531,276

 
$
246,233

 
$
17,506

 
$
85,750

 
$
1,880,765

Purchases
303,849

 
34,092

 
4,453

 
47,150

 
389,544

Sales
(61,037
)
 
(3,960
)
 
(2,775
)
 
—

 
(67,772
)
Paydowns
(202,107
)
 
(116,667
)
 
—

 
(18,900
)
 
(337,674
)
Accretion of discount
3,949

 
2,359

 
—

 
—

 
6,308

Net realized gains (losses)
(131
)
 
2

 
1,775

 
—

 
1,646

Net change in unrealized appreciation (depreciation)
(20,271
)
 
(1,154
)
 
1,395

 
—

 
(20,030
)
Balance, end of period
$
1,555,528

 
$
160,905

 
$
22,354

 
$
114,000

 
$
1,852,787

Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of June 30, 2018 included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations
$
(20,493
)
 
$
(1,893
)
 
$
1,172

 
$
—

 
$
(21,214
)
The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:
Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.
Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.
Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes EBITDA multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in Credit Fund’s mezzanine loan are valued using collateral analysis with the expected recovery rate of principal and interest. Investments in Credit Fund’s subordinated loan and member’s interest are valued using discounted cash flow analysis with the expected discount rate, default rate and recovery rate of principal and interest.




40


The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which are carried at fair value as of June 30, 2019 and December 31, 2018 :
 
Fair Value as of June 30, 2019
 
Valuation Techniques
 
Significant Unobservable Inputs
 
Range
 
 
 
Low
 
High
 
Weighted Average
Investments in First Lien Debt
$
1,510,402

 
Discounted Cash Flow
 
Discount Rate
 
5.71
%
 
28.06
%
 
9.69
%
 
101,024

 
Consensus Pricing
 
Indicative Quotes
 
40.17

 
100.00

 
92.78

 
40,473

 
Income Approach
 
Discount Rate
 
10.93
%
 
14.38
%
 
12.72
%
 
 
 
Market Approach
 
Comparable Multiple
 
7.97x

 
9.84x

 
8.94x

Total First Lien Debt
1,651,899

 
 
 
 
 
 
 
 
 
 
Investments in Second Lien Debt
161,203

 
Discounted Cash Flow
 
Discount Rate
 
9.90
%
 
11.93
%
 
10.76
%
 
41,984

 
Consensus Pricing
 
Indicative Quotes
 
98.50

 
99.08

 
98.76

Total Second Lien Debt
203,187

 
 
 
 
 
 
 
 
 
 
Investments in Equity
29,142

 
Income Approach
 
Discount Rate
 
8.28
%
 
12.62
%
 
10.50
%
 
 
 
Market Approach
 
Comparable Multiple
 
6.31x

 
16.48x

 
9.54x

Total Equity Investments
29,142

 
 
 
 
 
 
 
 
 
 
Investments in Investment Fund
 
 
 
 
 
 
 
 
 
 
 
Mezzanine Loan
80,000

 
Collateral Analysis
 
Recovery Rate
 
100.00
%
 
100.00
%
 
100.00
%
Subordinated Loan and
Member's Interest
111,386

 
Discounted Cash Flow
 
Discount Rate
 
10.00
%
 
10.00
%
 
10.00
%
 
 
 
Discounted Cash Flow
 
Default Rate
 
2.00
%
 
2.00
%
 
2.00
%
 
 
 
Discounted Cash Flow
 
Recovery Rate
 
75.00
%
 
75.00
%
 
75.00
%
Total Investments in Investment Fund
191,386

 
 
 
 
 
 
 
 
 
 
Total Level 3 Investments
$
2,075,614

 
 
 
 
 
 
 
 
 
 
 
Fair Value as of December 31, 2018
 
Valuation Techniques
 
Significant Unobservable Inputs
 
Range
 
 
 
Low
 
High
 
Weighted Average
Investments in First Lien Debt
$
1,457,170

 
Discounted Cash Flow
 
Discount Rate
 
6.45
%
 
26.48
%
 
10.49
%
 
74,774

 
Consensus Pricing
 
Indicative Quotes
 
50.00

 
100.00

 
92.04

 
14,327

 
Income Approach
 
Discount Rate
 
15.12
%
 
15.12
%
 
15.12
%
 
 
 
Market Approach
 
Comparable Multiple
 
6.76x

 
6.76x

 
6.76x

Total First Lien Debt
1,546,271

 
 
 
 
 
 
 
 
 
 
Investments in Second Lien Debt
176,307

 
Discounted Cash Flow
 
Discount Rate
 
9.34
%
 
13.22
%
 
11.31
%
 
2,651

 
Consensus Pricing
 
Indicative Quotes
 
98.17

 
98.17

 
98.17

Total Second Lien Debt
178,958

 
 
 
 
 
 
 
 
 
 
Investments in Equity
24,633

 
Income Approach
 
Discount Rate
 
8.51
%
 
12.84
%
 
10.49
%
 
 
 
Market Approach
 
Comparable Multiple
 
7.22x

 
14.70x

 
9.74x

Total Equity Investments
24,633

 
 
 
 
 
 
 
 
 
 
Investment in Investment Fund
 
 
 
 
 
 
 
 
 
 
 
Mezzanine Loan
112,000

 
Collateral Analysis
 
Recovery Rate
 
100.00
%
 
100.00
%
 
100.00
%
Subordinated Loan and Member's Interest
110,295

 
Discounted Cash Flow
 
Discount Rate
 
10.00
%
 
10.00
%
 
10.00
%
 
 
 
Discounted Cash Flow
 
Default Rate
 
2.00
%
 
2.00
%
 
2.00
%
 
 
 
Discounted Cash Flow
 
Recovery Rate
 
75.00
%
 
75.00
%
 
75.00
%
Total Investments in Investment Fund
222,295

 
 
 
 
 
 
 
 
 
 
Total Level 3 Investments
$
1,972,157

 
 
 
 
 
 
 
 
 
 
The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates, indicative quotes and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation may result in a significantly lower fair value measurement.

41


The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples in isolation would result in a significantly lower fair value measurement.
The significant unobservable input used in the fair value measurement of the Company’s investment in the mezzanine loan of Credit Fund is the recovery rate of principal and interest. A significant decrease in the recovery rate would result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in the subordinated loan and member’s interest of Credit Fund are the discount rate, default rate and recovery rate. Significant increases in the discount rate or default rate in isolation would result in a significantly lower fair value measurement. A significant decrease in the recovery rate in isolation would result in a significantly lower fair value measurement.
Financial instruments disclosed but not carried at fair value
The following table presents the carrying value and fair value of the Company’s secured borrowings disclosed but not carried at fair value as of June 30, 2019 and December 31, 2018 :
 
June 30, 2019
 
December 31, 2018
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Secured borrowings
$
649,397

 
$
649,397

 
$
514,635

 
$
514,635

Total
$
649,397

 
$
649,397

 
$
514,635

 
$
514,635

The carrying values of the secured borrowings approximate their respective fair values and are categorized as Level 3 within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Company’s secured borrowings are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement.
The following table represents the carrying values (before debt issuance costs) and fair values of the Company’s 2015-1R Notes disclosed but not carried at fair value as of June 30, 2019 and December 31, 2018 :
 
June 30, 2019
 
December 31, 2018
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Aaa/AAA Class A-1-1-R Notes
$
234,800

 
$
232,846

 
$
234,800

 
$
229,632

Aaa/AAA Class A-1-2-R Notes
50,000

 
49,400

 
50,000

 
49,442

Aaa/AAA Class A-1-3-R Notes
25,000

 
25,283

 
25,000

 
24,990

AA Class A-2-R Notes
66,000

 
66,000

 
66,000

 
66,000

A Class B Notes
46,400

 
45,356

 
46,400

 
44,242

BBB- Class C Notes
27,000

 
25,650

 
27,000

 
24,809

Total
$
449,200

 
$
444,535

 
$
449,200

 
$
439,115

The fair value determination of the Company’s notes payable was based on the market quotation(s) received from broker/dealer(s). These fair value measurements were based on significant inputs not observable and thus represent Level 3 measurements as defined in the accounting guidance for fair value measurement.
The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items.
4. RELATED PARTY TRANSACTIONS
Investment Advisory Agreement
On April 3, 2013, the Company’s Board of Directors, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Directors”), approved an investment advisory agreement (the “Original Investment Advisory Agreement”) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act.

42


The Original Investment Advisory Agreement was amended on September 15, 2017 (as amended, the “First Amended and Restated Investment Advisory Agreement”) after the approval of the Company’s Board of Directors, including a majority of the Independent Directors, at an in-person meeting of the Board of Directors held on May 30, 2017 and the approval of the Company’s stockholders at a special meeting of stockholders held on September 15, 2017. On August 6, 2018, the First Amended and Restated Investment Advisory Agreement was further amended (as amended, the “Investment Advisory Agreement”) after the approval of the Company’s Board of Directors, including a majority of the Independent Directors, at an in-person meeting of the Board of Directors held on August 6, 2018. On May 6, 2019, the Company’s Board of Directors, including a majority of the Independent Directors, approved at an in-person meeting the continuance of the Company’s Investment Advisory Agreement with the Adviser for an additional one year term.
Effective September 15, 2017, the base management fee has been calculated and payable quarterly in arrears at an annual rate of 1.50% of the average value of the gross assets at the end of the two most recently completed fiscal quarters; provided, however, effective July 1, 2018, the base management fee has been calculated at an annual rate of 1.00% of the average value of the gross assets as of the end of the two most recently completed calendar quarters that exceeds the product of (A) 200% and (B) the average value of the Company’s net asset value at the end of the two most recently completed calendar quarters. The base management fee will be appropriately adjusted for any share issuances or repurchases during such fiscal quarter and the base management fees for any partial month or quarter will be pro-rated. The Company’s gross assets exclude any cash and cash equivalents and include assets acquired through the incurrence of debt from the use of leverage.
The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.
Effective September 15, 2017, pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, has been compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up rate” of 1.82% per quarter (7.28% annualized), as applicable.
Pursuant to the Investment Advisory Agreement, the Company pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:
 
•
no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%;
•
100% of 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 1.82% in any calendar quarter (7.28% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.82%) as the “catch-up.” The “catch-up” is meant to provide the Investment Adviser with approximately 17.5% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.82% in any calendar quarter; and
•
17.5% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.82% in any calendar quarter (7.28% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 17.5% of all pre-incentive fee net investment income thereafter is allocated to the Investment Adviser.
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 17.5% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.    
For the three month and six month periods ended June 30, 2019 , base management fees were $7,913 and $15,598 , respectively, incentive fees related to pre-incentive fee net investment income were $5,933 and $11,779 , respectively, and there were no incentive fees related to realized capital gains. For the three month and six month periods ended June 30, 2018 , base management fees were $7,266 and $14,488 , incentive fees related to pre-incentive fee net investment income were $5,984 and $11,314 , respectively, and there were no incentive fees related to realized capital gains. For the three month and six month periods ended June 30, 2019 and 2018 , there were no accrued capital gains incentive fees based upon the cumulative net

43


realized and unrealized appreciation (depreciation) from inception through June 30, 2019 and 2018 , respectively. The accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual.
As of June 30, 2019 and December 31, 2018 , $13,846 and $13,834 , respectively, was included in base management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
On April 3, 2013, the Investment Adviser entered into a personnel agreement with The Carlyle Group Employee Co., L.L.C. (“Carlyle Employee Co.”), an affiliate of the Investment Adviser, pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment professionals.
Administration Agreement
On February 22, 2019, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the administration agreement, dated April 3, 2013, between the Company and the Administrator (the “Administration Agreement”). Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including the Chief Compliance Officer and Treasurer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), internal control assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears.
Unless terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.
For the three month and six month periods ended June 30, 2019 , the Company incurred $165 and $381 , respectively, and for the three month and six month periods ended June 30, 2018 , the Company incurred $185 and $371 , respectively, in fees under the Administrative Agreement, which were included in administrative service fees in the accompanying Consolidated Statements of Operations. As of June 30, 2019 and December 31, 2018 , $128 and $94 , respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
Sub-Administration Agreements
On February 22, 2019, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the sub-administration agreement, dated April 3, 2013, between the Administrator and Carlyle Employee Co. (the “Carlyle Sub-Administration Agreement”). Pursuant to the Carlyle Sub-Administration Agreement, Carlyle Employee Co. provides the Administrator with access to personnel.
On February 22, 2019, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the sub-administration agreement, dated April 3, 2013, between the Administrator and State Street Bank and Trust Company (“State Street” and, such agreement, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreement, the “Sub-Administration Agreements”). Unless terminated earlier, the State Street Sub-Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. The State Street Sub-Administration Agreement may be terminated upon at least 60 days’ written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.
For the three month and six month periods ended June 30, 2019 , fees incurred in connection with the State Street Sub-Administration Agreement, which amounted to $186 and $375 , respectively, were included in other general and administrative in the accompanying Consolidated Statements of Operations. For the three month and six month periods ended June 30, 2018 , fees incurred in connection with the State Street Sub-Administration Agreement, which amounted to $189 and $381 ,

44


respectively, were included in other general and administrative in the accompanying Consolidated Statements of Operations. As of June 30, 2019 and December 31, 2018 , $187 and $383 , respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.
License Agreement
The Company has entered into a royalty free license agreement with CIM, which wholly owns our Adviser and is a wholly owned subsidiary of Carlyle, pursuant to which CIM has granted the Company a non-exclusive, revocable and non-transferable license to use the name and mark “Carlyle.”
Board of Directors
The Company’s Board of Directors currently consists of five members, three of whom are Independent Directors. The Board of Directors has established an Audit Committee, a Nominating and Governance Committee and a Compensation Committee, the members of each of which consist entirely of the Company’s Independent Directors. The Board of Directors may establish additional committees in the future. For the three month and six month periods ended June 30, 2019 , the Company incurred $88 and $181 , respectively, and for the three month and six month periods ended June 30, 2018 , the Company incurred $93 and $191 , respectively, in fees and expenses associated with its Independent Directors' services on the Company's Board of Directors and its committees. As of June 30, 2019 and December 31, 2018 , no fees or expenses associated with its Independent Directors were payable.
Transactions with Credit Fund
For the three month and six month periods ended June 30, 2019 , the Company sold 1 and 1 investments, respectively, to Credit Fund for proceeds of $14,912 and $14,912 , respectively, and realized gains of $0 . For the three month and six month periods ended June 30, 2018 , the Company sold 2 and 3 investments, respectively, to Credit Fund for proceeds of $40,377 and $55,302 , respectively, and realized gains of $0 . See Note 5, Middle Market Credit Fund, LLC, for further information about Credit Fund.
5. MIDDLE MARKET CREDIT FUND, LLC
Overview
On February 29, 2016, the Company and Credit Partners entered into the Limited Liability Company Agreement to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of the Company’s representatives and two of Credit Partners’ representatives. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. By virtue of its membership interest, the Company and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.
Together with Credit Partners, the Company co-invests through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by the Company and its affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”), MMCF CLO 2017-1 LLC (the “2017-1 Issuer”) and MMCF CLO 2019-2, LLC (the "2019-2 Issuer"), each a Delaware limited liability company, were formed on April 5, 2016 and October 6, 2017 and May 21, 2019, respectively. Credit Fund Sub, the 2017-1 Issuer and the 2019-2 Issuer are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements commencing from the date of their respective formations. Credit Fund Sub, the 2017-1 Issuer and the 2019-2 Issuer primarily invest in first lien loans of middle market companies. Credit Fund and its wholly owned subsidiaries follow the same Internal Risk Rating System as the Company.
Credit Fund, the Company and Credit Partners entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Administrative Agent”), pursuant to which the Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-

45


administration agreements at the expense of Credit Fund with the approval of the board of managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Administrative Agent in performing its obligations thereunder.
Selected Financial Data
Since inception of Credit Fund and through June 30, 2019 and December 31, 2018 , the Company and Credit Partners each made capital contributions of $1 and $1 in members’ equity, respectively, and $123,500 and $118,000 in subordinated loans, respectively, to Credit Fund. As of June 30, 2019 and December 31, 2018 , Credit Fund had borrowings of $80,000 and $112,000 , respectively, in mezzanine loans under a revolving credit facility with the Company (the “Credit Fund Facility”). As of June 30, 2019 and December 31, 2018 , Credit Fund had total subordinated loans and members’ equity outstanding of $220,966 and $208,568 , respectively. As of June 30, 2019 and December 31, 2018 , the Company’s ownership interest in such subordinated loans and members’ equity was $111,386 and $110,295 , respectively, and in such mezzanine loans was $80,000 and $112,000 , respectively.
As of June 30, 2019 and December 31, 2018 , Credit Fund held cash and cash equivalents totaling $39,426 and $55,699 , respectively.
As of June 30, 2019 and December 31, 2018 , Credit Fund had total investments at fair value of $1,328,201 and $1,173,508 , respectively, which was comprised of first lien senior secured loans and second lien senior secured loans and an equity investment to 67 and 60 portfolio companies, respectively. As of June 30, 2019 and December 31, 2018 , 1 loan in Credit Fund’s portfolio was on non-accrual status with fair value of $21,098 and $25,400 , respectively. As of June 30, 2019 and December 31, 2018 , 98.4% and 99.9%, respectively, of investments in the portfolio were floating rate debt investments, which primarily are subject to interest rate floors. As of June 30, 2019 and December 31, 2018 , 1.6% and 0.1%, respectively, of debt investments in the portfolio were fixed rate debt investments. As of June 30, 2019 and December 31, 2018 , the fair value of the loans in the portfolio with PIK provisions was $21,098 and $1,119 , respectively, which represents approximately 1.6% and 0.1% of total investments at fair value. The portfolio companies in Credit Fund are U.S. middle market companies in industries similar to those in which the Company may invest directly. Additionally, as of June 30, 2019 and December 31, 2018 , Credit Fund had commitments to fund various undrawn revolving and delayed draw senior secured loans to its portfolio companies totaling $88,466 and $91,446 , respectively.
Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of June 30, 2019 and December 31, 2018 :
 
As of
June 30, 2019
 
As of
December 31, 2018
Senior secured loans (1)
$
1,347,889

 
$
1,207,913

Weighted average yields of senior secured loans based on amortized cost (2)
7.04
%
 
7.16
%
Weighted average yields of senior secured loans based on fair value (2)
7.09
%
 
7.32
%
Number of portfolio companies in Credit Fund
67

 
60

Average amount per portfolio company (1)
$
20,118

 
$
20,132

(1)
At par/principal amount.
(2)
Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2019 and December 31, 2018 . Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.

46


Consolidated Schedule of Investments as of June 30, 2019
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread  (2)
 
Interest Rate (2)
 
Maturity Date
 
 Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (98.36% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
Achilles Acquisition, LLC
+\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.00%
 
6.44%
 
10/11/2025
 
$
17,955

 
$
17,867

 
$
17,788

Acrisure, LLC
+\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.77%
 
11/22/2023
 
20,780

 
20,741

 
20,659

Acrisure, LLC
\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 3.75%
 
6.27%
 
11/22/2023
 
11,880

 
11,869

 
11,776

Advanced Instruments, LLC
^+*\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
7.57%
 
10/31/2022
 
11,732

 
11,646

 
11,680

Ahead, LLC
^+\
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.25%
 
6.70%
 
5/8/2024
 
22,281

 
21,858

 
22,020

Alpha Packaging Holdings, Inc.
+*\
 
(2) (3)
 
Containers, Packaging & Glass
 
L + 4.25%
 
6.58%
 
5/12/2020
 
16,771

 
16,751

 
16,762

AM Conservation Holding Corporation
+*\
 
(2) (3)
 
Energy: Electricity
 
L + 4.50%
 
6.89%
 
10/31/2022
 
37,969

 
37,763

 
37,847

AmeriLife Group, LLC
^
 
(2) (3) (8)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
6.90%
 
6/5/2026
 
14,912

 
14,828

 
14,891

API Technologies Corp.
+\
 
(2) (3)
 
Aerospace & Defense
 
L + 4.25%
 
6.57%
 
5/9/2026
 
15,000

 
14,930

 
14,946

Aptean, Inc.
+\
 
(2) (3)
 
Software
 
L + 4.25%
 
6.58%
 
4/23/2026
 
12,469

 
12,412

 
12,423

AQA Acquisition Holding, Inc.
^*\
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.25%
 
6.58%
 
5/24/2023
 
19,051

 
19,003

 
18,956

Avalign Technologies, Inc.
^+\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.50%
 
6.70%
 
12/22/2025
 
14,815

 
14,672

 
14,759

Big Ass Fans, LLC
+*\
 
(2) (3)
 
Capital Equipment
 
L + 3.75%
 
6.08%
 
5/21/2024
 
13,981

 
13,908

 
13,946

Borchers, Inc.
^+*\
 
(2) (3) (8)
 
Chemicals, Plastics & Rubber
 
L + 4.50%
 
6.83%
 
11/1/2024
 
15,116

 
15,066

 
15,113

Brooks Equipment Company, LLC
+*
 
(2) (3)
 
Construction & Building
 
L + 5.00%
 
7.52%
 
8/29/2020
 
5,778

 
5,772

 
5,775

Clarity Telecom LLC.
+
 
(2) (3)
 
Media: Broadcasting & Subscription
 
L + 4.50%
 
6.82%
 
6/20/2026
 
15,000

 
14,852

 
14,850

Clearent Newco, LLC
^+\
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.00%
 
6.40%
 
3/20/2024
 
26,999

 
26,651

 
26,722

Datto, Inc.
+\
 
(2) (3)
 
High Tech Industries
 
L + 4.25%
 
6.58%
 
4/2/2026
 
12,500

 
12,443

 
12,525

DecoPac, Inc.
^+*\
 
(2) (3) (8)
 
Non-durable Consumer Goods
 
L + 4.25%
 
6.58%
 
9/29/2024
 
12,765

 
12,651

 
12,730

Dent Wizard International Corporation
+\
 
(2) (3)
 
Automotive
 
L + 4.00%
 
6.40%
 
4/7/2022
 
37,059

 
36,949

 
36,941

DTI Holdco, Inc.
+*\
 
(2) (3)
 
High Tech Industries
 
L + 4.75%
 
7.33%
 
9/30/2023
 
18,983

 
18,854

 
17,362

EIP Merger Sub, LLC (Evolve IP)
+*
 
(2) (3) (4)
 
Telecommunications
 
L + 5.75%
 
8.15%
 
6/7/2022
 
22,207

 
21,822

 
21,974

EIP Merger Sub, LLC (Evolve IP)
*
 
(2) (3) (7)
 
Telecommunications
 
L + 5.75%
 
8.15%
 
6/7/2022
 
1,500

 
1,472

 
1,491

Eliassen Group, LLC
+\
 
(2) (3)
 
Business Services
 
L + 4.50%
 
6.90%
 
11/5/2024
 
7,600

 
7,571

 
7,600

Exactech, Inc.
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 3.75%
 
6.15%
 
2/14/2025
 
12,838

 
12,792

 
12,734

Executive Consulting Group, LLC, Inc.
^+\
 
(2) (3) (8)
 
Business Services
 
L + 4.50%
 
7.10%
 
6/20/2024
 
15,241

 
15,104

 
15,134

Golden West Packaging Group LLC
+*\
 
(2) (3)
 
Containers, Packaging & Glass
 
L + 5.25%
 
7.65%
 
6/20/2023
 
30,019

 
29,833

 
29,683

HMT Holding Inc.
^+*\
 
(2) (3) (8)
 
Energy: Oil & Gas
 
L + 4.50%
 
6.90%
 
11/17/2023
 
37,024

 
36,486

 
36,861

J.S. Held, LLC
+*\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
6.83%
 
9/25/2024
 
21,515

 
21,365

 
21,516

Jensen Hughes, Inc.
^+*\
 
(2) (3) (8)
 
Utilities: Electric
 
L + 4.50%
 
6.83%
 
3/22/2024
 
34,077

 
33,892

 
33,606

MAG DS Corp.
^+\
 
(2) (3) (8)
 
Aerospace & Defense
 
L + 4.75%
 
7.15%
 
6/6/2025
 
29,782

 
29,535

 
29,703

Maravai Intermediate Holdings, LLC
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.69%
 
8/2/2025
 
29,775

 
29,509

 
29,674


47


Consolidated Schedule of Investments as of June 30, 2019
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread  (2)
 
Interest Rate (2)
 
Maturity Date
 
 Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (98.36% of fair value) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
Marco Technologies, LLC
^+\
 
(2) (3) (8)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
6.83%
 
10/30/2023
 
$
7,500

 
$
7,447

 
$
7,500

Mold-Rite Plastics, LLC
+\
 
(2) (3)
 
Chemicals, Plastics & Rubber
 
L + 4.25%
 
6.58%
 
12/14/2021
 
14,557

 
14,509

 
14,528

MSHC, Inc.
^+*\
 
(2) (3) (8)
 
Construction & Building
 
L + 4.25%
 
6.58%
 
7/31/2023
 
33,851

 
33,742

 
33,585

Newport Group Holdings II, Inc.
+\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 3.75%
 
6.15%
 
9/13/2025
 
23,835

 
23,603

 
23,683

North American Dental Management, LLC
^+*\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
7.65%
 
7/7/2023
 
37,836

 
37,231

 
37,283

North Haven CA Holdings, Inc.
^+*\
 
(2) (3) (8)
 
Business Services
 
L + 4.50%
 
6.83%
 
10/2/2023
 
32,454

 
32,156

 
32,141

Odyssey Logistics & Technology Corporation
+*\
 
(2) (3)
 
Transportation: Cargo
 
L + 4.00%
 
6.40%
 
10/12/2024
 
39,013

 
38,844

 
38,759

Output Services Group
^+\
 
(2) (3) (8)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
6.65%
 
3/27/2024
 
17,312

 
17,256

 
16,881

PAI Holdco, Inc.
+*\
 
(2) (3)
 
Automotive
 
L + 4.25%
 
6.78%
 
1/5/2025
 
19,673

 
19,593

 
19,651

Park Place Technologies, Inc.
+\
 
(2) (3)
 
High Tech Industries
 
L + 4.00%
 
6.40%
 
3/29/2025
 
15,841

 
15,777

 
15,695

Pasternack Enterprises, Inc.
+\
 
(2) (3)
 
Capital Equipment
 
L + 4.00%
 
6.33%
 
7/2/2025
 
22,871

 
22,856

 
22,855

Pharmalogic Holdings Corp.
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 4.00%
 
6.40%
 
6/11/2023
 
11,377

 
11,350

 
11,378

Ping Identity Corporation
+\
 
(2) (3)
 
High Tech Industries
 
L + 3.75%
 
6.15%
 
1/25/2025
 
4,950

 
4,937

 
4,925

Premier Senior Marketing, LLC
*
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.58%
 
11/30/2025
 
4,941

 
4,920

 
4,901

Premise Health Holding Corp.
^+\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 3.75%
 
6.08%
 
7/10/2025
 
13,793

 
13,736

 
13,699

Propel Insurance Agency, LLC
^+\
 
(2) (3) (8)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
6.83%
 
6/1/2024
 
22,646

 
22,122

 
22,389

PSI Services, LLC
^+*\
 
(2) (3) (8)
 
Business Services
 
L + 5.00%
 
7.40%
 
1/20/2023
 
30,295

 
29,886

 
30,295

Q Holding Company
+*\
 
(2) (3)
 
Automotive
 
L + 5.00%
 
7.40%
 
12/18/2021
 
17,010

 
16,974

 
16,978

QW Holding Corporation (Quala)
^+*
 
(2) (3) (8)
 
Environmental Industries
 
L + 5.75%
 
8.14%
 
8/31/2022
 
10,572

 
10,367

 
10,459

Radiology Partners, Inc.
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 4.75%
 
7.36%
 
7/9/2025
 
28,937

 
28,798

 
28,848

RevSpring Inc.
+*\
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
6.65%
 
10/11/2025
 
24,875

 
24,784

 
24,636

Situs Group Holdings Corporation
^+\
 
(2) (3) (8)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.75%
 
7.15%
 
2/26/2023
 
13,784

 
13,575

 
13,749

Surgical Information Systems, LLC
+*\
 
(2) (3) (7)
 
High Tech Industries
 
L + 4.85%
 
7.24%
 
4/24/2023
 
26,168

 
25,982

 
25,948

Systems Maintenance Services Holding, Inc.
+*
 
(2) (3)
 
High Tech Industries
 
L + 6.00%
 
8.40%
 
10/28/2023
 
23,888

 
23,782

 
16,329

T2 Systems Canada, Inc.
+
 
(2) (3)
 
Transportation: Consumer
 
L + 6.75%
 
9.08%
 
9/28/2022
 
2,632

 
2,589

 
2,625

T2 Systems, Inc.
^+*
 
(2) (3) (8)
 
Transportation: Consumer
 
L + 6.75%
 
9.08%
 
9/28/2022
 
16,187

 
15,925

 
16,140

The Original Cakerie, Co. (Canada)
+*
 
(2) (3)
 
Beverage, Food & Tobacco
 
L + 5.00%
 
7.40%
 
7/20/2022
 
8,974

 
8,932

 
8,940

The Original Cakerie, Ltd. (Canada)
^+\
 
(2) (3) (8)
 
Beverage, Food & Tobacco
 
L + 4.50%
 
6.90%
 
7/20/2022
 
6,858

 
6,820

 
6,828

ThoughtWorks, Inc.
+*\
 
(2) (3)
 
Business Services
 
L + 4.00%
 
6.40%
 
10/12/2024
 
11,884

 
11,851

 
11,884

U.S. Acute Care Solutions, LLC
+*\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 5.00%
 
7.20%
 
5/15/2021
 
31,543

 
31,405

 
29,902


48


Consolidated Schedule of Investments as of June 30, 2019
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread  (2)
 
Interest Rate (2)
 
Maturity Date
 
 Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (98.36% of fair value) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
U.S. TelePacific Holdings Corp.
+*\
 
(2) (3)
 
Telecommunications
 
L + 5.00%
 
7.33%
 
5/2/2023
 
$
26,660

 
$
26,477

 
$
25,322

Upstream Intermediate, LLC
^+\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.00%
 
6.40%
 
1/3/2024
 
18,118

 
18,046

 
18,015

Valet Waste Holdings, Inc.
+\
 
(2) (3)
 
Construction & Building
 
L + 4.00%
 
6.41%
 
9/28/2025
 
11,910

 
11,889

 
11,867

Valicor Environmental Services, LLC
^+*\
 
(2) (3) (8)
 
Environmental Industries
 
L + 4.50%
 
6.88%
 
6/1/2023
 
34,836

 
34,396

 
34,593

WIRB - Copernicus Group, Inc.
^+*\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.58%
 
8/15/2022
 
18,113

 
18,034

 
18,001

WRE Holding Corp.
^+*
 
(2) (3) (8)
 
Environmental Industries
 
L + 5.00%
 
7.44%
 
1/3/2023
 
7,439

 
7,373

 
7,220

Zywave, Inc.
^+*\
 
(2) (3) (8)
 
High Tech Industries
 
L + 5.00%
 
7.56%
 
11/17/2022
 
17,566

 
17,445

 
17,558

First Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
$
1,316,276

 
$
1,306,437

Second Lien Debt (1.64% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
DBI Holding, LLC
^*
 
(2) (3) (9)
 
Transportation: Cargo
 
8.00% (100% PIK)
 
8.00%
 
2/1/2026
 
$
21,150

 
$
20,705

 
$
21,098

Zywave, Inc.
*
 
(2) (3)
 
High Tech Industries
 
L + 9.00%
 
11.59%
 
11/17/2023
 
666

 
659

 
666

Second Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
$
21,364

 
$
21,764

Investments (1)
 
 
Footnotes
 
Industry
 
Type
 
Shares/Units
 
Cost
 
Fair Value (6)
Equity Investments (0.0% of fair value)
 
 
 
 
 
 
 
 
DBI Holding, LLC
^
 
 
 
Transportation: Cargo
 
Preferred stock
 
13,996

 
$
5,364

 
$
—

DBI Holding, LLC
^
 
 
 
Transportation: Cargo
 
Common stock
 
2,961

 
$
—

 
$
—

Equity Investments Total
 
 
 
 
 
 
 
 
 
$
5,364

 
$
—

Total Investments
 
 
 
 
 
 
 
 
 
 
$
1,343,004

 
$
1,328,201


^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2017-1 Issuer or the 2019-2 Issuer.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund, the 2017-1 Issuer or the 2019-2 Issuer.
* Denotes that all or a portion of the assets are owned by the 2017-1 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on December 19, 2017 (the “2017-1 Debt Securitization”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub or the 2019-2 Issuer.
\ Denotes that all or a portion of the assets are owned by the 2019-2 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on May 21, 2019 (the “2019-2 Debt Securitization”). Accordingly, such assets are not available to creditors of Credit Fund, Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub or the 2017-1 Issuer.
(1)
Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of June 30, 2019 , the geographical composition of investments as a percentage of fair value was 1.19% in Canada and 98.81% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)
Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2019 . As of June 30, 2019 , the reference rates for Credit Fund’s variable rate loans were the 30-day LIBOR at 2.20% , the 90-day LIBOR at 2.32% and the 180-day LIBOR at 2.40% .
(3)
Loan includes interest rate floor feature, which is generally 1.00%.
(4)
Credit Fund Sub receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.20% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.
(5)
Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(6)
Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements.

49


(7)
In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, Credit Fund Sub and the 2017-1 Issuer is entitled to receive additional interest as a result of an agreement among lenders as follows: EIP Merger Sub, LLC (Evolve IP) ( 3.49% ) and Surgical Information Systems, LLC ( 1.13% ). Pursuant to the agreement among lenders in respect of these loans, these investments represent a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.
(8)
As of June 30, 2019 , Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
First Lien Debt – unfunded delayed draw and revolving term loans commitments
Type
 
Unused Fee
 
Par/ Principal Amount
 
Fair Value
Advanced Instruments, LLC
Revolver
 
0.50%
 
$
1,333

 
$
(5
)
Ahead, LLC
Delayed Draw
 
—
 
1,697

 
(15
)
Ahead, LLC
Revolver
 
0.38
 
4,688

 
(43
)
AmeriLife Group, LLC
Delayed Draw
 
0.50
 
2,088

 
(3
)
AQA Acquisition Holding, Inc.
Revolver
 
0.50
 
2,459

 
(11
)
Avalign Technologies, Inc.
Delayed Draw
 
—
 
715

 
(3
)
Borchers, Inc.
Revolver
 
0.50
 
1,935

 
—

Clearent Newco, LLC
Delayed Draw
 
1.00
 
2,028

 
(19
)
Clearent Newco, LLC
Revolver
 
0.50
 
704

 
(7
)
DecoPac, Inc.
Revolver
 
0.50
 
1,714

 
(4
)
Executive Consulting Group, LLC
Revolver
 
0.50
 
2,368

 
(14
)
HMT Holding Inc.
Revolver
 
0.50
 
2,469

 
(10
)
Jensen Hughes, Inc.
Delayed Draw
 
1.00
 
2,365

 
(30
)
Jensen Hughes, Inc.
Revolver
 
0.50
 
1,136

 
(14
)
MAG DS Corp.
Revolver
 
0.50
 
1,000

 
(3
)
Marco Technologies, LLC
Delayed Draw
 
1.00
 
7,500

 
—

MSHC, Inc.
Delayed Draw
 
1.00
 
6,505

 
(43
)
North American Dental Management, LLC
Revolver
 
0.50
 
1,677

 
(23
)
North Haven CA Holdings, Inc.
Revolver
 
0.50
 
6,114

 
(50
)
Output Services Group
Delayed Draw
 
4.25
 
2,518

 
(55
)
Premise Health Holding Corp.
Delayed Draw
 
1.00
 
1,103

 
(7
)
Propel Insurance Agency, LLC
Delayed Draw
 
0.50
 
7,143

 
(57
)
Propel Insurance Agency, LLC
Revolver
 
0.50
 
2,381

 
(19
)
PSI Services, LLC
Revolver
 
0.50
 
226

 
—

QW Holding Corporation (Quala)
Delayed Draw
 
1.00
 
1,355

 
(9
)
QW Holding Corporation (Quala)
Revolver
 
0.50
 
5,498

 
(36
)
Situs Group Holdings Corporation
Delayed Draw
 
—
 
1,216

 
(3
)
T2 Systems, Inc.
Revolver
 
0.50
 
684

 
(2
)
The Original Cakerie, Ltd. (Canada)
Revolver
 
0.50
 
1,199

 
(4
)
Upstream Intermediate, LLC
Revolver
 
0.50
 
1,606

 
(8
)
Valicor Environmental Services, LLC
Revolver
 
0.50
 
3,126

 
(20
)
WIRB - Copernicus Group, Inc.
Delayed Draw
 
1.00
 
5,472

 
(25
)
WIRB - Copernicus Group, Inc.
Revolver
 
0.50
 
1,000

 
(5
)
WRE Holding Corp.
Delayed Draw
 
1.00
 
2,069

 
(46
)
WRE Holding Corp.
Revolver
 
0.50
 
377

 
(8
)
Zywave, Inc.
Revolver
 
0.50
 
998

 
—

Total unfunded commitments
 
 
 
 
$
88,466

 
$
(601
)
(9)
Loan was on non-accrual status as of June 30, 2019 .



50


Consolidated Schedule of Investments as of December 31, 2018
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate (2)
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (99.91% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Achilles Acquisition, LLC
+\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.00%
 
6.56%
 
10/11/2025
 
$
18,000

 
$
17,906

 
$
17,716

Acrisure, LLC
+
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.77%
 
11/22/2023
 
20,886

 
20,843

 
19,981

Acrisure, LLC
+\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 3.75%
 
6.27%
 
11/22/2023
 
11,940

 
11,928

 
11,333

Advanced Instruments, LLC
^+*
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
7.63%
 
10/31/2022
 
11,791

 
11,695

 
11,690

Ahead, LLC
^+
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.25%
 
6.87%
 
5/8/2024
 
20,059

 
19,959

 
19,856

Alpha Packaging Holdings, Inc.
+*
 
(2) (3)
 
Containers, Packaging & Glass
 
L + 4.25%
 
7.05%
 
5/12/2020
 
16,860

 
16,830

 
16,813

AM Conservation Holding Corporation
+*
 
(2) (3)
 
Energy: Electricity
 
L + 4.50%
 
7.30%
 
10/31/2022
 
38,310

 
38,079

 
38,027

AQA Acquisition Holding, Inc.
^+*
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.25%
 
7.05%
 
5/24/2023
 
19,148

 
19,111

 
18,978

Avalign Technologies, Inc.
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 4.50%
 
7.00%
 
12/22/2025
 
13,000

 
12,874

 
12,848

Big Ass Fans, LLC
+*\
 
(2) (3)
 
Capital Equipment
 
L + 3.75%
 
6.55%
 
5/21/2024
 
14,052

 
13,973

 
13,840

Borchers, Inc.
^+*
 
(2) (3) (8)
 
Chemicals, Plastics & Rubber
 
L + 4.50%
 
7.30%
 
11/1/2024
 
15,589

 
15,533

 
15,545

Brooks Equipment Company, LLC
+*
 
(2) (3)
 
Construction & Building
 
L + 5.00%
 
7.71%
 
8/29/2020
 
5,948

 
5,940

 
5,935

Clearent Newco, LLC
^+
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.00%
 
6.52%
 
3/20/2024
 
23,093

 
22,702

 
22,819

DBI Holding, LLC
+*
 
(2) (3) (9)
 
Transportation: Cargo
 
L + 5.25%
 
7.76%
 
8/1/2021
 
34,494

 
34,276

 
25,400

DBI Holding, LLC
^
 
 
 
Transportation: Cargo
 
15% (100% PIK)
 
7.76%
 
2/1/2020
 
1,119

 
1,119

 
1,119

DecoPac, Inc.
^+*
 
(2) (3) (8)
 
Non-durable Consumer Goods
 
L + 4.25%
 
7.05%
 
9/29/2024
 
12,696

 
12,571

 
12,619

Dent Wizard International Corporation
+
 
(2) (3)
 
Automotive
 
L + 4.00%
 
6.51%
 
4/7/2022
 
24,256

 
24,183

 
24,110

DTI Holdco, Inc.
+*\
 
(2) (3)
 
High Tech Industries
 
L + 4.75%
 
7.28%
 
9/30/2023
 
19,081

 
18,941

 
17,793

EIP Merger Sub, LLC (Evolve IP)
+*
 
(2) (3) (4)
 
Telecommunications
 
L + 5.75%
 
8.27%
 
6/7/2022
 
22,358

 
21,923

 
21,788

EIP Merger Sub, LLC (Evolve IP)
*
 
(2) (3) (7)
 
Telecommunications
 
L + 5.75%
 
8.27%
 
6/7/2022
 
1,500

 
1,469

 
1,462

Eliassen Group, LLC
+
 
(2) (3)
 
Business Services
 
L + 4.50%
 
7.00%
 
11/5/2024
 
6,250

 
6,226

 
6,202

Exactech, Inc.
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 3.75%
 
6.27%
 
2/14/2025
 
12,903

 
12,849

 
12,741

Executive Consulting Group, LLC, Inc.
^+
 
(2) (3) (8)
 
Business Services
 
L + 4.50%
 
7.30%
 
6/20/2024
 
15,318

 
15,168

 
15,132

Golden West Packaging Group LLC
+*
 
(2) (3)
 
Containers, Packaging & Glass
 
L + 5.25%
 
7.77%
 
6/20/2023
 
30,180

 
29,978

 
29,760

HMT Holding Inc.
^+*
 
(2) (3) (8)
 
Energy: Oil & Gas
 
L + 4.50%
 
7.02%
 
11/17/2023
 
33,490

 
32,902

 
33,172

J.S. Held, LLC
+*
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
7.30%
 
9/25/2024
 
20,309

 
20,137

 
19,998

Jensen Hughes, Inc.
^+*
 
(2) (3) (8)
 
Utilities: Electric
 
L + 4.50%
 
7.30%
 
3/22/2024
 
27,978

 
27,896

 
27,382

Kestra Financial, Inc.
+*
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.76%
 
6/24/2022
 
21,744

 
21,547

 
21,690

MAG DS Corp.
^+
 
(2) (3) (8)
 
Aerospace & Defense
 
L + 4.75%
 
7.27%
 
6/6/2025
 
22,885

 
22,679

 
22,665

Maravai Intermediate Holdings, LLC
+\
 
(2)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.81%
 
8/2/2025
 
29,925

 
29,640

 
29,578


51


Consolidated Schedule of Investments as of December 31, 2018
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate (2)
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (99.91% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mold-Rite Plastics, LLC
+
 
(2) (3)
 
Chemicals, Plastics & Rubber
 
L + 4.50%
 
7.30%
 
12/14/2021
 
$
14,850

 
$
14,793

 
$
14,762

MSHC, Inc.
^+*
 
(2) (3) (8)
 
Construction & Building
 
L + 4.25%
 
6.89%
 
7/31/2023
 
23,579

 
23,514

 
23,088

Newport Group Holdings II, Inc.
+\
 
(2)
 
Banking, Finance, Insurance & Real Estate
 
L + 3.75%
 
6.54%
 
9/13/2025
 
17,790

 
17,666

 
17,564

North American Dental Management, LLC
^+*
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
8.04%
 
7/7/2023
 
37,781

 
37,329

 
37,093

North Haven CA Holdings, Inc.
^+*
 
(2) (3) (8)
 
Business Services
 
L + 4.50%
 
7.02%
 
10/2/2023
 
35,139

 
34,789

 
34,401

Odyssey Logistics & Technology Corporation
+*\
 
(2) (3)
 
Transportation: Cargo
 
L + 4.00%
 
6.52%
 
10/12/2024
 
39,680

 
39,496

 
39,149

Output Services Group
^+\
 
(2) (3) (8)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
6.77%
 
3/27/2024
 
17,400

 
17,338

 
16,663

PAI Holdco, Inc.
+*
 
(2) (3)
 
Automotive
 
L + 4.25%
 
7.05%
 
1/5/2025
 
19,727

 
19,637

 
19,459

Park Place Technologies, Inc.
+\
 
(2) (3)
 
High Tech Industries
 
L + 4.00%
 
6.52%
 
3/29/2025
 
15,922

 
15,856

 
15,639

Pasternack Enterprises, Inc.
+
 
(2) (3)
 
Capital Equipment
 
L + 4.00%
 
6.52%
 
7/2/2025
 
20,076

 
20,076

 
19,745

Pharmalogic Holdings Corp.
^+
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.00%
 
6.52%
 
6/11/2023
 
7,017

 
6,995

 
6,949

Ping Identity Corporation
+\
 
(2) (3)
 
High Tech Industries
 
L + 3.75%
 
6.27%
 
1/25/2025
 
4,975

 
4,956

 
4,915

Premier Senior Marketing, LLC
*
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.75%
 
11/30/2025
 
4,953

 
4,953

 
4,875

Premise Health Holding Corp.
^+\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 3.75%
 
6.55%
 
7/10/2025
 
13,862

 
13,805

 
13,717

Propel Insurance Agency, LLC
^+
 
(2) (3) (8)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.75%
 
6/1/2024
 
21,088

 
20,535

 
20,628

PSI Services, LLC
^+*
 
(2) (3) (8)
 
Business Services
 
L + 5.00%
 
7.52%
 
1/20/2023
 
29,919

 
29,469

 
29,239

Q Holding Company
+*
 
(2) (3)
 
Automotive
 
L + 5.00%
 
7.52%
 
12/18/2021
 
17,099

 
17,058

 
16,969

QW Holding Corporation (Quala)
^+*
 
(2) (3) (8)
 
Environmental Industries
 
L + 6.75%
 
9.22%
 
8/31/2022
 
9,704

 
9,338

 
9,489

RevSpring, Inc.
+*\
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
7.05%
 
10/11/2025
 
20,000

 
19,953

 
19,680

Situs Group Holdings Corporation
+
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
7.02%
 
2/26/2023
 
8,915

 
8,892

 
8,887

Surgical Information Systems, LLC
+*
 
(2) (3) (7)
 
High Tech Industries
 
L + 4.85%
 
7.37%
 
4/24/2023
 
27,708

 
27,494

 
27,171

Systems Maintenance Services Holding, Inc.
+*
 
(2) (3)
 
High Tech Industries
 
L + 5.00%
 
7.52%
 
10/28/2023
 
24,010

 
23,907

 
17,842

T2 Systems Canada, Inc.
+
 
(2) (3)
 
Transportation: Consumer
 
L + 6.75%
 
9.34%
 
9/28/2022
 
2,646

 
2,598

 
2,630

T2 Systems, Inc.
^+*
 
(2) (3) (8)
 
Transportation: Consumer
 
L + 6.75%
 
9.34%
 
9/28/2022
 
15,775

 
15,484

 
15,677

The Original Cakerie, Co. (Canada)
+*
 
(2) (3)
 
Beverage, Food & Tobacco
 
L + 5.00%
 
7.50%
 
7/20/2022
 
9,019

 
8,968

 
8,932

The Original Cakerie, Ltd. (Canada)
+
 
(2) (3) (8)
 
Beverage, Food & Tobacco
 
L + 4.50%
 
7.02%
 
7/20/2022
 
6,957

 
6,917

 
6,883

ThoughtWorks, Inc.
+*\
 
(2) (3)
 
Business Services
 
L + 4.00%
 
6.52%
 
10/12/2024
 
11,944

 
11,909

 
11,770

U.S. Acute Care Solutions, LLC
+*
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 5.00%
 
7.52%
 
5/15/2021
 
31,705

 
31,540

 
31,395


52


Consolidated Schedule of Investments as of December 31, 2018
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate (2)
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
U.S. TelePacific Holdings Corp.
+*\
 
(2) (3)
 
Telecommunications
 
L + 5.00%
 
7.80%
 
5/2/2023
 
26,660

 
26,459

 
24,768

First Lien Debt (99.91% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Upstream Intermediate, LLC
^+
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.77%
 
1/3/2024
 
$
17,939

 
$
17,863

 
$
17,677

Valet Waste Holdings, Inc.
+\
 
(2) (3)
 
Construction & Building
 
L + 4.00%
 
6.52%
 
9/28/2025
 
11,970

 
11,947

 
11,902

Valicor Environmental Services, LLC
^+*
 
(2) (3) (8)
 
Environmental Industries
 
L + 4.75%
 
7.27%
 
6/1/2023
 
33,410

 
32,914

 
32,995

WIRB - Copernicus Group, Inc.
^+*
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.77%
 
8/15/2022
 
17,194

 
17,098

 
16,931

WRE Holding Corp.
^+*
 
(2) (3) (8)
 
Environmental Industries
 
L + 5.00%
 
7.52%
 
1/3/2023
 
7,238

 
7,162

 
6,993

Zywave, Inc.
^+*
 
(2) (3) (8)
 
High Tech Industries
 
L + 5.00%
 
7.52%
 
11/17/2022
 
18,050

 
17,914

 
17,991

First Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,197,499

 
$
1,172,460

Second Lien Debt (0.09% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Zywave, Inc.
*
 
(2) (3)
 
High Tech Industries
 
L + 9.00%
 
11.65%
 
11/17/2023
 
$
1,050

 
$
1,038

 
$
1,048

Second Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
$
1,038

 
$
1,048

Total Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,198,537

 
$
1,173,508


^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2017-1 Issuer or the Credit Fund Warehouse.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund, the 2017-1 Issuer or the Credit Fund Warehouse.
* Denotes that all or a portion of the assets are owned by the 2017-1 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on December 19, 2017 (the “2017-1 Debt Securitization”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub or the Credit Fund Warehouse.
\ Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse. Credit Fund Warehouse has entered into a revolving credit facility (the “Credit Fund Warehouse Facility”). The lenders of the Credit Fund Warehouse Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse. Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub or the 2017-1 Issuer.
(1)
Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2018 , the geographical composition of investments as a percentage of fair value was 1.35% in Canada and 98.65% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)
Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2018 . As of December 31, 2018 , the reference rates for Credit Fund's variable rate loans were the 30-day LIBOR at 2.50% , the 90-day LIBOR at 2.81% and the 180-day LIBOR at 2.88% .
(3)
Loan includes interest rate floor feature, which is generally 1.00%.
(4)
Credit Fund Sub receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.20% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.
(5)
Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(6)
Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements.
(7)
In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, Credit Fund is entitled to receive additional interest as a result of an agreement among lenders as follows: EIP Merger Sub, LLC (Evolve IP) (3.75%) and Surgical Information Systems, LLC (0.89%). Pursuant to the agreement among lenders in respect of these loans, these investments represent a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.







53




(8)
As of December 31, 2018 , Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
First Lien Debt—unfunded delayed draw and revolving term loans commitments
Type
 
Unused Fee
 
Par/ Principal Amount
 
Fair Value
Advanced Instruments, LLC
Revolver
 
0.50
%
 
$
1,333

 
$
(10
)
Ahead, LLC
Revolver
 
0.50

 
4,688

 
(38
)
AQA Acquisition Holding, Inc.
Revolver
 
0.50

 
2,459

 
(19
)
Borchers, Inc.
Revolver
 
0.50

 
1,935

 
(5
)
Clearent Newco, LLC
Delayed Draw
 
1.00

 
4,988

 
(46
)
Clearent Newco, LLC
Revolver
 
0.50

 
1,760

 
(16
)
DecoPac, Inc.
Revolver
 
0.50

 
2,143

 
(11
)
Executive Consulting Group, LLC, Inc.
Revolver
 
0.50

 
2,368

 
(25
)
HMT Holding Inc.
Revolver
 
0.50

 
6,173

 
(49
)
Jensen Hughes, Inc.
Revolver
 
0.50

 
2,000

 
(39
)
Jensen Hughes, Inc.
Delayed Draw
 
1.00

 
337

 
(7
)
MAG DS Corp.
Revolver
 
0.50

 
2,022

 
(18
)
MSHC, Inc.
Delayed Draw
 
0.32

 
9,852

 
(145
)
North American Dental Management, LLC
Revolver
 
0.50

 
2,000

 
(35
)
North Haven CA Holdings, Inc. (CoAdvantage)
Revolver
 
0.50

 
6,114

 
(109
)
Output Services Group
Delayed Draw
 
4.25

 
2,518

 
(93
)
Pharmalogic Holdings Corp.
Delayed Draw
 
1.00

 
2,947

 
(20
)
Premise Health Holding Corp.
Delayed Draw
 
1.00

 
1,103

 
(11
)
Propel Insurance Agency, LLC
Delayed Draw
 
0.50

 
7,143

 
(110
)
Propel Insurance Agency, LLC
Revolver
 
0.50

 
1,667

 
(26
)
PSI Services LLC
Revolver
 
0.50

 
754

 
(17
)
QW Holding Corporation (Quala)
Revolver
 
0.50

 
5,498

 
(52
)
T2 Systems, Inc.
Revolver
 
0.50

 
1,173

 
(7
)
The Original Cakerie, Ltd. (Canada)
Revolver
 
0.50

 
1,132

 
(10
)
Upstream Intermediate, LLC
Revolver
 
0.50

 
1,606

 
(22
)
Valicor Environmental Services, LLC
Revolver
 
0.50

 
4,971

 
(54
)
WIRB - Copernicus Group, Inc.
Delayed Draw
 
1.00

 
6,480

 
(69
)
WIRB - Copernicus Group, Inc.
Revolver
 
0.50

 
1,000

 
(11
)
WRE Holding Corp.
Delayed Draw
 
0.89

 
2,069

 
(51
)
WRE Holding Corp.
Revolver
 
0.50

 
613

 
(15
)
Zywave, Inc.
Revolver
 
0.50

 
600

 
(2
)
Total unfunded commitments
 
 
 
 
$
91,446

 
$
(1,142
)
(9)
Loan was on non-accrual status as of December 31, 2018 .


54


Below is certain summarized consolidated financial information for Credit Fund as of June 30, 2019 and December 31, 2018 , respectively. Credit Fund commenced operations in May 2016.
 
 
June 30, 2019
 
December 31, 2018
 
 
(unaudited)
 
 
Selected Consolidated Balance Sheet Information
 
 
 
 
ASSETS
 
 
 
 
Investments, at fair value (amortized cost of $1,343,004 and $1,198,537, respectively)
 
$
1,328,201

 
$
1,173,508

Cash and other assets
 
47,039

 
62,547

Total assets
 
$
1,375,240

 
$
1,236,055

LIABILITIES AND MEMBERS’ EQUITY
 
 
 
 
Secured borrowings
 
$
384,493

 
$
572,178

Notes payable, net of unamortized debt issuance costs of $3,623 and $1,849, respectively
 
629,108

 
309,114

Mezzanine loans
 
80,000

 
112,000

Other liabilities
 
60,673

 
34,195

Subordinated loans and members’ equity
 
220,966

 
208,568

Liabilities and members’ equity
 
$
1,375,240

 
$
1,236,055

 
 
For the three month periods ended
 
For the six month periods ended
 
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
 
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Selected Consolidated Statement of Operations Information:
 
 
 
 
 
 
 
 
Total investment income
 
$
23,734

 
$
20,480

 
$
46,340

 
$
38,391

Expenses
 
 
 
 
 
 
 
 
Interest and credit facility expenses
 
15,671

 
13,101

 
30,401

 
23,757

Other expenses
 
472

 
380

 
913

 
769

Total expenses
 
16,143

 
13,481

 
31,314

 
24,526

Net investment income (loss)
 
7,591

 
6,999

 
15,026

 
13,865

Net realized gain (loss) on investments
 
(68
)
 
—

 
(8,353
)
 
—

Net change in unrealized appreciation (depreciation) on investments
 
(7,552
)
 
(2,922
)
 
10,226

 
113

Net increase (decrease) resulting from operations
 
$
(29
)
 
$
4,077

 
$
16,899

 
$
13,978

Debt
Credit Fund Facility
On June 24, 2016, Credit Fund entered into the Credit Fund Facility with the Company, which was subsequently amended on June 5, 2017, October 2, 2017, November 3, 2017, June 22, 2018 and June 29, 2018, pursuant to which Credit Fund may from time to time request mezzanine loans from the Company. The maximum principal amount of the Credit Fund Facility is $175,000. The maturity date of the Credit Fund Facility is March 22, 2020. Amounts borrowed under the Credit Fund Facility bear interest at a rate of LIBOR plus 9.00%.
During the three month periods ended June 30, 2019 and 2018 , there were mezzanine loan borrowings of $20,200 and $25,300 , respectively, and repayments of $64,000 and $18,900 , respectively, under the Credit Fund Facility. During the six month periods ended June 30, 2019 and 2018 , there were mezzanine loan borrowings of $50,700 and $47,150 , respectively, and repayments of $82,700 and $18,900 , respectively, under the Credit Fund Facility. As of June 30, 2019 and December 31, 2018 , there were $80,000 and $112,000 in mezzanine loans outstanding, respectively.
As of June 30, 2019 and December 31, 2018 , Credit Fund was in compliance with all covenants and other requirements of the Credit Fund Facility.
Credit Fund Sub Facility
On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders, which was subsequently amended on May 31, 2017, October 27, 2017 and August 24, 2018. The Credit Fund Sub Facility provides for secured borrowings

55


during the applicable revolving period up to an amount equal to $640,000. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund Sub. The maturity date of the Credit Fund Sub Facility is May 22, 2024. Amounts borrowed under the Credit Fund Sub Facility bear interest at a rate of LIBOR plus 2.25%.
During the three month periods ended June 30, 2019 and 2018 , there were secured borrowings of $48,850 and $41,300 , respectively, and repayments of $175,107 and $20,966 , respectively, under the Credit Fund Sub Facility. During the six month periods ended June 30, 2019 and 2018 , there were secured borrowings of $108,870 and $109,265 , respectively, and repayments of $195,511 and $36,001 , respectively, under the Credit Fund Sub Facility. As of June 30, 2019 and December 31, 2018 , there was $384,493 and $471,134 in secured borrowings outstanding, respectively.
As of June 30, 2019 and December 31, 2018 , Credit Fund Sub was in compliance with all covenants and other requirements of the Credit Fund Sub Facility.
2017-1 Notes
On December 19, 2017, Credit Fund completed the 2017-1 Debt Securitization. The notes offered in the 2017-1 Debt Securitization (the “2017-1 Notes”) were issued by the 2017-1 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2017-1 Issuer consisting primarily of first and second lien senior secured loans. The 2017-1 Debt Securitization was executed through a private placement of the 2017-1 Notes, consisting of $231,700 of Aaa/AAA Class A-1 Notes, which bear interest at the three-month LIBOR plus 1.17%; $48,300 of Aa2/AA Class A-2 Notes, which bear interest at the three-month LIBOR plus 1.50%; $15,000 of A2/A Class B-1 Notes, which bear interest at the three-month LIBOR plus 2.25%; $9,000 of A2/A Class B-2 Notes which bear interest at 4.30%; $22,900 of Baa2/BBB Class C Notes which bear interest at the three-month LIBOR plus 3.20%; and $25,100 of Ba2/BB Class D Notes which bear interest at the three-month LIBOR plus 6.38%. The 2017-1 Notes are scheduled to mature on January 15, 2028. Credit Fund received 100% of the preferred interests issued by the 2017-1 Issuer (the “2017-1 Issuer Preferred Interests”) on the closing date of the 2017-1 Debt Securitization in exchange for Credit Fund’s contribution to the 2017-1 Issuer of the initial closing date loan portfolio. The 2017-1 Issuer Preferred Interests do not bear interest and had a nominal value of $47,900 at closing.
As of June 30, 2019 and December 31, 2018 , the 2017-1 Issuer was in compliance with all covenants and other requirements of the indenture.
Credit Fund Warehouse Facility
MMCF Warehouse, LLC (the “Credit Fund Warehouse”) a Delaware limited liability company, was formed on November 26, 2018. On November 26, 2018, Credit Fund closed on the Credit Fund Warehouse Facility with lenders. The Credit Fund Warehouse Facility provided for secured borrowings during the applicable revolving period up to an amount equal to $150,000. The Credit Fund Warehouse Facility was secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Warehouse. The maturity date of the Credit Fund Warehouse Facility was November 26, 2019. Amounts borrowed under the Credit Fund Warehouse Facility bore interest at a rate of LIBOR plus 1.05%. Effective May 15, 2019, the Warehouse Facility changed its name from “MMCF Warehouse, LLC” to “MMCF CLO 2019-2, LLC” and secured borrowings outstanding were repaid in connection with the 2019-2 Debt Securitization.
During the three and six month periods ended June 30, 2019 , there were secured borrowings of $21,671 and $34,544 , respectively, and repayments of $135,589 and $135,589 , respectively, under the Credit Fund Warehouse Facility.
2019-2 Notes
On May 21, 2019, Credit Fund completed the 2019-2 Debt Securitization. The notes offered in the 2019-2 Debt Securitization (the “2019-2 Notes”) were issued by the 2019-2 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2019-2 Issuer consisting primarily of first and second lien senior secured loans. The 2019-2 Debt Securitization was executed through a private placement of the 2019-2 Notes, consisting of $233,000 of Aaa/AAA Class A-1 Notes, which bear interest at the three-month LIBOR plus 1.50%; $48,000 of Aa2/AA Class A-2 Notes, which bear interest at the three-month LIBOR plus 2.40%; $23,000 of A2/A Class B Notes, which bear interest at the three-month LIBOR plus 3.45%; $27,000 of Baa2/BBB- Class C Notes which bear interest at the three-month LIBOR plus 4.55%; and $21,000 of Ba2/BB- Class D Notes which bear interest at the three-month LIBOR plus 8.03%. The 2017-1 Notes are scheduled to mature on April 15, 2029. Credit Fund received 100% of the preferred interests issued by the 2019-2 Issuer (the “2019-2 Issuer Preferred Interests”) on the closing date of the 2019-2 Debt Securitization in exchange for Credit Fund’s contribution to the 2019-2 Issuer of the initial closing date loan portfolio. The 2019-2 Issuer Preferred Interests do not bear interest and had a nominal value of $48,300 at closing.

56


As of June 30, 2019 , the 2019-2 Issuer was in compliance with all covenants and other requirements of the indenture.

6. BORROWINGS
In accordance with the Investment Company Act, the Company is currently only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 150% after such borrowing. As of June 30, 2019 and December 31, 2018 , asset coverage was 193.45% and 210.31% , respectively. During the three month and six month periods ended June 30, 2019 , there were secured borrowings of $149,000 and $402,950 , respectively, under the SPV Credit Facility and Credit Facility and repayments of $160,562 and $268,188 , respectively, under the SPV Credit Facility and Credit Facility. During the three month and six month periods ended June 30, 2018 , there were secured borrowings of $170,000 and $423,050 , respectively, under the SPV Credit Facility and Credit Facility and repayments of $112,760 and $400,838 , respectively, under the SPV Credit Facility and Credit Facility. As of June 30, 2019 and December 31, 2018 , there were $649,397 and $514,635 , respectively, in secured borrowings outstanding.
SPV Credit Facility
The SPV closed on the SPV Credit Facility on May 24, 2013 , which was subsequently amended on June 30, 2014, June 19, 2015, June 9, 2016, May 26, 2017 and August 9, 2018. The SPV Credit Facility provides for secured borrowings during the applicable revolving period up to an amount equal to the lesser of $400,000 (the borrowing base as calculated pursuant to the terms of the SPV Credit Facility) and the amount of net cash proceeds and unpledged capital commitments the Company has received, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings. The SPV Credit Facility has a revolving period through May 21, 2021 and a maturity date of May 23, 2023. Borrowings under the SPV Credit Facility bear interest initially at the applicable commercial paper rate (if the lender is a conduit lender) or LIBOR (or, if applicable, a rate based on the prime rate or federal funds rate) plus 2.00% per year through May 21, 2021, with pre-determined future interest rate increases of 0.875%-1.75% following the end of the revolving period. The SPV is also required to pay an undrawn commitment fee of between 0.50% and 0.75% per year depending on the drawings under the SPV Credit Facility. Payments under the SPV Credit Facility are made quarterly. The lenders have a first lien security interest on substantially all of the assets of the SPV.
As part of the SPV Credit Facility, the SPV is subject to limitations as to how borrowed funds may be used and the types of loans that are eligible to be acquired by the SPV including, but not limited to, restrictions on sector and geographic concentrations, loan size, payment frequency, tenor and minimum investment ratings (or estimated ratings). In addition, borrowed funds are intended to be used primarily to purchase first lien loan assets, and the SPV is limited in its ability to purchase certain other assets (including, but not limited to, second lien loans, covenant-lite loans, revolving and delayed draw loans and discount loans) and other assets are not permitted to be purchased (including, but not limited to paid-in-kind loans). The SPV Credit Facility has certain requirements relating to asset coverage, interest coverage, collateral quality and portfolio performance, including limitations on delinquencies and charge offs, certain violations of which could result in the immediate acceleration of the amounts due under the SPV Credit Facility. The SPV Credit Facility is also subject to a borrowing base that applies different advance rates to assets held by the SPV based generally on the fair market value of such assets. Under certain circumstances as set forth in the SPV Credit Facility, the Company could be obliged to repurchase loans from the SPV.
As of June 30, 2019 and December 31, 2018 , the SPV was in compliance with all covenants and other requirements of the SPV Credit Facility.
Credit Facility
The Company closed on the Credit Facility on March 21, 2014, which was subsequently amended on January 8, 2015, May 25, 2016, March 22, 2017, September 25, 2018 and June 14, 2019. The maximum principal amount of the Credit Facility is $593,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased to $900,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit. The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either LIBOR plus an applicable spread of 2.25%, or an “alternative base rate” (which is the highest of a prime rate,

57


the federal funds effective rate plus 0.50%, or one month LIBOR plus 1.00%) plus an applicable spread of 1.25%. The Company may elect either the LIBOR or the “alternative base rate” at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on undrawn amounts under the Credit Facility and, in respect of each undrawn letter of credit, a fee and interest rate equal to the then-applicable margin under the Credit Facility while the letter of credit is outstanding. The availability period under the Credit Facility will terminate on June 14, 2023 and the Credit Facility will mature on June 14, 2024. During the period from June 14, 2023 to June 14, 2024, the Company will be obligated to make mandatory prepayments under the Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.
Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.
As of June 30, 2019 and December 31, 2018 , the Company was in compliance with all covenants and other requirements of the Credit Facility.
Summary of Facilities
The Facilities consisted of the following as of June 30, 2019 and December 31, 2018 :
 
June 30, 2019
 
Total Facility
 
Borrowings Outstanding
 
Unused Portion  (1)
 
Amount Available  (2)
SPV Credit Facility
$
400,000

 
$
246,897

 
$
153,103

 
$
16,388

Credit Facility
593,000

 
402,500

 
190,500

 
190,500

Total
$
993,000

 
$
649,397

 
$
343,603

 
$
206,888

 
 
 
 
 
 
 
 
 
December 31, 2018
 
Total Facility
 
Borrowings Outstanding
 
Unused Portion  (1)
 
Amount Available  (2)
SPV Credit Facility
$
400,000

 
$
224,135

 
$
175,865

 
$
2,547

Credit Facility
413,000

 
290,500

 
122,500

 
122,500

Total
$
813,000

 
$
514,635

 
$
298,365

 
$
125,047

 
(1)
The unused portion is the amount upon which commitment fees are based.
(2)
Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
As of June 30, 2019 and December 31, 2018 , $2,925 and $2,978 , respectively, of interest expense, $227 and $205 , respectively, of unused commitment fees and $23 and $23 , respectively, of other fees were included in interest and credit facility fees payable. For the three month and six month periods ended June 30, 2019 , the weighted average interest rates were 4.61% and 4.64% , respectively, and the average principal debt outstanding was $665,693 and $617,374 , respectively. For the three month and six month periods ended June 30, 2018 , the weighted average interest rates were 4.19% and 3.98% , respectively, and the average principal debt outstanding was $542,561 and $548,078 , respectively. As of June 30, 2019 and December 31, 2018 , the weighted average interest rates were 4.59% and 4.67% , respectively, based on floating LIBOR rates.

58


For the three month and six month periods ended June 30, 2019 and 2018 , the components of interest expense and credit facility fees were as follows:
 
For the three month periods ended
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Interest expense
$
7,753

 
$
5,740

 
$
14,406

 
$
10,975

Facility unused commitment fee
296

 
294

 
599

 
582

Amortization of deferred financing costs
266

 
252

 
502

 
454

Other fees
109

 
35

 
138

 
70

Total interest expense and credit facility fees
$
8,424

 
$
6,321

 
$
15,645

 
$
12,081

Cash paid for interest expense
$
8,011

 
$
5,461

 
$
14,460

 
$
10,752

7. NOTES PAYABLE
On June 26, 2015, the Company completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, a wholly-owned and consolidated subsidiary of the Company. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of $160,000 of Aaa/AAA Class A-1A Notes; $40,000 of Aaa/AAA Class A-1B Notes; $27,000 of Aaa/AAA Class A-1C Notes; and $46,000 of Aa2 Class A-2 Notes. The 2015-1 Notes were issued at par and were scheduled to mature on July 15, 2027. The Company received 100% of the preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for the Company’s contribution to the 2015-1 Issuer of the initial closing date loan portfolio. The 2015-1 Issuer Preferred Interests do not bear interest and had a nominal value of $125,900 at closing. In connection with the contribution, the Company made customary representations, warranties and covenants to the 2015-1 Issuer in the purchase agreement. The Class A-1A, Class A-1B and Class A-1C and Class A-2 Notes are included in these consolidated financial statements. The 2015-1 Issuer Preferred Interests were eliminated in consolidation.
On the closing date of the 2015-1 Debt Securitization, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the 2015-1 Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility and the Credit Facility. As part of the 2015-1 Debt Securitization, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement.
On August 30, 2018, the Company and the 2015-1 Issuer closed the 2015-1 Debt Securitization Refinancing. On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer, among other things, (a) refinanced the issued Class A-1A Notes by redeeming in full the Class A-1A Notes and issuing new AAA Class A-1-1-R Notes in an aggregate principal amount of $234,800 which bear interest at the three-month LIBOR plus 1.55%; (b) refinanced the issued Class A-1B Notes by redeeming in full the Class A-1B Notes and issuing new AAA Class A-1-2-R Notes in an aggregate principal amount of $50,000 which bear interest at the three-month LIBOR plus 1.48% for the first 24 months and the three-month LIBOR plus 1.78% thereafter; (c) refinanced the issued Class A-1C Notes by redeeming in full the Class A-1C Notes and issuing new AAA Class A-1-3-R Notes in an aggregate principal amount of $25,000 which bear interest at 4.56%; (d) refinanced the issued Class A-2 Notes by redeeming in full the Class A-2 Notes and issuing new Class A-2-R Notes in an aggregate principal amount of $66,000 which bear interest at the three-month LIBOR plus 2.20%; (e) issued new single-A Class B Notes and BBB- Class C Notes in aggregate principal amounts of $46,400 and $27,000, respectively, which bear interest at the three-month LIBOR plus 3.15% and the three-month LIBOR plus 4.00%, respectively; (f) reduced the 2015-1 Issuer Preferred Interests by approximately $21,375 from a nominal value of $125,900 to approximately $104,525 at close; and (g) extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to October 15, 2023 and October 15, 2031, respectively. Following the 2015-1 Debt Securitization Refinancing, the Company retained the 2015-1 Issuer Preferred Interests. The 2015-1R Notes in the 2015-1 Debt Securitization Refinancing were issued by the 2015-1 Issuer and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans.
On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the 2015-1R Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility and the Credit Facility. As part of the 2015-1 Debt Securitization Refinancing, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement. The Company contributed the loans that comprised the initial closing date loan portfolio (including the loans distributed to the Company from the SPV) to the 2015-1 Issuer pursuant to a contribution agreement. Future loan transfers from the Company to the 2015-1 Issuer will be made pursuant to a

59


sale agreement and are subject to the approval of the Company’s Board of Directors. Assets of the 2015-1 Issuer are not available to the creditors of the SPV or the Company. In connection with the issuance and sale of the 2015-1R Notes, the Company made customary representations, warranties and covenants in the purchase agreement.
During the reinvestment period, pursuant to the indenture governing the 2015-1R Notes, all principal collections received on the underlying collateral may be used by the 2015-1 Issuer to purchase new collateral under the direction of Investment Adviser in its capacity as collateral manager of the 2015-1 Issuer and in accordance with the Company’s investment strategy.
The Investment Adviser serves as collateral manager to the 2015-1 Issuer under a collateral management agreement (the “Collateral Management Agreement”). Pursuant to the Collateral Management Agreement, the 2015-1 Issuer pays management fees (comprised of base management fees, subordinated management fees and incentive management fees) to the Investment Adviser for rendering collateral management services. As per the Collateral Management Agreement, for the period the Company retains all of the 2015-1 Issuer Preferred Interests, the Investment Adviser does not earn management fees for providing such collateral management services. The Company currently retains all of the 2015-1 Issuer Preferred Interests, thus the Investment Adviser did not earn any management fees from the 2015-1 Issuer for the three month and six month periods ended June 30, 2019 and 2018 . Any such waived fees may not be recaptured by the Investment Adviser.
Pursuant to an undertaking by the Company in connection with the 2015-1 Debt Securitization Refinancing, the Company has agreed to hold on an ongoing basis the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remain outstanding. As of June 30, 2019 , the Company was in compliance with its undertaking.
The 2015-1 Issuer pays ongoing administrative expenses to the trustee, 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 2015-1 Issuer.
As of June 30, 2019 , the 2015-1R Notes were secured by 58 first lien and second lien senior secured loans with a total fair value of approximately $530,314 and cash of $32,483 . The pool of loans in the securitization must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2015-1R Notes.
For the six month periods ended June 30, 2019 and 2018 , the weighted average interest rate, the effective annualized weighted average interest rates, which include amortization of debt issuance costs on the 2015-1R Notes and 2015-1 Notes, were 4.65% and 4.04% , respectively, based on floating LIBOR rates. As of June 30, 2019 and December 31, 2018 the weighted average interest rates were 4.57% and 4.42% respectively, based on floating LIBOR rates.
For the three month and six month periods ended June 30, 2019 and 2018 , the components of interest expense on the 2015-1R Notes and 2015-1 Notes were as follows:
 
For the three month periods ended
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Interest expense
$
5,217

 
$
2,918

 
$
10,494

 
$
5,448

Amortization of deferred financing costs
62

 
51

 
123

 
101

Total interest expense and credit facility fees
$
5,279

 
$
2,969

 
$
10,617

 
$
5,549

Cash paid for interest expense
$
5,334

 
$
2,567

 
$
10,400

 
$
4,958



8. COMMITMENTS AND CONTINGENCIES
A summary of significant contractual payment obligations was as follows as of June 30, 2019 and December 31, 2018 :

60


 
 
SPV Credit Facility and Credit Facility
 
2015-1R Notes
Payment Due by Period
 
June 30, 2019
 
December 31, 2018
 
June 30, 2019
 
December 31, 2018
Less than 1 Year
 
$
—

 
$
—

 
$
—

 
$
—

1-3 Years
 
—

 
—

 
—

 
—

3-5 Years
 
649,397

 
514,635

 
—

 
—

More than 5 Years
 
—

 
—

 
449,200

 
449,200

Total
 
$
649,397

 
$
514,635

 
$
449,200

 
$
449,200

In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnification or warranties. Future events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the consolidated financial statements as of June 30, 2019 and December 31, 2018 for any such exposure.
The Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:
 
Par Value as of
 
June 30, 2019
 
December 31, 2018
Unfunded delayed draw commitments
$
105,692

 
$
97,261

Unfunded revolving term loan commitments
69,442

 
59,856

Total unfunded commitments
$
175,134

 
$
157,117

9. NET ASSETS
The Company has the authority to issue 200,000,000 shares of common stock, $0.01 per share par value.
On November 5, 2018, the Company’s Board of Directors approved a $100,000 stock repurchase program (the “Company Stock Repurchase Program”). The Company Stock Repurchase Program is expected to be in effect until the earlier of November 5, 2019 and the date the approved dollar amount has been used to repurchase shares. Since the inception of the Company Stock Repurchase Program through June 30, 2019 , the Company has repurchased 2,386,149 shares of the Company's common stock at an average cost of $14.74 per share, or $35,221 in the aggregate, resulting in accretion to net assets per share of $0.09.
During the three month period ended June 30, 2019 , the Company repurchased and extinguished 1,089,559 shares for $16,258 . The following table summarizes capital activity during the three month period ended June 30, 2019 :

61


 
 
 
Common Stock
 
Capital in Excess of Par Value
 
Offering
Costs
 
Accumulated Net Investment Income (Loss)
 
Accumulated Net Realized Gain (Loss) on Investments
 
Accumulated Net Unrealized Appreciation (Depreciation) on Investments
 
Total Net Assets
 
 
Shares
 
Amount
 
Balance, beginning of period
 
61,272,069

 
$
613

 
$
1,160,258

 
$
(1,633
)
 
$
10,791

 
$
(43,673
)
 
$
(66,169
)
 
$
1,060,187

Repurchase of common stock
 
(1,090,210
)
 
(11
)
 
(16,258
)
 
—

 
—

 
—

 
—

 
(16,269
)
Net investment income (loss)
 
—

 
—

 
—

 
—

 
27,971

 
—

 
—

 
27,971

Net realized gain (loss) on investments
 
—

 
—

 
—

 
—

 
—

 
(7,681
)
 
—

 
(7,681
)
Net change in unrealized appreciation (depreciation) on investments
 
—

 
—

 
—

 
—

 
—

 
—

 
(10,533
)
 
(10,533
)
Dividends declared
 
—

 
—

 
—

 
—

 
(27,083
)
 
—

 
—

 
(27,083
)
Balance, end of period
 
60,181,859

 
$
602

 
$
1,144,000

 
$
(1,633
)
 
$
11,679

 
$
(51,354
)
 
$
(76,702
)
 
$
1,026,592

During the six month period ended June 30, 2019 , the Company repurchased and extinguished 2,048,392 shares for $30,354 . The following table summarizes capital activity during the six month period ended June 30, 2019 :
 
 
 
Common Stock
 
Capital in Excess of Par Value
 
Offering Costs
 
Accumulated Net Investment Income (Loss)
 
Accumulated Net Realized Gain (Loss) on Investments
 
Accumulated Net Unrealized Appreciation (Depreciation) on Investments
 
Total Net Assets
 
 
Shares
 
Amount
 
Balance, beginning of period
 
62,230,251

 
$
622

 
$
1,174,334

 
$
(1,633
)
 
$
5,901

 
$
(44,572
)
 
$
(71,434
)
 
$
1,063,218

Repurchase of common stock
 
(2,048,392
)
 
(20
)
 
(30,334
)
 
—

 
—

 
—

 
—

 
(30,354
)
Net investment income (loss)
 
—

 
—

 
—

 
—

 
55,533

 
—

 
—

 
55,533

Net realized gain (loss) on investments
 
—

 
—

 
—

 
—

 
—

 
(6,782
)
 
—

 
(6,782
)
Net change in unrealized appreciation (depreciation) on investments
 
—

 
—

 
—

 
—

 
—

 
—

 
(5,268
)
 
(5,268
)
Dividends declared
 
—

 
—

 
—

 
—

 
(49,755
)
 
—

 
—

 
(49,755
)
Balance, end of period
 
60,181,859

 
$
602

 
$
1,144,000

 
$
(1,633
)
 
$
11,679

 
$
(51,354
)
 
$
(76,702
)
 
$
1,026,592

During the three month period ended June 30, 2018 , the Company did not issue shares through the reinvestment of dividends. The following table summarizes capital activity during the three month period ended June 30, 2018 :

62


 
 
 
Common Stock
 
Capital in Excess of Par Value
 
Offering Costs
 
Accumulated Net Investment Income (Loss)
 
Accumulated Net Realized Gain (Loss) on Investments
 
Accumulated Net Unrealized Appreciation (Depreciation) on Investments
 
Total Net Assets
 
 
Shares
 
Amount
 
Balance, beginning of period
 
62,568,659

 
$
626

 
$
1,179,432

 
$
(1,633
)
 
$
4,502

 
$
(43,677
)
 
$
(7,393
)
 
$
1,131,857

Reinvestment of dividends
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Offering costs
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Net investment income (loss)
 
—

 
—

 
—

 
—

 
28,210

 
—

 
—

 
28,210

Net realized gain (loss) on investments
 
—

 
—

 
—

 
—

 
—

 
1,775

 
—

 
1,775

Net change in unrealized appreciation (depreciation) on investments
 
—

 
—

 
—

 
—

 
—

 
—

 
(16,879
)
 
(16,879
)
Dividends declared
 
—

 
—

 
—

 
—

 
(23,151
)
 
—

 
—

 
(23,151
)
Balance, end of period
 
62,568,659

 
$
626

 
$
1,179,432

 
$
(1,633
)
 
$
9,561

 
$
(41,902
)
 
$
(24,272
)
 
$
1,121,812

During the six month period ended June 30, 2018 , the Company issued 361,056 shares for $6,629 , through the reinvestment of dividends. The following table summarizes capital activity during the six month period ended June 30, 2018 :
 
 
 
Common Stock
 
Capital in Excess of Par Value
 
Offering Costs
 
Accumulated Net Investment Income (Loss)
 
Accumulated Net Realized Gain (Loss) on Investments
 
Accumulated Net Unrealized Appreciation (Depreciation) on Investments
 
Total Net Assets
 
 
Shares
 
Amount
 
Balance, beginning of period
 
62,207,603

 
$
622

 
$
1,172,807

 
$
(1,618
)
 
$
2,522

 
$
(43,548
)
 
$
(3,481
)
 
$
1,127,304

Reinvestment of dividends
 
361,056

 
4

 
6,625

 
—

 
—

 
—

 
—

 
6,629

Offering costs
 
—

 
—

 
—

 
(15
)
 
—

 
—

 
—

 
(15
)
Net investment income (loss)
 
—

 
—

 
—

 
—

 
53,340

 
—

 
—

 
53,340

Net realized gain (loss) on investments
 
—

 
—

 
—

 
—

 
—

 
1,646

 
—

 
1,646

Net change in unrealized appreciation (depreciation) on investments
 
—

 
—

 
—

 
—

 
—

 
—

 
(20,791
)
 
(20,791
)
Dividends declared
 
—

 
—

 
—

 
—

 
(46,301
)
 
—

 
—

 
(46,301
)
Balance, end of period
 
62,568,659

 
$
626

 
$
1,179,432

 
$
(1,633
)
 
$
9,561

 
$
(41,902
)
 
$
(24,272
)
 
$
1,121,812

The following table summarizes total shares issued and proceeds received related to capital activity during the six month period ended June 30, 2018 :
 
 
Shares Issued
 
Proceeds Received
January 17, 2018*
 
361,056

 
$
6,629

Total
 
361,056

 
$
6,629

* Represents shares issued upon the reinvestment of dividends
The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share . Basic earnings per common share were calculated by dividing net increase (decrease) in net assets resulting from operations attributable to the Company by the weighted-average number of common shares outstanding for the period.

63


Basic and diluted earnings per common share were as follows:
 
 
For the three month periods ended
 
For the six month periods ended
 
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Net increase (decrease) in net assets resulting from operations
 
$
9,757

 
$
13,106

 
$
43,483

 
$
34,195

Weighted-average common shares outstanding
 
60,596,402

 
62,568,651

 
61,191,926

 
62,534,740

Basic and diluted earnings per common share
 
$
0.16

 
$
0.21

 
$
0.71

 
$
0.55

The following table summarizes the Company’s dividends declared during the two most recent fiscal years and the current fiscal year to-date:
Date Declared
 
Record Date
 
Payment Date
 
Per Share Amount
 
March 20, 2017
 
March 20, 2017
 
April 24, 2017
 
$
0.41

 
June 20, 2017
 
June 30, 2017
 
July 18, 2017
 
$
0.37

 
August 7, 2017
 
September 29, 2017
 
October 18, 2017
 
$
0.37

 
November 7, 2017
 
December 29, 2017
 
January 17, 2018
 
$
0.37

 
December 13, 2017
 
December 29, 2017
 
January 17, 2018
 
$
0.12

(1)  
February 26, 2018
 
March 29, 2018
 
April 17, 2018
 
$
0.37

 
May 2, 2018
 
June 29, 2018
 
July 17, 2018
 
$
0.37

 
August 6, 2018
 
September 28, 2018
 
October 17, 2018
 
$
0.37

 
November 5, 2018
 
December 28, 2018
 
January 17, 2019
 
$
0.37

 
December 12, 2018
 
December 28, 2018
 
January 17, 2019
 
$
0.20

(1)  
February 22, 2019
 
March 29, 2019
 
April 17, 2019
 
$
0.37

 
May 6, 2019
 
June 28, 2019
 
July 17, 2019
 
$
0.37

 
June 17, 2019
 
June 28, 2019
 
July 17, 2019
 
$
0.08

(1)  
(1)  
Represents a special dividend.

64


10. CONSOLIDATED FINANCIAL HIGHLIGHTS
The following is a schedule of consolidated financial highlights for the six month periods ended June 30, 2019 and 2018 :  
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
Per Share Data:
 
 
 
Net asset value per share, beginning of period
$
17.09

 
$
18.12

Net investment income (loss) (1)
0.91

 
0.86

Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments
(0.20
)
 
(0.31
)
Net increase (decrease) in net assets resulting from operations
0.71

 
0.55

Dividends declared (2)
(0.82
)
 
(0.74
)
Accretion due to share repurchases
0.08

 
—

Net asset value per share, end of period
$
17.06

 
$
17.93

Market price per share, end of period
$
15.24

 
$
17.02

 
 
 
 
Number of shares outstanding, end of period
60,181,859

 
62,568,651

Total return based on net asset value (3)
4.62
%
 
3.04
 %
Total return based on market price (4)
29.52
%
 
(11.38
)%
Net assets, end of period
$
1,026,592

 
$
1,121,812

Ratio to average net assets (5):
 
 
 
Expenses before incentive fees
4.22
%
 
3.09
 %
Expenses after incentive fees
5.33
%
 
4.08
 %
Net investment income (loss)
5.24
%
 
4.68
 %
Interest expense and credit facility fees
2.48
%
 
1.55
 %
Ratios/Supplemental Data:
 
 
 
Asset coverage, end of period
193.45
%
 
230.73
 %
Portfolio turnover
18.15
%
 
19.28
 %
Weighted-average shares outstanding
61,191,926

 
62,534,740

(1)
Net investment income (loss) per share was calculated as net investment income (loss) for the period divided by the weighted average number of shares outstanding for the period.
(2)
Dividends declared per share was calculated as the sum of dividends declared during the period divided by the number of shares outstanding at each respective quarter-end date (refer to Note 9, Net Assets).
(3)
Total return based on net asset value (not annualized) is based on the change in net asset value per share during the period plus the declared dividends, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the period.
(4)
Total return based on market value (not annualized) is calculated as the change in market value per share during the period plus the declared dividends, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning market price for the period.
(5)
These ratios to average net assets have not been annualized.

11. LITIGATION
The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current matters, if any, will materially impact the Company or its consolidated financial statements. As of June 30, 2019 and December 31, 2018 , the Company was not subject to any material legal proceedings, nor, to the Company’s knowledge, is any material legal proceeding threatened against the Company.
In addition, portfolio investments of the Company could be the subject of litigation or regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these consolidated financial statements.

65


12. TAX
The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of June 30, 2019 and December 31, 2018 .
In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. As of June 30, 2019 and December 31, 2018 , the Company had filed tax returns and therefore is subject to examination.
The Company’s taxable income for each period is an estimate and will not be finally determined until the Company files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate. The estimated tax character of dividends declared for six month periods ended June 30, 2019 and 2018 was as follows:
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
Ordinary income
$
49,755

 
$
46,301

Tax return of capital
$
—

 
$
—

13. SUBSEQUENT EVENTS
Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below.
Subsequent to  June 30, 2019 , the Company borrowed  $132,699  under the Credit Facility and SPV Credit Facility to fund investment acquisitions. The Company also voluntarily repaid  $10,000  under the Credit Facility and SPV Credit Facility.
On August 5, 2019, the Company’s Board of Directors declared a quarterly dividend of $0.37 per share, which is payable on October 17, 2019 to stockholders of record as of September 30, 2019.






66


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(dollar amounts in thousands, except per share data, unless otherwise indicated)
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
We have included or incorporated by reference in this Form 10-Q, and from time to time our management may make, “forward-looking statements”. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. The forward-looking statements contained in this Form 10-Q and the documents incorporated by reference herein involve a number of risks and uncertainties, including statements concerning:
 
•
our, or our portfolio companies’, future business, operations, operating results or prospects;
•
the return or impact of current and future investments;
•
the impact of any protracted decline in the liquidity of credit markets on our business;
•
the impact of fluctuations in interest rates on our business;
•
our future operating results;
•
the impact of changes in laws, policies or regulations (including the interpretation thereof) affecting our operations or the operations of our portfolio companies;
•
the valuation of our investments in portfolio companies, particularly those having no liquid trading market;
•
our ability to recover unrealized losses;
•
market conditions and our ability to access alternative debt markets and additional debt and equity capital;
•
our contractual arrangements and relationships with third parties;
•
the general economy and its impact on the industries in which we invest;
•
uncertainty surrounding the financial stability of the United States, Europe and China;
•
the social, geopolitical, financial, trade and legal implications of Brexit;
•
the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives;
•
competition with other entities and our affiliates for investment opportunities;
•
the speculative and illiquid nature of our investments;
•
the use of borrowed money to finance a portion of our investments;
•
our expected financings and investments;
•
the adequacy of our cash resources and working capital;
•
the timing, form and amount of any dividend distributions;
•
the timing of cash flows, if any, from the operations of our portfolio companies;
•
the ability to consummate acquisitions;
•
the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments;
•
currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;
•
the ability of The Carlyle Group Employee Co., L.L.C. to attract and retain highly talented professionals that can provide services to our investment adviser and administrator;
•
our ability to maintain our status as a business development company; and
•
our intent to satisfy the requirements of a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.


67


We use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” “plans,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” in Part II, Item 1A of and elsewhere in this Form 10-Q.
We have based the forward-looking statements included in this Form 10-Q on information available to us on the date of this Form 10-Q, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
OVERVIEW
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part I, Item 1 of this Form 10-Q “Financial Statements.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2018 and Part II, Item 1A of this Form 10-Q “Risk Factors.” Our actual results could differ materially from those anticipated by such forward-looking statements due to factors discussed under “Risk Factors” and “Cautionary Statements Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-Q.
We are a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. We have elected to be regulated as a BDC under the Investment Company Act. We have elected to be treated, and intend to continue to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code.
Our investment objective is to generate current income and capital appreciation primarily through debt investments. We primarily invest in U.S. middle market companies, which we define as companies with approximately $10 million to $100 million of EBITDA. We seek to achieve our investment objective primarily through direct originations of Middle Market Senior Loans, with the balance of our assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities). We generally make Middle Market Senior Loans to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, we expect that between 70% and 80% of the value of our assets will be invested in Middle Market Senior Loans. However, we may from time to time invest in larger or smaller companies. We expect that the composition of our portfolio will change over time given our Investment Adviser’s view on, among other things, the economic and credit environment (including with respect to interest rates) in which we are operating.
On June 19, 2017, we closed our IPO, issuing 9,454,200 shares of our common stock (including shares issued pursuant to the exercise of the underwriters’ over-allotment option on July 5, 2017) at a public offering price of $18.50 per share. Net of underwriting costs, we received cash proceeds of $169,488 . Shares of common stock of TCG BDC began trading on the NASDAQ Global Select Market under the symbol “CGBD” on June 14, 2017.
On June 9, 2017, we acquired NF Investment Corp. (“NFIC”), a BDC managed by our Investment Advisor (the “NFIC Acquisition”). As a result, we issued 434,233 shares of common stock to the NFIC stockholders and approximately $145,602 in cash, and acquired approximately $153,648 in net assets.
We are externally managed by our Investment Adviser, an investment adviser registered under the Advisers Act. Our Administrator provides the administrative services necessary for us to operate. Both our Investment Adviser and our Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of Carlyle. Our Investment Adviser’s five-person investment committee is responsible for reviewing and approving our investment opportunities. The members of the investment committee have experience investing through different credit cycles. As of June 30, 2019, our Investment Adviser’s investment team included a team of 26 dedicated investment professionals. The five members of our Investment Adviser’s investment committee have an average of 26 years of industry experience. In addition, our Investment Adviser and its investment team are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co., a wholly owned subsidiary of Carlyle.

68


In conducting our investment activities, we believe that we benefit from the significant scale, relationships and resources of Carlyle, including our Investment Adviser and its affiliates. We have operated our business as a BDC since we began our investment activities in May 2013.


KEY COMPONENTS OF OUR RESULTS OF OPERATIONS
Investments
Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle market companies, the general economic environment and the competitive environment for the type of investments we make.
Revenue
We generate revenue primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and generally bear interest at a floating rate usually determined on the basis of a benchmark such as LIBOR. Interest on these debt investments is generally paid quarterly. 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. We may also generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.
Expenses
Our primary operating expenses include the payment of: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to the Investment Advisory Agreement between us and our Investment Adviser; (ii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the Administration Agreement between us and our Administrator; and (iii) other operating expenses as detailed below:
 
•
administration fees payable under our Administration Agreement and Sub-Administration Agreements, including related expenses;
•
the costs of any offerings of our common stock and other securities, if any;
•
calculating individual asset values and our net asset value (including the cost and expenses of any independent valuation firms);
•
expenses, including travel expenses, incurred by our Investment Adviser, or members of our Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, expenses of enforcing our rights;
•
certain costs and expenses relating to distributions paid on our shares;
•
debt service and other costs of borrowings or other financing arrangements;
•
the allocated costs incurred by our Investment Adviser in providing managerial assistance to those portfolio companies that request it;
•
amounts payable to third parties relating to, or associated with, making or holding investments;
•
the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;
•
transfer agent and custodial fees;

69


•
costs of hedging;
•
commissions and other compensation payable to brokers or dealers;
•
federal and state registration fees;
•
any U.S. federal, state and local taxes, including any excise taxes;
•
independent director fees and expenses;
•
costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other regulatory bodies), and other reporting and compliance costs, including registration and listing fees, and the compensation of professionals responsible for the preparation or review of the foregoing;
•
the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholders’ meetings and the compensation of investor relations personnel responsible for the preparation of the foregoing and related matters;
•
the costs of specialty and custom software for monitoring risk, compliance and overall portfolio, including any development costs incurred prior to the filing of our election to be regulated as a BDC;
•
our fidelity bond;
•
directors and officers/errors and omissions liability insurance, and any other insurance premiums;
•
indemnification payments;
•
direct fees and expenses associated with independent audits, agency, consulting and legal costs; and
•
all other expenses incurred by us or our Administrator in connection with administering our business, including our allocable share of certain officers and their staff compensation.
We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.
PORTFOLIO AND INVESTMENT ACTIVITY
As of June 30, 2019 , the fair value of our investments was approximately $2,075,614 , comprised of 135 investments in 106 portfolio companies/investment fund across 28 industries with 63 sponsors. As of December 31, 2018 , the fair value of our investments was approximately $1,972,157 , comprised of 119 investments in 96 portfolio companies/investment fund across 27 industries with 57 sponsors.
Based on fair value as of June 30, 2019 , our portfolio consisted of approximately 89.4% in secured debt ( 79.6% in first lien debt, including 10.1% in first lien/last out loans, and 9.8% in second lien debt), 9.2% in Credit Fund and 1.4% in equity investments. Based on fair value as of June 30, 2019 , approximately 1% of our debt portfolio was invested in debt bearing a fixed interest rate and approximately 99% of our debt portfolio was invested in debt bearing a floating interest rate, which primarily are subject to interest rate floors.
Based on fair value as of December 31, 2018 , our portfolio consisted of approximately 87.5% in secured debt ( 78.4% in first lien debt, including 10.3% in first lien/last out loans, and 9.1% in second lien debt), 11.3% in Credit Fund and 1.2% in equity investments. Based on fair value as of December 31, 2018 , approximately 1% of our debt portfolio was invested in debt bearing a fixed interest rate and approximately 99% of our debt portfolio was invested in debt bearing a floating interest rate, which primarily are subject to interest rate floors.

70


Our investment activity for the three month periods ended June 30, 2019 and 2018 is presented below (information presented herein is at amortized cost unless otherwise indicated):
 
For the three month periods ended
 
June 30, 2019
 
June 30, 2018
Investments:
 
 
 
Total investments, beginning of period
$
2,221,378

 
$
1,920,852

New investments purchased
230,893

 
277,943

Net accretion of discount on investments
3,984

 
3,918

Net realized gain (loss) on investments
(7,714
)
 
1,775

Investments sold or repaid
(296,224
)
 
(233,424
)
Total Investments, end of period
$
2,152,317

 
$
1,971,064

Principal amount of investments funded:
 
 
 
First Lien Debt (excluding First Lien/Last Out)
$
153,525

 
$
231,471

First Lien/Last Out Unitranche
15,711

 
11,715

Second Lien Debt
35,839

 
9,246

Equity Investments
587

 
3,953

Investment Fund
25,699

 
27,300

Total
$
231,361

 
$
283,685

Principal amount of investments sold or repaid:
 
 
 
First Lien Debt (excluding First Lien/Last Out)
$
(176,210
)
 
$
(141,795
)
First Lien/Last Out Unitranche
(1,629
)
 
(4,179
)
Second Lien Debt
(62,059
)
 
(66,646
)
Equity Investments
(1,500
)
 
(1,000
)
Investment Fund
(64,000
)
 
(18,900
)
Total
$
(305,398
)
 
$
(232,520
)
Number of new funded investments
12

 
16

Average amount of new funded investments
$
19,241

 
$
17,371

Percentage of new funded debt investments at floating interest rates
100
%
 
100
%
Percentage of new funded debt investments at fixed interest rates
—
%
 
—
%
As of June 30, 2019 and December 31, 2018 , investments consisted of the following:
 
June 30, 2019
 
December 31, 2018
 
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
First Lien Debt (excluding First Lien/Last Out)
$
1,471,410

 
$
1,442,698

 
$
1,375,437

 
$
1,343,422

First Lien/Last Out Unitranche
254,231

 
209,201

 
241,263

 
202,849

Second Lien Debt
202,010

 
203,187

 
179,434

 
178,958

Equity Investments
21,165

 
29,142

 
17,456

 
24,633

Investment Fund
203,501

 
191,386

 
230,001

 
222,295

Total
$
2,152,317

 
$
2,075,614

 
$
2,043,591

 
$
1,972,157











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The weighted average yields (1)  for our first and second lien debt, based on the amortized cost and fair value as of June 30, 2019 and December 31, 2018 , were as follows:
 
 
June 30, 2019
 
December 31, 2018
 
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
First Lien Debt (excluding First Lien/Last Out)
8.77
%
 
8.95
%
 
9.16
%
 
9.38
%
First Lien/Last Out Unitranche
8.55
%
 
10.39
%
 
10.62
%
 
12.63
%
First Lien Debt Total
8.74
%
 
9.13
%
 
9.38
%
 
9.80
%
Second Lien Debt
10.90
%
 
10.83
%
 
11.04
%
 
11.07
%
First and Second Lien Debt Total
8.97
%
 
9.32
%
 
9.54
%
 
9.94
%
 
(1)
Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2019 and December 31, 2018 . Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
Total weighted average yields (which includes the effect of accretion of discount and amortization of premiums) of our first and second lien debt investments as measured on an amortized cost basis decreased from 9.54% to 8.97% from December 31, 2018 to June 30, 2019 . The decrease in weighted average yields was primarily due to a decrease in the effective LIBOR rate applicable to loans in the portfolio.
The following table summarizes the fair value of our performing and non-performing investments as of June 30, 2019 and December 31, 2018 :
 
June 30, 2019
 
December 31, 2018
 
Fair Value
 
Percentage
 
Fair Value
 
Percentage
Performing
$
2,033,432

 
97.97
%
 
$
1,957,830

 
99.27
%
Non-accrual (1)
42,182

 
2.03

 
14,327

 
0.73

Total
$
2,075,614

 
100.00
%
 
$
1,972,157

 
100.00
%
 
(1)
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a 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 regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest has been paid current and, in management’s judgment, likely to remain current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. See Note 2 to the consolidated financial statements included in Part I, Item 1 of this Form 10-Q for more information on the accounting policies.
See the Consolidated Schedules of Investments as of June 30, 2019 and December 31, 2018 in our consolidated financial statements in Part I, Item 1 of this Form 10-Q for more information on these investments, including a list of companies and type and amount of investments.

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As part of the monitoring process, our Investment Adviser has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on the following categories, which we refer to as “Internal Risk Ratings”:
Internal Risk Ratings Definitions
Rating
  
Definition
1
  
Performing—Low Risk:  Borrower is operating more than 10% ahead of the base case.
 
 
2
  
Performing—Stable Risk:  Borrower is operating within 10% of the base case (above or below). This is the initial rating assigned to all new borrowers.
 
 
3
  
Performing—Management Notice:  Borrower is operating more than 10% below the base case. A financial covenant default may have occurred, but there is a low risk of payment default.
 
 
4
  
Watch List:  Borrower is operating more than 20% below the base case and there is a high risk of covenant default, or it may have already occurred. Payments are current although subject to greater uncertainty, and there is moderate to high risk of payment default.
 
 
5
  
Watch List—Possible Loss:  Borrower is operating more than 30% below the base case. At the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or may have occurred. Loss of principal is possible.
 
 
6
  
Watch List—Probable Loss:  Borrower is operating more than 40% below the base case, and at the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or may have already occurred. Additionally, the prospects for improvement in the borrower’s situation are sufficiently negative that impairment of some or all principal is probable.
Our Investment Adviser’s risk rating model is based on evaluating portfolio company performance in comparison to the base case when considering certain credit metrics including, but not limited to, adjusted EBITDA and net senior leverage as well as specific events including, but not limited to, default and impairment.
Our Investment Adviser monitors and, when appropriate, changes the investment ratings assigned to each debt investment in our portfolio. In connection with our quarterly valuation process, our Investment Adviser reviews our investment ratings on a regular basis. The following table summarizes the Internal Risk Ratings as of June 30, 2019 and December 31, 2018 :
 
June 30, 2019
 
December 31, 2018
 
Fair Value
 
% of Fair Value
 
Fair Value
 
% of Fair Value
(dollar amounts in millions)
 
 
 
 
 
 
 
Internal Risk Rating 1
$
49.7

 
2.68
%
 
$
71.0

 
4.12
%
Internal Risk Rating 2
1,431.2

 
77.15

 
1,302.9

 
75.52

Internal Risk Rating 3
123.1

 
6.64

 
208.4

 
12.08

Internal Risk Rating 4
197.2

 
10.63

 
105.1

 
6.09

Internal Risk Rating 5
46.3

 
2.49

 
23.5

 
1.36

Internal Risk Rating 6
7.6

 
0.41

 
14.3

 
0.83

Total
$
1,855.1

 
100.00
%
 
$
1,725.2

 
100.00
%

As of June 30, 2019 and December 31, 2018 , the weighted average Internal Risk Rating of our debt investment portfolio was 2.3 . As of June 30, 2019 and December 31, 2018 , 18 and 12 of our debt investments, with an aggregate fair value of $251.1 million and $142.9 million , respectively, were assigned an Internal Risk Rating of 4-6 (“Watch List”). As of June 30, 2019 and December 31, 2018 , six and two first lien debt investments in the portfolio with fair values of $42.2 million and $14.3 million , respectively, were on non-accrual status, which represented approximately 2.03% and 0.73% , respectively, of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2019 and December 31, 2018 . 

During the six month period ended June 30, 2019 , eight investments with fair value of $184.1 million were downgraded to the Watch List due to changes in financial condition and performance of the respective portfolio companies and three investments with fair value of $59.2 million were upgraded and removed from the Watch List due to improved performance of the respective portfolio companies.

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CONSOLIDATED RESULTS OF OPERATIONS
For the three month and six month periods ended June 30, 2019 and 2018
The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation. As a result, quarterly comparisons may not be meaningful.
Investment Income
Investment income for the three month and six month periods ended June 30, 2019 and 2018 was as follows:  
 
For the three month periods ended
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Investment income
 
 
 
 
 
 
 
First Lien Debt
$
43,546

 
$
37,909

 
$
85,120

 
$
71,364

Second Lien Debt
6,246

 
7,697

 
11,992

 
14,800

Equity Investments
—

 
63

 
247

 
63

Investment Fund
6,993

 
6,698

 
14,531

 
13,579

Cash
82

 
85

 
164

 
129

Total investment income
$
56,867

 
$
52,452

 
$
112,054

 
$
99,935

The increase in investment income for the three month and six month periods ended June 30, 2019 from the comparable periods in 2018 was primarily driven by our increasing invested balance, an increase in LIBOR, and increased interest and dividend income from Credit Fund. As of June 30, 2019 , the size of our portfolio increased to $2,152,317 from $1,971,064 as of June 30, 2018 , at amortized cost, and total principal amount of investments outstanding increased to $2,470,004 from $2,001,400 as of June 30, 2018 . As of June 30, 2019 , the weighted average yield of our first and second lien debt investments decreased to 8.97% from 9.16% as of June 30, 2018 on amortized cost, primarily due to loans placed on non-accrual status, partially offset by increase in LIBOR.
Interest income on our first and second lien debt investments is dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of June 30, 2019 and 2018 , six and three first lien debt investments in the portfolio were on non-accrual with fair value of $42,182 and $32,393, respectively, which represents approximately 2.0% and 1.7% of total investments at fair value, respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2019 and 2018 .
For the three month periods ended June 30, 2019 and 2018 , the Company earned $2,266 and $3,590 , respectively, in other income. For the six month periods ended June 30, 2019 and 2018 , the Company earned $4,294 and $4,485 , respectively, in other income. The decrease in other income for the three month and six month periods ended June 30, 2019 from the comparable periods in 2018 was primarily driven by lower underwriting fees, offset partially by higher prepayment fees.
Our total dividend and interest income from investments in Credit Fund totaled $6,993 and $14,531 for the three month and six month periods ended June 30, 2019 , respectively, higher than dividend and interest income of $6,698 and $13,579 for the three month and six month periods ended June 30, 2018 , respectively. The increase was primarily driven by our increased invested balance in Credit Fund for three month and six month periods ended June 30, 2019 from the comparable periods in 2018 and an increase in LIBOR.
Net investment income (loss) for the three month and six month periods ended June 30, 2019 and 2018 was as follows:

 
For the three month periods ended
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Total investment income
$
56,867

 
$
52,452

 
$
112,054

 
$
99,935

Net expenses (including excise tax expense)
(28,896
)
 
(24,242
)
 
(56,521
)
 
(46,595
)
Net investment income (loss)
$
27,971

 
$
28,210

 
$
55,533

 
$
53,340


74



Expenses
 
For the three month periods ended
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Base management fees
$
7,913

 
$
7,266

 
$
15,598

 
$
14,488

Incentive fees
5,933

 
5,984

 
11,779

 
11,314

Professional fees
600

 
959

 
1,345

 
1,721

Administrative service fees
165

 
185

 
381

 
371

Interest expense
13,032

 
8,709

 
25,023

 
16,524

Credit facility fees
671

 
581

 
1,239

 
1,106

Directors’ fees and expenses
88

 
93

 
181

 
191

Other general and administrative
434

 
435

 
855

 
840

Excise tax expense
60

 
30

 
120

 
40

Net expenses
$
28,896

 
$
24,242

 
$
56,521

 
$
46,595


Interest expense and credit facility fees for the three month and six month periods ended June 30, 2019 and 2018 were comprised of the following:
 
For the three month periods ended
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Interest expense
$
13,032

 
$
8,709

 
$
25,023

 
$
16,524

Facility unused commitment fee
296

 
294

 
599

 
582

Amortization of deferred financing costs
266

 
252

 
502

 
454

Other fees
109

 
35

 
138

 
70

Total interest expense and credit facility fees
$
13,703

 
$
9,290

 
$
26,262

 
$
17,630

Cash paid for interest expense
$
13,345

 
$
8,028

 
$
24,860

 
$
15,710

The increase in interest expense for the three month and six month periods ended June 30, 2019 compared to the comparable periods in 2018 was primarily driven by increased drawings under the Facilities related to increased deployment of capital for investments and an increase in LIBOR. For the three month period ended June 30, 2019 , the average interest rate increased to 4.62% from 4.22% for the comparable period in 2018 , and average principal debt outstanding increased to $1,114,893 from $815,561 for the comparable period in 2018 . For the six month period ended June 30, 2019 , the average interest rate increased to 4.67% from 4.00% for the comparable period in 2018 , and average principal debt outstanding increased to $1,066,574 from $821,078 for the comparable period in 2018 .
The increase in base management fees and incentive fees related to pre-incentive fee net investment income for the three month and six month periods ended June 30, 2019 from the comparable periods in 2018 were driven by our deployment of capital and increasing invested balance. For the three month periods ended June 30, 2019 and 2018 , base management fees were $ 7,913 and $7,266, respectively, incentive fees related to pre-incentive fee net investment income were $5,933 and $5,984, respectively, and there were no incentive fees related to realized capital gains. For the six month periods ended June 30, 2019 and 2018 , base management fees were $15,598 and $14,488 , respectively, incentive fees related to pre-incentive fee net investment income were $11,779 and $11,314 , respectively, and there were no incentive fees related to realized capital gains. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“U.S. GAAP”) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4 to the consolidated financial statements included in Part I, Item 1 of this Form 10-Q for more information on the incentive and base management fees. For the three month and six month periods ended June 30, 2019 and 2018 , there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of June 30, 2019 and 2018 .
Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of the Company. Administrative service fees represent fees paid to the Administrator for our

75


allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.
Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments
During the three month and six month periods ended June 30, 2019 , we had realized gains on two and four investments, respectively, totaling approximately $1,732 and $2,691 , respectively, which were offset by realized losses on two and three investments, respectively, totaling approximately $9,413 and $9,473 , respectively. During the three month and six month periods ended June 30, 2019 , we had a change in unrealized appreciation on 71 and 141 investments, respectively, totaling approximately $18,150 and $34,345 , respectively, which was offset by a change in unrealized depreciation on 61 and 98 investments, respectively, totaling approximately $28,683 and $39,613 , respectively. During the three month and six month periods ended June 30, 2018 , we had realized gains on one and two investments, respectively, totaling approximately $1,775 and $1,777 , respectively, which were offset by realized losses on zero and three investments, respectively, totaling approximately $0 and $131 , respectively. During the three month and six month periods ended June 30, 2018 , we had a change in unrealized appreciation on 58 and 67 investments, respectively, totaling approximately $7,071 and $13,869 , respectively, which was offset by a change in unrealized depreciation on 52 and 54 investments, respectively, totaling approximately $23,950 and $34,660 , respectively.
Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the three month and six month periods ended June 30, 2019 and 2018 were as follows:
 
For the three month periods ended
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Net realized gain (loss) on investments
$
(7,681
)
 
$
1,775

 
$
(6,782
)
 
$
1,646

Net change in unrealized appreciation (depreciation) on investments
(10,533
)
 
(16,879
)
 
(5,268
)
 
(20,791
)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments
$
(18,214
)
 
$
(15,104
)
 
$
(12,050
)
 
$
(19,145
)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the three month and six month periods ended June 30, 2019 and 2018 were as follows:
 
For the three month periods ended
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Type
Net realized gain (loss)
 
Net change in unrealized appreciation (depreciation)
 
Net realized gain (loss)
 
Net change in unrealized appreciation (depreciation)
 
Net realized gain (loss)
 
Net change in unrealized appreciation (depreciation)
 
Net realized gain (loss)
 
Net change in unrealized appreciation (depreciation)
First Lien Debt
$
(9,413
)
 
$
(4,290
)
 
$
—

 
$
(15,286
)
 
$
(9,473
)
 
$
(3,312
)
 
$
(131
)
 
$
(20,271
)
Second Lien Debt
—

 
234

 
—

 
(721
)
 
—

 
1,653

 
2

 
(1,154
)
Equity Investments
1,732

 
(1,572
)
 
1,775

 
589

 
2,691

 
800

 
1,775

 
1,395

Investment Fund
—

 
(4,905
)
 
—

 
(1,461
)
 
—

 
(4,409
)
 
—

 
(761
)
Total
$
(7,681
)
 
$
(10,533
)
 
$
1,775

 
$
(16,879
)
 
$
(6,782
)
 
$
(5,268
)
 
$
1,646

 
$
(20,791
)
Net change in unrealized appreciation in our investments for the three month and six month periods ended June 30, 2019 compared to the comparable period in 2018 was primarily due to changes in various inputs utilized under our valuation methodology, including, but not limited to, market spreads, leverage multiples and borrower ratings, and the impact of exits.
MIDDLE MARKET CREDIT FUND, LLC
Overview
On February 29, 2016, the Company and Credit Partners entered into the Limited Liability Company Agreement to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of the

76


Company’s representatives and two of Credit Partners’ representatives. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. By virtue of its membership interest, the Company and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.
Together with Credit Partners, the Company co-invests through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by the Company and its affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”), MMCF CLO 2017-1 LLC (the “2017-1 Issuer”) and MMCF CLO 2019-2, LLC (the "2019-2 Issuer"), each a Delaware limited liability company, were formed on April 5, 2016 and October 6, 2017 and May 21, 2019, respectively. Credit Fund Sub, the 2017-1 Issuer and the 2019-2 Issuer are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements commencing from the date of their respective formations. Credit Fund Sub, the 2017-1 Issuer and the 2019-2 Issuer primarily invest in first lien loans of middle market companies. Credit Fund and its wholly owned subsidiaries follow the same Internal Risk Rating System as the Company.
Credit Fund, the Company and Credit Partners entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Administrative Agent”), pursuant to which the Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund with the approval of the board of managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Administrative Agent in performing its obligations thereunder.
Selected Financial Data
Since inception of Credit Fund and through June 30, 2019 and December 31, 2018 , the Company and Credit Partners each made capital contributions of $1 and $1 in members’ equity, respectively, and $123,500 and $118,000 in subordinated loans, respectively, to Credit Fund. As of June 30, 2019 and December 31, 2018 , Credit Fund had borrowings of $80,000 and $112,000 , respectively, in mezzanine loans under a revolving credit facility with the Company (the “Credit Fund Facility”). As of June 30, 2019 and December 31, 2018 , Credit Fund had total subordinated loans and members’ equity outstanding of $220,966 and $208,568 , respectively. As of June 30, 2019 and December 31, 2018 , the Company’s ownership interest in such subordinated loans and members’ equity was $111,386 and $110,295 , respectively, and in such mezzanine loans was $80,000 and $112,000 , respectively.
As of June 30, 2019 and December 31, 2018 , Credit Fund held cash and cash equivalents totaling $39,426 and $55,699 , respectively.
As of June 30, 2019 and December 31, 2018 , Credit Fund had total investments at fair value of $1,328,201 and $1,173,508 , respectively, which was comprised of first lien senior secured loans, second lien senior secured loans and an equity investment to 67 and 60 portfolio companies, respectively. As of June 30, 2019 and December 31, 2018 , one loan in Credit Fund’s portfolio was on non-accrual status with fair value of $21,098 and $25,400 , respectively. As of June 30, 2019 and December 31, 2018 , 98.4% and 99.9%, respectively, of investments in the portfolio were floating rate debt investments, which primarily are subject to interest rate floors. As of June 30, 2019 and December 31, 2018 , 1.6% and 0.1%, respectively, of debt investments in the portfolio were fixed rate debt investments. As of June 30, 2019 and December 31, 2018 , the fair value of the loans in the portfolio with PIK provisions was $21,098 and $1,119 , respectively, which represents approximately 1.6% and 0.1% of total investments at fair value. The portfolio companies in Credit Fund are U.S. middle market companies in industries similar to those in which the Company may invest directly. Additionally, as of June 30, 2019 and December 31, 2018 , Credit Fund had commitments to fund various undrawn revolving and delayed draw Senior secured loans to its portfolio companies totaling $88,466 and $91,446 , respectively.
Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of June 30, 2019 and December 31, 2018 :

77


 
As of June 30,
2019
 
As of December 31, 2018
Senior secured loans (1)
$
1,347,889

 
$
1,207,913

Weighted average yields of senior secured loans based on amortized cost (2)
7.04
%
 
7.16
%
Weighted average yields of senior secured loans based on fair value (2)
7.09
%
 
7.32
%
Number of portfolio companies in Credit Fund
67

 
60

Average amount per portfolio company (1)
$
20,118

 
$
20,132

(1)
At par/principal amount.
(2)
Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2019 and December 31, 2018 . Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.

78


Credit Fund's Consolidated Schedule of Investments as of June 30, 2019
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread  (2)
 
Interest Rate (2)
 
Maturity Date
 
 Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (98.36% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Achilles Acquisition, LLC
+\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.00%
 
6.44%
 
10/11/2025
 
$
17,955

 
$
17,867

 
$
17,788

Acrisure, LLC
+\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.77%
 
11/22/2023
 
20,780

 
20,741

 
20,659

Acrisure, LLC
\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 3.75%
 
6.27%
 
11/22/2023
 
11,880

 
11,869

 
11,776

Advanced Instruments, LLC
^+*\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
7.57%
 
10/31/2022
 
11,732

 
11,646

 
11,680

Ahead, LLC
^+\
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.25%
 
6.70%
 
5/8/2024
 
22,281

 
21,858

 
22,020

Alpha Packaging Holdings, Inc.
+*\
 
(2) (3)
 
Containers, Packaging & Glass
 
L + 4.25%
 
6.58%
 
5/12/2020
 
16,771

 
16,751

 
16,762

AM Conservation Holding Corporation
+*\
 
(2) (3)
 
Energy: Electricity
 
L + 4.50%
 
6.89%
 
10/31/2022
 
37,969

 
37,763

 
37,847

AmeriLife Group, LLC
^
 
(2) (3) (8)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
6.90%
 
6/5/2026
 
14,912

 
14,828

 
14,891

API Technologies Corp.
+\
 
(2) (3)
 
Aerospace & Defense
 
L + 4.25%
 
6.57%
 
5/9/2026
 
15,000

 
14,930

 
14,946

Aptean, Inc.
+\
 
(2) (3)
 
Software
 
L + 4.25%
 
6.58%
 
4/23/2026
 
12,469

 
12,412

 
12,423

AQA Acquisition Holding, Inc.
^*\
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.25%
 
6.58%
 
5/24/2023
 
19,051

 
19,003

 
18,956

Avalign Technologies, Inc.
^+\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.50%
 
6.70%
 
12/22/2025
 
14,815

 
14,672

 
14,759

Big Ass Fans, LLC
+*\
 
(2) (3)
 
Capital Equipment
 
L + 3.75%
 
6.08%
 
5/21/2024
 
13,981

 
13,908

 
13,946

Borchers, Inc.
^+*\
 
(2) (3) (8)
 
Chemicals, Plastics & Rubber
 
L + 4.50%
 
6.83%
 
11/1/2024
 
15,116

 
15,066

 
15,113

Brooks Equipment Company, LLC
+*
 
(2) (3)
 
Construction & Building
 
L + 5.00%
 
7.52%
 
8/29/2020
 
5,778

 
5,772

 
5,775

Clarity Telecom LLC.
+
 
(2) (3)
 
Media: Broadcasting & Subscription
 
L + 4.50%
 
6.82%
 
6/20/2026
 
15,000

 
14,852

 
14,850

Clearent Newco, LLC
^+\
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.00%
 
6.40%
 
3/20/2024
 
26,999

 
26,651

 
26,722

Datto, Inc.
+\
 
(2) (3)
 
High Tech Industries
 
L + 4.25%
 
6.58%
 
4/2/2026
 
12,500

 
12,443

 
12,525

DecoPac, Inc.
^+*\
 
(2) (3) (8)
 
Non-durable Consumer Goods
 
L + 4.25%
 
6.58%
 
9/29/2024
 
12,765

 
12,651

 
12,730

Dent Wizard International Corporation
+\
 
(2) (3)
 
Automotive
 
L + 4.00%
 
6.40%
 
4/7/2022
 
37,059

 
36,949

 
36,941

DTI Holdco, Inc.
+*\
 
(2) (3)
 
High Tech Industries
 
L + 4.75%
 
7.33%
 
9/30/2023
 
18,983

 
18,854

 
17,362

EIP Merger Sub, LLC (Evolve IP)
+*
 
(2) (3) (4)
 
Telecommunications
 
L + 5.75%
 
8.15%
 
6/7/2022
 
22,207

 
21,822

 
21,974

EIP Merger Sub, LLC (Evolve IP)
*
 
(2) (3) (7)
 
Telecommunications
 
L + 5.75%
 
8.15%
 
6/7/2022
 
1,500

 
1,472

 
1,491

Eliassen Group, LLC
+\
 
(2) (3)
 
Business Services
 
L + 4.50%
 
6.90%
 
11/5/2024
 
7,600

 
7,571

 
7,600

Exactech, Inc.
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 3.75%
 
6.15%
 
2/14/2025
 
12,838

 
12,792

 
12,734

Executive Consulting Group, LLC, Inc.
^+\
 
(2) (3) (8)
 
Business Services
 
L + 4.50%
 
7.10%
 
6/20/2024
 
15,241

 
15,104

 
15,134

Golden West Packaging Group LLC
+*\
 
(2) (3)
 
Containers, Packaging & Glass
 
L + 5.25%
 
7.65%
 
6/20/2023
 
30,019

 
29,833

 
29,683

HMT Holding Inc.
^+*\
 
(2) (3) (8)
 
Energy: Oil & Gas
 
L + 4.50%
 
6.90%
 
11/17/2023
 
37,024

 
36,486

 
36,861

J.S. Held, LLC
+*\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
6.83%
 
9/25/2024
 
21,515

 
21,365

 
21,516

Jensen Hughes, Inc.
^+*\
 
(2) (3) (8)
 
Utilities: Electric
 
L + 4.50%
 
6.83%
 
3/22/2024
 
34,077

 
33,892

 
33,606

MAG DS Corp.
^+\
 
(2) (3) (8)
 
Aerospace & Defense
 
L + 4.75%
 
7.15%
 
6/6/2025
 
29,782

 
29,535

 
29,703

Maravai Intermediate Holdings, LLC
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.69%
 
8/2/2025
 
29,775

 
29,509

 
29,674


79


Credit Fund's Consolidated Schedule of Investments as of June 30, 2019
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread  (2)
 
Interest Rate (2)
 
Maturity Date
 
 Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (98.36% of fair value) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
Marco Technologies, LLC
^+\
 
(2) (3) (8)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
6.83%
 
10/30/2023
 
$
7,500

 
$
7,447

 
$
7,500

Mold-Rite Plastics, LLC
+\
 
(2) (3)
 
Chemicals, Plastics & Rubber
 
L + 4.25%
 
6.58%
 
12/14/2021
 
14,557

 
14,509

 
14,528

MSHC, Inc.
^+*\
 
(2) (3) (8)
 
Construction & Building
 
L + 4.25%
 
6.58%
 
7/31/2023
 
33,851

 
33,742

 
33,585

Newport Group Holdings II, Inc.
+\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 3.75%
 
6.15%
 
9/13/2025
 
23,835

 
23,603

 
23,683

North American Dental Management, LLC
^+*\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
7.65%
 
7/7/2023
 
37,836

 
37,231

 
37,283

North Haven CA Holdings, Inc.
^+*\
 
(2) (3) (8)
 
Business Services
 
L + 4.50%
 
6.83%
 
10/2/2023
 
32,454

 
32,156

 
32,141

Odyssey Logistics & Technology Corporation
+*\
 
(2) (3)
 
Transportation: Cargo
 
L + 4.00%
 
6.40%
 
10/12/2024
 
39,013

 
38,844

 
38,759

Output Services Group
^+\
 
(2) (3) (8)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
6.65%
 
3/27/2024
 
17,312

 
17,256

 
16,881

PAI Holdco, Inc.
+*\
 
(2) (3)
 
Automotive
 
L + 4.25%
 
6.78%
 
1/5/2025
 
19,673

 
19,593

 
19,651

Park Place Technologies, Inc.
+\
 
(2) (3)
 
High Tech Industries
 
L + 4.00%
 
6.40%
 
3/29/2025
 
15,841

 
15,777

 
15,695

Pasternack Enterprises, Inc.
+\
 
(2) (3)
 
Capital Equipment
 
L + 4.00%
 
6.33%
 
7/2/2025
 
22,871

 
22,856

 
22,855

Pharmalogic Holdings Corp.
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 4.00%
 
6.40%
 
6/11/2023
 
11,377

 
11,350

 
11,378

Ping Identity Corporation
+\
 
(2) (3)
 
High Tech Industries
 
L + 3.75%
 
6.15%
 
1/25/2025
 
4,950

 
4,937

 
4,925

Premier Senior Marketing, LLC
*
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.58%
 
11/30/2025
 
4,941

 
4,920

 
4,901

Premise Health Holding Corp.
^+\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 3.75%
 
6.08%
 
7/10/2025
 
13,793

 
13,736

 
13,699

Propel Insurance Agency, LLC
^+\
 
(2) (3) (8)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
6.83%
 
6/1/2024
 
22,646

 
22,122

 
22,389

PSI Services, LLC
^+*\
 
(2) (3) (8)
 
Business Services
 
L + 5.00%
 
7.40%
 
1/20/2023
 
30,295

 
29,886

 
30,295

Q Holding Company
+*\
 
(2) (3)
 
Automotive
 
L + 5.00%
 
7.40%
 
12/18/2021
 
17,010

 
16,974

 
16,978

QW Holding Corporation (Quala)
^+*
 
(2) (3) (8)
 
Environmental Industries
 
L + 5.75%
 
8.14%
 
8/31/2022
 
10,572

 
10,367

 
10,459

Radiology Partners, Inc.
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 4.75%
 
7.36%
 
7/9/2025
 
28,937

 
28,798

 
28,848

RevSpring Inc.
+*\
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
6.65%
 
10/11/2025
 
24,875

 
24,784

 
24,636

Situs Group Holdings Corporation
^+\
 
(2) (3) (8)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.75%
 
7.15%
 
2/26/2023
 
13,784

 
13,575

 
13,749

Surgical Information Systems, LLC
+*\
 
(2) (3) (7)
 
High Tech Industries
 
L + 4.85%
 
7.24%
 
4/24/2023
 
26,168

 
25,982

 
25,948

Systems Maintenance Services Holding, Inc.
+*
 
(2) (3)
 
High Tech Industries
 
L + 6.00%
 
8.40%
 
10/28/2023
 
23,888

 
23,782

 
16,329

T2 Systems Canada, Inc.
+
 
(2) (3)
 
Transportation: Consumer
 
L + 6.75%
 
9.08%
 
9/28/2022
 
2,632

 
2,589

 
2,625

T2 Systems, Inc.
^+*
 
(2) (3) (8)
 
Transportation: Consumer
 
L + 6.75%
 
9.08%
 
9/28/2022
 
16,187

 
15,925

 
16,140

The Original Cakerie, Co. (Canada)
+*
 
(2) (3)
 
Beverage, Food & Tobacco
 
L + 5.00%
 
7.40%
 
7/20/2022
 
8,974

 
8,932

 
8,940

The Original Cakerie, Ltd. (Canada)
^+\
 
(2) (3) (8)
 
Beverage, Food & Tobacco
 
L + 4.50%
 
6.90%
 
7/20/2022
 
6,858

 
6,820

 
6,828

ThoughtWorks, Inc.
+*\
 
(2) (3)
 
Business Services
 
L + 4.00%
 
6.40%
 
10/12/2024
 
11,884

 
11,851

 
11,884

U.S. Acute Care Solutions, LLC
+*\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 5.00%
 
7.20%
 
5/15/2021
 
31,543

 
31,405

 
29,902


80


Credit Fund's Consolidated Schedule of Investments as of June 30, 2019
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread  (2)
 
Interest Rate (2)
 
Maturity Date
 
 Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (98.36% of fair value) (continued)
 
 
 
 
 
 
 
 
 
 
 
 
U.S. TelePacific Holdings Corp.
+*\
 
(2) (3)
 
Telecommunications
 
L + 5.00%
 
7.33%
 
5/2/2023
 
$
26,660

 
$
26,477

 
$
25,322

Upstream Intermediate, LLC
^+\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.00%
 
6.40%
 
1/3/2024
 
18,118

 
18,046

 
18,015

Valet Waste Holdings, Inc.
+\
 
(2) (3)
 
Construction & Building
 
L + 4.00%
 
6.41%
 
9/28/2025
 
11,910

 
11,889

 
11,867

Valicor Environmental Services, LLC
^+*\
 
(2) (3) (8)
 
Environmental Industries
 
L + 4.50%
 
6.88%
 
6/1/2023
 
34,836

 
34,396

 
34,593

WIRB - Copernicus Group, Inc.
^+*\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.58%
 
8/15/2022
 
18,113

 
18,034

 
18,001

WRE Holding Corp.
^+*
 
(2) (3) (8)
 
Environmental Industries
 
L + 5.00%
 
7.44%
 
1/3/2023
 
7,439

 
7,373

 
7,220

Zywave, Inc.
^+*\
 
(2) (3) (8)
 
High Tech Industries
 
L + 5.00%
 
7.56%
 
11/17/2022
 
17,566

 
17,445

 
17,558

First Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
$
1,316,276

 
$
1,306,437

Second Lien Debt (1.64% of fair value)
 
 
 
 
 
 
 
 
 
 
DBI Holding, LLC
^*
 
(2) (3) (9)
 
Transportation: Cargo
 
8.00% (100% PIK)
 
8.00%
 
2/1/2026
 
$
21,150

 
$
20,705

 
$
21,098

Zywave, Inc.
*
 
(2) (3)
 
High Tech Industries
 
L + 9.00%
 
11.59%
 
11/17/2023
 
666

 
659

 
666

Second Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
$
21,364

 
$
21,764

Investments (1)
 
 
Footnotes
 
Industry
 
Type
 
Shares/Units
 
Cost
 
Fair Value (6)
Equity Investments (0.0% of fair value)
 
 
 
 
 
 
 
 
DBI Holding, LLC
^
 
 
 
Transportation: Cargo
 
Preferred stock
 
13,996

 
$
5,364

 
$
—

DBI Holding, LLC
^
 
 
 
Transportation: Cargo
 
Common stock
 
2,961

 
$
—

 
$
—

Equity Investments Total
 
 
 
 
 
 
 
 
 
$
5,364

 
$
—

Total Investments
 
 
 
 
 
 
 
 
 
 
$
1,343,004

 
$
1,328,201


^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2017-1 Issuer or the 2019-2 Issuer.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund, the 2017-1 Issuer or the 2019-2 Issuer.
* Denotes that all or a portion of the assets are owned by the 2017-1 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on December 19, 2017 (the “2017-1 Debt Securitization”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub or the 2019-2 Issuer.
\ Denotes that all or a portion of the assets are owned by the 2019-2 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on May 21, 2019 (the “2019-2 Debt Securitization”). Accordingly, such assets are not available to creditors of Credit Fund, Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub or the 2017-1 Issuer.

(1)
Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of June 30, 2019 , the geographical composition of investments as a percentage of fair value was 1.19% in Canada and 98.81% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)
Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2019 . As of June 30, 2019 , the reference rates for Credit Fund's variable rate loans were the 30-day LIBOR at 2.20% , the 90-day LIBOR at 2.32% and the 180-day LIBOR rate at 2.40% .
(3)
Loan includes interest rate floor feature, which is generally 1.00%.
(4)
Credit Fund Sub receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.20% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.
(5)
Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.

81


(6)
Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.
(7)
In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, Credit Fund Sub and the 2017-1 Issuer is entitled to receive additional interest as a result of an agreement among lenders as follows: EIP Merger Sub, LLC (Evolve IP) ( 3.49% ) and Surgical Information Systems, LLC ( 1.13% ). Pursuant to the agreement among lenders in respect of these loans, these investments represent a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.
(8)
As of June 30, 2019 , Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
First Lien Debt—unfunded delayed draw and revolving term loans commitments
 
Type
 
Unused Fee
 
Par/ Principal Amount
 
Fair Value
Advanced Instruments, LLC
 
Revolver
 
0.50
%
 
$
1,333

 
$
(5
)
Ahead, LLC
 
Delayed Draw
 
—

 
1,697

 
(15
)
Ahead, LLC
 
Revolver
 
0.38

 
4,688

 
(43
)
AmeriLife Group, LLC
 
Delayed Draw
 
0.50

 
2,088

 
(3
)
AQA Acquisition Holding, Inc.
 
Revolver
 
0.50

 
2,459

 
(11
)
Avalign Technologies, Inc.
 
Delayed Draw
 
—

 
715

 
(3
)
Borchers, Inc.
 
Revolver
 
0.50

 
1,935

 
—

Clearent Newco, LLC
 
Delayed Draw
 
1.00

 
2,028

 
(19
)
Clearent Newco, LLC
 
Revolver
 
0.50

 
704

 
(7
)
DecoPac, Inc.
 
Revolver
 
0.50

 
1,714

 
(4
)
Executive Consulting Group, LLC
 
Revolver
 
0.50

 
2,368

 
(14
)
HMT Holding Inc.
 
Revolver
 
0.50

 
2,469

 
(10
)
Jensen Hughes, Inc.
 
Delayed Draw
 
1.00

 
2,365

 
(30
)
Jensen Hughes, Inc.
 
Revolver
 
0.50

 
1,136

 
(14
)
MAG DS Corp.
 
Revolver
 
0.50

 
1,000

 
(3
)
Marco Technologies, LLC
 
Delayed Draw
 
1.00

 
7,500

 
—

MSHC, Inc.
 
Delayed Draw
 
1.00

 
6,505

 
(43
)
North American Dental Management, LLC
 
Revolver
 
0.50

 
1,677

 
(23
)
North Haven CA Holdings, Inc.
 
Revolver
 
0.50

 
6,114

 
(50
)
Output Services Group
 
Delayed Draw
 
4.25

 
2,518

 
(55
)
Premise Health Holding Corp.
 
Delayed Draw
 
1.00

 
1,103

 
(7
)
Propel Insurance Agency, LLC
 
Delayed Draw
 
0.50

 
7,143

 
(57
)
Propel Insurance Agency, LLC
 
Revolver
 
0.50

 
2,381

 
(19
)
PSI Services, LLC
 
Revolver
 
0.50

 
226

 
—

QW Holding Corporation (Quala)
 
Delayed Draw
 
1.00

 
1,355

 
(9
)
QW Holding Corporation (Quala)
 
Revolver
 
0.50

 
5,498

 
(36
)
Situs Group Holdings Corporation
 
Delayed Draw
 
—

 
1,216

 
(3
)
T2 Systems, Inc.
 
Revolver
 
0.50

 
684

 
(2
)
The Original Cakerie, Ltd. (Canada)
 
Revolver
 
0.50

 
1,199

 
(4
)
Upstream Intermediate, LLC
 
Revolver
 
0.50

 
1,606

 
(8
)
Valicor Environmental Services, LLC
 
Revolver
 
0.50

 
3,126

 
(20
)
WIRB - Copernicus Group, Inc.
 
Delayed Draw
 
1.00

 
5,472

 
(25
)
WIRB - Copernicus Group, Inc.
 
Revolver
 
0.50

 
1,000

 
(5
)
WRE Holding Corp.
 
Delayed Draw
 
1.00

 
2,069

 
(46
)
WRE Holding Corp.
 
Revolver
 
0.50

 
377

 
(8
)
Zywave, Inc.
 
Revolver
 
0.50

 
998

 
—

Total unfunded commitments
 
 
 
 
 
$
88,466

 
$
(601
)
(9)
Loan was on non-accrual status as of June 30, 2019 .



82


Credit Fund's Consolidated Schedule of Investments as of December 31, 2018
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate (2)
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (99.91% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Achilles Acquisition, LLC
+\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.00%
 
6.56%
 
10/11/2025
 
$
18,000

 
$
17,906

 
$
17,716

Acrisure, LLC
+
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.77%
 
11/22/2023
 
20,886

 
20,843

 
19,981

Acrisure, LLC
+\
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 3.75%
 
6.27%
 
11/22/2023
 
11,940

 
11,928

 
11,333

Advanced Instruments, LLC
^+*
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
7.63%
 
10/31/2022
 
11,791

 
11,695

 
11,690

Ahead, LLC
^+
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.25%
 
6.87%
 
5/8/2024
 
20,059

 
19,959

 
19,856

Alpha Packaging Holdings, Inc.
+*
 
(2) (3)
 
Containers, Packaging & Glass
 
L + 4.25%
 
7.05%
 
5/12/2020
 
16,860

 
16,830

 
16,813

AM Conservation Holding Corporation
+*
 
(2) (3)
 
Energy: Electricity
 
L + 4.50%
 
7.30%
 
10/31/2022
 
38,310

 
38,079

 
38,027

AQA Acquisition Holding, Inc.
^+*
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.25%
 
7.05%
 
5/24/2023
 
19,148

 
19,111

 
18,978

Avalign Technologies, Inc.
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 4.50%
 
7.00%
 
12/22/2025
 
13,000

 
12,874

 
12,848

Big Ass Fans, LLC
+*\
 
(2) (3)
 
Capital Equipment
 
L + 3.75%
 
6.55%
 
5/21/2024
 
14,052

 
13,973

 
13,840

Borchers, Inc.
^+*
 
(2) (3) (8)
 
Chemicals, Plastics & Rubber
 
L + 4.50%
 
7.30%
 
11/1/2024
 
15,589

 
15,533

 
15,545

Brooks Equipment Company, LLC
+*
 
(2) (3)
 
Construction & Building
 
L + 5.00%
 
7.71%
 
8/29/2020
 
5,948

 
5,940

 
5,935

Clearent Newco, LLC
^+
 
(2) (3) (8)
 
High Tech Industries
 
L + 4.00%
 
6.52%
 
3/20/2024
 
23,093

 
22,702

 
22,819

DBI Holding, LLC
+*
 
(2) (3) (9)
 
Transportation: Cargo
 
L + 5.25%
 
7.76%
 
8/1/2021
 
34,494

 
34,276

 
25,400

DBI Holding, LLC
^
 
 
 
Transportation: Cargo
 
15% (100% PIK)
 
7.76%
 
2/1/2020
 
1,119

 
1,119

 
1,119

DecoPac, Inc.
^+*
 
(2) (3) (8)
 
Non-durable Consumer Goods
 
L + 4.25%
 
7.05%
 
9/29/2024
 
12,696

 
12,571

 
12,619

Dent Wizard International Corporation
+
 
(2) (3)
 
Automotive
 
L + 4.00%
 
6.51%
 
4/7/2022
 
24,256

 
24,183

 
24,110

DTI Holdco, Inc.
+*\
 
(2) (3)
 
High Tech Industries
 
L + 4.75%
 
7.28%
 
9/30/2023
 
19,081

 
18,941

 
17,793

EIP Merger Sub, LLC (Evolve IP)
+*
 
(2) (3) (4)
 
Telecommunications
 
L + 5.75%
 
8.27%
 
6/7/2022
 
22,358

 
21,923

 
21,788

EIP Merger Sub, LLC (Evolve IP)
*
 
(2) (3) (7)
 
Telecommunications
 
L + 5.75%
 
8.27%
 
6/7/2022
 
1,500

 
1,469

 
1,462

Eliassen Group, LLC
+
 
(2) (3)
 
Business Services
 
L + 4.50%
 
7.00%
 
11/5/2024
 
6,250

 
6,226

 
6,202

Exactech, Inc.
+\
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 3.75%
 
6.27%
 
2/14/2025
 
12,903

 
12,849

 
12,741

Executive Consulting Group, LLC, Inc.
^+
 
(2) (3) (8)
 
Business Services
 
L + 4.50%
 
7.30%
 
6/20/2024
 
15,318

 
15,168

 
15,132

Golden West Packaging Group LLC
+*
 
(2) (3)
 
Containers, Packaging & Glass
 
L + 5.25%
 
7.77%
 
6/20/2023
 
30,180

 
29,978

 
29,760

HMT Holding Inc.
^+*
 
(2) (3) (8)
 
Energy: Oil & Gas
 
L + 4.50%
 
7.02%
 
11/17/2023
 
33,490

 
32,902

 
33,172

J.S. Held, LLC
+*
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
7.30%
 
9/25/2024
 
20,309

 
20,137

 
19,998

Jensen Hughes, Inc.
^+*
 
(2) (3) (8)
 
Utilities: Electric
 
L + 4.50%
 
7.30%
 
3/22/2024
 
27,978

 
27,896

 
27,382

Kestra Financial, Inc.
+*
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.76%
 
6/24/2022
 
21,744

 
21,547

 
21,690

MAG DS Corp.
^+
 
(2) (3) (8)
 
Aerospace & Defense
 
L + 4.75%
 
7.27%
 
6/6/2025
 
22,885

 
22,679

 
22,665

Maravai Intermediate Holdings, LLC
+\
 
(2)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.81%
 
8/2/2025
 
29,925

 
29,640

 
29,578


83


Credit Fund's Consolidated Schedule of Investments as of December 31, 2018
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate (2)
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (99.91% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mold-Rite Plastics, LLC
+
 
(2) (3)
 
Chemicals, Plastics & Rubber
 
L + 4.50%
 
7.30%
 
12/14/2021
 
$
14,850

 
$
14,793

 
$
14,762

MSHC, Inc.
^+*
 
(2) (3) (8)
 
Construction & Building
 
L + 4.25%
 
6.89%
 
7/31/2023
 
23,579

 
23,514

 
23,088

Newport Group Holdings II, Inc.
+\
 
(2)
 
Banking, Finance, Insurance & Real Estate
 
L + 3.75%
 
6.54%
 
9/13/2025
 
17,790

 
17,666

 
17,564

North American Dental Management, LLC
^+*
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 5.25%
 
8.04%
 
7/7/2023
 
37,781

 
37,329

 
37,093

North Haven CA Holdings, Inc.
^+*
 
(2) (3) (8)
 
Business Services
 
L + 4.50%
 
7.02%
 
10/2/2023
 
35,139

 
34,789

 
34,401

Odyssey Logistics & Technology Corporation
+*\
 
(2) (3)
 
Transportation: Cargo
 
L + 4.00%
 
6.52%
 
10/12/2024
 
39,680

 
39,496

 
39,149

Output Services Group
^+\
 
(2) (3) (8)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
6.77%
 
3/27/2024
 
17,400

 
17,338

 
16,663

PAI Holdco, Inc.
+*
 
(2) (3)
 
Automotive
 
L + 4.25%
 
7.05%
 
1/5/2025
 
19,727

 
19,637

 
19,459

Park Place Technologies, Inc.
+\
 
(2) (3)
 
High Tech Industries
 
L + 4.00%
 
6.52%
 
3/29/2025
 
15,922

 
15,856

 
15,639

Pasternack Enterprises, Inc.
+
 
(2) (3)
 
Capital Equipment
 
L + 4.00%
 
6.52%
 
7/2/2025
 
20,076

 
20,076

 
19,745

Pharmalogic Holdings Corp.
^+
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.00%
 
6.52%
 
6/11/2023
 
7,017

 
6,995

 
6,949

Ping Identity Corporation
+\
 
(2) (3)
 
High Tech Industries
 
L + 3.75%
 
6.27%
 
1/25/2025
 
4,975

 
4,956

 
4,915

Premier Senior Marketing, LLC
*
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.75%
 
11/30/2025
 
4,953

 
4,953

 
4,875

Premise Health Holding Corp.
^+\
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 3.75%
 
6.55%
 
7/10/2025
 
13,862

 
13,805

 
13,717

Propel Insurance Agency, LLC
^+
 
(2) (3) (8)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.25%
 
6.75%
 
6/1/2024
 
21,088

 
20,535

 
20,628

PSI Services, LLC
^+*
 
(2) (3) (8)
 
Business Services
 
L + 5.00%
 
7.52%
 
1/20/2023
 
29,919

 
29,469

 
29,239

Q Holding Company
+*
 
(2) (3)
 
Automotive
 
L + 5.00%
 
7.52%
 
12/18/2021
 
17,099

 
17,058

 
16,969

QW Holding Corporation (Quala)
^+*
 
(2) (3) (8)
 
Environmental Industries
 
L + 6.75%
 
9.22%
 
8/31/2022
 
9,704

 
9,338

 
9,489

RevSpring, Inc.
+*\
 
(2) (3)
 
Media: Advertising, Printing & Publishing
 
L + 4.25%
 
7.05%
 
10/11/2025
 
20,000

 
19,953

 
19,680

Situs Group Holdings Corporation
+
 
(2) (3)
 
Banking, Finance, Insurance & Real Estate
 
L + 4.50%
 
7.02%
 
2/26/2023
 
8,915

 
8,892

 
8,887

Surgical Information Systems, LLC
+*
 
(2) (3) (7)
 
High Tech Industries
 
L + 4.85%
 
7.37%
 
4/24/2023
 
27,708

 
27,494

 
27,171

Systems Maintenance Services Holding, Inc.
+*
 
(2) (3)
 
High Tech Industries
 
L + 5.00%
 
7.52%
 
10/28/2023
 
24,010

 
23,907

 
17,842

T2 Systems Canada, Inc.
+
 
(2) (3)
 
Transportation: Consumer
 
L + 6.75%
 
9.34%
 
9/28/2022
 
2,646

 
2,598

 
2,630

T2 Systems, Inc.
^+*
 
(2) (3) (8)
 
Transportation: Consumer
 
L + 6.75%
 
9.34%
 
9/28/2022
 
15,775

 
15,484

 
15,677

The Original Cakerie, Co. (Canada)
+*
 
(2) (3)
 
Beverage, Food & Tobacco
 
L + 5.00%
 
7.50%
 
7/20/2022
 
9,019

 
8,968

 
8,932

The Original Cakerie, Ltd. (Canada)
+
 
(2) (3) (8)
 
Beverage, Food & Tobacco
 
L + 4.50%
 
7.02%
 
7/20/2022
 
6,957

 
6,917

 
6,883

ThoughtWorks, Inc.
+*\
 
(2) (3)
 
Business Services
 
L + 4.00%
 
6.52%
 
10/12/2024
 
11,944

 
11,909

 
11,770

U.S. Acute Care Solutions, LLC
+*
 
(2) (3)
 
Healthcare & Pharmaceuticals
 
L + 5.00%
 
7.52%
 
5/15/2021
 
31,705

 
31,540

 
31,395


84


Credit Fund's Consolidated Schedule of Investments as of December 31, 2018
Investments (1)
 
 
Footnotes
 
Industry
 
Reference Rate & Spread (2)
 
Interest Rate (2)
 
Maturity Date
 
Par/ Principal Amount
 
Amortized Cost (5)
 
Fair Value (6)
First Lien Debt (99.91% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. TelePacific Holdings Corp.
+*\
 
(2) (3)
 
Telecommunications
 
L + 5.00%
 
7.80%
 
5/2/2023
 
$
26,660

 
$
26,459

 
$
24,768

Upstream Intermediate, LLC
^+
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.77%
 
1/3/2024
 
17,939

 
17,863

 
17,677

Valet Waste Holdings, Inc.
+\
 
(2) (3)
 
Construction & Building
 
L + 4.00%
 
6.52%
 
9/28/2025
 
11,970

 
11,947

 
11,902

Valicor Environmental Services, LLC
^+*
 
(2) (3) (8)
 
Environmental Industries
 
L + 4.75%
 
7.27%
 
6/1/2023
 
33,410

 
32,914

 
32,995

WIRB - Copernicus Group, Inc.
^+*
 
(2) (3) (8)
 
Healthcare & Pharmaceuticals
 
L + 4.25%
 
6.77%
 
8/15/2022
 
17,194

 
17,098

 
16,931

WRE Holding Corp.
^+*
 
(2) (3) (8)
 
Environmental Industries
 
L + 5.00%
 
7.52%
 
1/3/2023
 
7,238

 
7,162

 
6,993

Zywave, Inc.
^+*
 
(2) (3) (8)
 
High Tech Industries
 
L + 5.00%
 
7.52%
 
11/17/2022
 
18,050

 
17,914

 
17,991

First Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,197,499

 
$
1,172,460

Second Lien Debt (0.09% of fair value)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Zywave, Inc.
*
 
(2) (3)
 
High Tech Industries
 
L + 9.00%
 
11.65%
 
11/17/2023
 
$
1,050

 
$
1,038

 
$
1,048

Second Lien Debt Total
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,038

 
$
1,048

Total Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,198,537

 
$
1,173,508


^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2017-1 Issuer or the Credit Fund Warehouse.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund, the 2017-1 Issuer or the Credit Fund Warehouse.
* Denotes that all or a portion of the assets are owned by the 2017-1 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on December 19, 2017 (the “2017-1 Debt Securitization”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub or the Credit Fund Warehouse.
\ Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse. Credit Fund Warehouse has entered into a revolving credit facility (the “Credit Fund Warehouse Facility”). The lenders of the Credit Fund Warehouse Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse. Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub or the 2017-1 Issuer.
(1)
Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2018 , the geographical composition of investments as a percentage of fair value was 1.35% in Canada and 98.65% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)
Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2018 . As of December 31, 2018 , the reference rates for Credit Fund's variable rate loans were the 30-day LIBOR at 2.50% , the 90-day LIBOR at 2.81% and 180-day LIBOR at 2.88% .
(3)
Loan includes interest rate floor feature, which is generally 1.00%.
(4)
Credit Fund Sub receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.20% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.
(5)
Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(6)
Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to the consolidated financial statements in Part I, Item I of this Form 10-Q.
(7)
In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, Credit Fund is entitled to receive additional interest as a result of an agreement among lenders as follows: EIP Merger Sub, LLC (Evolve IP) (3.75%) and Surgical Information Systems, LLC (0.89%). Pursuant to the agreement among lenders in respect of these loans, these investments represent a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.



85


(8)
As of December 31, 2018 , Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
First Lien Debt—unfunded delayed draw and revolving term loans commitments
 
Type
 
Unused Fee
 
Par/ Principal Amount
 
Fair Value
Advanced Instruments, LLC
 
Revolver
 
0.50%
 
$
1,333

 
$
(10
)
Ahead, LLC
 
Revolver
 
0.50
 
4,688

 
(38
)
AQA Acquisition Holding, Inc.
 
Revolver
 
0.50
 
2,459

 
(19
)
Borchers, Inc.
 
Revolver
 
0.50
 
1,935

 
(5
)
Clearent Newco, LLC
 
Delayed Draw
 
1.00
 
4,988

 
(46
)
Clearent Newco, LLC
 
Revolver
 
0.50
 
1,760

 
(16
)
DecoPac, Inc.
 
Revolver
 
0.50
 
2,143

 
(11
)
Executive Consulting Group, LLC, Inc.
 
Revolver
 
0.50
 
2,368

 
(25
)
HMT Holding Inc.
 
Revolver
 
0.50
 
6,173

 
(49
)
Jensen Hughes, Inc.
 
Revolver
 
0.50
 
2,000

 
(39
)
Jensen Hughes, Inc.
 
Delayed Draw
 
1.00
 
337

 
(7
)
MAG DS Corp.
 
Revolver
 
0.50
 
2,022

 
(18
)
MSHC, Inc.
 
Delayed Draw
 
0.32
 
9,852

 
(145
)
North American Dental Management, LLC
 
Revolver
 
0.50
 
2,000

 
(35
)
North Haven CA Holdings, Inc. (CoAdvantage)
 
Revolver
 
0.50
 
6,114

 
(109
)
Output Services Group
 
Delayed Draw
 
4.25
 
2,518

 
(93
)
Pharmalogic Holdings Corp.
 
Delayed Draw
 
1.00
 
2,947

 
(20
)
Premise Health Holding Corp.
 
Delayed Draw
 
1.00
 
1,103

 
(11
)
Propel Insurance Agency, LLC
 
Delayed Draw
 
0.50
 
7,143

 
(110
)
Propel Insurance Agency, LLC
 
Revolver
 
0.50
 
1,667

 
(26
)
PSI Services LLC
 
Revolver
 
0.50
 
754

 
(17
)
QW Holding Corporation (Quala)
 
Revolver
 
0.50
 
5,498

 
(52
)
T2 Systems, Inc.
 
Revolver
 
0.50
 
1,173

 
(7
)
The Original Cakerie, Ltd. (Canada)
 
Revolver
 
0.50
 
1,132

 
(10
)
Upstream Intermediate, LLC
 
Revolver
 
0.50
 
1,606

 
(22
)
Valicor Environmental Services, LLC
 
Revolver
 
0.50
 
4,971

 
(54
)
WIRB - Copernicus Group, Inc.
 
Delayed Draw
 
1.00
 
6,480

 
(69
)
WIRB - Copernicus Group, Inc.
 
Revolver
 
0.50
 
1,000

 
(11
)
WRE Holding Corp.
 
Delayed Draw
 
0.89
 
2,069

 
(51
)
WRE Holding Corp.
 
Revolver
 
0.50
 
613

 
(15
)
Zywave, Inc.
 
Revolver
 
0.50
 
600

 
(2
)
Total unfunded commitments
 
 
 
 
 
$
91,446

 
$
(1,142
)
(9)
Loan was on non-accrual status as of December 31, 2018 .








86


Below is certain summarized consolidated financial information for Credit Fund as of June 30, 2019 and December 31, 2018 , respectively. Credit Fund commenced operations in May 2016.
 
 
June 30, 2019
 
December 31, 2018
 
 
(unaudited)
 
 
Selected Consolidated Balance Sheet Information
 
 
 
 
ASSETS
 
 
 
 
Investments, at fair value (amortized cost of $1,343,004 and $1,198,537, respectively)
 
$
1,328,201

 
$
1,173,508

Cash and other assets
 
47,039

 
62,547

Total assets
 
$
1,375,240

 
$
1,236,055

LIABILITIES AND MEMBERS’ EQUITY
 
 
 
 
Secured borrowings
 
$
384,493

 
$
572,178

Notes payable, net of unamortized debt issuance costs of $3,623 and $1,849, respectively
 
629,108

 
309,114

Mezzanine loans
 
80,000

 
112,000

Other liabilities
 
60,673

 
34,195

Subordinated loans and members’ equity
 
220,966

 
208,568

Liabilities and members’ equity
 
$
1,375,240

 
$
1,236,055

 
 
For the three month periods ended
 
For the six month periods ended
 
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
 
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Selected Consolidated Statement of Operations Information:
 
 
 
 
 
 
 
 
Total investment income
 
$
23,734

 
$
20,480

 
$
46,340

 
$
38,391

Expenses
 
 
 
 
 
 
 
 
Interest and credit facility expenses
 
15,671

 
13,101

 
30,401

 
23,757

Other expenses
 
472

 
380

 
913

 
769

Total expenses
 
16,143

 
13,481

 
31,314

 
24,526

Net investment income (loss)
 
7,591

 
6,999

 
15,026

 
13,865

Net realized gain (loss) on investments
 
(68
)
 
—

 
(8,353
)
 
—

Net change in unrealized appreciation (depreciation) on investments
 
(7,552
)
 
(2,922
)
 
10,226

 
113

Net increase (decrease) resulting from operations
 
$
(29
)
 
$
4,077

 
$
16,899

 
$
13,978

Debt
Credit Fund Facility
On June 24, 2016, Credit Fund entered into the Credit Fund Facility with the Company pursuant to which Credit Fund may from time to time request mezzanine loans from us, which was subsequently amended on June 5, 2017, October 2, 2017, November 3, 2017, June 22, 2018 and June 29, 2018. The maximum principal amount of the Credit Fund Facility is $175,000. The maturity date of the Credit Fund Facility is March 22, 2020. Amounts borrowed under the Credit Fund Facility bear interest at a rate of LIBOR plus 9.00%.
During the three month periods ended June 30, 2019 and 2018 , there were mezzanine loan borrowings of $20,200 and $25,300 , respectively, and repayments of $64,000 and $18,900 , respectively, under the Credit Fund Facility. During the six month periods ended June 30, 2019 and 2018 , there were mezzanine loan borrowings of $50,700 and $47,150 , respectively, and repayments of $82,700 and $18,900 , respectively, under the Credit Fund Facility. As of June 30, 2019 and December 31, 2018 , there were $80,000 and $112,000 in mezzanine loans outstanding, respectively.
As of June 30, 2019 and December 31, 2018 , Credit Fund was in compliance with all covenants and other requirements of the Credit Fund Facility.
Credit Fund Sub Facility
On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders, which was subsequently amended on May 31, 2017, October 27, 2017 and August 24, 2018. The Credit Fund Sub Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $640,000. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund Sub. The maturity date of the Credit Fund Sub Facility is May 22, 2024. Amounts borrowed under the Credit Fund Sub Facility bear interest at a rate of LIBOR plus 2.25%.

87


During the three month periods ended June 30, 2019 and 2018 , there were secured borrowings of $48,850 and $41,300 , respectively, and repayments of $175,107 and $20,966 , respectively, under the Credit Fund Sub Facility. During the six month periods ended June 30, 2019 and 2018 , there were secured borrowings of $108,870 and $109,265 , respectively, and repayments of $195,511 and $36,001 , respectively, under the Credit Fund Sub Facility. As of June 30, 2019 and December 31, 2018 , there was $384,493 and $471,134 in secured borrowings outstanding, respectively.
As of June 30, 2019 and December 31, 2018 , Credit Fund Sub was in compliance with all covenants and other requirements of the Credit Fund Sub Facility.
2017-1 Notes
On December 19, 2017, Credit Fund completed the 2017-1 term Debt Securitization. The notes offered in the 2017-1 Debt Securitization (the “2017-1 Notes”) were issued by the 2017-1 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2017-1 Issuer consisting primarily of first and second lien senior secured loans. The 2017-1 Debt Securitization was executed through a private placement of the 2017-1 Notes, consisting of $231,700 of Aaa/AAA Class A-1 Notes, which bear interest at the three-month LIBOR plus 1.17%; $48,300 of Aa2/AA Class A-2 Notes, which bear interest at the three-month LIBOR plus 1.50%; $15,000 of A2/A Class B-1 Notes, which bear interest at the three-month LIBOR plus 2.25%; $9,000 of A2/A Class B-2 Notes which bear interest at 4.30%; $22,900 of Baa2/BBB Class C Notes which bear interest at the three-month LIBOR plus 3.20%; and $25,100 of Ba2/BB Class D Notes which bear interest at the three-month LIBOR plus 6.38%. The 2017-1 Notes are scheduled to mature on January 15, 2028. Credit Fund received 100% of the preferred interests issued by the 2017-1 Issuer (the “2017-1 Issuer Preferred Interests”) on the closing date of the 2017-1 Debt Securitization in exchange for Credit Fund’s contribution to the 2017-1 Issuer of the initial closing date loan portfolio. The 2017-1 Issuer Preferred Interests do not bear interest and had a nominal value of $47,900 at closing.
As of June 30, 2019 and December 31, 2018 , the 2017-1 Issuer was in compliance with all covenants and other requirements of the indenture.
Credit Fund Warehouse Facility
MMCF Warehouse, LLC (the “Credit Fund Warehouse”) a Delaware limited liability company, was formed on November 26, 2018. On November 26, 2018, Credit Fund closed on the Credit Fund Warehouse Facility with lenders. The Credit Fund Warehouse Facility provided for secured borrowings during the applicable revolving period up to an amount equal to $150,000. The Credit Fund Warehouse Facility was secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Warehouse. The maturity date of the Credit Fund Warehouse Facility was November 26, 2019. Amounts borrowed under the Credit Fund Warehouse Facility bore interest at a rate of LIBOR plus 1.05%. Effective May 15, 2019, the Warehouse Facility changed its name from “MMCF Warehouse, LLC” to “MMCF CLO 2019-2, LLC” and secured borrowings outstanding were repaid in connection with the 2019-2 Debt Securitization.
During the three and six month periods ended June 30, 2019 , there were secured borrowings of $21,671 and $34,544 , respectively, and repayments of $135,589 and $135,589 , respectively, under the Credit Fund Warehouse Facility.
2019-2 Notes
On May 21, 2019, Credit Fund completed the 2019-2 Debt Securitization. The notes offered in the 2019-2 Debt Securitization (the “2019-2 Notes”) were issued by the 2019-2 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2019-2 Issuer consisting primarily of first and second lien senior secured loans. The 2019-2 Debt Securitization was executed through a private placement of the 2019-2 Notes, consisting of $233,000 of Aaa/AAA Class A-1 Notes, which bear interest at the three-month LIBOR plus 1.50%; $48,000 of Aa2/AA Class A-2 Notes, which bear interest at the three-month LIBOR plus 2.40%; $23,000 of A2/A Class B Notes, which bear interest at the three-month LIBOR plus 3.45%; $27,000 of Baa2/BBB- Class C Notes which bear interest at the three-month LIBOR plus 4.55%; and $21,000 of Ba2/BB- Class D Notes which bear interest at the three-month LIBOR plus 8.03%. The 2017-1 Notes are scheduled to mature on April 15, 2029. Credit Fund received 100% of the preferred interests issued by the 2019-2 Issuer (the “2019-2 Issuer Preferred Interests”) on the closing date of the 2019-2 Debt Securitization in exchange for Credit Fund’s contribution to the 2019-2 Issuer of the initial closing date loan portfolio. The 2019-2 Issuer Preferred Interests do not bear interest and had a nominal value of $48,300 at closing.
As of June 30, 2019 , the 2019-2 Issuer was in compliance with all covenants and other requirements of the indenture.


88



FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We generate cash from the net proceeds of offerings of our common stock and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Facilities, as well as through securitization of a portion of our existing investments.
The SPV closed on May 24, 2013 on the SPV Credit Facility, which was subsequently amended on June 30, 2014, June 19, 2015, June 9, 2016, May 26, 2017 and August 9, 2018. The SPV Credit Facility provides for secured borrowings during the applicable revolving period up to an amount equal to the lesser of $400,000 (the borrowing base as calculated pursuant to the terms of the SPV Credit Facility) and the amount of net cash proceeds and unpledged capital commitments the Company has received, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings. The SPV Credit Facility imposes financial and operating covenants on us and the SPV that restrict our and its business activities. Continued compliance with these covenants will depend on many factors, some of which are beyond our control.
We closed on the Credit Facility on March 21, 2014, which was subsequently amended on January 8, 2015, May 25, 2016, March 22, 2017, September 25, 2018 and June 14, 2019. The maximum principal amount of the Credit Facility is $593,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased, subject to certain conditions, to $900,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit. Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.
Although we believe that we and the SPV will remain in compliance, there are no assurances that we or the SPV will continue to comply with the covenants in the Credit Facility and SPV Credit Facility, as applicable. Failure to comply with these covenants could result in a default under the Credit Facility and/or the SPV Credit Facility that, if we or the SPV were unable to obtain a waiver from the applicable lenders, could result in the immediate acceleration of the amounts due under the Credit Facility and/or the SPV Credit Facility, and thereby have a material adverse impact on our business, financial condition and results of operations.
For more information on the SPV Credit Facility and the Credit Facility, see Note 6 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.
The primary use of existing funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders and for other general corporate purposes.
On June 26, 2015, we completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of us. On August 30, 2018, the 2015-1 Issuer refinanced the 2015-1 Debt Securitization (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer, among other things, (a) refinanced the issued Class A-1A Notes by redeeming in full the Class A-1A Notes and issuing new AAA Class A-1-1-R Notes in an aggregate principal amount of $234,800 which bear interest at the three-month LIBOR plus 1.55%; (b) refinanced the issued Class A-1B Notes by redeeming in full the Class A-1B Notes and issuing new AAA Class A-1-2-R Notes in an aggregate principal amount of $50,000 which bear interest at the three-month LIBOR plus 1.48% for the first 24 months and the three-month LIBOR plus 1.78% thereafter; (c) refinanced the issued Class A-1C Notes by redeeming in full the Class A-1C Notes and issuing new AAA Class A-1-3-R Notes in an aggregate principal amount of $25,000 which bear interest at

89


4.56%; (d) refinanced the issued Class A-2 Notes by redeeming in full the Class A-2 Notes and issuing new Class A-2-R Notes in an aggregate principal amount of $66,000 which bear interest at the three-month LIBOR plus 2.20%; (e) issued new single-A Class B Notes and BBB- Class C Notes in aggregate principal amounts of $46,400 and $27,000, respectively, which bear interest at the three-month LIBOR plus 3.15% and the three-month LIBOR plus 4.00%, respectively; (f) reduced the 2015-1 Issuer Preferred Interests by approximately $21,375 from a nominal value of $125,900 to approximately $104,525 at close; and (g) extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to October 15, 2023 and October 15, 2031, respectively. In connection with the contribution, we have made customary representations, warranties and covenants to the 2015-1 Issuer. The Class A-1-1-R, Class A-1-2-R, Class A-1-3-R, Class A-2-R, Class B and Class C Notes are included in the consolidated financial statements included in Part I, Item 1 of this Form 10-Q. The 2015-1 Issuer Preferred Interests were eliminated in consolidation. For more information on the 2015-1R Notes, see Note 7 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.
As of June 30, 2019 and December 31, 2018 , we had $62,324 and $87,186 , respectively, in cash and cash equivalents. The Facilities consisted of the following as of June 30, 2019 and December 31, 2018 :
 
June 30, 2019
 
Total Facility
 
Borrowings Outstanding
 
Unused Portion  (1)
 
Amount Available  (2)
SPV Credit Facility
$
400,000

 
$
246,897

 
$
153,103

 
$
16,388

Credit Facility
593,000

 
402,500

 
190,500

 
190,500

Total
$
993,000

 
$
649,397

 
$
343,603

 
$
206,888

 
December 31, 2018
 
Total Facility
 
Borrowings Outstanding
 
Unused Portion  (1)
 
Amount Available  (2)
SPV Credit Facility
$
400,000

 
$
224,135

 
$
175,865

 
$
2,547

Credit Facility
413,000

 
290,500

 
122,500

 
122,500

Total
$
813,000

 
$
514,635

 
$
298,365

 
$
125,047

(1)
The unused portion is the amount upon which commitment fees are based.
(2)
Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.

The following were the carrying values (before debt issuance costs) and fair values of the Company’s 2015-1R Notes as of June 30, 2019 and December 31, 2018 :
 
June 30, 2019
 
December 31, 2018
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Aaa/AAA Class A-1-1-R Notes
$
234,800

 
$
232,846

 
$
234,800

 
$
229,632

Aaa/AAA Class A-1-2-R Notes
50,000

 
49,400

 
50,000

 
49,442

Aaa/AAA Class A-1-3-R Notes
25,000

 
25,283

 
25,000

 
24,990

AA Class A-2-R Notes
66,000

 
66,000

 
66,000

 
66,000

A Class B Notes
46,400

 
45,356

 
46,400

 
44,242

BBB- Class C Notes
27,000

 
25,650

 
27,000

 
24,809

Total
$
449,200

 
$
444,535

 
$
449,200

 
$
439,115


As of June 30, 2019 and December 31, 2018 , we had a combined $1,098,597 and $963,835 , respectively, of outstanding consolidated indebtedness under our Facilities and notes. Our annualized interest cost as of June 30, 2019 and December 31, 2018 , was 4.69% and 4.55% , excluding fees (such as fees on undrawn amounts and amortization of upfront fees).
Equity Activity
Shares issued and outstanding as of June 30, 2019 and December 31, 2018 were 60,181,859 and 62,230,251, respectively.

90


The following table summarizes activity in the number of shares of our common stock outstanding during the six month periods ended June 30, 2019 and 2018 :
 
For the six month periods ended
 
June 30, 2019
 
June 30, 2018
Shares outstanding, beginning of period
62,230,251

 
62,207,603

Reinvestment of dividends
—

 
361,056

Repurchase of common stock
(2,048,392
)
 
—

Shares outstanding, end of period
60,181,859

 
62,568,659

Contractual Obligations
A summary of our significant contractual payment obligations was as follows as of June 30, 2019 and December 31, 2018 :
 
 
SPV Credit Facility and Credit Facility
 
2015-1R Notes
Payment Due by Period
 
June 30, 2019
 
December 31, 2018
 
June 30, 2019
 
December 31, 2018
Less than 1 Year
 
$
—

 
$
—

 
$
—

 
$
—

1-3 Years
 
—

 
—

 
—

 
—

3-5 Years
 
649,397

 
514,635

 
—

 
—

More than 5 Years
 
—

 
—

 
449,200

 
449,200

Total
 
$
649,397

 
$
514,635

 
$
449,200

 
$
449,200

As of June 30, 2019 and December 31, 2018 , $246,897 and $224,135 , respectively, of secured borrowings were outstanding under the SPV Credit Facility, $402,500 and $290,500 , respectively, were outstanding under the Credit Facility. As of June 30, 2019 and December 31, 2018 , $449,200 and $449,200 of 2015-1R Notes, respectively, were outstanding. For the three month and six month periods ended June 30, 2019 , we incurred $13,032 and $25,023 , respectively, of interest expense and $296 and $599 , respectively, of unused commitment fees. For the three month and six month periods ended June 30, 2018 , we incurred $8,709 and $16,524 , respectively, of interest expense and $294 and $582 , respectively, of unused commitment fees.
OFF BALANCE SHEET ARRANGEMENTS
In the ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these consolidated financial statements as of June 30, 2019 and December 31, 2018 in Part I, Item 1 of this Form 10-Q for any such exposure.
We have in the past and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments.
We had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:
 
Principal Amount as of
 
June 30, 2019
 
December 31, 2018
Unfunded delayed draw commitments
$
105,692

 
$
97,261

Unfunded revolving term loan commitments
69,442

 
59,856

Total unfunded commitments
$
175,134

 
$
157,117

Pursuant to an undertaking by us in connection with the 2015-1 Debt Securitization, we agreed to hold on an ongoing basis the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remains outstanding. As of June 30, 2019 and December 31, 2018 , we were in compliance with this undertaking.

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DIVIDENDS AND DISTRIBUTIONS TO COMMON STOCKHOLDERS
Prior to July 5, 2017, we had an “opt in” dividend reinvestment plan. Effective on July 5, 2017, we converted our “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our stockholders, other than those stockholders who have “opted out” of the plan. As a result of adopting the plan, if our Board of Directors authorizes, and we declare, a cash dividend or distribution, our stockholders who have not elected to “opt out” of our dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of our common stock, rather than receiving cash. Each registered stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, our plan administrator, in additional shares. The number of shares to be issued to the stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes. We intend to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless we instruct the plan administrator otherwise.
The following table summarizes the Company's dividends declared during the two most recent fiscal years and the current fiscal year to date:
Date Declared
 
Record Date
 
Payment Date
 
Per Share Amount
 
2017
 
 
 
 
 
 
 
March 20, 2017
 
March 20, 2017
 
April 24, 2017
 
$
0.41

 
June 20, 2017
 
June 30, 2017
 
July 18, 2017
 
$
0.37

 
August 7, 2017
 
September 29, 2017
 
October 18, 2017
 
$
0.37

 
November 7, 2017
 
December 29, 2017
 
January 17, 2018
 
$
0.37

 
December 13, 2017
 
December 29, 2017
 
January 17, 2018
 
$
0.12

(1)  
Total
 
 
 
 
 
$
1.64

 
2018
 
 
 
 
 
 
 
February 26, 2018
 
March 29, 2018
 
April 17, 2018
 
$
0.37

 
May 2, 2018
 
June 29, 2018
 
July 17, 2018
 
$
0.37

 
August 6, 2018
 
September 28, 2018
 
October 17, 2018
 
$
0.37

 
November 5, 2018
 
December 28, 2018
 
January 17, 2019
 
$
0.37

 
December 12, 2018
 
December 28, 2018
 
January 17, 2019
 
$
0.20

(1)  
Total
 
 
 
 
 
$
1.68

 
2019
 
 
 
 
 
 
 
February 22, 2019
 
March 29, 2019
 
April 17, 2019
 
$
0.37

 
May 6, 2019
 
June 28, 2019
 
July 17, 2019
 
$
0.37

 
June 17, 2019
 
June 28, 2019
 
July 17, 2019
 
$
0.08

(1)  
Total
 
 
 
 
 
$
0.82

 
(1)
Represents a special dividend.

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ASSET COVERAGE
In accordance with the Investment Company Act, a BDC is only allowed to borrow amounts such that its “asset coverage,” as defined in the Investment Company Act, satisfies the minimum asset coverage ratio specified in the Investment Company Act after such borrowing. “Asset coverage” generally refers to a company’s total assets, less all liabilities and indebtedness not represented by “senior securities,” as defined in the Investment Company Act, divided by total senior securities representing indebtedness and, if applicable, preferred stock. “Senior securities” for this purpose includes borrowings from banks or other lenders, debt securities and preferred stock.
Prior to March 23, 2018, BDCs were required to maintain a minimum asset coverage ratio of 200%. On March 23, 2018, an amendment to Section 61(a) of the Investment Company Act was signed into law to permit BDCs to reduce the minimum asset coverage ratio from 200% to 150%, so long as certain approval and disclosure requirements are satisfied. Under the 200% minimum asset coverage ratio, BDCs are permitted to borrow up to one dollar for investment purposes for every one dollar of investor equity, and under the 150% minimum asset coverage ratio, BDCs are permitted to borrow up to two dollars for investment purposes for every one dollar of investor equity. In other words, Section 61(a) of the Investment Company Act, as amended, permits BDCs to potentially increase their debt-to-equity ratio from a maximum of 1 to 1 to a maximum of 2 to 1.
On April 9, 2018 and June 6, 2018, the Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the Investment Company Act), and the stockholders of the Company, respectively, approved the application to the Company of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the Investment Company Act. As a result, the minimum asset coverage ratio applicable to the Company was reduced from 200% to 150%, effective as of June 7, 2018, the first day after the Company's 2018 Annual Meeting.
As of June 30, 2019 and December 31, 2018 , the Company had total senior securities of $1,098,597 and $963,835 , respectively, consisting of secured borrowings under the Facilities and the Notes Payable, and had asset coverage ratios of 193.45% and 210.31% , respectively. For a discussion of the principal risk factors associated with these senior securities, see Part II, Item 1A of this Form 10‑Q.
CRITICAL ACCOUNTING POLICIES
The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in connection with our consolidated financial statements in Part I, Item 1 of this Form 10-Q and in Part II, Item 8 of the Company’s annual report on Form 10-K for the year ended December 31, 2018 .
Fair Value Measurements
The Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Company determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.
Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Board of Directors, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where

93


available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the “Audit Committee”) reviews the assessments of the Investment Adviser and the third-party valuation firm and provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
 
•
the nature and realizable value of any collateral;
•
call features, put features and other relevant terms of debt;
•
the portfolio company’s leverage and ability to make payments;
•
the portfolio company’s public or private credit rating;
•
the portfolio company’s actual and expected earnings and discounted cash flow;
•
prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
•
the markets in which the portfolio company does business and recent economic and/or market events; and
•
comparisons to comparable transactions and publicly traded securities.
Investment performance data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.
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 Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of June 30, 2019 and December 31, 2018 .
U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:
 
•
Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. Financial instruments in this category generally include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
•
Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. Financial instruments in this category generally include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.
•
Level 3—inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial

94


instruments that are included in this category generally include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Adviser’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 investment.
Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur.
The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:
Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.
Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.
Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes EBITDA multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in Credit Fund’s mezzanine loan are valued using collateral analysis with expected recovery rate of principal and interest. Investments in Credit Fund’s subordinated loan and member’s interest are valued using discounted cash flow analysis with expected discount rates, default rates and recovery rates of principal and interest.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates, indicative quotes and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation may result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples would result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in the mezzanine loan of Credit Fund are recovery rates of principal and interest. Significant decreases in recovery rates would result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in the subordinated loan and member’s interest of Credit Fund are discount rates, default rates and recovery rates. Significant increases in discount rates or default rates would result in a significantly lower fair value measurement. Significant decreases in recovery rates would result in a significantly lower fair value measurement.

95


The carrying values of the secured borrowings and notes payable approximate their respective fair values and are categorized as Level 3 within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Company’s secured borrowings are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement. The fair value determination of the Company’s notes payable was based on the market quotation(s) received from broker/dealer(s). These fair value measurements were based on significant inputs not observable and thus represent Level 3 measurements as defined in the accounting guidance for fair value measurement.
The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items.
See Note 3 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q for further information on fair value measurements.
Use of Estimates
The preparation of consolidated financial statements in Part I, Item 1 of this Form 10-Q in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements in Part I, Item 1 of this Form 10-Q. Actual results could differ from these estimates and such differences could be material.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the Consolidated Statements of Operations in Part I, Item 1 of this Form 10-Q reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.
Revenue Recognition
Interest from Investments and Realized Gain/Loss on Investments
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit using the specific identification method.
The Company has loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in interest income in the Consolidated Statements of Operations included in Part I, Item 1 of this Form 10-Q.
Dividend Income
Dividend income from the investment fund is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment fund and are expected to be collected.
Other Income

96


Other income may include income such as consent, waiver, amendment, unused, underwriting, arranger and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the Consolidated Statements of Assets and Liabilities included in Part I, Item 1 of this Form 10-Q.
Non-Accrual Income
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a 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 regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.
Income Taxes
For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely than not” to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.
The SPVs and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company.
Dividends and Distributions to Common Stockholders
To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to retain such capital gains for investment.

97


Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.
Valuation Risk
Our investments may not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board of Directors in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. 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 our investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.
Interest Rate Risk
As of June 30, 2019 , on a fair value basis, approximately 1% of our debt investments bear interest at a fixed rate and approximately 99% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors. Interest rates on the investments held within our portfolio of investments are typically based on floating LIBOR, with many of these investments also having a LIBOR floor. Additionally, our Facilities are also subject to floating interest rates and are currently paid based on floating LIBOR rates.
Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. There can be no assurance that a significant change in market interest rates will not have a material adverse effect on our income in the future.
The following table estimates the potential changes in net cash flow generated from interest income, should interest rates increase or decrease by 100, 200 or 300 basis points. These hypothetical interest income calculations are based on a model of the settled debt investments in our portfolio, excluding our investment in Credit Fund, held as of June 30, 2019 and December 31, 2018 , and are only adjusted for assumed changes in the underlying base interest rates and the impact of that change on interest income. Interest expense is calculated based on outstanding secured borrowings and notes payable as of June 30, 2019 and December 31, 2018 and based on the terms of our Facilities and notes payable. Interest expense on our Facilities and notes payable is calculated using the stated interest rate as of June 30, 2019 and December 31, 2018 , adjusted for the hypothetical changes in rates, as shown below. We intend to continue to finance a portion of our investments with borrowings and the interest rates paid on our borrowings may impact significantly our net interest income.
We regularly measure exposure to interest rate risk. We assess interest rate risk and manage interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.
Based on our Consolidated Statements of Assets and Liabilities as of June 30, 2019 and December 31, 2018 , the following table shows the annual impact on net investment income of base rate changes in interest rates for our settled debt investments (considering interest rate floors for variable rate instruments), excluding our investment in Credit Fund, and outstanding secured borrowings and notes payable assuming no changes in our investment and borrowing structure:
 
As of June 30, 2019
 
As of December 31, 2018
Basis Point Change
Interest Income
 
Interest Expense
 
Net Investment Income
 
Interest Income
 
Interest Expense
 
Net Investment Income
Up 300 basis points
$
55,720

 
$
(32,208
)
 
$
23,512

 
$
52,554

 
$
(28,165
)
 
$
24,389

Up 200 basis points
$
37,146

 
$
(21,472
)
 
$
15,674

 
$
35,036

 
$
(18,777
)
 
$
16,259

Up 100 basis points
$
18,573

 
$
(10,736
)
 
$
7,837

 
$
17,518

 
$
(9,388
)
 
$
8,130

Down 100 basis points
$
(18,427
)
 
$
10,736

 
$
(7,691
)
 
$
(17,477
)
 
$
9,388

 
$
(8,089
)
Down 200 basis points
$
(26,874
)
 
$
21,472

 
$
(5,402
)
 
$
(28,103
)
 
$
18,777

 
$
(9,326
)
Down 300 basis points
$
(27,802
)
 
$
26,953

 
$
(849
)
 
$
(28,741
)
 
$
22,953

 
$
(5,788
)

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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive Officer) and our Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them of material information relating to the Company that is required to be disclosed by us in the reports we file or submit under the Exchange Act.
Changes in Internal Controls over Financial Reporting
There have been no changes in our internal control over financial reporting during the three month period ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
The Company may become party to certain lawsuits in the ordinary course of business. The Company is not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against the Company. See also Note 11 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.
Item 1A. Risk Factors.
There have been no material changes to the risk factors previously disclosed in our annual report on Form 10-K for the year ended December 31, 2018 . For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 26, 2019, which is accessible on the SEC’s website at sec.gov.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
We did not sell any equity securities during the period covered in this report that were not registered under the Securities Act of 1933, as amended.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table provides information regarding purchases of our common stock made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) during the three months ended June 30, 2019 for the periods indicated.
Period
 
Total Number of Shares Purchased (1)
 
Average Price Paid Per Share
 
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)(2)
 
Maximum (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2019 through April 30, 2019
 
549,217

 
$
14.83

 
549,217

 
$
72,697

May 1, 2019 through May 31, 2019
 
217,343

 
15.03

 
217,343

 
69,430

June 1, 2019 through June 30, 2019
 
268,184

 
15.11

 
268,184

 
65,379

Total
 
1,034,744

 
 
 
1,034,744

 
 
(1)
On trade date basis.
(2)
Shares purchased by the Company pursuant to the Company Stock Repurchase Program, which was entered into on November 5, 2018. Pursuant to the program, the Company is authorized to repurchase up to $100 million in the aggregate of its outstanding common stock in the open market and/or through privately negotiated transactions at prices not to exceed the Company’s net asset value per share as reported in its most recent financial statements, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. The timing, manner, price and amount of any repurchases will be determined by the Company, in its discretion, based upon the evaluation of economic and market conditions, stock price, available cash, applicable legal and regulatory requirements and other factors, and may include purchases pursuant to Rule 10b5-1 of the Exchange Act. The program is expected to be in effect until the earlier of November 5, 2019 and the date the approved dollar amount has been used to repurchase shares. The program does not require the Company to repurchase any specific number of shares and there can be no assurance as to the amount of shares repurchased under the program. The program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law. Pursuant to the authorization described above, the Company adopted a Rule 10b5-1 plan (the “Company 10b5-1 Plan” ). The Company 10b5-1 Plan provides that purchases will be conducted on the open market in accordance with Rule 10b5-1 and 10b-18 under the Exchange Act and will otherwise be subject to applicable law, which may prohibit purchases under certain circumstances. The amount of purchases made under the Company 10b5-1 Plan or otherwise and how much will be purchased at any time is uncertain, dependent on prevailing market prices and trading volumes, all of which we cannot predict.
Item 3. Defaults Upon Senior Securities.
Not applicable.

100


Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits.
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
* Filed herewith

101


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.
 
 
TCG BDC, INC.
 
 
 
Dated: August 6, 2019
By
  
/s/ Thomas M. Hennigan
 
 
  
Thomas M. Hennigan
Chief Financial Officer
(principal financial officer)

102
EXECUTION VERSION

OMNIBUS AMENDMENT NO. 5

THIS OMNIBUS AMENDMENT NO. 5, dated as of June 14, 2019 (this “ Amendment ”), to the Existing Credit Agreement and the Existing Guarantee and Security Agreement (capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in Article I ) is among TCG BDC, Inc. (f/k/a CARLYLE GMS FINANCE, INC.), a Maryland corporation (the “ Borrower ”), the Lenders party hereto, HSBC BANK USA, N.A. (“ HSBC ”) as existing administrative agent (the “ Existing Administrative Agent ”), existing collateral agent (the “ Existing Collateral Agent ”) and existing swingline lender (the “ Existing Swingline Lender ”) and JPMORGAN CHASE BANK, N.A. (“ JPMCB ”), as successor administrative agent (as successor to HSBC, in such capacity, the “ Successor Administrative Agent ”), successor collateral agent (as successor to HSBC, in such capacity, the “ Successor Collateral Agent ”) and successor swingline lender (as successor to HSBC, in such capacity, the “ Successor Swingline Lender ”).
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders and the Existing Administrative Agent are parties to the Senior Secured Revolving Credit Agreement, dated as of March 21, 2014 (as amended by the Omnibus Amendment No. 1 dated as of January 8, 2015, the Omnibus Amendment No. 2 dated as of May 25, 2016, the Omnibus Amendment No. 3 dated as of March 22, 2017, the Omnibus Amendment No. 4 dated as of September 25, 2018 (the “ Existing Credit Agreement ”), and as amended by this Amendment and as the same may be further amended, supplemented, amended and restated or otherwise modified from time to time, the “ Credit Agreement ”);
WHEREAS, the Borrower, the Existing Administrative Agent and the Existing Collateral Agent are parties to the Guarantee and Security Agreement, dated as of March 21, 2014 (as amended by the Omnibus Amendment No. 1 dated as of January 8, 2015, the Omnibus Amendment No. 2 dated as of May 25, 2016, the Omnibus Amendment No. 3 dated as of March 22, 2017, the Omnibus Amendment No. 4 dated as of September 25, 2018 (the “ Existing Guarantee and Security Agreement ”), and as amended by this Amendment and as the same may be further amended, supplemented, amended and restated or otherwise modified from time to time, the “ Guarantee and Security Agreement ”);
WHEREAS, HSBC hereby notifies the Lenders that it wishes to resign in its capacity as Existing Administrative Agent, Existing Collateral Agent and Existing Swingline Lender, and each of the parties hereto hereby desire to appoint JPMCB as the successor to HSBC in all such capacities, and JPMCB desires to assume such obligations in accordance with the terms and conditions of the Credit Agreement, the Guarantee and Security Agreement and this Amendment.
WHEREAS, the Borrower has requested that the Lenders agree to amend the Existing Credit Agreement and the Existing Guarantee and Security Agreement and each Lender, the Successor Administrative Agent, the Successor Collateral Agent and the Successor Swingline Lender are willing, from and after the Fifth Amendment Effective Date (as hereinafter defined), on the terms and subject to the conditions hereinafter set forth, to agree to the amendments set forth below and the other terms hereof;

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NOW, THEREFORE, the parties hereto hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1.      Definitions . Capitalized terms used in this Amendment but not defined herein shall have the meanings ascribed thereto in the Credit Agreement.
ARTICLE II     
AMENDMENT TO CREDIT AGREEMENT
Subject to the satisfaction of the conditions precedent set forth in Section 4.1 hereof, effective on and as of the Fifth Amendment Effective Date (as hereinafter defined), the Borrower, the Lenders and the Successor Administrative Agent hereby agree that the Credit Agreement shall be amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text ) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Credit Agreement attached hereto as Exhibit A .
ARTICLE III
AMENDMENT TO GUARANTEE AND SECURITY AGREEMENT
Subject to the occurrence of the Fifth Amendment Effective Date (as hereinafter defined), the Existing Guarantee and Security Agreement is amended in accordance with this Article III.
SECTION 3.1.    All references to “HSBC” in the Existing Guarantee and Security Agreement are hereby deleted and replaced with “JPMCB”.
SECTION 3.2.    All references to “HSBC BANK USA, N.A.” in the Existing Guarantee and Security Agreement are hereby deleted and replaced with “JPMorgan Chase Bank, N.A.”.
SECTION 3.3.    Section 10.01. Notices. The “Address for Notices” for the Successor Collateral Agent shall be as follows:
“JPMorgan Chase Bank, N.A.    

CIB DMO WLO    

Mail code NY1-C413    

4 CMC, Brooklyn, NY, 11245-0001    

United States    

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2



Email:
ib.collateral.services@jpmchase.com ”.
ARTICLE IV
CONDITIONS TO EFFECTIVENESS
SECTION 4.1. Effective Date . This Amendment shall become effective on the date each of the following conditions have been satisfied (the “ Fifth Amendment Effective Date ”):
(a)    delivery to the Successor Administrative Agent of counterparts of this Amendment duly executed by each of the Borrower, each Lender, the Existing Administrative Agent and the Successor Administrative Agent;
(b)    all fees and expenses owing to the Existing Administrative Agent and the Successor Administrative Agent, and all other invoiced or otherwise documented fees, expenses and costs (including attorney’s fees and disbursements) shall have been paid;
(c)    the Borrower shall cause to be delivered to the Successor Administrative Agent an opinion of counsel in form and substance reasonably satisfactory to the Successor Administrative Agent regarding the enforceability of this Amendment and a customary bring-down opinion in respect of the creation and perfection of the security under the Guarantee and Security Agreement;
(d)    the Borrower shall cause to be delivered to the Successor Administrative Agent a Borrowing Base Certificate showing a calculation of the pro forma Borrowing Base as of May 31, 2019;
(e)    the Successor Administrative Agent and the Borrower shall have executed and delivered a fee letter in relation to the annual agency fee and other related fees paid to the Successor Administrative Agent in its capacity as the Administrative Agent and Collateral Agent;
(f)    the Existing Administrative Agent shall have delivered the Register maintained by the Existing Administrative Agent as of June 14, 2019 (which shall include evidence of the principal, interest and other sums due under the Loan Documents) to the Successor Administrative Agent;
(g)    all accrued and unpaid interest and commitment fees shall have been paid to the Existing Administrative Agent; and
(h)    the actions described in Schedule I shall have been performed.
ARTICLE V
ACKNOWLEDGMENT OF SUCCESSOR ADMINISTRATIVE AGENT, SUCCESSOR SWINGLINE LENDER AND SUCCESSOR COLLATERAL AGENT

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SECTION 5.1.     Resignation, Appointment and Acceptance of Appointment . Each of the parties to this Amendment hereby acknowledges and agrees that, prior to giving effect to any of the amendments set forth in Articles II or III of this Amendment, HSBC (the “ Retiring Agent ”) has resigned in its capacity as Administrative Agent, Swingline Lender and Collateral Agent under the Credit Agreement, the Guarantee and Security Agreement and each of the other Loan Documents, and, as of the Fifth Amendment Effective Date, subject to the last sentence of this Section 5.1, has assigned all of its interests under the Existing Credit Agreement, the Existing Guarantee and Security Agreement and the other Loan Documents, to JPMCB, and the Parties hereto, including the Lenders, hereby appoint JPMCB as successor (the “ Successor Agent ”). The Successor Agent hereby acknowledges and agrees to such appointment. The Retiring Agent, the undersigned Lenders and the Successor Agent each agree that as of the Fifth Amendment Effective Date such resignation and appointment and the acceptance thereof are effective under the Loan Documents and binding on each of the parties hereto. Each of the parties hereto agrees to execute all such further documents and take such further action, at the expense of the Borrower, as may be necessary to evidence the resignation and appointment described herein. For the avoidance of doubt, the Retiring Agent is not assigning, nor is the Successor Agent assuming, any Loans (including Swingline Loans) made by the Retiring Agent in its capacity as Lender or Swingline Lender.
SECTION 5.2. Rights, Duties and Obligations .
(a)    As of the Fifth Amendment Effective Date, (i) the Successor Agent shall succeed to and become vested with all the applicable rights, powers, discretion, privileges and shall assume all the applicable duties and obligations of the Retiring Agent as described in the Existing Credit Agreement, the Existing Guarantee and Security Agreement and the other Loan Documents, and shall be bound by the terms thereof in its respective capacities as Administrative Agent, Collateral Agent and Swingline Lender, in each case as if the Successor Agent had been a party to each of the Existing Credit Agreement and the Existing Guarantee and Security Agreement and the other Loan Documents in such respective capacities on and from the date of those agreements, (ii) any reference to the Retiring Agent in the Loan Documents shall be deemed to be a reference to the Successor Agent, and (iii) subject to Sections 5.2(b) and (c) below, the Retiring Agent is hereby discharged from its duties and obligations under the Loan Documents in its capacities as Administrative Agent, Swingline Lender, and Collateral Agent; provided that the provisions of (x) Article VIII and Section 9.03 of the Existing Credit Agreement and (y) Sections 9 and 10.04 of the Existing Guarantee and Security Agreement shall, in each case, continue in effect for the benefit of the Retiring Agent in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent, Swingline Lender or Collateral Agent, as applicable
(b)    The Borrower and the Lenders expressly agree and acknowledge that (i) the Successor Agent shall bear no responsibility for any actions taken or omitted to be taken by the Retiring Agent prior to the Fifth Amendment Effective Date in any of its capacities as Administrative Agent, Collateral Agent and Swingline Lender under the Loan Documents and (ii) the Successor Agent is not assuming any liability (A) under or related to the Loan Documents prior to the Fifth Amendment Effective Date, (B) for any and all claims under or related to the Loan Documents that may have arisen or accrued prior to the Fifth Amendment Effective Date, and (C) has not made an independent investigation as to the completeness or accuracy of the attachments and Schedules

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4


attached hereto and the information contained herein or therein, and may conclusively rely thereon for all purposes under the Existing Credit Agreement and the Existing Guarantee and Security Agreement and other Loan Documents.
(c)    The Retiring Agent expressly agrees and acknowledges that (i) it shall continue to bear responsibility for any actions taken or omitted to be taken by the it while it served as Administrative Agent, Collateral Agent and Swingline Lender under the Loan Documents; provided that the provisions of (x) Article VIII and Section 9.03 of the Existing Credit Agreement and (y) Sections 9 and 10.04 of the Existing Guarantee and Security Agreement shall, in each case, continue in effect for the benefit of the Retiring Agent in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent or Collateral Agent, as applicable, and (ii) the Successor Agent is not assuming any liability of the Retiring Agent (A) under or related to the Loan Documents prior to the Fifth Amendment Effective Date and (B) for any and all claims under or related to the Loan Documents that may have arisen or accrued prior to the Fifth Amendment Effective Date. Each of the Obligors confirms as of the date hereof that it has no actual knowledge of any claim against the Retiring Agent under the Loan Documents.
(d)    The Retiring Agent hereby transfers and assigns to the Successor Agent, effective on and after the Fifth Amendment Effective Date, each of the Liens and security interests granted to the Retiring Agent under the Loan Documents and the Successor Agent hereby assumes all such Liens, for its benefit and for the ratable benefit of all other Secured Parties (as defined in the Guarantee and Security Agreement) under the Loan Documents. Each of the Borrower and the Retiring Agent authorizes the Successor Agent to file any Uniform Commercial Code (as in effect from time to time in the State of New York, the “ UCC ”) assignments or amendments with respect to the UCC financing statements, mortgages, and other filings in respect of the Collateral as the Successor Agent deems reasonably necessary or desirable to maintain or perfect the Collateral.
(e)    The Retiring Agent covenants and agrees that it will use commercially reasonable efforts to take all actions reasonably requested by the Successor Agent or its representatives at the cost of the Borrower to facilitate the transfer of information in its possession with respect to the Loan Documents needed by the Successor Agent in connection with the Loan Documents.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1.     Borrower Representations and Warranties . To induce the Lenders and the Successor Administrative Agent to execute and deliver this Amendment, the Borrower hereby represents and warrants to the Lenders and the Successor Administrative Agent on the Fifth Amendment Effective Date that (A) the representations and warranties contained in Article III of the Credit Agreement and the other Loan Documents are true and correct in all material respects (or, in the case of any portion of any representations and warranties already subject to a materiality qualifier, true and correct in all respects), except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date and (B) no Default or Event of Default has occurred and is continuing.

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5


ARTICLE VII
REAFFIRMATION OF LIEN GRANT
SECTION 8.1. Reaffirmation . After giving effect to the amendments set forth in Article III , the Borrower hereby absolutely and unconditionally reaffirms to the Successor Administrative Agent and the Successor Collateral Agent, for the benefit of the Secured Parties, its grant of a Lien in the Collateral pursuant to, and in accordance with, Section 4 of the Guarantee and Security Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1.      Cross-References . References in this Amendment to any Article or Section are, unless otherwise specified, to such Article or Section of this Amendment.
SECTION 8.2.      Headings . Article and Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.
SECTION 8.3.      Loan Document Pursuant to Credit Agreement . This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated therein) be construed, administered and applied in accordance with all of the terms and provisions of the Credit Agreement, as amended hereby, including Articles VIII and IX thereof.
SECTION 8.4.      Successors and Assigns . The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 8.5.      Counterparts . This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy electronically (e.g. pdf) shall be effective as delivery of a manually executed counterpart of this Amendment.
SECTION 8.6.      Governing Law . This Amendment shall be governed by and construed in accordance with the laws of the State of New York.
SECTION 8.7.      Submission to Jurisdiction . The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive 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 Amendment, 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

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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 Amendment shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Borrower or its properties in the courts of any jurisdiction.
SECTION 8.8.      WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS. THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 8.9.      Full Force and Effect; Limited Amendment . Except as expressly amended hereby, all of the representations, warranties, terms, covenants, conditions and other provisions of the Credit Agreement, the Guarantee and Security Agreement and the other Loan Documents shall remain unchanged and shall continue to be, and shall remain, in full force and effect in accordance with their respective terms. The amendment set forth herein shall be limited precisely as provided for herein to the provisions expressly amended herein and shall not be deemed to be an amendment to, waiver of, consent to or modification of any other terms or provisions of the Credit Agreement, the Guarantee and Security Agreement or any other Loan Document or of any transaction or further or future action on the part of the Borrower which would require the consent of the Lenders under the Credit Agreement or any of the Loan Documents. Upon and after the execution of this Amendment by each of the parties hereto, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, each reference in the Guarantee and Security Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Guarantee and Security Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement or the Guarantee and Security Agreement, as applicable, shall mean and be a reference to the Credit Agreement or the Guarantee and Security Agreement, as applicable, as modified hereby.
SECTION 8.10.      Fifth Amendment Effective Date Adjustments . If, in connection with the Fifth Amendment Effective Date, there is any increase, reduction or change in the Commitments, on the Fifth Amendment Effective Date the Borrower will borrow from each of the Lenders, and the Lenders will make Loans to the Borrower (in the case of Eurocurrency Loans, with Interest Period(s) ending on the date(s) of any then outstanding Interest Period(s) under the Existing Credit Agreement), and (notwithstanding the provisions in this Agreement requiring that borrowings and

4821-9346-7543
7


prepayments be made ratably in accordance with the principal amounts of the Loans held by the Lenders) taking into consideration outstanding Revolving Dollar Credit Exposure and Revolving Multicurrency Credit Exposure as of the Fifth Amendment Effective Date, the Borrower shall prepay the Loans held by the Lenders in such amounts as may be necessary, together with any amounts payable under Section 2.15, so that after giving effect to such Loans and prepayments, the Loans (and Interest Period(s) of Eurocurrency Loan(s)) of each Class shall be held by the Lenders pro rata in accordance with the respective amounts of their Commitments of such Class. Concurrently therewith, the Lenders shall be deemed to have adjusted their participation interests in any outstanding Letters of Credit of a Class so that such interests are held ratably in accordance with their Commitments of such Class as so modified.


[ Signature pages follow ]



4821-9346-7543
8


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

BORROWER :     TCG BDC, INC.

By: /s/ Erik Barrios
Name: Erik Barrios
Title: CCO & Secretary



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Signature Page to Amendment No. 5


HSBC BANK USA, N.A. ,
as Existing Administrative Agent and Existing Collateral Agent

By: /s/ Anita Ram
Name: Anita Ram
Title: AVP


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Signature Page to Amendment No. 5

HSBC BANK USA, N.A.,
as Existing Swingline Lender

By: /s/ Shubhendu Kudaisya
Name: Shubhendu Kudaisya
Title: SVP, Structured Finance Group

4821-9346-7543
Signature Page to Amendment No. 5


JPMORGAN CHASE BANK, N.A.,
as Successor Administrative Agent, Successor Collateral Agent, Successor Swingline Lender and Lender
 

By: /s/ Diego E. Nunes     
Name: Diego E. Nunes
Title: Executive Director

4821-9346-7543
Signature Page to Amendment No. 5

LENDERS :    


STATE STREET BANK AND TRUST COMPANY ,
as a Lender
 

By: /s/ John Doherty
Name: John Doherty
Title: Vice President

    


4821-9346-7543
Signature Page to Amendment No. 5

LENDERS :    


MUFG UNION BANK, N.A. ,
as a Lender
 

By: /s/ Jacob Ulevich
Name: Jacob Ulevich
Title: Director

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Signature Page to Amendment No. 5


LENDERS :    


BANK OF AMERICA, N.A. ,
as a Lender
 

By: /s/ Manisha Kumar
Name: Manisha Kumar
Title: Vice President

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Signature Page to Amendment No. 5



LENDERS :    


CITIBANK, N.A. ,
as a Lender
 

By: /s/ Eros Marshall
Name: Eros Marshall
Title: Director

4821-9346-7543
Signature Page to Amendment No. 5

LENDERS :    


DEUTSCHE BANK AG NEW YORK BRANCH ,
as a Lender
 

By: /s/ Virginia Cosenza
Name: Virginia Cosenza
Title: Vice President


By: /s/ Ming K. Chu
Name: Ming K. Chu
Title: Director

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Signature Page to Amendment No. 5

LENDERS :    


BARCLAYS BANK PLC ,
as a Lender
 

By: /s/ Ronnie Glenn
Name: Ronnie Glenn
Title: Director

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Signature Page to Amendment No. 5

LENDERS :    


CIT FINANCE LLC ,
as a Lender
 

By: /s/ Robert L. Klein
Name: Robert L. Klein
Title: Director

4821-9346-7543
Signature Page to Amendment No. 5

LENDERS :    


MORGAN STANLEY BANK, N.A. ,
as a Lender
 

By: /s/ Michael King
Name: Michael King
Title: Authorized Signer


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Signature Page to Amendment No. 5


SCHEDULE I

SUCCESSOR COLLATERAL AGENT ACTIONS

1.
The following UCC financing statements currently on file shall be amended to list the Successor Agent as the Secured Party:
a.
UCC Financing Statement naming TCG BDC, Inc. as debtor and HSBC Bank USA, N.A. as secured party, originally filed on March 25, 2014 with the Maryland State Department of Assessments and Taxation, file number: 0000000181495423.
2.
Assignment of Control Agreement from Retiring Agent to Successor Agent.




4821-9346-7543

Exhibit A

[See Attached]


4821-9346-7543
Exhibit 10.2

Conformed through:
Omnibus Amendment No. 1 dated January 8, 2015
Ominbus Amendment No. 2 dated as of May 25, 2016
Amendment No. 3 dated as of March 22, 2017
Amendment No. 4 dated as of September 25, 2018
Amendment No. 5 dated as of June 14, 2019

1

SENIOR SECURED
REVOLVING CREDIT AGREEMENT
dated as of
March 21, 2014
among
TCG BDC, Inc.
as Borrower
The LENDERS Party Hereto
and
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
$593,000,000
__________________

J.P. MORGAN SECURITIES LLC
as Lead Arranger and Book Runner





4846-6818-4471 57000.00022
TABLE OF CONTENTS
Page


ARTICLE I DEFINITIONS
1
SECTION 1.01.
Defined Terms    1
SECTION 1.02.
Classification of Loans and Borrowings    33
SECTION 1.03.
Terms Generally    33
SECTION 1.04.
Accounting Terms; GAAP    33
SECTION 1.05.
Currencies; Currency Equivalents    34
SECTION 1.06.
Divisions    35
SECTION 1.07.
Letter of Credit Amounts    35
ARTICLE II THE CREDITS
36
SECTION 2.01.
The Commitments    36
SECTION 2.02.
Loans and Borrowings    36
SECTION 2.03.
Requests for Syndicated Borrowings    37
SECTION 2.04.
Swingline Loans    38
SECTION 2.05.
Letters of Credit    40
SECTION 2.06.
Funding of Borrowings    44
SECTION 2.07.
Interest Elections    45
SECTION 2.08.
Termination, Reduction or Increase of the Commitments    46
SECTION 2.09.
Repayment of Loans; Evidence of Debt    49

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TABLE OF CONTENTS
(continued)
Page


SECTION 2.10.
Prepayment of Loans    51
SECTION 2.11.
Fees    54
SECTION 2.12.
Interest    55
SECTION 2.13.
Alternate Rate of Interest    56
SECTION 2.14.
Increased Costs    58
SECTION 2.15.
Break Funding Payments    59
SECTION 2.16.
Taxes    60
SECTION 2.17.
Payments Generally; Pro Rata Treatment: Sharing of Set-offs    63
SECTION 2.18.
Mitigation Obligations; Replacement of Lenders    66
SECTION 2.19.
Defaulting Lenders    67
ARTICLE III REPRESENTATIONS AND WARRANTIES
70
SECTION 3.01.
Organization; Powers    70
SECTION 3.02.
Authorization; Enforceability    71
SECTION 3.03.
Governmental Approvals; No Conflicts    71
SECTION 3.04.
Financial Condition; No Material Adverse Change    71
SECTION 3.05.
Litigation    71
SECTION 3.06.
Compliance with Laws and Agreements    72
SECTION 3.07.
Taxes    72

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TABLE OF CONTENTS
(continued)
Page


SECTION 3.08.
ERISA    72
SECTION 3.09.
Disclosure    72
SECTION 3.10.
Investment Company Act; Margin Regulations    72
SECTION 3.11.
Material Agreements and Liens    73
SECTION 3.12.
Subsidiaries and Investments    73
SECTION 3.13.
Properties    73
SECTION 3.14.
Affiliate Agreements    74
SECTION 3.15.
OFAC    74
SECTION 3.16.
Patriot Act    75
SECTION 3.17.
Foreign Corrupt Practices Act    75
SECTION 3.18.
Collateral Documents    75
SECTION 3.19.
Anti-Money Laundering    75
SECTION 3.20.
EEA Financial Institutions    75
ARTICLE IV CONDITIONS
75
SECTION 4.01.
Effective Date    75
SECTION 4.02.
Each Credit Event    77
ARTICLE V AFFIRMATIVE COVENANTS
78
SECTION 5.01.
Financial Statements and Other Information    78

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TABLE OF CONTENTS
(continued)
Page


SECTION 5.02.
Notices of Material Events    81
SECTION 5.03.
Existence: Conduct of Business    81
SECTION 5.04.
Payment of Obligations    81
SECTION 5.05.
Maintenance of Properties; Insurance    81
SECTION 5.06.
Books and Records; Inspection and Audit Rights    82
SECTION 5.07.
Compliance with Laws    82
SECTION 5.08.
Certain Obligations Respecting Subsidiaries; Further Assurances    82
SECTION 5.09.
Use of Proceeds    83
SECTION 5.10.
Status of RIC and BDC    84
SECTION 5.11.
Investment Policies    84
SECTION 5.12.
Portfolio Valuation and Diversification Etc    84
SECTION 5.13.
Calculation of Borrowing Base    88
ARTICLE VI NEGATIVE COVENANTS
96
SECTION 6.01.
Indebtedness    96
SECTION 6.02.
Liens    97
SECTION 6.03.
Fundamental Changes    98
SECTION 6.04.
Investments    99
SECTION 6.05.
Restricted Payments    100

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SECTION 6.06.
Certain Restrictions on Subsidiaries    101
SECTION 6.07.
Certain Financial Covenants    101
SECTION 6.08.
Transactions with Affiliates    102
SECTION 6.09.
Lines of Business    102
SECTION 6.10.
No Further Negative Pledge    102
SECTION 6.11.
Modifications of Longer-Term Indebtedness Documents    102
SECTION 6.12.
Payments of Longer-Term Indebtedness    103
SECTION 6.13.
Accounting Changes    103
SECTION 6.14.
SBIC Guarantee    104
SECTION 6.15.
Negative Pledge on TCG BDC SPV LLC    104
ARTICLE VII EVENTS OF DEFAULT
104
ARTICLE VIII THE ADMINISTRATIVE AGENT
107
SECTION 8.01.
Appointment of the Administrative Agent    107
SECTION 8.02.
Capacity as Lender    107
SECTION 8.03.
Limitation of Duties; Exculpation    107
SECTION 8.04.
Reliance    108
SECTION 8.05.
Sub-Agents    109
SECTION 8.06.
Resignation; Successor Administrative Agent    109

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SECTION 8.07.
Reliance by Lenders    110
SECTION 8.08.
Modifications to Loan Documents    110
SECTION 8.09.
Bankruptcy Proceedings    110
ARTICLE IX MISCELLANEOUS
111
SECTION 9.01.
Notices; Electronic Communications    111
SECTION 9.02.
Waivers; Amendments    113
SECTION 9.03.
Expenses; Indemnity; Damage Waiver    115
SECTION 9.04.
Successors and Assigns    117
SECTION 9.05.
Survival    122
SECTION 9.06.
Counterparts; Integration; Effectiveness; Electronic Execution    123
SECTION 9.07.
Severability    123
SECTION 9.08.
Right of Setoff    123
SECTION 9.09.
Governing Law; Jurisdiction; Etc    124
SECTION 9.10.
WAIVER OF JURY TRIAL    124
SECTION 9.11.
Judgment Currency    125
SECTION 9.12.
Headings    125
SECTION 9.13.
Treatment of Certain Information; No Fiduciary Duty; Confidentiality    125
SECTION 9.14.
USA PATRIOT Act    127

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SECTION 9.15.
Interest Rate Limitation    127
SECTION 9.16.
Acknowledgement and Consent to Bail-In of EEA Financial Institutions    127
SECTION 9.17.
German Bank Separation Act    128





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SCHEDULE 1.01(a)    -    Approved Dealers and Approved Pricing Services
SCHEDULE 1.01(b)    -    Commitments
SCHEDULE 1.01(c)    -    Industry Classification Group List
SCHEDULE 3.11    -    Material Agreements and Liens
SCHEDULE 3.12(a)    -    Subsidiaries
SCHEDULE 3.12(b)    -    Investments
SCHEDULE 6.08    -    Transactions with Affiliates



EXHIBIT A    -    Form of Assignment and Assumption
EXHIBIT B    -    Form of Borrowing Base Certificate
EXHIBIT C    -    Form of Borrowing Request




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SENIOR SECURED REVOLVING CREDIT AGREEMENT dated as of March 21, 2014 (this “ Agreement ”), among TCG BDC, INC., a Maryland corporation (the “ Borrower ”), the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.
ARTICLE I

DEFINITIONS
SECTION 1.01.      Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
“ ABR ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans constituting such Borrowing, are denominated in Dollars and bearing interest at a rate determined by reference to the Alternate Base Rate.
“ Adjusted Borrowing Base ” means the Borrowing Base minus the aggregate amount of Cash and Cash Equivalents (other than Cash Collateral for outstanding Letters of Credit) included in the Portfolio Investments held by the Obligors.
“ Adjusted Covered Debt Balance ” means, on any date, the aggregate Covered Debt Amount on such date minus the aggregate amount of Cash and Cash Equivalents (other than Cash Collateral for outstanding Letters of Credit) included in the Portfolio Investments held by the Obligors.
“ Adjusted LIBO Rate ” means, for the Interest Period for any Eurocurrency Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate for such Interest Period; provided , that, if the Adjusted LIBO Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“ Administrative Agent ” means JPMCB, in its capacity as administrative agent for the Lenders hereunder.
“ Administrative Agent Appraisal Testing Month ” has the meaning assigned to such term in Section 5.12(b)(ii)(E)(y) .
“ Administrative Questionnaire ” means an administrative questionnaire in a form supplied by the Administrative Agent.
“ Advance Rate ” has the meaning assigned to such term in Section 5.13 .
“ Affected Currency ” has the meaning assigned to such term in Section 2.13 .
“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. Anything herein to the contrary notwithstanding, the term “Affiliate” shall not include any Person that constitutes an Investment held by any Obligor or

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Financing Subsidiary in the ordinary course of business; provided that the term “Affiliate” shall include any Financing Subsidiary.
“ Affiliate Agreements ” means collectively, (a) the Investment Advisory Agreement dated as of April 3, 2013, between the Borrower and Carlyle GMS Investment Management L.L.C., (b) the Placement Agent Agreement dated as of April 3, 2013, between the Borrower and TCG Securities, L.L.C., (c) the Administration Agreement dated as of April 3, 2013, between the Borrower and Carlyle GMS Finance Administration L.L.C. and (d) the License Agreement dated as of April 3, 2013, between the Borrower and Carlyle Investment Management L.L.C.
“ Agreed Foreign Currency ” means, at any time, any of Canadian Dollars, English Pounds Sterling, Euros and, with the prior written consent of each Multicurrency Lender, any other Foreign Currency, so long as, in respect of any such specified Foreign Currency or other Foreign Currency, at such time (a) such Foreign Currency is dealt with in the London interbank deposit market or, in the case of any Local Rate Currency, the relevant local market for obtaining quotations, (b) such Foreign Currency is freely transferable and convertible into Dollars in the London foreign exchange market and (c) no central bank or other governmental authorization in the country of issue of such Foreign Currency (including, in the case of the Euro, any authorization by the European Central Bank) is required to permit use of such Foreign Currency by any Multicurrency Lender for making any Loan hereunder and/or to permit the Borrower to borrow and repay the principal thereof and to pay the interest thereon, unless such authorization has been obtained and is in full force and effect.
“ Agents ” means the Administrative Agent and the Collateral Agent.
“ Agreement ” has the meaning assigned to such term in the preamble to this Agreement.
“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the New York Fed Bank Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%; provided that the Adjusted LIBO Rate for any day shall be based on the LIBO Rate at approximately 11:00 a.m. London time on such day, subject to the interest rate floor set forth in the definition of the term “LIBO Rate”. Any change in the Alternate Base Rate due to a change in the Prime Rate, the New York Fed Bank Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the New York Fed Bank Rate or the Adjusted LIBO Rate, respectively; provided, that at no time shall the “ Alternate Base Rate ” be deemed to be less than 1.0%. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.13, then the Alternate Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above.
“ Anti-Money Laundering Laws ” means all laws of any jurisdiction applicable to the Borrower or its Subsidiaries concerning or relating to antimony laundering and anti-terrorism financing, including, without limitation, the Currency and Financial Transactions Reporting Act of 1970, as amended by Title III of the USA PATRIOT Act of 2001, the Money Laundering Control

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Act of 1986 and other legislation, which legislative framework is commonly referred to as the "Bank Secrecy Act", and all rules and regulations implementing these laws, as any of the foregoing may be amended from time to time.
“ Applicable Dollar Percentage ” means, with respect to any Dollar Lender, the percentage of the total Dollar Commitments represented by such Dollar Lender’s Dollar Commitment. If the Dollar Commitments have terminated or expired, the Applicable Dollar Percentages shall be determined based upon the Dollar Commitments most recently in effect, giving effect to any assignments.
“ Applicable Margin ” means: (a) with respect to any ABR Loan, 1.25% per annum; and (b) with respect to any Eurocurrency Loan, 2.25% per annum.
“ Applicable Multicurrency Percentage ” means, with respect to any Multicurrency Lender, the percentage of the total Multicurrency Commitments represented by such Multicurrency Lender’s Multicurrency Commitment. If the Multicurrency Commitments have terminated or expired, the Applicable Multicurrency Percentages shall be determined based upon the Multicurrency Commitments most recently in effect, giving effect to any assignments.
“ Applicable Percentage ” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.
“ Applicable Time ” means, with respect to any borrowings and payments in any Foreign Currency, the local time in the Principal Financial Center for such Foreign Currency.
“ Approved Dealer ” means (a) in the case of any Portfolio Investment that is not a U.S. Government Security, a bank or a broker-dealer registered under the Securities Exchange Act of 1934 of nationally recognized standing or an Affiliate thereof, (b) in the case of a U.S. Government Security, any primary dealer in U.S. Government Securities, and (c) in the case of any foreign Portfolio Investment, any foreign broker-dealer of internationally recognized standing or an Affiliate thereof, in the case of each of clauses (a) , (b)  and (c)  above, as set forth on Schedule 1.01(a) or any other bank or broker-dealer acceptable to the Administrative Agent in its reasonable determination.
“ Approved Pricing Service ” means a pricing or quotation service as set forth in Schedule 1.01(a) or any other pricing or quotation service approved by the Board of Directors of the Borrower and designated in writing to the Administrative Agent (which designation shall be accompanied by a copy of a resolution of the Board of Directors of the Borrower that such pricing or quotation service has been approved by the Borrower).
“ Approved Third-Party Appraiser ” means any Independent nationally recognized third-party appraisal firm designated by the Administrative Agent to the Borrower, including Houlihan Lokey Howard & Zukin Capital, Inc., FTI Consulting, Inc., Murray, Devine and Company, Lincoln International LLC (formerly known as Lincoln Partners LLC), Valuation Research Corporation and Alvarez & Marsal. From and after the Fifth Amendment Effective Date, Lincoln

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International LLC will continue to act as the Approved Third-Party Appraiser under its existing engagement with the Borrower until the Administrative Agent shall appoint an Approved Third-Party Appraiser.
“ Asset Coverage Ratio ” means the ratio, determined on a consolidated basis for Borrower and its Subsidiaries, without duplication, in accordance with GAAP, of (a) the value of total assets of the Borrower and its Subsidiaries, less all liabilities and indebtedness not represented by senior securities to (b) the aggregate amount of senior securities representing indebtedness of Borrower and its Subsidiaries (including this Agreement).
“ Assignment and Assumption ” means an Assignment and Assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04 ), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.
“ Assuming Lender ” has the meaning assigned to such term in Section 2.08(e) .
“ Availability Period ” means the period from and including the Effective Date to but excluding the earlier of the Commitment Termination Date and the date of termination of the Commitments.
“ Average COF Rate ” has the meaning assigned to such term in Section 2.13.
“ Bail-In Action ” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“ Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“ BHC Act Affiliate ” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.
“ Borrower ” has the meaning assigned to such term in the preamble to this Agreement.
“ Borrower Unquoted Investment Valuation Policy ” has the meaning assigned to such term in Section 5.12(b)(ii)(B) .
“ Borrowing ” means (a) all Syndicated ABR Loans of the same Class made, converted or continued on the same date, (b) all Eurocurrency Loans of the same Class denominated in the same Currency that have the same Interest Period and/or (c) a Swingline Loan.
“ Borrowing Base ” has the meaning assigned to such term in Section 5.13 .

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“ Borrowing Base Certificate ” means a certificate of a Financial Officer of the Borrower, substantially in the form of Exhibit B and appropriately completed.
“ Borrowing Base Deficiency ” means, at any date on which the same is determined, the amount, if any, that (a) the aggregate Covered Debt Amount as of such date exceeds (b) the Borrowing Base as of such date.
“ Borrowing Request ” means a request by the Borrower for a Syndicated Borrowing in accordance with Section 2.03 , which, if in writing, shall be substantially in the form of Exhibit C .
“ Business Day ” means any day (a) that is not a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed, (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, a continuation or conversion of or into, or the Interest Period for, a Eurocurrency Borrowing denominated in Dollars, or to a notice by the Borrower with respect to any such borrowing, payment, prepayment, continuation, conversion, or Interest Period, that is also a day on which dealings in deposits denominated in Dollars are carried out in the London interbank market and (c) if such day relates to a borrowing or continuation of, a payment or prepayment of principal of or interest on, or the Interest Period for, any Borrowing denominated in any Foreign Currency, or to a notice by the Borrower with respect to any such borrowing, continuation, payment, prepayment or Interest Period, that is also a day on which commercial banks and the London foreign exchange market settle payments in the Principal Financial Center for such Foreign Currency.
“ Calculation Amount ” shall mean, as of the end of any Testing Quarter, an amount equal to the greater of: (a) (i) 125% of the Adjusted Covered Debt Balance (as of the end of such Testing Quarter) minus (ii) the aggregate Value of all Quoted Investments included in the Borrowing Base (as of the end of such Testing Quarter) and (b) 10% of the aggregate Value of all Unquoted Investments included in the Borrowing Base (as of the end of such Testing Quarter); provided that in no event shall more than 25% (or, if clause (b) applies, 10%, or as near thereto as reasonably practicable) of the aggregate Value of the Unquoted Investments in the Borrowing Base be tested in respect of any applicable Testing Quarter.
“ Canadian Dollars ” means the lawful currency of Canada.
“ Canadian Prime Rate ” means, on any day, the rate determined by the Administrative Agent to be the higher of (i) the rate equal to the PRIMCAN index rate that appears on the Bloomberg screen at 10:15 a.m. Toronto time on such day (or, in the event that the PRIMCAN index is not published by Bloomberg, any other information services that publishes such index from time to time, as selected by the Administrative Agent in its reasonable discretion) and (ii) the CDOR Rate for thirty (30) days, plus 1% per annum. Any change in the Canadian Prime Rate due to a change in the PRIMCAN index or the CDOR Rate shall be effective from and including the effective date of such change in the PRIMCAN Index or CDOR Rate, respectively.

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“ Capital Lease Obligations ” of any Person means the obligations of such Person 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 Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“ Cash ” means any immediately available funds in Dollars or in any currency other than Dollars (measured in terms of the Dollar Equivalent thereof) which is a freely convertible currency.
“ Cash Collateralize ” means, in respect of a Letter of Credit or any obligation hereunder, to provide and pledge cash collateral pursuant to Section 2.05(k) , at a location and pursuant to documentation in form and substance reasonably satisfactory to Administrative Agent and the Issuing Bank. “ Cash Collateral ” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“ Cash Equivalents ” means investments (other than Cash) that are one or more of the following obligations:
(a)    U.S. Government Securities, in each case maturing within one year from the date of acquisition thereof;
(b)    investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, a credit rating of at least A‑1 from S&P and at least P‑1 from Moody’s;
(c)    investments in certificates of deposit, bankers’ acceptances and time deposits maturing within 180 days from the date of acquisition thereof (i) issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof or under the laws of the jurisdiction or any constituent jurisdiction thereof of any Agreed Foreign Currency; provided that such certificates of deposit, banker’s acceptances and time deposits are held in a securities account (as defined in the Uniform Commercial Code) through which the Collateral Agent can perfect a security interest therein and (ii) having, at such date of acquisition, a credit rating of at least A‑1 from S&P and at least P‑1 from Moody’s;
(d)    fully collateralized repurchase agreements with a term of not more than 30 days from the date of acquisition thereof for U.S. Government Securities and entered into with (i) a financial institution satisfying the criteria described in clause (c)  of this definition or (ii) an Approved Dealer having (or being a member of a consolidated group having) at such date of acquisition, a credit rating of at least A‑1 from S&P and at least P‑1 from Moody’s; and
(e)    investments in money market funds that invest solely, and which are restricted by their respective charters to invest solely, in investments of the type described in the

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immediately preceding clauses (a) through (d) above (including as to credit quality and maturity).
provided that (i) in no event shall Cash Equivalents include any obligation that provides for the payment of interest alone (for example, interest-only securities or “IOs”); (ii) if any of Moody’s or S&P changes its rating system, then any ratings included in this definition shall be deemed to be an equivalent rating in a successor rating category of Moody’s or S&P, as the case may be; (iii) Cash Equivalents (other than U.S. Government Securities or repurchase agreements) shall not include any such investment of more than 10% of total assets of the Borrower and its Subsidiaries in any single issuer; and (iv) in no event shall Cash Equivalents include any obligation that is not denominated in Dollars or an Agreed Foreign Currency.
“ CDOR Rate ” means, on any day and for any period, an annual rate of interest equal to the average rate applicable to Canadian Dollars bankers’ acceptances for the applicable period that appears on the Reuters Screen CDOR Page (or, in the event such rate does not appear on such page or screen, on any successor or substitute page or screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time, as selected by the Administrative Agent in its reasonable discretion), rounded to the nearest 1/100th of 1% (with .005% being rounded up), at approximately 10:15 a.m. Toronto time on such day, or if such day is not a Business Day, then on the immediately preceding Business Day (the “ CDOR Screen Rate ”); provided that if such CDOR Screen Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“ CDOR Screen Rate ” has the meaning assigned to such term in the definition of “CDOR Rate”.

“ Change in Control ” means (a) (other than in connection with a Permitted IPO) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of shares representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the Borrower, other than the External Manager or any Affiliate of the External Manager in the business of managing or advising clients (but, for the avoidance of doubt, excluding Controlled portfolio investment companies of the External Manager); (b) (other than in connection with a Permitted IPO) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated by the requisite members of the board of directors of the Borrower nor (ii) appointed by a majority of the directors so nominated; or (c) the acquisition of direct or indirect Control of the Borrower by any Person or group other than the External Manager or any Affiliate of the External Manager in the business of managing or advising clients (but, for the avoidance of doubt, excluding Controlled portfolio investment companies of the External Manager).
“ Change in Law ” means the occurrence, after the date of this Agreement, of (a) the adoption of any law, treaty or governmental rule or regulation or any change in any law, treaty or governmental rule or regulation or in the interpretation, administration or application thereof

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(regardless of whether the underlying law, treaty or governmental rule or regulation was issued or enacted prior to the date hereof), but excluding proposals thereof, or any determination of a court or Governmental Authority, (b) any guideline, request or directive by any Governmental Authority (whether or not having the force of law) or any implementation rules or interpretations of previously issued guidelines, requests or directives, in each case that is issued or made after the date hereof or (c) compliance by any Lender (or its applicable lending office) or any company controlling such Lender with any guideline, request or directive regarding capital adequacy or liquidity (whether or not having the force of law) of any such Governmental Authority, in each case adopted after the date hereof. For the avoidance of doubt, all requests, rules, guidelines or directives concerning liquidity and capital adequacy issued (i) by any United States regulatory authority under or in connection with the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and (ii) in connection with the implementation of the recommendations of the Bank for International Settlements or the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority), in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date adopted, issued, promulgated or implemented.
“ Class ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans constituting such Borrowing, are Syndicated Dollar Loans, Syndicated Multicurrency Loans or Swingline Loans; when used in reference to any Lender, refers to whether such Lender is a Dollar Lender or a Multicurrency Lender; and, when used in reference to any Commitment, refers to whether such Commitment is a Dollar Commitment or a Multicurrency Commitment. The “ Class ” of a Letter of Credit refers to whether such Letter of Credit is a Dollar Letter of Credit or a Multicurrency Letter of Credit.
“ CLO ” means any collateralized loan obligation, securitization vehicle, or other similar special purpose vehicle.
“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.
“ COF Rate ” has the meaning assigned to such term in Section 2.13.
“ Collateral ” has the meaning assigned to such term in the Guarantee and Security Agreement.
“ Collateral Agent ” means JPMCB in its capacity as Collateral Agent under the Guarantee and Security Agreement, and includes any successor Collateral Agent thereunder.
“ Commitments ” means, collectively, the Dollar Commitments and the Multicurrency Commitments.
“ Commitment Increase ” has the meaning assigned to such term in Section 2.08(e) .
“ Commitment Increase Date ” has the meaning assigned to such term in Section 2.08(e) .

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“ Commitment Termination Date ” means June 14, 2023.
“ 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.
“ Consolidated Group ” has the meaning assigned to such term in Section 5.13(a) .
“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.
“ Covered Debt Amount ” means, on any date, the sum of (x) all of the Revolving Credit Exposures of all Lenders on such date plus (y) the aggregate amount of Other Covered Indebtedness on such date minus (z) the LC Exposures fully Cash Collateralized on such date pursuant to Section 2.05(k) and the last paragraph of Section 2.09(a) .
“ Covered Entity ” means any of the following:
(i)    a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii)    a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii)    a “covered FSI” as that term is defined in, and interpreted in accordance with 12 C.F.R. § 382.2(b).
“ Currency ” means Dollars or any Foreign Currency.
“ Custodian ” means State Street Bank and Trust Company, as custodian holding Investments on behalf of the Obligors, or any successor in such capacity. The term “Custodian” includes any agent or sub-custodian acting on behalf of the Custodian.
“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“ Defaulting Lender ” means subject to Section 2.19(b) , any Lender that (a) has failed to (i) fund all or any portion of its Loans or participations in Letters of Credit within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s reasonable determination that one or more conditions precedent to funding (each of which conditions precedent, together with the applicable default, if any, shall be specifically identified in detail in such writing) has not been satisfied or otherwise waived in accordance with this Agreement, or (ii) pay to the Administrative Agent, Issuing Bank, Swingline Lender or any Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two Business Days of the date when due, (b) has notified the Borrower,

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the Administrative Agent, Issuing Bank or Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s reasonable determination that a condition precedent to funding (which condition precedent, together with the applicable default, if any, shall be specifically identified in detail in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by Administrative Agent and Borrower), or (d) Administrative Agent has received notification that such Lender has become, or has a direct or indirect parent company that is, (i) insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors or (ii) the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Lender or its direct or indirect parent company, or such Lender or its direct or indirect parent company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment, or (iii) the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority or instrumentality so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.19(b) ) upon such determination (and the Administrative Agent shall deliver written notice of such determination to the Borrower, the Issuing Bank and each Lender and the Swingline Lender).
“ Default Right ” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“ Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that the term “Disposition” or “Dispose” shall not include the disposition of Investments originated by the Borrower and immediately transferred to a Financing Subsidiary pursuant to a transaction not prohibited hereunder.
“ Dollar Commitment ” means, with respect to each Dollar Lender, the commitment of such Dollar Lender to make Syndicated Loans, and to acquire participations in Letters of Credit and Swingline Loans, denominated in Dollars hereunder, expressed as an amount representing the

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maximum aggregate amount of such Lender’s Revolving Dollar Credit Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04 . The amount of each Lender’s Dollar Commitment as of the Fifth Amendment Effective Date is set forth on Schedule 1.01(b) , or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Dollar Commitment, as applicable. The aggregate amount of the Lenders’ Dollar Commitments as of the Fifth Amendment Effective Date is $75,000,000.
“ Dollar Equivalent ” for any amount, at the time of determination thereof, (a) if such amount is expressed in Dollars, such amount, and (b) if such amount is expressed in a Foreign Currency, the equivalent of such amount in Dollars determined at such time on the basis of the Exchange Rate for the purchase of Dollars with such Foreign Currency at such time.
“ Dollar LC Exposure ” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Dollar Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements in respect of such Dollar Letters of Credit that have not yet been reimbursed by or on behalf of the Borrower at such time. The Dollar LC Exposure of any Lender at any time shall be its Applicable Dollar Percentage of the total Dollar LC Exposure at such time.
“ Dollar Lender ” means the Persons listed on Schedule 1.01(b) as having Dollar Commitments and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption that provides for it to assume a Dollar Commitment or to acquire Revolving Dollar Credit Exposure, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption or otherwise.
“ Dollar Letters of Credit ” means Letters of Credit that utilize the Dollar Commitments.
“ Dollar Loan ” means a Loan denominated in Dollars.
“ Dollars ” or “ $ ” refers to lawful money of the United States of America.
“ EEA Financial Institution ” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“ EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“ EEA Resolution Authority ” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

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“ Effective Date ” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02 ).
“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ ERISA Event ” means (a) any “reportable event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) any failure by any Plan to satisfy the minimum funding standard (within the meaning of Sections 412 and 430 of the Code or Sections 302 and 303 of ERISA) applicable to such Plan; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, in each case within the meaning of Title IV of ERISA.
“ EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“ Euro ” means a single currency of the Participating Member States.
“ Eurocurrency ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans constituting such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
“ Event of Default ” has the meaning assigned to such term in Article VII .
“ Exchange Rate ” means, on any day with respect to any Foreign Currency, the rate of exchange for the purchase of Dollars with such Foreign Currency last provided (either by

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publication or otherwise provided to the Administrative Agent) by the applicable Thomson Reuters Corp., Refinitiv, or any successor thereto (“ Reuters ”) source on the Business Day (New York City time) immediately preceding the date of determination or if such service ceases to be available or ceases to provide a rate of exchange for the purchase of dollars with the Foreign Currency, as provided by such other publicly available information service which provides that rate of exchange at such time in place of Reuters chosen by the Administrative Agent in its sole discretion (or if such service ceases to be available or ceases to provide such rate of exchange, the equivalent of such amount in Dollars that would be required to purchase such amount of such Foreign Currency on the date two Business Days prior to such date, based upon the spot selling rate at which the Administrative Agent offers to sell such Foreign Currency for Dollars in the London foreign exchange market at approximately 11:00 a.m., London time, for delivery two Business Days later).

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a)  Taxes imposed on (or measured by) its net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located, in the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, any U.S. withholding tax imposed on amounts payable to such Lender at the time such Lender (other than an assignee pursuant to a request by the Borrower under Section 2.18(b) ) becomes a party to this Agreement or designates a new lending office, except to the extent that such Lender’s assignor or such Lender was entitled to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.16 , at the time of such assignment or designation, (c) Taxes attributable to such Lender’s failure or inability (other than as a result of a Change in Law occurring after the date such Lender becomes a party to this Agreement) to comply with Section 2.16(f)(ii) , (d) any U.S. federal, state or local backup withholding Taxes imposed on payments made under any Loan Document, and (e) any U.S. federal withholding tax that is imposed pursuant to FATCA.
“ External Manager ” means Carlyle Global Credit Investment Management L.L.C. (f/k/a Carlyle GMS Investment Management L.L.C.).
“ Extraordinary Receipts ” means any cash received by or paid to any Obligor on account of any foreign, United States, state or local tax refunds, pension plan reversions, judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, condemnation awards (and payments in lieu thereof), indemnity payments received not in the ordinary course of business and any purchase price adjustment received not in the ordinary course of business in connection with any purchase agreement and proceeds of insurance (excluding, however, for the avoidance of doubt, proceeds of any issuance of Equity Interests and issuances of Indebtedness by any Obligor); provided that Extraordinary Receipts shall not include any (x) amounts that the Borrower receives from the Administrative Agent or any Lender pursuant to Section 2.16(f) , or (y) cash receipts to the extent received from proceeds of insurance, condemnation awards (or payments in lieu thereof), indemnity payments or payments in respect of judgments or settlements of claims, litigation or proceedings to the extent that such proceeds, awards or payments are received

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by any Person in respect of any unaffiliated third party claim against or loss by such Person and promptly applied to pay (or to reimburse such Person for its prior payment of) such claim or loss and the costs and expenses of such Person with respect thereto.
“ FATCA ” means Section 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“ Federal Funds Effective Rate ” means, for any day, the rate calculated by the New York Fed based on such day’s federal funds transactions by depository institutions (as determined in such manner as the New York Fed shall set forth on its public website from time to time) and published on the next succeeding Business Day by the New York Fed as the federal funds effective rate.
“ Final Maturity Date ” means June 14, 2024.
“ Financial Officer ” means the chief financial officer, chief accounting officer, principal accounting officer, chief operating officer, chief compliance officer, general counsel, accounting manager, treasurer or controller of the Borrower or any other officer of the Borrower which has been consented to by the Required Lenders.
“ Financing Subsidiary ” means an SPE Subsidiary or an SBIC Subsidiary.
“ Foreign Currency ” means at any time any Currency other than Dollars.
“ Foreign Currency Equivalent ” means, with respect to any amount in Dollars, the amount of any Foreign Currency that could be purchased with such amount of Dollars using the reciprocal of the foreign exchange rate(s) specified in the definition of the term “Dollar Equivalent”, as determined by the Administrative Agent.
“ Foreign Lender ” means any Lender that is not a “United States person” as defined under Section 7701(a)(30) of the Code.
“ Foreign Subsidiary ” means any (a) direct or indirect Subsidiary of the Borrower that is organized under the laws of any jurisdiction other than the United States or its territories or possessions and that is treated as a corporation for United States federal income tax purposes, (b) direct or indirect Subsidiary of the Borrower which is a “controlled foreign corporation” within the meaning of the Code, (c) direct or indirect Subsidiary of the Borrower substantially all of whose assets consist of the Capital Stock of one or more direct or indirect Foreign Subsidiaries or (d) a Subsidiary of a Foreign Subsidiary.
“ Fourth Amendment Effective Date ” means September 20, 2018.
“ Fifth Amendment Effective Date ” means June 14, 2019

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“ Fronting Exposure ” means, at any time there is a Defaulting Lender, with respect to any Issuing Bank, such Defaulting Lender’s (a) Applicable Dollar Percentage of the outstanding Dollar LC Exposure and (b) Applicable Multicurrency Percentage of the outstanding Multicurrency LC Exposure, in each case with respect to Letters of Credit issued by such Issuing Bank other than Dollar LC Exposure or Multicurrency LC Exposure, as the case may be, as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.
“ GAAP ” means generally accepted accounting principles in the United States of America.
“ GBP ” means the lawful currency of the United Kingdom.
“ GBSA ” has the meaning assigned to such term in Section 9.17 .
“ GBSA Consultation Notice ” has the meaning assigned to such term in Section 9.17 .
“ GBSA Consultation Period ” has the meaning assigned to such term in Section 9.17 .
“ GBSA Final Notice ” has the meaning assigned to such term in Section 9.17 .
“ GBSA Initial Notice ” has the meaning assigned to such term in Section 9.17 .
“ GBSA Lender ” has the meaning assigned to such term in Section 9.17 .
“ Governmental Authority ” means the government of the United States of America, or of any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include (i) endorsements for collection or deposit in the ordinary course of business or (ii) customary indemnification agreements entered into in the ordinary course of business, provided that such indemnification obligations are unsecured, such Person has determined that any liability thereunder is remote and such indemnification

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obligations are not the functional equivalent of the guaranty of a payment obligation of the primary obligor.
“ Guarantee and Security Agreement ” means that certain Guarantee and Security Agreement dated as of the date hereof among the Borrower, the Administrative Agent, each Subsidiary of the Borrower from time to time party thereto, each holder (or a representative or trustee therefor) from time to time of any Secured Longer-Term Indebtedness or Secured Shorter-Term Indebtedness, and the Collateral Agent (as successor to HSBC Bank USA, N.A. as the previous collateral agent).
“ Guarantee Assumption Agreement ” means a Guarantee Assumption Agreement substantially in the form of Exhibit B to the Guarantee and Security Agreement between the Collateral Agent and an entity that pursuant to Section 5.08 is required to become a “Subsidiary Guarantor” under the Guarantee and Security Agreement (with such changes as the Administrative Agent shall reasonably request consistent with the requirements of Section 5.08 ).
“ Hedging Agreement ” means any interest rate protection agreement, foreign currency exchange protection agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.
“ Immaterial Subsidiaries ” means those Subsidiaries of the Borrower that are “designated” as Immaterial Subsidiaries by the Borrower from time to time (it being understood that the Borrower may at any time change any such designation); provided that such designated Immaterial Subsidiaries shall collectively meet all of the following criteria as of the date of the most recent balance sheet required to be delivered pursuant to Section 5.01 : (a) the aggregate assets of such Subsidiaries and their Subsidiaries (on a consolidated basis) as of such date do not exceed an amount equal to 3% of the consolidated assets of the Borrower and its Subsidiaries as of such date; and (b) the aggregate revenues of such Subsidiaries and their Subsidiaries (on a consolidated basis) for the fiscal quarter ending on such date do not exceed an amount equal to 3% of the consolidated revenues of the Borrower and its Subsidiaries for such period.
“ Increasing Lender ” has the meaning assigned to such term in Section 2.08(e) .
“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding accounts payable and accrued expenses incurred in the ordinary course of business), (e) all Indebtedness of others secured by any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed (with the value of such debt being the lower of the outstanding amount of such debt and the fair market value of the property subject to such Lien), (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances. The Indebtedness of any Person

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shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding the foregoing, “Indebtedness” shall not include (x) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset or Investment to satisfy unperformed obligations of the seller of such asset or Investment or (y) a commitment arising in the ordinary course of business to make a future Investment.
“ Indemnified Taxes ” means Taxes other than Excluded Taxes.
“ Independent ” when used with respect to any specified Person means that such Person (a) does not have any direct financial interest or any material indirect financial interest in the Borrower or any of its Subsidiaries or Affiliates (including its investment advisor or any Affiliate thereof) and (b) is not connected with the Borrower or its Subsidiaries or Affiliates (including its investment advisor or any Affiliate thereof) as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions.
“ Industry Classification Group ” means (a) any of the classification groups set forth in Schedule 1.01(c) hereto, together with any such classification groups that may be subsequently established by Moody’s and provided by the Borrower to the Lenders, and (b) up to three additional industry group classifications established by the Borrower pursuant to Section 5.12 .
“ Initial GBSA Termination Date ” has the meaning assigned to such term in Section 9.17 .
“ Interest Election Request ” means a request by the Borrower to convert or continue a Syndicated Borrowing in accordance with Section 2.07 .
“ Interest Payment Date ” means (a) with respect to any Syndicated ABR Loan, each Quarterly Date, (b) with respect to any Eurocurrency Loan, the last day of each Interest Period therefor and, in the case of any Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at three-month intervals after the first day of such Interest Period and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid.
“ Interest Period ” means, for any Eurocurrency Loan or Borrowing, the period commencing on the date of such Loan or Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter or, with respect to such portion of any Eurocurrency Loan or Borrowing denominated in a Foreign Currency that is scheduled to be repaid on the Final Maturity Date, a period of less than one month’s duration commencing on the date of such Loan or Borrowing and ending on the Final Maturity Date, as specified in the applicable Borrowing Request or Interest Election Request; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (ii) any

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Interest Period (other than an Interest Period pertaining to a Eurocurrency Borrowing denominated in a Foreign Currency that ends on the Final Maturity Date that is permitted to be of less than one month’s duration as provided in this definition) that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Loan initially shall be the date on which such Loan is made and thereafter shall be the effective date of the most recent conversion or continuation of such Loan, and the date of a Syndicated Borrowing comprising Loans that have been converted or continued shall be the effective date of the most recent conversion or continuation of such Loans.
“ Interpolated Rate ” means, at any time, for any Interest Period, the rate per annum (rounded upward to four decimal places) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the applicable Screen Rate (for the longest period for which the applicable Screen Rate is available for the applicable currency) that is shorter than the Impacted Interest Period and (b) the applicable Screen Rate for the shortest period (for which such Screen Rate is available for the applicable currency) that exceeds the Impacted Interest Period, in each case, at such time.

“ Investment ” means, for any Person: (a) Equity Interests, bonds, notes, debentures or other securities of any other Person or any agreement to acquire any Equity Interests, bonds, notes, debentures or other securities of any other Person (and any rights or proceeds in respect of (x) any “short sale” of securities or (y) any sale of any securities at a time when such securities are not owned by such Person); (b) deposits, advances, loans or other extensions of credit made to any other Person (including purchases of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such Person); or (c) Hedging Agreements.
“ Investment Company Act ” means the Investment Company Act of 1940, as amended from time to time.
“ Investment Policies ” means the investment objectives, policies, restrictions and limitations set forth in the “BUSINESS” section of the Borrower’s Registration Statement, and as the same may be changed, altered, expanded, amended, modified, terminated or restated from time to time pursuant to a Permitted Policy Amendment.
“ IRS ” means the United States Internal Revenue Service.
“ Issuing Bank ” means such bank or other entity, including its successors and assigns in such capacity as provided in Section 2.05(j) , identified as the “Issuing Bank” in a written notice provided by the Borrower to the Administrative Agent and consented to by such proposed Issuing Bank, provided that (a) such bank or entity has executed a joinder to this Agreement in a form reasonably satisfactory to the Administrative Agent and (b) to the extent such bank or entity is not a Lender or an Affiliate of a Lender, the Administrative Agent shall have consented to such designation (such consent not to be unreasonably withheld, delayed or conditioned). In the case of any Letter of Credit to be issued in an Agreed Foreign Currency, the Issuing Bank may designate

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any of its affiliates as the “Issuing Bank” for purposes of such Letter of Credit. For the avoidance of doubt, to the extent an Issuing Bank has not been designated pursuant to this definition, the term “Issuing Bank” as used in this Agreement or any other Loan Document and any provision related thereto shall be of no force or effect and the Borrower shall have no right to request Letters of Credit under Section 2.05. As of the Fifth Amendment Effective Date, JPMCB is an Issuing Bank.
“ JPMCB ” means JPMorgan Chase Bank, N.A.
“ LC Disbursement ” means a payment made by the Issuing Bank pursuant to a Letter of Credit.
“ LC Exposure ” means, at any time, the sum of the Dollar LC Exposure and the Multicurrency LC Exposure. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the LC Exposure at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Article 29(a) of the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600 (or such later version thereof as may be in effect at the applicable time) or Rule 3.13 or Rule 3.14 of the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time) or similar terms of the Letter of Credit itself, or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed to be “outstanding” and “undrawn” in the amount so remaining available to be paid, and the obligations of the Borrower and each Lender shall remain in full force and effect until the Issuing Bank and the Lenders shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit.
“ Lenders ” means, collectively, the Dollar Lenders and the Multicurrency Lenders. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.
“ Letter of Credit ” means any letter of credit issued pursuant to this Agreement.
“ Letter of Credit Collateral Account ” has the meaning assigned to such term in Section 2.05(k) .
“ Letter of Credit Documents ” means, with respect to any Letter of Credit, collectively, any application therefor and any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any of such obligations, each as the same may be modified and supplemented and in effect from time to time.
“ LIBO Quoted Currency ” means each of the following currencies: Dollars; Euro; and English Pounds Sterling; in each case, as long as there is a published LIBO rate with respect thereto.

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“ LIBO Rate ” means, with respect to (A) any Eurocurrency Borrowing in any LIBO Quoted Currency and for any applicable Interest Period, the London interbank offered rate administered by the ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for such LIBO Quoted Currency for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen or, in the event such rate does not appear on such Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate as shall be selected by the Administrative Agent from time to time in its reasonable discretion (the “ LIBO Screen Rate ”) at approximately 11:00 a.m., London time, on the Quotation Day for such Interest Period and (B) any Eurocurrency Borrowing denominated in any Local Rate Currency and for any applicable Interest Period, the applicable Local Screen Rate for such Local Rate Currency; provided, that, if a LIBO Screen Rate or a Local Screen Rate, as applicable, shall not be available at the applicable time for the applicable Interest Period (the “ Impacted Interest Period ”), then the LIBO Rate shall be the Interpolated Rate at such time, subject to Sections 2.13 and 2.14, as applicable, and provided further, that, if the LIBO Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, except in favor of the issuer thereof (and in the case of Investments that are securities, excluding customary drag-along, tag-along, right of first refusal and other similar rights in favor of the equity holders of the same issuer).
“ Loan Documents ” means, collectively, this Agreement, the Letter of Credit Documents and the Security Documents.
“ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement.
“ Local Rate Currency ” means any currency other than a LIBO Quoted Currency.

“ Local Screen Rate ” means the CDOR Screen Rate.

“ Margin Stock ” means “margin stock” within the meaning of Regulations T, U and X.
“ Material Adverse Change ” has the meaning assigned to such term in Section 3.04(b) .
“ Material Adverse Effect ” means a material adverse effect on (a) the business, Portfolio Investments and other assets, liabilities or financial condition of the Borrower or the Borrower and its Subsidiaries taken as a whole (excluding in any case a decline in the net asset

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value of the Borrower or a change in general market conditions or values of the Portfolio Investments), or (b) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Administrative Agent and the Lenders thereunder.
“ Material Indebtedness ” means (a) Indebtedness (other than the Loans, Letters of Credit and Hedging Agreements), of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $20,000,000 and (b) obligations in respect of one or more Hedging Agreements under which the maximum aggregate amount (giving effect to any netting agreements) that the Borrower and its Subsidiaries would be required to pay if such Hedging Agreement(s) were terminated at such time would exceed $20,000,000.
“ Maximum Commitment Increase Amount ” means an amount equal to $900,000,000.
“ Maximum Rate ” has the meaning assigned to such term in Section 9.15 .
“ Minimum Collateral Amount ” means, at any time, with respect to Cash Collateral consisting of Cash or deposit account balances, an amount equal to 102% of the Fronting Exposure of Issuing Bank with respect to Letters of Credit issued and outstanding at such time.
“ Moody’s ” means Moody’s Investors Service, Inc. or any successor thereto.
“ Multicurrency Commitment ” means, with respect to each Multicurrency Lender, the commitment of such Multicurrency Lender to make Syndicated Loans, and to acquire participations in Letters of Credit and Swingline Loans, denominated in Dollars and in Agreed Foreign Currencies hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Multicurrency Credit Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04 . The amount of each Lender’s Multicurrency Commitment as of the Fifth Amendment Effective Date is set forth on Schedule 1.01(b) , or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Multicurrency commitment, as applicable. The aggregate amount of the Lenders’ Multicurrency Commitments as of the Fifth Amendment Effective Date is $518,000,000.
“ Multicurrency LC Exposure ” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Multicurrency Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements in respect of such Letters of Credit that have not yet been reimbursed by or on behalf of the Borrower at such time. The Multicurrency LC Exposure of any Lender at any time shall be its Applicable Multicurrency Percentage of the total Multicurrency LC Exposure at such time.
“ Multicurrency Lender ” means the Persons listed on Schedule 1.01(b) as having Multicurrency Commitments and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption that provides for it to assume a Multicurrency Commitment or to acquire Revolving Multicurrency Credit Exposure, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption or otherwise.

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“ Multicurrency Letters of Credit ” means Letters of Credit that utilize the Multicurrency Commitments.
“ Multicurrency Loan ” means a Loan denominated in Dollars or an Agreed Foreign Currency.
“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“ National Currency ” means the currency, other than the Euro, of a Participating Member State.
“ Net Cash Proceeds ” means:
(a)    with respect to any Disposition by the Borrower or any of its Subsidiaries (other than Financing Subsidiaries), or any Extraordinary Receipt received or paid to the account of the Borrower or any of its Subsidiaries (other than Financing Subsidiaries) (in each case, which requires a payment of the Loans under Section 2.10(d) ), an amount equal to (a) the sum of cash and Cash Equivalents received in connection with such transaction (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) minus (b) the sum of (i) the principal amount of any Indebtedness that is secured by the applicable asset and that is required to be repaid in connection with such transaction (other than Indebtedness under the Loan Documents), (ii) the reasonable out-of-pocket fees, costs and expenses incurred by the Borrower or such Subsidiary in connection with such transaction, (iii) the taxes paid or reasonably estimated to be actually payable within two years of the date of the relevant transaction in connection with such transaction; provided that, if the amount of any estimated taxes pursuant to this clause (iii) exceeds the amount of taxes actually required to be paid in cash in respect of such Disposition, the aggregate amount of such excess shall constitute Net Cash Proceeds (as of the date the Borrower determines such excess exists); and provided further that if the amount of any estimated taxes pursuant to this clause (iii) is less than the amount of taxes actually required to be paid in cash in respect of such Disposition, the shortfall shall be netted against subsequent Net Cash Proceeds received by the Borrower or any of its Subsidiaries (other than any Financing Subsidiaries) and (iv) any reasonable costs, fees, commissions, premiums and expenses incurred by the Borrower or any of its Subsidiaries in connection with such Disposition; and
(b)    with respect to the sale or issuance of any Equity Interest by the Borrower or any of its Subsidiaries (other than any Financing Subsidiary) (including, for the avoidance of doubt, cash received by the Borrower or any of its Subsidiaries (other than any Financing Subsidiaries) for the sale by the Borrower or such Subsidiary of any Equity Interest of a Financing Subsidiary but specifically excluding any sale of any Equity Interest by a Financing Subsidiary or cash received by a Financing Subsidiary in connection with the sale of any Equity Interest), or the incurrence or issuance of any Indebtedness by the Borrower or any of its Subsidiaries (other than Financing Subsidiaries) (in each case, which

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requires a payment of the Loans under Section 2.10(d) ), an amount equal to (i) the sum of the cash and Cash Equivalents received in connection with such transaction minus (ii) the sum of (1) reasonable out-of-pocket fees, costs and expenses, incurred by the Borrower or such Subsidiary in connection therewith plus (2) any reasonable costs, fees, commissions, premiums, expenses, or underwriting discounts or commissions incurred by the Borrower or any of its Subsidiaries in connection therewith.
“ New York Fed ” means the Federal Reserve Bank of New York.
“ New York Fed Bank Rate ” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day; provided that if both such rates are not so published for any day that is a Business Day, the term “New York Fed Bank Rate” means the rate quoted for such day for a federal funds transaction at 11:00 a.m. on such day received by the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“ Non-Defaulting Lender ” means, at any time, a Lender that is not a Defaulting Lender at such time.
“ Non-Public Information ” means material non-public information (within the meaning of United States federal, state or other applicable securities laws) with respect to the Borrower or its Affiliates or their Securities.
“ Obligor ” means, collectively, the Borrower and the Subsidiary Guarantors.
“ Original Currency ” has the meaning assigned to such term in Section 2.17 .
“ Other Connection Taxes ” means, with respect to the Administrative Agent, any Lender or the Issuing Bank, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising solely 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 Loan Document, or sold or assigned an interest in any Loans or Loan Document).
“ Other Covered Indebtedness ” means, collectively, Secured Longer-Term Indebtedness, Secured Shorter-Term Indebtedness and Unsecured Shorter-Term Indebtedness; provided that “Other Covered Indebtedness” shall not include any Indebtedness secured by a Lien on Investments permitted under Section 6.02(e) .
“ Other Permitted Indebtedness ” means (a) accrued expenses and current trade accounts payable incurred in the ordinary course of any Obligor’s business which are not overdue for a period of more than 90 days or which are being contested in good faith by appropriate proceedings, (b) Indebtedness (other than Indebtedness for borrowed money) arising in connection with transactions in the ordinary course of any Obligor’s business in connection with its purchasing

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of securities, derivatives transactions, reverse repurchase agreements or dollar rolls to the extent such transactions are permitted under the Investment Company Act and the Borrower’s Investment Policies (after giving effect to any Permitted Policy Amendments), provided that such Indebtedness does not arise in connection with the purchase of Investments other than Cash Equivalents and U.S. Government Securities and (c) Indebtedness in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as such judgments or awards do not constitute an Event of Default under clause (l) of Article VII .
“ Other Taxes ” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document, excluding any such taxes, charges or similar levies resulting from an assignment by any Lender in accordance with Section 9.04 hereof (unless such assignment is made pursuant to Section 2.18(b) ).
“ Overnight Bank Funding Rate ” means, for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.–managed banking offices of depository institutions (as such composite rate shall be determined by the New York Fed as set forth on its public website from time to time) and published on the next succeeding Business Day by the New York Fed as an overnight bank funding rate (from and after such date as the New York Fed shall commence to publish such composite rate).
“ Participant ” has the meaning assigned to such term in Section 9.04 .
“ Participant Register ” has the meaning assigned to such term in Section 9.04 .
“ Participating Member State ” means any member state of the European Community that adopts or has adopted the Euro as its lawful currency in accordance with the legislation of the European Union relating to the European Monetary Union.
“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“ Permitted IPO ” means an initial public offering by the Borrower of its common Securities after the Effective Date pursuant to an effective registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act.
“ Permitted Liens ” means (a) Liens imposed by any Governmental Authority for taxes, assessments or charges not yet due or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Borrower in accordance with GAAP; (b) Liens of clearing agencies or broker-dealers and similar Liens incurred in the ordinary course of business, provided that such Liens (i) attach only to the securities (or proceeds) being purchased or sold and (ii) secure only obligations incurred in connection with such purchase or sale, and not any obligation in connection with margin financing; (c) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmens’, storage and repairmen’s Liens and other similar Liens arising in the ordinary course of business and securing obligations (other

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than Indebtedness for borrowed money) not yet due or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Borrower in accordance with GAAP; (d) Liens incurred or pledges or deposits made to secure obligations incurred in the ordinary course of business under workers’ compensation laws, unemployment insurance or other similar social security legislation (other than in respect of employee benefit plans subject to ERISA) or to secure public or statutory obligations; (e) Liens securing the performance of, or payment in respect of, bids, insurance premiums, deductibles or co-insured amounts, tenders, government or utility contracts (other than for the repayment of borrowed money), surety, stay, customs and appeal bonds and other obligations of a similar nature incurred in the ordinary course of business; (f) Liens arising out of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as such judgments or awards do not constitute an Event of Default under clause (l) of Article VII ; (g) customary rights of setoff and liens upon (i) deposits of cash in favor of banks or other depository institutions in which such cash is maintained in the ordinary course of business, (ii) cash and financial assets held in securities accounts in favor of banks and other financial institutions with which such accounts are maintained in the ordinary course of business and (iii) assets held by a custodian in favor of such custodian in the ordinary course of business securing payment of fees, indemnities and other similar obligations; (h) Liens arising solely from precautionary filings of financing statements under the Uniform Commercial Code of the applicable jurisdictions in respect of operating leases entered into by the Borrower or any of its Subsidiaries in the ordinary course of business; (i) deposits of money securing leases to which Borrower is a party as lessee made in the ordinary course of business; (j) easements, rights of way, zoning restrictions and similar encumbrances on real property and minor irregularities in the title thereto that do not (i) secure obligations for the payment of money or (ii) materially impair the value of such property or its use by any Obligor or any of its Subsidiaries in the normal conduct of such Person’s business; (k) Liens in favor of any escrow agent solely on and in respect of any cash earnest money deposits made by any Obligor in connection with any letter of intent or purchase agreement (to the extent that the acquisition or disposition with respect thereto is otherwise permitted hereunder); and (l) precautionary Liens, and filings of financing statements under the Uniform Commercial Code, covering assets sold or contributed to any Person not prohibited hereunder. For the avoidance of doubt, no Liens securing the facility of any Financing Subsidiary shall be a Permitted Lien hereunder.
“ Permitted Policy Amendment ” means any change, alteration, expansion, amendment, modification, termination or restatement of the Investment Policies that is either (a) approved in writing by the Administrative Agent (with the consent of the Required Lenders), (b) required by applicable law, rule, regulation or Governmental Authority, or (c) not material in the reasonable discretion of the Administrative Agent (for the avoidance of doubt, no change, alteration, expansion, amendment, modification, termination or restatement of the Investment Policies shall be deemed “material” if investment size proportionately increases as the size of the Borrower’s capital base changes).
“ Permitted SBIC Guarantee ” means a guarantee by one or more Obligors of Indebtedness of an SBIC Subsidiary on the SBA’s then applicable form, provided that the recourse to such Obligor(s) thereunder is expressly limited only to periods after the occurrence of an event or condition that is an impermissible change in the control of such SBIC Subsidiary (it being

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understood that, as provided in clause (r) of Article VII , it shall be an Event of Default hereunder if any such event or condition giving rise to such recourse occurs).
“ Permitted Valuation Policy Amendment ” means any change, alteration, expansion, amendment, modification, termination or restatement of the Borrower Unquoted Investment Valuation Policy that is either (a) approved in writing by the Administrative Agent (with the consent of the Required Lenders), (b) required by applicable law, rule, regulation or Governmental Authority, or (c) not material in the reasonable discretion of the Administrative Agent.
“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“ Platform ” means has the meaning set forth in Section 5.01(i) .
“ Portfolio Investment ” means any Investment held by the Obligors in their asset portfolio (and solely for purposes of determining the Borrowing Base and clause (p) of Article VII, Cash).  Without limiting the generality of the foregoing, the following Investments shall not be considered Portfolio Investments under this Agreement or any other Loan Document: (a) any Investment by an Obligor in any Financing Subsidiary, Foreign Subsidiary, Immaterial Subsidiary or other Obligor; (b) any Investment that has been contributed, sold or otherwise transferred to a Subsidiary which does not constitute a Subsidiary Guarantor; (c) any Investment that is subject to existing assertions by the obligor in respect of such Investment of rescission, set-off, counterclaim or any other defenses; (d) any Investment, which if debt, is an obligation (other than a revolving loan or delayed draw term loan) pursuant to which any future advances or payments to the obligor may be required to be made by an Obligor; (e) any Investment which, as of the date of its making, is made to a bankrupt entity (other than a debtor-in-possession financing and current pay obligations); and (f) any portion of an Investment, Cash or account in which a Financing Subsidiary has an interest.
“ Prime Rate ” means the rate which is quoted in the print edition of The Wall Street Journal , Money Rates Section; each change in the Prime Rate shall be effective from and including the date such change is printed in the print edition of The Wall Street Journal , Money Rates Section.
“ Principal Financial Center ” means, in the case of any Currency, the principal financial center where such Currency is cleared and settled, as determined by the Administrative Agent.
“ Prohibited Assignees and Participants Side Letter ” means that certain Side Letter, dated as of the date hereof, between the Borrower and the Administrative Agent.

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“ Public Lender ” means Lenders that do not wish to receive Non-Public Information with respect to the Borrower or any of its Subsidiaries or their Securities.
“ QFC ” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
“ QFC Credit Support ” has the meaning assigned to it in Section 9.18.

“ Quarterly Dates ” means the last Business Day of March, June, September and December in each year, commencing on June 30, 2014.
“ Quotation Day ” means, with respect to any Eurocurrency Borrowing for any Interest Period, (i) if the currency is Canadian Dollars or GBP, the first day of such Interest Period, (ii) if the currency is Euro, two TARGET Days before the first day of such Interest Period, and (iii) for any other currency, two Business Days prior to the commencement of such Interest Period (unless, in each case under this clause (iii), market practice differs in the relevant market where the LIBO Rate for such currency is to be determined, in which case the Quotation Day will be determined by the Administrative Agent in accordance with market practice in such market (and if quotations would normally be given on more than one day, then the Quotation Day will be the last of those days).

“ Quoted Investments ” means Portfolio Investments (including Cash Equivalents) for which market quotations are readily available in the manner set forth under Section 5.12(b)(ii)(A) , as determined by the Borrower in its commercially reasonable discretion; provided that a Portfolio Investment shall not constitute a Quoted Investment unless there are at least three bids from Approved Dealers (including in the case of an Approved Pricing Service, the inclusion of at least three bids) available at any time the Borrower is required to determine the Value of such Portfolio Investment in accordance with Section 5.12 .
“ Register ” has the meaning set forth in Section 9.04 .
“ Registration Statement ” means the Registration Statement filed by the Borrower with the Securities and Exchange Commission on April 11, 2013.
“ Regulations D, T, U and X ” means, respectively, Regulations D, T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.
“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective partners, directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

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“ Relevant Available Funds ” means the sum (without duplication) of the aggregate amount available to be drawn under any committed facilities, including, for the avoidance of doubt, this Agreement, for which all applicable conditions to availability could be satisfied at such time.
“ Required Lenders ” means, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing more than 50% of the sum of the total Revolving Credit Exposures and unused Commitments at such time; provided that the Revolving Credit Exposures and unused Commitments of any Defaulting Lender shall be disregarded in the determination of Required Lenders. The Required Lenders of a Class (which shall include the terms “Required Dollar Lenders” and “Required Multicurrency Lenders”) means Lenders having Revolving Credit Exposures and unused Commitments of such Class representing more than 50% of the sum of the total Revolving Credit Exposures and unused Commitments of such Class at such time.
“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any shares of any class of capital stock of the Borrower or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of capital stock of the Borrower or any option, warrant or other right to acquire any such shares of capital stock of the Borrower (it being understood that none of: (w) the conversion features under convertible notes; (x) the triggering and/or settlement thereof; or (y) any cash payment made by the Borrower or any Subsidiary in respect thereof shall constitute a Restricted Payment hereunder).
“ Return of Capital ” means (a) any net cash amount received by any Obligor in respect of the outstanding principal of any Investment (whether at stated maturity, by acceleration or otherwise), (b) without duplication of amounts received under clause (a) , any net cash proceeds received by any Obligor from the sale of any property or assets pledged as collateral in respect of any Investment to the extent such net cash proceeds are less than or equal to the outstanding principal balance of such Investment, (c) any net cash amount received by any Obligor in respect of any Investment that is an Equity Interest (x) upon the liquidation or dissolution of the issuer of such Investment, (y) as a distribution of capital made on or in respect of such Investment, or (z) pursuant to the recapitalization or reclassification of the capital of the issuer of such Investment or pursuant to the reorganization of such issuer or (d) any similar return of capital received by any Obligor in cash in respect of any Investment (in the case of clauses (a) , (b) , (c) and (d) , net of any fees, costs, expenses and taxes payable with respect thereto).
“ Revaluation Date ” shall mean (a) with respect to any Loan denominated in any Foreign Currency, each of the following: (i) the date of the Borrowing of such Loan and (ii) each date of a conversion into or continuation of such Loan pursuant to the terms of this Agreement; (b) with respect to any Letter of Credit denominated in an Foreign Currency, each of the following: (i) the date on which such Letter of Credit is issued, (ii) the first Business Day of each calendar month and (iii) the date of any amendment of such Letter of Credit that has the effect of increasing the face amount thereof; and (c) any additional date as the Administrative Agent may determine at any time when an Event of Default exists.

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“ Revolving Credit Exposure ” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Dollar Credit Exposure and Revolving Multicurrency Credit Exposure at such time.
“ Revolving Dollar Credit Exposure ” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Syndicated Loans, and its LC Exposure and Swingline Exposure, at such time made or incurred under the Dollar Commitments.
“ Revolving Multicurrency Credit Exposure ” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Syndicated Loans, and its LC Exposure and Swingline Exposure, at such time made or incurred under the Multicurrency Commitments.
“ Revolving Percentage ” means, as of any date of determination, the result, expressed as a percentage, of the Revolving Credit Exposure on such date divided by the aggregate outstanding Covered Debt Amount on such date.
“ RIC ” means a person qualifying for treatment as a “regulated investment company” under the Code.
“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc., a New York corporation, or any successor thereto.
“ Sanctions ” means any international economic sanction administered or enforced by OFAC, the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority with jurisdiction over the Obligors.
“ SBA ” means the United States Small Business Administration.
“ SBIC Equity Commitment ” means a commitment by the Borrower to make one or more capital contributions to an SBIC Subsidiary in form and substance reasonably acceptable to the Administrative Agent.
“ SBIC Subsidiary ” means any direct or indirect Subsidiary (including such Subsidiary’s general partner or managing entity to the extent that the only material asset of such general partner or managing entity is its equity interest in the SBIC Subsidiary) of the Borrower licensed as a small business investment company under the Small Business Investment Act of 1958, as amended, (or that has applied for such a license and is actively pursuing the granting thereof by appropriate proceedings promptly instituted and diligently conducted) and which is designated by the Borrower (as provided below) as an SBIC Subsidiary, so long as (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such Subsidiary: (i) is Guaranteed by any Obligor (other than a Permitted SBIC Guarantee), (ii) is recourse to or obligates any Obligor in any way (other than in respect of any SBIC Equity Commitment or Permitted SBIC Guarantee), or (iii) subjects any property of any Obligor, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than Equity Interests in any SBIC Subsidiary pledged to secure such Indebtedness, and (b) no Obligor has any obligation to maintain or preserve such Subsidiary’s

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financial condition or cause such entity to achieve certain levels of operating results (other than in respect of any SBIC Equity Commitment or Permitted SBIC Guarantee). Any such designation by the Borrower shall be effected pursuant to a certificate of a Financial Officer delivered to the Administrative Agent, which certificate shall include a statement to the effect that, to the best of such officer’s knowledge, such designation complied with the foregoing conditions.
“ Screen Rate ” means the LIBO Screen Rate and the Local Screen Rates collectively and individually as the context may require.

“ Secured Longer-Term Indebtedness ” means, as at any date, Indebtedness (other than Indebtedness hereunder) of an Obligor (which may be Guaranteed by one or more Obligors) that (a) has no scheduled amortization prior to, and a final maturity date not earlier than, six months after the Final Maturity Date (it being understood that none of: (w) the conversion features under convertible notes; (x) the triggering and/or settlement thereof; or (y) any cash payment made in respect thereof, shall constitute “amortization” for purposes of this clause (a) ), (b) is incurred pursuant to documentation that is substantially comparable to market terms for substantially similar debt of other similarly situated borrowers as determined by the Borrower in its reasonable judgment and (c) is not secured by any assets of any Obligor other than pursuant to this Agreement or the Security Documents and the holders of which have either executed (i) a joinder agreement to the Guarantee and Security Agreement or (ii) such other document or agreement, in a form reasonably satisfactory to the Administrative Agent and the Collateral Agent, pursuant to which the holders of such Secured Longer-Term Indebtedness shall have become a party to the Guarantee and Security Agreement and assumed the obligations of a Financing Agent or Designated Indebtedness Holder (in each case, as defined in the Guarantee and Security Agreement).
“ Secured Shorter-Term Indebtedness ” means, collectively, (a) any Indebtedness of an Obligor that is secured by any assets of any Obligor and that does not constitute Secured Longer-Term Indebtedness, (b) any Indebtedness of an Obligor that is not secured by any assets of any Obligor other than pursuant to this Agreement or the Security Documents and the holders of which have either executed (i) a joinder agreement to the Guarantee and Security Agreement or (ii) such other document or agreement, in a form reasonably satisfactory to the Administrative Agent and the Collateral Agent, pursuant to which the holders of such Secured Shorter-Term Indebtedness shall have become a party to the Guarantee and Security Agreement and assumed the obligations of a Financing Agent or Designated Indebtedness Holder (in each case, as defined in the Guarantee and Security Agreement) (for the avoidance of doubt, other than any Secured Long-Term Indebtedness) and (c) any Indebtedness that is designated as “Secured Shorter-Term Indebtedness” pursuant to Section 6.11(a) .
“ Security Documents ” means, collectively, the Guarantee and Security Agreement, all Uniform Commercial Code financing statements filed with respect to the security interests in personal property created pursuant to the Guarantee and Security Agreement and all other assignments, pledge agreements, security agreements, control agreements and other instruments executed and delivered on or after the date hereof by any of the Obligors pursuant to the Guarantee and Security Agreement or otherwise providing or relating to any collateral security for any of the Secured Obligations under and as defined in the Guarantee and Security Agreement.

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“ Special Equity Interests ” has the meaning assigned to such term in Section 6.02(d) .
“ Shareholders’ Equity ” means, at any date, the amount determined on a consolidated basis, without duplication, in accordance with GAAP, of shareholders equity for the Borrower and its Subsidiaries at such date.
“ SPE Subsidiary ” means an SBIC Subsidiary or a direct or indirect Subsidiary of the Borrower with respect to which (other than pursuant to Standard Securitization Undertakings):
(a)    no portion of the Indebtedness or any other obligations (contingent or otherwise) of such Subsidiary (i) is Guaranteed by any Obligor, (ii) is recourse to or obligates any Obligor in any way or (iii) subjects any property of any Obligor, directly or indirectly, contingently or otherwise, to the satisfaction thereof or any Guarantee thereof,
(b)    no Obligor has any material contract, agreement, arrangement or understanding other than on terms no less favorable to such Obligor than those that might be obtained at the time from Persons that are not Affiliates of any Obligor, other than fees payable in the ordinary course of business in connection with servicing receivables or other financial assets, and
(c)    no Obligor has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Borrower shall be effected pursuant to a certificate of a Financial Officer delivered to the Administrative Agent, which certificate shall include a statement to the effect that, to the best of such officer’s knowledge, such designation complied with the foregoing conditions. Each Subsidiary of an SPE Subsidiary shall be deemed to be an SPE Subsidiary and shall comply with the foregoing requirements of this definition.
“ Standard Securitization Undertakings ” means, collectively, (a) customary arms-length servicing obligations (together with any related performance guarantees), (b) obligations (together with any related performance guarantees) to refund the purchase price or grant purchase price credits for dilutive events or misrepresentations (in each case unrelated to the collectibility of the assets sold or the creditworthiness of the associated account debtors) and (c) representations, warranties, covenants and indemnities (together with any related performance guarantees) of a type that are reasonably customary in accounts receivable securitizations or securitization of financial assets.
“ Statutory Reserve Rate ” means, for the Interest Period for any Eurocurrency Borrowing, a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the arithmetic mean, taken over each day in such Interest Period, of the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D). Such reserve percentages shall include those imposed pursuant to Regulation D. Eurocurrency Loans shall be deemed to constitute eurocurrency funding

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and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“ Subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Anything herein to the contrary notwithstanding, the term “Subsidiary” shall not include any Person that constitutes an Investment held by any Obligor in the ordinary course of business and that is not, under GAAP, consolidated on the financial statements of the Borrower and its Subsidiaries. Unless otherwise specified, “Subsidiary” means a Subsidiary of the Borrower.
“ Subsidiary Guarantor ” means any Subsidiary that is a Guarantor under the Guarantee and Security Agreement. It is understood and agreed that no Financing Subsidiary, Immaterial Subsidiary or Foreign Subsidiary (or a Subsidiary of a Foreign Subsidiary) shall be a Subsidiary Guarantor.
“ Supported QFC ” has the meaning assigned to it in Section 9.18.
“ Swingline Exposure ” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be the sum of (i) its Applicable Dollar Percentage of the total Swingline Exposure incurred under the Dollar Commitments and (ii) its Applicable Multicurrency Percentage of the total Swingline Exposure at such time incurred under the Multicurrency Commitments.
“ Swingline Lender ” means JPMCB, in its capacity as lender of Swingline Loans hereunder, and its successors, and any other Lender that agrees to become a “Swingline Lender” (subject to the consent and approval of the Administrative Agent and the Borrower), in each case, in such capacity as provided in Section 2.04(d) .
“ Swingline Loan ” means a Loan made pursuant to Section 2.04 .
“ Syndicated ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans constituting such Borrowing, are made pursuant to Section 2.01 .
“ Taxes ” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings (including backup withholding), assessments, fees, or other charges

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imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“ Termination Date ” means the earliest to occur of (i) the Final Maturity Date, (ii) the date of the termination of the Commitments in full pursuant to Section 2.08(b) , or (iii) the date on which the Commitments are terminated pursuant to Article VII .
“ Testing Quarter ” has the meaning assigned to such term in Section 5.12(b)(ii)(E)(x) .
“ Transactions ” means the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, the borrowing of Loans, the use of the proceeds thereof, the issuance of Letters of Credit hereunder and the use of proceeds thereof.
“ Type ”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans constituting such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
“ Uniform Commercial Code ” means the Uniform Commercial Code as in effect from time to time in the State of New York.
“ Unquoted Investments ” means any Portfolio Investment other than a Quoted Investment.
“ Unsecured Longer-Term Indebtedness ” means any Indebtedness of an Obligor (which may be Guaranteed by one or more other Obligors) that (a) has no amortization prior to, and a final maturity date not earlier than, six months after the Final Maturity Date (it being understood that none of: (w) the conversion features under convertible notes; (x) the triggering and/or settlement thereof; or (y) any cash payment made in respect thereof, shall constitute “amortization” for purposes of this clause (a) ), (b) is incurred pursuant to documentation that is substantially comparable to market terms for substantially similar debt of other similarly situated borrowers as determined by the Borrower in its reasonable judgment and (c) is not secured by any assets of any Obligor.
“ Unsecured Shorter-Term Indebtedness ” means, collectively, (a) any Indebtedness of an Obligor that is not secured by any assets of any Obligor and that does not constitute Unsecured Longer-Term Indebtedness and (b) any Indebtedness that is designated as “Unsecured Shorter-Term Indebtedness” pursuant to Section 6.11(a) .
“ U.S. Government Securities ” means securities that are direct obligations of, and obligations the timely payment of principal and interest on which is fully guaranteed 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 and in the form of conventional bills, bonds, and notes.
“ U.S. Person ” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“ Value ” has the meaning assigned to such term in Section 5.13 .

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“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“ Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
SECTION 1.02.      Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Syndicated Dollar Loan” or “Syndicated Multicurrency Loan”), by Type (e.g., an “ABR Loan”) or by Class and Type (e.g., a “Syndicated Multicurrency LIBOR Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Dollar Borrowing”, “Multicurrency Borrowing” or “Syndicated Borrowing”), by Type (e.g., an “ABR Borrowing”) or by Class and Type (e.g., a “Syndicated ABR Borrowing” or “Syndicated Multicurrency LIBOR Borrowing”). Loans and Borrowings may also be identified by Currency.
SECTION 1.03.      Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) 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 from time to time amended, restated, amended and restated, supplemented, renewed or otherwise modified (subject to any restrictions on such amendments, supplements, renews or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) 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, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) 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.
SECTION 1.04.      Accounting Terms; GAAP . 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, (a) 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

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shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith and (b) all leases that would be treated as operating leases for purposes of GAAP on the date hereof shall continue to be accounted for as operating leases for purposes of all financial definitions and calculations hereunder regardless of any change to GAAP following the date hereof that would otherwise require such leases to be treated as Capital Lease Obligations. The Borrower covenants and agrees with the Lenders that whether or not the Borrower may at any time adopt Financial Accounting Standard No. 159 (or successor standard solely as it relates to fair valuing liabilities) or accounts for liabilities acquired in an acquisition on a fair value basis pursuant to Financial Accounting Standard No. 141(R) (or successor standard solely as it relates to fair valuing liabilities), all determinations of compliance with the terms and conditions of this Agreement shall be made on the basis that the Borrower has not adopted Financial Accounting Standard No. 159 (or such successor standard solely as it relates to fair valuing liabilities) or, in the case of liabilities acquired in an acquisition, Financial Accounting Standard No. 141(R) (or such successor standard solely as it relates to fair valuing liabilities).
SECTION 1.05.      Currencies; Currency Equivalents .
(a)      Currencies Generally . At any time, any reference in the definition of the term “Agreed Foreign Currency” or in any other provision of this Agreement to the Currency of any particular nation means the lawful currency of such nation at such time whether or not the name of such Currency is the same as it was on the date hereof. Except as provided in Section 2.10(b) and the last sentence of Section 2.17(a) , for purposes of determining (i) whether the amount of any Borrowing or Letter of Credit under the Multicurrency Commitments, together with all other Borrowings and Letters of Credit under the Multicurrency Commitments then outstanding or to be borrowed at the same time as such Borrowing, would exceed the aggregate amount of the Multicurrency Commitments, (ii) the aggregate unutilized amount of the Multicurrency Commitments, (iii) the Revolving Credit Exposure, (iv) the Multicurrency LC Exposure, (v) the Covered Debt Amount and (vi) the Borrowing Base or the Value or the fair market value of any Portfolio Investment, the outstanding principal amount of any Borrowing or Letter of Credit that is denominated in any Foreign Currency or the Value or the fair market value of any Portfolio Investment that is denominated in any Foreign Currency shall be deemed to be the Dollar Equivalent of the amount of the Foreign Currency of such Borrowing, Letter of Credit or Portfolio Investment, as the case may be, determined as of the date of such Borrowing or Letter of Credit (determined in accordance with the last sentence of the definition of the term “Interest Period”) or the date of valuation of such Portfolio Investment, as the case may be. Wherever in this Agreement in connection with a Borrowing or Loan an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Borrowing or Loan is denominated in a Foreign Currency, such amount shall be the relevant Foreign Currency Equivalent of such Dollar amount (rounded to the nearest 1,000 units of such Foreign Currency).
The Administrative Agent shall determine the Exchange Rate for any Foreign Currency as of each Revaluation Date to be used for calculating the Dollar Equivalent amounts of Loans, Letters of Credit and Revolving Credit Exposure denominated in such Foreign Currency. Such Exchange Rate shall become effective as of such Revaluation Date and shall be the Exchange Rate employed in converting any amounts between the applicable currencies until

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the next Revaluation Date to occur. Except for purposes of financial statements delivered pursuant to Section 5.01 or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent.

(b)      Special Provisions Relating to Euro . Each obligation hereunder of any party hereto that is denominated in the National Currency of a state that is not a Participating Member State on the date hereof shall, effective from the date on which such state becomes a Participating Member State, be redenominated in Euro in accordance with the legislation of the European Union applicable to the European Monetary Union; provided that, if and to the extent that any such legislation provides that any such obligation of any such party payable within such Participating Member State by crediting an account of the creditor can be paid by the debtor either in Euros or such National Currency, such party shall be entitled to pay or repay such amount either in Euros or in such National Currency. If the basis of accrual of interest or fees expressed in this Agreement with respect to an Agreed Foreign Currency of any country that becomes a Participating Member State after the date on which such currency becomes an Agreed Foreign Currency shall be inconsistent with any convention or practice in the interbank market for the basis of accrual of interest or fees in respect of the Euro, such convention or practice shall replace such expressed basis effective as of and from the date on which such state becomes a Participating Member State; provided that, with respect to any Borrowing denominated in such currency that is outstanding immediately prior to such date, such replacement shall take effect at the end of the Interest Period therefor.
Without prejudice to the respective liabilities of the Borrower to the Lenders and the Lenders to the Borrower under or pursuant to this Agreement, each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time, in consultation with the Borrower, reasonably specify to be necessary or appropriate to reflect the introduction or changeover to the Euro in any country that becomes a Participating Member State after the date hereof; provided that the Administrative Agent shall provide the Borrower and the Lenders with prior notice of the proposed change with an explanation of such change in sufficient time to permit the Borrower and the Lenders an opportunity to respond to such proposed change.
SECTION 1.06.      Divisions . For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized and acquired on the first date of its existence by the holders of its Equity Interests at such time.
SECTION 1.07.      Letter of Credit Amounts . Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the amount of such Letter of Credit available to be drawn at such time; provided that with respect to any Letter of Credit that, by its terms or the terms of any Letter of Credit Agreement related thereto, provides for one or more automatic increases in the available amount thereof, the amount of such Letter of Credit shall be

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deemed to be the maximum amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum amount is available to be drawn at such time.


THE CREDITS
SECTION 1.08.      The Commitments . Subject to the terms and conditions set forth herein:
(a)      each Dollar Lender severally agrees to make Syndicated Loans in Dollars to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lender’s Revolving Dollar Credit Exposure exceeding such Lender’s Dollar Commitment, (ii) the aggregate Revolving Dollar Credit Exposure of all of the Dollar Lenders exceeding the aggregate Dollar Commitments, or (iii) the total Covered Debt Amount exceeding the Borrowing Base then in effect; and
(b)      each Multicurrency Lender severally agrees to make Syndicated Loans in Dollars and in Agreed Foreign Currencies to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lender’s Revolving Multicurrency Credit Exposure exceeding such Lender’s Multicurrency Commitment, (ii) the aggregate Revolving Multicurrency Credit Exposure of all of the Multicurrency Lenders exceeding the aggregate Multicurrency Commitments or (iii) the total Covered Debt Amount exceeding the Borrowing Base then in effect.
Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Syndicated Loans.
SECTION 1.09.      Loans and Borrowings .
(a)      Obligations of Lenders . Each Syndicated Loan shall be made as part of a Borrowing consisting of Loans of the same Class, Currency and Type made by the applicable Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.
(b)      Type of Loans . Subject to Section 2.13 , each Syndicated Borrowing of a Class shall be constituted entirely of ABR Loans or of Eurocurrency Loans of such Class denominated in a single Currency as the Borrower may request in accordance herewith. Each ABR Loan shall be denominated in Dollars. Each Lender at its option may make any Eurocurrency Loan or ABR Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

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(c)      Minimum Amounts . Each Eurocurrency Borrowing shall be in an aggregate amount of $1,000,000 or a larger multiple of $1,000,000, and each ABR Borrowing (whether Syndicated or Swingline) shall be in an aggregate amount of $1,000,000 or a larger multiple of $100,000; provided that a Syndicated ABR Borrowing of a Class may be in an aggregate amount that is equal to the entire unused balance of the total Commitments of such Class or that is required to finance the reimbursement of an LC Disbursement of such Class as contemplated by Section 2.05(f) . Borrowings of more than one Class, Currency and Type may be outstanding at the same time.
(d)      Limitations on Interest Periods . Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request (or to elect to convert to or continue as a Eurocurrency Borrowing) any Borrowing if the Interest Period requested therefor would end after the Final Maturity Date.
SECTION 1.10.      Requests for Syndicated Borrowings .
(a)      Notice by the Borrower . To request a Syndicated Borrowing, the Borrower shall deliver a Borrowing Request to the Administrative Agent of (i) in the case of a Eurocurrency Borrowing denominated in Dollars, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing, (ii) in the case of a Eurocurrency Borrowing denominated in a Foreign Currency, not later than 11:00 a.m., New York City time, four Business Days before the date of the proposed Borrowing or (iii) in the case of a Syndicated ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of the proposed Borrowing. Each such Borrowing Request shall be irrevocable and shall be in a form approved by the Administrative Agent and signed by the Borrower.
(b)      Content of Borrowing Requests . Each Borrowing Request shall specify the following information in compliance with Section 2.02 :
(i)      whether such Borrowing is to be made under the Dollar Commitments or the Multicurrency Commitments;
(ii)      the aggregate amount and Currency of the requested Borrowing;
(iii)      the date of such Borrowing, which shall be a Business Day;
(iv)      in the case of a Syndicated Borrowing denominated in Dollars, whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;
(v)      in the case of a Eurocurrency Borrowing, the Interest Period therefor, which shall be a period contemplated by the definition of the term “Interest Period” and permitted under Section 2.02(d) ; and
(vi)      the location and number of the Borrower’s account to which funds are to be disbursed.

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(c)      Notice by the Administrative Agent to the Lenders . Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each applicable Lender of the details thereof and of the amounts of such Lender’s Loan to be made as part of the requested Borrowing.
(d)      Failure to Elect . If no election as to the Class of a Syndicated Borrowing is specified, then the requested Syndicated Borrowing shall be deemed to be under the Multicurrency Commitments. If no election as to the Currency of a Syndicated Borrowing is specified, then the requested Syndicated Borrowing shall be denominated in Dollars. If no election as to the Type of a Syndicated Borrowing is specified, then the requested Borrowing shall be a Eurocurrency Borrowing having an Interest Period of one month and, if an Agreed Foreign Currency has been specified, the requested Syndicated Borrowing shall be a Eurocurrency Borrowing denominated in such Agreed Foreign Currency and having an Interest Period of one month. If a Eurocurrency Borrowing is requested but no Interest Period is specified, (i) if the Currency specified for such Borrowing is Dollars (or if no Currency has been so specified), the requested Borrowing shall be a Eurocurrency Borrowing denominated in Dollars having an Interest Period of one month’s duration, and (ii) if the Currency specified for such Borrowing is an Agreed Foreign Currency, the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
SECTION 1.11.      Swingline Loans .
(a)      Agreement to Make Swingline Loans . Subject to the terms and conditions set forth herein, each Swingline Lender agrees to make Swingline Loans under its outstanding Commitment to the Borrower from time to time during the Availability Period in Dollars, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $50,000,000, (ii) the total Revolving Dollar Credit Exposures exceeding the aggregate Dollar Commitments, (iii) the total Revolving Multicurrency Credit Exposures exceeding the aggregate Multicurrency Commitments, (iv) the total Covered Debt Amount exceeding the Borrowing Base then in effect or (v) the sum of such Swingline Lender’s outstanding Swingline Loans of any Class (minus any participations in any such Swingline Loans purchased by other Lenders pursuant to Section 2.04(c) ) plus its Revolving Credit Exposure exceeding its Commitments of such Class; provided that no Swingline Lender shall be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.
(b)      Notice of Swingline Loans by the Borrower . To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request in writing (confirmed by telecopy) not later than 11:00 a.m., New York City time, on the day of such proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day), the amount of the requested Swingline Loan and whether such Swingline Loan is to be made under the Dollar Commitments or the Multicurrency Commitments. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the case of

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a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(f) , by remittance to the Issuing Bank) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan. Notwithstanding the foregoing, if the Borrower provides prior written notice to the Administrative Agent by 9:00 a.m., New York City time, on the day of such proposed Swingline Loan, the Swingline Lender shall make such Swingline Loan available to the Borrower in accordance with the immediately preceding sentence not later than 1:00 p.m., New York City time, on the requested date of such Swingline Loan.
(c)      Participations by Lenders in Swingline Loans . The Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., New York City time on any Business Day, require the Lenders of the applicable Class to acquire participations on such Business Day in all or a portion of the Swingline Loans of such Class outstanding. Such notice to the Administrative Agent shall specify the aggregate amount of Swingline Loans in which the applicable Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each applicable Lender, specifying in such notice such Lender’s Applicable Dollar Percentage or Applicable Multicurrency Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above in this paragraph, to pay to the Administrative Agent, for account of the Swingline Lender, such Lender’s Applicable Dollar Percentage or Applicable Multicurrency Percentage, as the case may be, of such Swingline Loan or Loans; provided that no Lender shall be required to purchase a participation in a Swingline Loan pursuant to this Section 2.04(c)  if (x) the conditions set forth in Section 4.02 would not be satisfied in respect of a Borrowing at the time such Swingline Loan was made and (y) the Required Lenders of the respective Class shall have so notified the Swingline Lender in writing and shall not have subsequently determined that the circumstances giving rise to such conditions not being satisfied no longer exist.
Subject to the foregoing, each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph (c)  is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments of the respective Class, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear. The purchase of

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participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.
(d)      Resignation and Replacement of Swingline Lender . The Swingline Lender may resign and be replaced at any time by written agreement among the Borrower, the Administrative Agent, the resigning Swingline Lender and the successor Swingline Lender. The Administrative Agent shall notify the Lenders of any such resignation and replacement of the Swingline Lender. In addition to the foregoing, if a Lender becomes, and during the period it remains, a Defaulting Lender, and if any Default has arisen from a failure of the Borrower to comply with Section 2.19(a) , then the Swingline Lender may, upon prior written notice to the Borrower and the Administrative Agent, resign as Swingline Lender, effective at the close of business New York City time on a date specified in such notice (which date may not be less than five (5) Business Days after the date of such notice). On or after the effective date of any such resignation, the Borrower and the Administrative Agent may, by written agreement, appoint a successor Swingline Lender. The Administrative Agent shall notify the Lenders of any such appointment of a successor Swingline Lender. Upon the effectiveness of any resignation of the Swingline Lender, the Borrower shall repay in full all outstanding Swingline Loans together with all accrued interest thereon. From and after the effective date of the appointment of a successor Swingline Lender, (i) the successor Swingline Lender shall have all the rights and obligations of the replaced Swingline Lender under this Agreement with respect to Swingline Loans to be made thereafter and (ii) references herein to the term “Swingline Lender” shall be deemed to refer to such successor or to any previous Swingline Lender, or to such successor and all previous Swingline Lenders, as the context shall require. After the replacement of the Swingline Lender hereunder, the replaced Swingline Lender shall have no obligation to make additional Swingline Loans.
SECTION 1.12.      Letters of Credit .
(a)      General . Subject to the terms and conditions set forth herein, in addition to the Loans provided for in Section 2.01 , the Borrower may request any Issuing Bank to issue, at any time and from time to time during the Availability Period and under either the Dollar Commitments or Multicurrency Commitments (provided that such Issuing Bank has outstanding Commitments of such Class), Letters of Credit denominated in Dollars or (in the case of Letters of Credit under the Multicurrency Commitments) in any Agreed Foreign Currency for its own account or the account of its designee (provided the Obligors shall remain primarily liable to the Lenders hereunder for payment and reimbursement of all amounts payable in respect of such Letter of Credit hereunder) in such form as is acceptable to the Issuing Bank in its reasonable determination and for the benefit of such named beneficiary or beneficiaries as are specified by the Borrower. Letters of Credit issued hereunder shall constitute utilization of the Commitments up to the aggregate amount available to be drawn thereunder.
(b)      Notice of Issuance, Amendment, Renewal or Extension . To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal

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or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (d)  of this Section), the amount and Currency of such Letter of Credit, whether such Letter of Credit is to be issued under the Dollar Commitments or the Multicurrency Commitments, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.
An Issuing Bank shall not be under any obligation to issue any Letter of Credit if any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing such Letter of Credit, or any law applicable to such Issuing Bank shall prohibit, or require that such Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not otherwise compensated hereunder) not in effect on the Fifth Amendment Effective Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense that was not applicable on the Fifth Amendment Effective Date and that such Issuing Bank in good faith deems material to it.
(c)      Limitations on Amounts . A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the aggregate LC Exposure of the Issuing Bank (determined for these purposes without giving effect to the participations therein of the Lenders pursuant to paragraph (e)  of this Section) shall not exceed $20,000,000, (ii) the total Revolving Dollar Credit Exposures shall not exceed the aggregate Dollar Commitments, (iii) the total Revolving Multicurrency Credit Exposures shall not exceed the aggregate Multicurrency Commitments and (iv) the total Covered Debt Amount shall not exceed the Borrowing Base then in effect.
(d)      Expiration Date . Each Letter of Credit shall expire at or prior to the close of business on the date twelve months after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, twelve months after the then-current expiration date of such Letter of Credit, so long as such renewal or extension occurs within three months of such then-current expiration date); provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods. No Letter of Credit may be renewed following the earlier to occur of the Commitment Termination Date and the Termination Date, except to the extent that the relevant Letter of Credit is Cash Collateralized no later than five (5)

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Business Days prior to the Commitment Termination Date or Termination Date, as applicable, or supported by another letter of credit, in each case pursuant to arrangements reasonably satisfactory to the Issuing Bank and the Administrative Agent. Notwithstanding anything to the contrary in this clause (d) , no Letter of Credit shall expire following the Final Maturity Date.
(e)      Participations . By the issuance of a Letter of Credit of a Class (or an amendment to a Letter of Credit increasing the amount thereof) by the Issuing Bank, and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender of such Class, and each Lender of such Class hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Dollar Percentage or Applicable Multicurrency Percentage, as the case may be, of the aggregate amount available to be drawn under such Letter of Credit. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the applicable Commitments; provided that no Lender shall be required to purchase a participation in a Letter of Credit pursuant to this Section 2.05(e) if (x) the conditions set forth in Section 4.02 would not be satisfied in respect of a Borrowing at the time such Letter of Credit was issued and (y) the Required Lenders of the respective Class shall have so notified the Issuing Bank in writing and shall not have subsequently determined that the circumstances giving rise to such conditions not being satisfied no longer exist.
In consideration and in furtherance of the foregoing, each Lender of a Class hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for account of the Issuing Bank, such Lender’s Applicable Dollar Percentage or Applicable Multicurrency Percentage, as the case may be, of each LC Disbursement made by the Issuing Bank in respect of Letters of Credit of such Class promptly upon the request of the Issuing Bank at any time from the time of such LC Disbursement until such LC Disbursement is reimbursed by the Borrower or at any time after any reimbursement payment is required to be refunded to the Borrower for any reason. Such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each such payment shall be made in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to the next following paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that the Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.
(f)      Reimbursement . If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse the Issuing Bank in respect of such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on (i) the Business Day that the Borrower receives

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notice of such LC Disbursement, if such notice is received prior to 10:00 a.m., New York City time, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time; provided that, if such LC Disbursement is not less than $1,000,000 and is denominated in Dollars, the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that such payment be financed with a Syndicated ABR Borrowing or a Swingline Loan of the respective Class in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting Syndicated ABR Borrowing or Swingline Loan.
If the Borrower fails to make such payment when due, the Administrative Agent shall notify each applicable Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Dollar Percentage or Applicable Multicurrency Percentage, as the case may be, thereof.
(g)      Obligations Absolute . The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (f) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply strictly with the terms of such Letter of Credit, and (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of the Borrower’s obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit by the Issuing Bank or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s fraud, gross negligence or willful misconduct when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that:
(i)      the Issuing Bank may accept documents that appear on their face to be in substantial compliance with the terms of a Letter of Credit without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment

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upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit;
(ii)      the Issuing Bank shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit; and
(iii)      this sentence shall establish the standard of care to be exercised by the Issuing Bank when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof (and the parties hereto hereby waive, to the extent permitted by applicable law, any standard of care inconsistent with the foregoing).
(h)      Disbursement Procedures . The Issuing Bank shall, within a reasonable time following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly after such examination notify the Administrative Agent and the Borrower in writing of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the applicable Lenders with respect to any such LC Disbursement.
(i)      Interim Interest . If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to Syndicated ABR Loans; provided that, if the Borrower fails to reimburse such LC Disbursement within two Business Days following the date when due pursuant to paragraph (f)  of this Section, then the provisions of Section 2.12(c)  shall apply. Interest accrued pursuant to this paragraph shall be for account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (f)  of this Section to reimburse the Issuing Bank shall be for account of such Lender to the extent of such payment.
(j)      Resignation and/or Replacement of Issuing Bank . The Issuing Bank may resign and be replaced at any time by written agreement among the Borrower, the Administrative Agent, the resigning Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such resignation and replacement of the Issuing Bank. Upon the effectiveness of any resignation of the Issuing Bank, the Borrower shall pay all unpaid fees accrued for account of the resigning Issuing Bank pursuant to Section 2.11(b) . From and after the effective date of the appointment of a successor Issuing Bank, (i) the successor Issuing Bank shall have all the rights and obligations of the replaced Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the effective resignation of the Issuing Bank hereunder, the resigning Issuing Bank, as the case may be, shall remain a party hereto and shall continue to have all the rights and obligations of the Issuing Bank under this Agreement with respect

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to Letters of Credit issued by it prior to such resignation, but shall not be required to issue additional Letters of Credit.
(k)      Cash Collateralization . If the Borrower shall be required to provide Cash Collateral for LC Exposure pursuant to Section 2.09(a) , Section 2.10(b) or (c)  or the last paragraph of Article VII , the Borrower shall immediately deposit into a segregated collateral account or accounts (herein, collectively, the “ Letter of Credit Collateral Account ”) in the name and under the dominion and control of the Administrative Agent Cash denominated in the Currency of the Letter of Credit under which such LC Exposure arises in an amount equal to the amount required under Section 2.09(a) , Section 2.10(b) or (c)  or the last paragraph of Article VII , as applicable. Such deposit shall be held by the Administrative Agent as collateral in the first instance for the LC Exposure under this Agreement and thereafter for the payment of the “Secured Obligations” under and as defined in the Guarantee and Security Agreement, and for these purposes the Borrower hereby grants a security interest to the Administrative Agent for the benefit of the Lenders in the Letter of Credit Collateral Account and in any financial assets (as defined in the Uniform Commercial Code) or other property held therein.
SECTION 1.13.      Funding of Borrowings .
(a)      Funding by Lenders . Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 11:00 a.m., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.04 . The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing Request; provided that Syndicated ABR Borrowings made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(f) shall be remitted by the Administrative Agent to the Issuing Bank.
(b)      Presumption by the Administrative Agent . Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a)  of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the Federal Funds Effective Rate or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing. Nothing in this paragraph shall relieve any Lender of its obligation to fulfill its commitments hereunder, and this paragraph shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

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SECTION 1.14.      Interest Elections .
(a)      Elections by the Borrower for Syndicated Borrowings . Subject to Section 2.03(d) , the Loans constituting each Syndicated Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have the Interest Period specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a Borrowing of a different Type or to continue such Borrowing as a Borrowing of the same Type and, in the case of a Eurocurrency Borrowing, may elect the Interest Period therefor, all as provided in this Section; provided , however , that (i) a Syndicated Borrowing of a Class may only be continued or converted into a Syndicated Borrowing of the same Class, (ii) a Syndicated Borrowing denominated in one Currency may not be continued as, or converted to, a Syndicated Borrowing in a different Currency, (iii) no Eurocurrency Borrowing denominated in a Foreign Currency may be continued if, after giving effect thereto, the aggregate Revolving Multicurrency Credit Exposures would exceed the aggregate Multicurrency Commitments, and (iv) a Eurocurrency Borrowing denominated in a Foreign Currency may not be converted to a Borrowing of a different Type. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders of the respective Class holding the Loans constituting such Borrowing, and the Loans constituting each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, which may not be converted or continued.
(b)      Notice of Elections . To make an election pursuant to this Section, the Borrower shall deliver an Interest Election Request to the Administrative Agent by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Syndicated Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such Interest Election Request shall be irrevocable and shall be in a form approved by the Administrative Agent and signed by the Borrower.
(c)      Content of Interest Election Requests . Each Interest Election Request shall specify the following information in compliance with Section 2.02 :
(i)      the Borrowing (including the Class) to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii)  and (iv)  of this paragraph shall be specified for each resulting Borrowing);
(ii)      the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii)      whether, in the case of a Borrowing denominated in Dollars, the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and
(iv)      if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period therefor after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period” and permitted under Section 2.02(d) .

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(d)      Notice by the Administrative Agent to the Lenders . Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each applicable Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e)      Failure to Elect; Events of Default . If the Borrower fails to deliver a timely and complete Interest Election Request with respect to a Eurocurrency Borrowing prior to the end of the Interest Period therefor, then, unless such Borrowing is repaid as provided herein, (i) if such Borrowing is denominated in Dollars, at the end of such Interest Period such Borrowing shall be converted to a Syndicated Eurocurrency Borrowing of the same Class having an Interest Period of one month, and (ii) if such Borrowing is denominated in a Foreign Currency, the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, (i) any Eurocurrency Borrowing denominated in Dollars shall, at the end of the applicable Interest Period for such Eurocurrency Borrowing, be automatically converted to an ABR Borrowing and (ii) any Eurocurrency Borrowing denominated in a Foreign Currency shall not have an Interest Period of more than one month’s duration.
SECTION 1.15.      Termination, Reduction or Increase of the Commitments .
(a)      Scheduled Termination . Unless previously terminated, the Commitments of each Class shall terminate on the Commitment Termination Date.
(b)      Voluntary Termination or Reduction . The Borrower may at any time, without premium or penalty, terminate, or from time to time reduce, the Commitments of either Class; provided that (i) each reduction of the Commitments of a Class shall be in an amount that is $10,000,000 (or, if less, the entire remaining amount of the Commitments of such Class) or a larger multiple of $5,000,000 in excess thereof (or the entire amount of the Commitments of such Class) and (ii) the Borrower shall not terminate or reduce the Commitments of either Class if, after giving effect to any concurrent prepayment of the Syndicated Loans of such Class in accordance with Section 2.10 , the total Revolving Credit Exposures of such Class would exceed the total Commitments of such Class. Any such reduction of the Commitments below the principal amount of the Swingline Loans permitted under Section 2.04(a)(i) and the Letters of Credit permitted under Section 2.05(c)(i) shall result in a dollar-for-dollar reduction of such amounts as applicable.
(c)      Notice of Voluntary Termination or Reduction . The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b)  of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the applicable Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments of a Class delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.

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(d)      Effect of Termination or Reduction . Any termination or reduction of the Commitments of a Class shall be permanent. Each reduction of the Commitments of a Class shall be made ratably among the Lenders of such Class in accordance with their respective Commitments.
(e)      Increase of the Commitments .
(i)      Requests for Increase by Borrower . The Borrower may, at any time, request that the Commitments hereunder of a Class be increased (each such proposed increase being a “ Commitment Increase ”), upon notice to the Administrative Agent (who shall promptly notify the Lenders), which notice shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders (or such lesser period as the Administrative Agent may reasonably agree)). Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment. The Borrower shall provide notice to the Administrative Agent specifying each existing Lender (each an “ Increasing Lender ”) and/or each additional lender (each an “ Assuming Lender ”) that shall have agreed to an additional Commitment and the date on which such increase is to be effective (the “ Commitment Increase Date ”), which shall be a Business Day at least three Business Days (or such lesser period as the Administrative Agent may reasonably agree) after delivery of such notice and 30 days prior to the Commitment Termination Date; provided that:
(A)      the minimum amount of the Commitment of any Assuming Lender, and the minimum amount of the increase of the Commitment of any Increasing Lender, as part of such Commitment Increase shall be $10,000,000 or a larger multiple of $5,000,000 in excess thereof (or such lesser amount as the Administrative Agent may reasonably agree);
(B)      immediately after giving effect to such Commitment Increase, the total Commitments of all of the Lenders hereunder shall not exceed the Maximum Commitment Increase Amount;
(C)      each Assuming Lender shall be consented to by the Administrative Agent and the Issuing Bank (such consent not to be unreasonably withheld, delayed or conditioned);
(D)      no Default shall have occurred and be continuing on such Commitment Increase Date or shall result from the proposed Commitment Increase; and
(E)      the representations and warranties contained in this Agreement shall be true and correct in all material respects (or, in the case of any portion of the representations and warranties already subject to a materiality qualifier, true and correct in all respects) on and as of the Commitment Increase Date as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

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(ii)      Effectiveness of Commitment Increase by Borrower . An Assuming Lender, if any, shall become a Lender hereunder as of such Commitment Increase Date and the Commitment of the respective Class of any Increasing Lender and such Assuming Lender shall be increased as of such Commitment Increase Date; provided that:
(x)    the Administrative Agent shall have received on or prior to 11:00 a.m., New York City time, on such Commitment Increase Date a certificate of a duly authorized officer of the Borrower stating that each of the applicable conditions to such Commitment Increase set forth in the foregoing paragraph (i)  has been satisfied; and
(y)    each Assuming Lender or Increasing Lender shall have delivered to the Administrative Agent, on or prior to 11:00 a.m., New York City time on such Commitment Increase Date, an agreement, in form and substance satisfactory to the Borrower and the Administrative Agent, pursuant to which such Lender shall, effective as of such Commitment Increase Date, undertake a Commitment or an increase of Commitment in each case of the respective Class, duly executed by such Assuming Lender or Increasing Lender, as applicable, and the Borrower and acknowledged by the Administrative Agent.
Promptly following satisfaction of such conditions, the Administrative Agent shall notify the Lenders of such Class (including any Assuming Lenders) thereof and of the occurrence of the Commitment Increase Date by facsimile transmission or electronic messaging system.
(iii)      Recordation into Register . Upon its receipt of an agreement referred to in clause (ii)(y)  above executed by an Assuming Lender or any Increasing Lender, together with the certificate referred to in clause (ii)(x)  above, the Administrative Agent shall, if such agreement has been completed, (x) accept such agreement, (y) record the information contained therein in the Register and (z) give prompt notice thereof to the Borrower.
(iv)      Adjustments of Borrowings upon Effectiveness of Increase . On the Commitment Increase Date, the Borrower shall (A) prepay the outstanding Loans (if any) of the affected Class in full, (B) simultaneously borrow new Loans of such Class hereunder in an amount equal to such prepayment; provided that with respect to subclauses (A)  and (B) , (x) the prepayment to, and borrowing from, any existing Lender shall be effected by book entry to the extent that any portion of the amount prepaid to such Lender will be subsequently borrowed from such Lender and (y) the existing Lenders, the Increasing Lenders and the Assuming Lenders shall make and receive payments among themselves, in a manner acceptable to the Administrative Agent, so that, after giving effect thereto, the Loans of such Class are held ratably by the Lenders of such Class in accordance with the respective Commitments of such Class of such Lenders (after giving effect to such Commitment Increase) and (C) pay to the Lenders of such Class the amounts, if any, payable under Section 2.15 as a result of any such prepayment. Concurrently therewith, the Lenders of such Class shall be deemed to have adjusted their participation interests in any outstanding Letters of Credit of such Class so that such interests are held ratably in accordance with their commitments of such Class as so increased.

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(f)      Realloaction of Dollar Commitments to Multicurrency Commitments . Notwithstanding anything herein to the contrary, provided that no Default or Event of Default is continuing, any Dollar Lender, with the consent of the Administrative Agent and the Borrower, may upon not less than three Business Days’ notice (or such shorter period as the Administrative Agent may agree) elect that all (and not less than all) of its Dollar Commitments be reallocated to the Multicurrency Commitments, whereupon such Lender shall have zero Dollar Commitments and a Multicurrency Commitment equal to its former Dollar Commitment. On the effective date of such reallocation, the outstanding Loans and Letters of Credit of each Class shall be prepaid and adjusted in accordance with instructions of the Administrative Agent in a manner consistent with Section 2.08(e)(iv) so that, after giving effect to such prepayments and adjustments, the Loans of each Class are held ratably by the Lenders of such Class in accordance with the respective Commitments of such Class. Concurrently therewith, the Lenders of each Class shall be deemed to have adjusted their participation interests in any outstanding Letters of Credit of such Class so that such interests are held ratably in accordance with their commitments of such Class as so increased.
SECTION 1.16.      Repayment of Loans; Evidence of Debt .
(a)      Repayment . The Borrower hereby unconditionally promises to pay the Loans of each Class as follows:
(i)      to the Administrative Agent for account of the Lenders of such Class the outstanding principal amount of the Syndicated Loans of such Class on the Final Maturity Date; and
(ii)      to the Swingline Lender the then unpaid principal amount of each Swingline Loan of such Class denominated in Dollars, on the earlier of the Commitment Termination Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least ten Business Days after such Swingline Loan is made; provided that on each date that a Syndicated Borrowing of such Class is made, the Borrower shall repay all Swingline Loans of such Class then outstanding.
In addition, on the Commitment Termination Date, the Borrower shall deposit into the Letter of Credit Collateral Account Cash (denominated in the Currency of the Letter of Credit under which such LC Exposure arises) in an amount equal to 102% of the undrawn face amount of all Letters of Credit outstanding on the close of business on the Commitment Termination Date, such deposit to be held by the Administrative Agent as collateral security for the LC Exposure under this Agreement in respect of the undrawn portion of such Letters of Credit.
(b)      Manner of Payment . Prior to any repayment or prepayment of any Borrowings of any Class hereunder, the Borrower shall select the Borrowing or Borrowings of such Class to be paid and shall notify the Administrative Agent in writing of such selection not later than the time set forth in Section 2.10(e) prior to the scheduled date of such repayment; provided that each repayment of Borrowings of a Class shall be applied to repay any outstanding ABR Borrowings of such Class before any other Borrowings of such Class. If the Borrower fails to make a timely selection of the Borrowing or Borrowings to be repaid or prepaid, such payment shall be applied,

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first, to pay any outstanding ABR Borrowings of the applicable Class and, second, to other Borrowings of such Class in the order of the remaining duration of their respective Interest Periods (the Borrowing with the shortest remaining Interest Period to be repaid first). Each payment of a Syndicated Borrowing shall be applied ratably to the Loans included in such Borrowing.
(c)      Maintenance of Records by Lenders . Each Lender shall maintain in accordance with its usual practice records evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts and Currency of principal and interest payable and paid to such Lender from time to time hereunder.
(d)      Maintenance of Records by the Administrative Agent . The Administrative Agent shall maintain records in which it shall record (i) the amount and Currency of each Loan made hereunder, the Class and Type thereof and each Interest Period therefor, (ii) the amount and Currency of any principal or interest due and payable or to become due and payable from the Borrower to each Lender of such Class hereunder and (iii) the amount and Currency of any sum received by the Administrative Agent hereunder for account of the Lenders and each Lender’s share thereof.
(e)      Effect of Entries . The entries made in the records maintained pursuant to paragraph (c)  or (d)  of this Section shall be prima facie evidence, absent obvious error, of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such records or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.
(f)      Promissory Notes . Any Lender may request that Loans of any Class made by it be evidenced by a promissory note; in such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04 ) be represented by one or more promissory notes in such form payable to the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
SECTION 1.17.      Prepayment of Loans .
(a)      Optional Prepayments . The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty except for payments under Section 2.15 , subject to the requirements of this Section.
(b)      Mandatory Prepayments due to Changes in Exchange Rates .
(i)      Determination of Amount Outstanding . On each Revaluation Date, the Administrative Agent shall determine the aggregate Revolving Multicurrency Credit Exposure. For the purpose of this determination, the outstanding principal amount of any Loan or LC Exposure that is denominated in any Foreign Currency shall be deemed to be

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the Dollar Equivalent of the amount in the Foreign Currency of such Loan or LC Exposure, determined as of such Revaluation Date. Upon making such determination, the Administrative Agent shall promptly notify the Multicurrency Lenders and the Borrower thereof.
(ii)      Prepayment . If on the date of such determination the aggregate Revolving Multicurrency Credit Exposure minus the Multicurrency LC Exposure fully Cash Collateralized on such date exceeds 105% of the aggregate amount of the Multicurrency Commitments as then in effect, the Borrower shall, if requested by the Required Multicurrency Lenders (through the Administrative Agent), prepay the Syndicated Multicurrency Loans and Swingline Multicurrency Loans (and/or provide Cash Collateral for Multicurrency LC Exposure as specified in Section 2.05(k) ) within 15 Business Days following the relevant date of determination (provided that the Borrower shall not be required to make such prepayment and/or provide Cash Collateral prior to five (5) Business Days after the Borrower’s receipt of such request) in such amounts as shall be necessary so that after giving effect thereto the aggregate Revolving Multicurrency Credit Exposure does not exceed the Multicurrency Commitments.
Any prepayment pursuant to this paragraph shall be applied, first to Swingline Multicurrency Loans outstanding, second , to Syndicated Multicurrency Loans outstanding and third , as cover for Multicurrency LC Exposure.
(c)      Mandatory Prepayments due to Borrowing Base Deficiency . In the event that at any time any Borrowing Base Deficiency shall exist, the Borrower shall, within five Business Days after delivery of the applicable Borrowing Base Certificate, prepay the Loans (or provide Cash Collateral for Letters of Credit as contemplated by Section 2.05(k) ) or reduce Other Covered Indebtedness in such amounts as shall be necessary so that such Borrowing Base Deficiency is cured; provided that (i) the aggregate amount of such prepayment of Loans (and Cash Collateral for Letters of Credit) shall be at least equal to the Revolving Percentage times the aggregate prepayment of the Covered Debt Amount, and (ii) if, within five Business Days after delivery of a Borrowing Base Certificate demonstrating such Borrowing Base Deficiency, the Borrower shall present the Lenders with a reasonably feasible plan acceptable to the Required Lenders in their sole discretion to enable such Borrowing Base Deficiency to be cured within 30 Business Days (which 30-Business Day period shall include the five (5) Business Days permitted for delivery of such plan), then such prepayment or reduction shall not be required to be effected immediately but may be effected in accordance with such plan (with such modifications as the Borrower may reasonably determine), so long as such Borrowing Base Deficiency is cured within such 30-Business Day period.
(d)      Mandatory Prepayments During Amortization Period . During the period commencing on the date immediately following the Commitment Termination Date and ending on the Final Maturity Date:
(i)      Asset Disposition . If the Borrower or any of its Subsidiaries (other than a Financing Subsidiary) Disposes of any property which results in the receipt by such Person of Net Cash Proceeds in excess of $2,000,000 in the aggregate since the Commitment

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Termination Date, the Borrower shall prepay an aggregate principal amount of Loans equal to 100% of such excess Net Cash Proceeds no later than the fifth Business Day following the receipt of such excess Net Cash Proceeds (such prepayments to be applied as set forth in Section 2.09(b) ).
(ii)      Equity Issuance . Upon the sale or issuance by the Borrower or any of its Subsidiaries (other than a Financing Subsidiary) of any of its Equity Interests (other than any sales or issuances of Equity Interests (x) to the Borrower or any Subsidiary Guarantor or (y) in connection with a Permitted IPO), the Borrower shall prepay an aggregate principal amount of Loans equal to 75% of all Net Cash Proceeds received therefrom no later than the fifth Business Day following the receipt of such Net Cash Proceeds (such prepayments to be applied as set forth in Section 2.09(b) ); provided that, with respect to any such sale or issuance by the Borrower or any of its Subsidiaries (other than a Financing Subsidiary) of any of its Equity Interests, the 75% of Net Cash Proceeds from such sale or issuance which are required to be prepaid pursuant to this clause (ii) may be reduced (but not below an amount equal to 50% of such Net Cash Proceeds) to the extent that such portion of such Net Cash Proceeds are or will be applied to the acquisition of Portfolio Investments which shall be included in the Borrowing Base.
(iii)      Indebtedness . Upon the incurrence or issuance by the Borrower or any of its Subsidiaries (other than a Financing Subsidiary) of any Indebtedness, the Borrower shall prepay an aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds received therefrom no later than the fifth Business Day following the receipt of such Net Cash Proceeds (such prepayments to be applied as set forth in Section 2.09(b) ).
(iv)      Extraordinary Receipt . Upon any Extraordinary Receipt (which, when taken with all other Extraordinary Receipts received after the Commitment Termination Date, exceeds $5,000,000 in the aggregate) received by or paid to or for the account of the Borrower or any of its Subsidiaries (other than a Financing Subsidiary), and not otherwise included in clauses (i) , (ii) or (iii) of this Section 2.10(d) , the Borrower shall prepay an aggregate principal amount of Loans equal to 100% of such excess Net Cash Proceeds received therefrom no later than the fifth Business Day following the receipt of such excess Net Cash Proceeds (such prepayments to be applied as set forth in Section 2.09(b) ).
(v)      Return of Capital . If any Obligor shall receive any Return of Capital, the Borrower shall prepay an aggregate principal amount of Loans equal to 100% of such Return of Capital (excluding amounts, if any, payable by the Borrower pursuant to Section 2.15 ) no later than the fifth Business Day following the receipt of such Return of Capital (such prepayments to be applied as set forth in Section 2.09(b) ).
Notwithstanding the foregoing, Net Cash Proceeds and Returns of Capital required to be applied to the prepayment of the Loans pursuant to this Section 2.10(d) shall (A) be applied in accordance with the Guarantee and Security Agreement, (B) exclude the amount necessary for the Borrower to make all required distributions (which shall be no less than the amount estimated in good faith by Borrower under Section 6.05(b) herein) to maintain the status of a RIC under the Code and a “business development company” under the Investment Company Act for so long as

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the Borrower retains such status, (C) exclude amounts described above in clauses (i) through (v) with respect to a Foreign Subsidiary if the application of such amounts to the repayment of the Loans would create a liability for the Borrower or such Foreign Subsidiary under Section 956 of the Code and (D) if the Loans to be prepaid are Eurocurrency Loans, the Borrower may defer such prepayment until the last day of the Interest Period applicable to such Loans, so long as the Borrower deposits an amount equal to such Net Cash Proceeds, no later than the fifth Business Day following the receipt of such Net Cash Proceeds, into a segregated collateral account in the name and under the dominion and control of the Administrative Agent, pending application of such amount to the prepayment of the Loans on the last day of such Interest Period; provided , that the Administrative Agent may direct the application of such deposits as set forth in Section 2.09(b) at any time and if the Administrative Agent does so, no amounts will be payable by the Borrower pursuant to Section 2.15 .
(e)      Notices, Etc . The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) in writing of any prepayment hereunder (i) in the case of prepayment of a Eurocurrency Borrowing denominated in Dollars (other than in the case of a prepayment pursuant to Section 2.10(d) ), not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of a Eurocurrency Borrowing denominated in a Foreign Currency (other than in the case of a prepayment pursuant to Section 2.10(d) ), not later than 11:00 a.m., Applicable Time, four Business Days before the date of prepayment, (iii) in the case of prepayment of a Syndicated ABR Borrowing (other than in the case of a prepayment pursuant to Section 2.10(d)) , not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment, (iv) in the case of prepayment of a Swingline Loan, not later than 11:00 a.m., New York City time, on the date of prepayment, or (v) in the case of any prepayment pursuant to Section 2.10(d) , not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment; provided that, if (i) a notice of prepayment is given in connection with a conditional notice of termination of the Commitments of a Class as contemplated by Section 2.08 , then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.08 and (ii) any notice given in connection with Section 2.10(d) may be conditioned on the consummation of the applicable transaction contemplated by such Section and the receipt by the Borrower or any such Subsidiary (other than a Financing Subsidiary) of Net Cash Proceeds. Promptly following receipt of any such notice relating to a Syndicated Borrowing, the Administrative Agent shall advise the affected Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of a Borrowing of the same Type as provided in Section 2.02 or in the case of a Swingline Loan, as provided in Section 2.04 , except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Syndicated Borrowing of a Class shall be applied ratably to the Loans of such Class included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.12 and shall be made in the manner specified in Section 2.09(b) .
SECTION 1.18.      Fees .

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(a)      Commitment Fee . The Borrower agrees to pay to the Administrative Agent for account of each Lender a commitment fee, which shall accrue at a rate per annum equal to 0.375% on the average daily unused amount of the Dollar Commitment and Multicurrency Commitment, as applicable, of such Lender during the period from and including the date hereof to but excluding the earlier of the date such commitment terminates and the Commitment Termination Date. Accrued commitment fees shall be payable within one Business Day after each Quarterly Date and on the earlier of the date the Commitments of the respective Class terminate and the Commitment Termination Date, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). For purposes of computing commitment fees, the Commitment of any Class of a Lender shall be deemed to be used to the extent of the outstanding Syndicated Loans and LC Exposure of such Class of such Lender (and the Swingline Exposure of such Class of such Lender shall be disregarded for such purpose).
(b)      Letter of Credit Fees . The Borrower agrees to pay (i) to the Administrative Agent for account of each Lender a participation fee with respect to its participations in each outstanding Letter of Credit of each Class, which shall accrue on the daily maximum amount then available to be drawn under such Letter of Credit at the same Applicable Margin applicable to interest on Eurocurrency Loans, during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment of such Class terminates and the date on which such Lender ceases to have any LC Exposure of such Class, and (ii) to each Issuing Bank a fronting fee with respect to each Letter of Credit issued by such Issuing Bank, which shall accrue at the rate of 0.25% per annum on the daily maximum amount then available to be drawn under such Letter of Credit, during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, with respect to Letters of Credit issued by such Issuing Bank as well as such Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including each Quarterly Date shall be payable on the third Business Day following such Quarterly Date, commencing on the first such date to occur after the Effective Date; provided that all such fees with respect to the Letters of Credit shall be payable on the Termination Date and the Borrower shall pay any such fees that have accrued and that are unpaid on the Termination Date and, in the event any Letters of Credit shall be outstanding that have expiration dates after the Termination Date, the Borrower shall prepay on the Termination Date the full amount of the participation and fronting fees that will accrue on such Letters of Credit subsequent to the Termination Date through but not including the date such outstanding Letters of Credit are scheduled to expire (and, in that connection, the Lenders agree not later than the date two Business Days after the date upon which the last such Letter of Credit shall expire or be terminated to rebate to the Borrower the excess, if any, of the aggregate participation and fronting fees that have been prepaid by the Borrower over the sum of the amount of such fees that ultimately accrue through the date of such expiration or termination and the aggregate amount of all other unpaid obligations hereunder at such time). Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis

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of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(c)      Administrative Agent Fees . The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.
(d)      Payment of Fees . All fees payable hereunder shall be paid on the dates due, in Dollars (or, at the election of the Borrower with respect to any fees payable to an Issuing Bank on account of Letters of Credit issued in any Foreign Currency, in such Foreign Currency) and immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances absent obvious error.
SECTION 1.19.      Interest .
(a)      ABR Loans . The Loans constituting each ABR Borrowing (including each Swingline Loan) shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.
(b)      Eurocurrency Loans . The Loans constituting each Eurocurrency Borrowing (i) denominated in any LIBO Quoted Currency shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the related Interest Period for such Borrowing and for (ii) each Eurocurrency Borrowing denominated in any Local Rate Currency, the LIBO Rate for the related Interest Period for such Borrowing plus the Applicable Margin.
(c)      Default Interest . Notwithstanding the foregoing, if any Event of Default has occurred and is continuing and the Required Lenders have elected to increase pricing, the interest rates applicable to Loans and any fee or other amount payable by the Borrower hereunder shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided above, (ii) in the case of any Letter of Credit, 2% plus the fee otherwise applicable to such Letter of Credit as provided in Section 2.11(b)(i) , or (iii)  in the case of any fee or other amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.
(d)      Payment of Interest . Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan in the Currency in which such Loan is denominated and, in the case of Syndicated Loans, upon the Termination Date; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of a Syndicated ABR Loan prior to the Final Maturity Date), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurocurrency Borrowing denominated in Dollars prior to the end of the Interest Period therefor, accrued interest on such Borrowing shall be payable on the effective date of such conversion.

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(e)      Computation . All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed (i) by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate and (ii) on Multicurrency Loans denominated in Pounds Sterling or Canadian Dollars shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent and such determination shall be conclusive absent manifest error.
SECTION 1.20.      Alternate Rate of Interest .
(a)      If at the time that the Administrative Agent shall seek to determine the relevant Screen Rate on the Quotation Day for any Interest Period for a Eurocurrency Borrowing the applicable Screen Rate shall not be available for such Interest Period and/or for the applicable Currency with respect to such Eurocurrency Borrowing for any reason and the Administrative Agent shall determine that it is not possible to determine the Interpolated Rate (which conclusion shall be conclusive and binding absent manifest error), then for purposes of determining the LIBO Rate for such Eurocurrency Borrowing, (i) if such Borrowing shall be requested in Dollars, then such Borrowing shall be made as an ABR Borrowing at the Alternate Base Rate, (ii) if such Borrowing shall be requested in any Foreign Currency (other than Canadian Dollars) then either, at the Borrower’s election, (A) any Borrowing Request that requests a Eurocurrency Borrowing denominated in the affected Currency shall be deemed ineffective or (B) the LIBO Rate for such Eurocurrency Borrowing shall be equal to the weighted average of the cost to each Lender to fund its pro rata share of such Eurocurrency Borrowing (from whatever source and using whatever methodologies as such Lender may select in its reasonable discretion) (with respect to a Lender, the “ COF Rate ” and with respect to the weighted average of the COF Rate applicable to each Lender for any Borrowing, the “ Average COF Rate ” ) and (iii) if such Borrowing shall be requested in Canadian Dollars, then the LIBO Rate shall be equal to the Canadian Prime Rate.
(b)      If prior to the commencement of the Interest Period for any Eurocurrency Borrowing of a Class (the Currency of such Borrowing herein called the “ Affected Currency ”):
(i)      the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for the Affected Currency for such Interest Period; or
(ii)      the Administrative Agent is advised by the Required Lenders of such Class that the Adjusted LIBO Rate for the Affected Currency for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their respective Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the affected Lenders in writing as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and such Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Syndicated Borrowing to, or the continuation of any Syndicated Borrowing as, a Eurocurrency Borrowing denominated in the

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Affected Currency shall be ineffective and, if the Affected Currency is Dollars, such Syndicated Borrowing (unless prepaid) shall be continued as, or converted to, a Syndicated ABR Borrowing, (ii) if the Affected Currency is Dollars and any Borrowing Request requests a Eurocurrency Borrowing denominated in Dollars, such Borrowing shall be made as a Syndicated ABR Borrowing and (iii) if the Affected Currency is a Foreign Currency, then either, at the Borrower’s election, (A), any Borrowing Request that requests a Eurocurrency Borrowing denominated in the Affected Currency shall be ineffective, (B) the LIBO Rate for such Eurocurrency Borrowing (other than for any such Eurocurrency Borrowing denominated in Canadian Dollars) shall be the Average COF Rate or (C) the LIBO Rate for any such Eurocurrency Borrowing denominated in Canadian Dollars shall be at the Canadian Prime Rate; provided that, if the circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be permitted.
(c)      If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in clause (b)(i) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (b)(i) have not arisen but the supervisor for the administrator of the LIBO Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the LIBO Screen Rate shall no longer be used for determining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the LIBO Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable (but for the avoidance of doubt, such related changes shall not include a reduction of the Applicable Margin), provided that, if such alternate rate of interest shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. Notwithstanding anything to the contrary in Section 9.02, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five Business Days a copy of such amendment is provided to the Lenders, a written notice from the Required Lenders of each Class stating that such Required Lenders object to such amendment. Until an alternate rate of interest shall be determined in accordance with this clause (c) (but, in the case of the circumstances described in clause (ii) of the first sentence of this Section 2.13(c), only to the extent the LIBO Screen Rate for the applicable currency and such Interest Period is not available or published at such time on a current basis), (x) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (y) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 1.21.      Increased Costs .
(a)      Increased Costs Generally . If any Change in Law shall:
(i)      impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for account

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of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;
(ii)      impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Eurocurrency Loans made by such Lender or any Letter of Credit or participation therein; or
(iii)      subject the Administrative Agent, any Lender and the Issuing Bank to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (e) of the definition of Excluded Taxes, and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;
and the result of any of the foregoing shall be to increase the cost to such Lenders of making, converting to, continuing or maintaining any Eurocurrency Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or the Issuing Bank, as the case may be, in Dollars, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.
(b)      Capital Requirements . If any Lender or the Issuing Bank 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 Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Swingline Loans and Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), by an amount deemed to be material by such Lender or Issuing Bank, then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, in Dollars, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.
(c)      Certificates from Lenders . A certificate of a Lender or the Issuing Bank setting forth the amount or amounts, in Dollars, necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a)  or (b)  of this Section shall be promptly delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d)      Delay in Requests . Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s

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or the Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than six months prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’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 six-month period referred to above shall be extended to include the period of retroactive effect thereof.
SECTION 1.22.      Break Funding Payments . In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period therefor (including as a result of the occurrence of any Commitment Increase Date or an Event of Default), (b) the conversion of any Eurocurrency Loan other than on the last day of an Interest Period therefor, (c) the failure to borrow, convert, continue or prepay any Syndicated Loan on the date specified in any notice delivered pursuant hereto (including, in connection with any Commitment Increase Date, and regardless of whether such notice is permitted to be revocable under Section 2.10(e)  and is revoked in accordance herewith), or (d) the assignment as a result of a request by the Borrower pursuant to Section 2.18(b)  of any Eurocurrency Loan other than on the last day of an Interest Period therefor, then, in any such event, the Borrower shall compensate each affected Lender for the loss, cost and reasonable expense attributable to such event. In the case of a Eurocurrency Loan, the loss to any Lender attributable to any such event shall be deemed to include an amount determined by such Lender to be equal to the excess, if any, of
(i)      the amount of interest that such Lender would pay for a deposit equal to the principal amount of such Loan denominated in the Currency of such Loan for the period from the date of such payment, conversion, failure or assignment to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the duration of the Interest Period that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the Adjusted LIBO Rate for such Currency for such Interest Period, over
(ii)      the amount of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such Lender (or an affiliate of such Lender) for deposits denominated in such Currency from other banks in the Eurocurrency market at the commencement of such period.
Payment under this Section shall be made upon request of a Lender delivered following the payment, conversion, or failure to borrow, convert, continue or prepay that gives rise to a claim under this Section accompanied by a certificate of such Lender setting forth the amount or amounts that such Lender is entitled to receive pursuant to this Section, which certificate shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
SECTION 1.23.      Taxes .

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(a)      Payments Free of Taxes . Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Taxes, except as required by applicable law; provided that if the Borrower shall be required to deduct any Taxes from such payments, then (i) if such Taxes are Indemnified Taxes, the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.
(b)      Payment of Other Taxes by the Borrower . In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(c)      Indemnification by the Borrower . The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank for and, within 10 Business Days after written demand therefor, pay the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by, or required to be withheld or deducted from a payment to, the Administrative Agent, such Lender or the Issuing Bank, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other 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 the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error. The Borrower shall, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within ten (10) days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 2.16(d) below. The applicable Lender shall indemnify the applicable Borrower, and shall make payment in respect thereof, within ten (10) days after demand therefor, for any amount which such Borrower is required to pay to the Administrative Agent pursuant to the immediately preceding sentence.
(d)      Indemnification by the Lenders . Each Lender shall severally indemnify the Administrative Agent, within 10 Business Days after written demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only if and to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and Other Taxes without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(f) relating to the maintenance of a Participant Register, and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan 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

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set off and apply any and all amounts at any time owing to such Lender under any Loan 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 paragraph (d) .
(e)      Evidence of Payments . As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(f)      Tax Documentation . (i) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate. In addition, any Lender, if 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 2.16(f)(ii) below) 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)      Without limiting the generality of the foregoing:
(A)      any Lender that is a “United States person” (as defined under Section 7701(a)(30) of the Code) shall deliver to the Borrower and the Administrative Agent (and such additional copies as shall be reasonably requested by the recipient) on or prior to the date on which such Lender become a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), duly completed and executed copies of Internal Revenue Service Form W-9 or any successor form certifying that such Lender is exempt from U.S. federal backup withholding tax; and
(B)      each Foreign Lender shall 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 Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

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(w)    duly completed and executed copies of Internal Revenue Service Form W-8BEN or any successor form claiming eligibility for benefits of an income tax treaty to which the United States is a party,
(x)    duly completed copies of Internal Revenue Service Form W-8ECI or any successor form certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States,
(y)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (1) a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (2) duly completed and executed copies of Internal Revenue Service Form W-8BEN (or any successor form) certifying that the Foreign Lender is not a United States Person, or
(z)    any other form including Internal Revenue Service Form W-8IMY as applicable 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 to determine the withholding or deduction required to be made.
(ii)      In addition, each Lender shall deliver such forms promptly upon the obsolescence, expiration or invalidity of any form previously delivered by such Lender; provided it is legally able to do so at the time. Each Lender shall promptly notify the Borrower and the Administrative Agent at any time the chief tax officer of such Lender becomes aware that it no longer satisfies the legal requirements to provide any previously delivered form or certificate to the Borrower (or any other form of certification adopted by the U.S. or other taxing authorities for such purpose).
(g)      Documentation Required by FATCA . If a payment made to a Lender under this Agreement 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 law and at such time or times reasonably requested by the Borrower or the Administrative Agent, such document 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 respective obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.16(g) , “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

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(h)      Treatment of Certain Refunds . If the Administrative Agent, any Lender or an Issuing Bank determines, in its sole discretion, that it has received a refund or credit (in lieu of such refund) of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, any Lender or an Issuing Bank, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of the Administrative Agent, any Lender or an Issuing Bank, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, any Lender or an Issuing Bank in the event the Administrative Agent, any Lender or an Issuing Bank is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this clause (h) , in no event will the Administrative Agent, any Lender or an Issuing Bank be required to pay any amount to Borrower pursuant to this clause (h) , the payment of which would place such Person in a less favorable net after-Tax position than such Person would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld, or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid. This subsection shall not be construed to require the Administrative Agent, any Lender or an Issuing Bank to make available its tax returns or its books or records (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.
SECTION 1.24.      Payments Generally; Pro Rata Treatment: Sharing of Set-offs .
(a)      Payments by the Borrower . The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or under Section 2.14 , 2.15 or 2.16 , or otherwise) or under any other Loan Document (except to the extent otherwise provided therein) prior to 12:00 noon, New York City time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the account or accounts (one for each Currency) designated by the Administrative Agent in a notice to the Borrower and the Lenders, except as otherwise expressly provided in the relevant Loan Document and except payments to be made directly to the Issuing Bank or the Swingline Lender as expressly provided herein and payments pursuant to Sections 2.14 , 2.15 , 2.16 and 9.03 , which shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.

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All amounts owing under this Agreement (including commitment fees, payments required under Section 2.14 , and payments required under Section 2.15 relating to any Loan denominated in Dollars, but not including principal of and interest on any Loan denominated in any Foreign Currency or payments relating to any such Loan required under Section 2.15 , which are payable in such Foreign Currency) or under any other Loan Document (except to the extent otherwise provided therein) are payable in Dollars. Notwithstanding the foregoing, if the Borrower shall fail to pay any principal of any Loan when due (whether at stated maturity, by acceleration, by mandatory prepayment or otherwise), the unpaid portion of such Loan shall, if such Loan is not denominated in Dollars, automatically be redenominated in Dollars on the due date thereof (or, if such due date is a day other than the last day of the Interest Period therefor, on the last day of such Interest Period) in an amount equal to the Dollar Equivalent thereof on the date of such redenomination and such principal shall be payable on demand; and if the Borrower shall fail to pay any interest on any Loan that is not denominated in Dollars, such interest shall automatically be redenominated in Dollars on the due date therefor (or, if such due date is a day other than the last day of the Interest Period therefor, on the last day of such Interest Period) in an amount equal to the Dollar Equivalent thereof on the date of such redenomination and such interest shall be payable on demand.
Notwithstanding the foregoing provisions of this Section, if, after the making of any Borrowing in any Foreign Currency, currency control or exchange regulations are imposed in the country which issues such currency with the result that the type of currency in which the Borrowing was made (the “ Original Currency ”) no longer exists or the Borrower is not able to make payment to the Administrative Agent for the account of the Lenders in such Original Currency, then all payments to be made by the Borrower hereunder in such currency shall instead be made when due in Dollars in an amount equal to the Dollar Equivalent (as of the date of repayment) of such payment due, it being the intention of the parties hereto that the Borrower takes all risks of the imposition of any such currency control or exchange regulations.
(b)      Application of Insufficient Payments . If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees of a Class then due hereunder, such funds shall be applied (i) first, to pay interest and fees of such Class then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees of such Class then due to such parties, and (ii) second, to pay principal and unreimbursed LC Disbursements of such Class then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements of such Class then due to such parties.
(c)      Pro Rata Treatment . Except to the extent otherwise provided herein: (i) each Syndicated Borrowing of a Class shall be made from the Lenders of such Class, each payment of commitment fee under Section 2.11 shall be made for account of the Lenders of the applicable Class, and each termination or reduction of the amount of the Commitments of a Class under Section 2.08 shall be applied to the respective Commitments of the Lenders of such Class, pro rata according to the amounts of their respective Commitments of such Class; (ii) each Syndicated Borrowing of a Class shall be allocated pro rata among the Lenders of such Class according to the amounts of their respective Commitments of such Class (in the case of the making of Syndicated

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Loans) or their respective Loans of such Class that are to be included in such Borrowing (in the case of conversions and continuations of Loans); (iii) each payment or prepayment of principal of Syndicated Loans of a Class by the Borrower shall be made for account of the Lenders of such Class pro rata in accordance with the respective unpaid principal amounts of the Syndicated Loans of such Class held by them; and (iv) each payment of interest on Syndicated Loans of a Class by the Borrower shall be made for account of the Lenders of such Class pro rata in accordance with the amounts of interest on such Loans of such Class then due and payable to the respective Lenders.
(d)      Sharing of Payments by Lenders . If any Lender of any Class shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Syndicated Loans, or participations in LC Disbursements or Swingline Loans, of such Class resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Syndicated Loans, and participations in LC Disbursements and Swingline Loans, and accrued interest thereon of such Class then due than the proportion received by any other Lender of such Class, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Syndicated Loans, and participations in LC Disbursements and Swingline Loans, of other Lenders of such Class to the extent necessary so that the benefit of all such payments shall be shared by the Lenders of such Class ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Syndicated Loans, and participations in LC Disbursements and Swingline Loans, of such Class; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(e)      Presumptions of Payment . Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent at the Federal Funds Effective Rate.

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(f)      Certain Deductions by the Administrative Agent . If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(c) , 2.05(e) , 2.06(a)  or  (b)  or 2.17(e) , then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.
SECTION 1.25.      Mitigation Obligations; Replacement of Lenders .
(a)      Designation of a Different Lending Office . If any Lender requests compensation under Section 2.14 , or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16 , then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16 , as the case may be, in the future and (ii) would not subject such Lender to any cost or expense not required to be reimbursed by the Borrower and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b)      Replacement of Lenders . If any Lender requests compensation under Section 2.14 , or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for account of any Lender pursuant to Section 2.16 , or if any Lender becomes a Defaulting Lender or is a Non-Consenting Lender (as provided in Section 9.02(d) ), then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04 ), all of its 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 (i) the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Commitment is being assigned, the Issuing Bank and the Swingline Lender), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.16 , such assignment will result in a reduction in such compensation or payments. 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 apply.
SECTION 1.26.      Defaulting Lenders .

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(a)      Defaulting Lender Adjustments . Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i)      Defaulting Lender Waterfall . Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second , to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Issuing Bank or the Swingline Lender hereunder; third , to Cash Collateralize the Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender in the manner described in Section 2.09(a) ; fourth , as the Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth , if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize Issuing Bank’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in the manner described in Section 2.09(a) ; sixth , to the payment of any amounts owing to the Lenders, the Issuing Bank or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Bank or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh , so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or reimbursement obligations in respect of any LC Disbursement for which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied and waived, such payment shall be applied solely to pay the Loans of, and reimbursement obligations in respect of any LC Disbursement that is owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or reimbursement obligations in respect of any LC Disbursement that is owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in Letters of Credit and Swingline Loans are held by the Lenders pro rata in accordance with the applicable Commitments without giving effect to Section 2.19(a)(iii) . Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.19(a)(i) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

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(ii)      Certain Fees .
(A)      No Defaulting Lender shall be entitled to receive any fee pursuant to Sections 2.11(a) and (b) for any period during which that Lender is a Defaulting Lender (and Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender); provided that such Defaulting Lender shall be entitled to receive fees pursuant to Section 2.11(b) for any period during which that Lender is a Defaulting Lender only to extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.19(d) .
(B)      With respect to any Section 2.11(b) fees not required to be paid to any Defaulting Lender pursuant to clause (A) above, Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in Letters of Credit or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iii) below, (y) pay to Issuing Bank the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to Issuing Bank’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.
(iii)      Reallocation of Participations to Reduce Fronting Exposure . All or any part of such Defaulting Lender’s participation in Letters of Credit and Swingline Loans shall be reallocated (effective no later than one (1) Business Day after the Administrative Agent has actual knowledge that such Lender has become a Defaulting Lender) among the Non-Defaulting Lenders in accordance with their respective Applicable Dollar Percentages and Applicable Multicurrency Percentages, as the case may be (in each case calculated without regard to such Defaulting Lender’s Commitment), but only to the extent that (x) the conditions set forth in Section 4.02 are satisfied at the time of such reallocation (and, unless Borrower shall have otherwise notified Administrative Agent at such time, Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment. Subject to Section 9.16 , no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.
(iv)      Cash Collateral; Repayment of Swingline Loans . If the reallocation described in clause (iii) above cannot, or can only partially, be effected, the Borrower shall not later than three (3) Business Days after demand by the Administrative Agent (at the direction of the Issuing Bank and/or the Swingline Lender), without prejudice to any right or remedy available to it hereunder or under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline Lender’s Swingline Exposure (which exposure shall be deemed equal to the applicable Defaulting Lender’s Applicable Percentage of the total outstanding Swingline

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Exposure (other than Swingline Exposure as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof)) and (y) second, Cash Collateralize the Issuing Bank’s Fronting Exposure in accordance with the procedures set forth in Section 2.19(d) or (z) make other arrangements reasonably satisfactory to the Administrative Agent, the Issuing Bank and the Swingline Lender in their sole discretion to protect them against the risk of non-payment by such Defaulting Lender.
(b)      Defaulting Lender Cure . If the Borrower, the Administrative Agent, the Swingline Lender and the Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that such former Defaulting Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the applicable Commitments (without giving effect to Section 2.19(a)(iii) ), and if Cash Collateral has been posted with respect to such Defaulting Lender, the Administrative Agent will promptly return or release such Cash Collateral to the Borrower and the Defaulting Lender has reimbursed the Borrower for all fees and expenses paid by the Borrower to establish the applicable Cash Collateral account, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of Borrower while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender having been a Defaulting Lender.
(c)      New Swingline Loans/Letters of Credit . So long as any Lender is a Defaulting Lender, (i) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that the participations therein will be fully allocated among Non-Defaulting Lenders in a manner consistent with clause (a)(iii) above and the Defaulting Lender shall not participate therein and (ii) the Issuing Bank shall not be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that the participations in any existing Letters of Credit as well as the new, extended, renewed or increased Letter of Credit has been or will be fully allocated among the Non-Defaulting Lenders in a manner consistent with clause (a)(iii) above and such Defaulting Lender shall not participate therein except to the extent such Defaulting Lender’s participation has been or will be fully Cash Collateralized in accordance with Section 2.19(d) .
(d)      Cash Collateral . At any time that there shall exist a Defaulting Lender, promptly following the written request of the Administrative Agent or the Issuing Bank (with a copy to the Administrative Agent) the Borrower shall Cash Collateralize the Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.19(a)(iii) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

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(i)      Grant of Security Interest . The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Issuing Bank, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of Letters of Credit, to be applied pursuant to clause (ii) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the Issuing Bank as herein provided (other than any Permitted Liens), or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender). All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at JPMCB. The Borrower shall pay on demand therefor from time to time all reasonable and customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.
(ii)      Application . Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.19 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of Letters of Credit (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.
(iii)      Termination of Requirement . Cash Collateral (or the appropriate portion thereof) provided to reduce the Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.19 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender) or (ii) the determination by the Administrative Agent and the Issuing Bank that there exists excess Cash Collateral; provided that, subject to the other provisions of this Section 2.19 , the Person providing Cash Collateral and the Issuing Bank may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure; provided , further , that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.
ARTICLE II     

REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 2.01.      Organization; Powers . Each of the Borrower and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its

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organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required of the Borrower or such Subsidiary, as applicable.
SECTION 2.02.      Authorization; Enforceability . The Transactions are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate and, if required, by all necessary shareholder action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each of the other Loan Documents when executed and delivered will constitute, a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
SECTION 2.03.      Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except for (i) such as have been or will be obtained or made and are in full force and effect and (ii) filings and recordings in respect of the Liens created pursuant to this Agreement or the Security Documents, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or any other Obligor or any order of any Governmental Authority, (c) will not violate or result in a default in any material respect under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or assets, or give rise to a right thereunder to require any payment to be made by any such Person, and (d) except for the Liens created pursuant to this Agreement or the Security Documents, will not result in the creation or imposition of any Lien on any asset of the Borrower or any other Obligor.
SECTION 2.04.      Financial Condition; No Material Adverse Change .
(a)      Financial Statements . The Borrower has heretofore delivered to the Administrative Agent the audited consolidated balance sheet of the Borrower and its Subsidiaries as of and for the year ended December 31, 2017, certified by a Financial Officer of the Borrower. Such financial statements present fairly, in all material respects, the consolidated financial position and results of operations and cash flows of the Borrower and its Subsidiaries as of such date and for such period in accordance with GAAP.
(b)      No Material Adverse Change . Since December 31, 2017, there has not been any event, development or circumstance (herein, a “ Material Adverse Change ”) that has had or could reasonably be expected to have a material adverse effect on (i) the business, Portfolio Investments and other assets, liabilities or financial condition of the Borrower and its Subsidiaries (other than any Financing Subsidiary) taken as a whole (excluding in any case a decline in the net asset value of the Borrower or a change in general market conditions or values of the Portfolio Investments of the Borrower or any of its Subsidiaries), or (ii) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Administrative Agent and the Lenders thereunder.

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SECTION 2.05.      Litigation . There are no actions, suits, investigations or proceedings by or before any arbitrator or Governmental Authority now pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve this Agreement or the Transactions.
SECTION 2.06.      Compliance with Laws and Agreements . Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Neither the Borrower nor any of other Obligor is subject to any contract or other arrangement, the performance of which by them could reasonably be expected to result in a Material Adverse Effect.
SECTION 2.07.      Taxes . Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all material Tax returns and reports required to have been filed and has paid or caused to be paid all material Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Person has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
SECTION 2.08.      ERISA . No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.
SECTION 2.09.      Disclosure . The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other written information (other than projected financial information, other forward looking information relating to third parties and information of a general economic or general industry nature) furnished by or on behalf of the Borrower to the Administrative Agent in connection with the negotiation of this Agreement and the other Loan Documents or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) when taken as a whole (and after giving effect to all updates, modifications and supplements) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. With respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions that the Borrower in good faith believed to be reasonable at the time of preparation thereof.
SECTION 2.10.      Investment Company Act; Margin Regulations .

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(a)      Status as Business Development Company . The Borrower is an “investment company” that has elected to be regulated as a “business development company” within the meaning of the Investment Company Act and qualifies as a RIC.
(b)      Compliance with Investment Company Act . The business and other activities of the Borrower and its Subsidiaries, including the making of the Loans hereunder, the application of the proceeds and repayment thereof by the Borrower and the consummation of the Transactions contemplated by the Loan Documents do not result in a violation or breach in any material respect of the provisions of the Investment Company Act or any rules, regulations or orders issued by the Securities and Exchange Commission thereunder, in each case that are applicable to the Borrower and its Subsidiaries.
(c)      Investment Policies . The Borrower is in compliance in all respects with the Investment Policies (after giving effect to any Permitted Policy Amendments), except to the extent that the failure to so comply could not reasonably be expected to have a Material Adverse Effect.
(d)      Use of Credit . Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of the Loans or Letters of Credit will be used to buy or carry any Margin Stock.
SECTION 2.11.      Material Agreements and Liens .
(a)      Material Agreements . Part A of Schedule 3.11 is a complete and correct list, as of the date hereof, of each credit agreement, loan agreement, indenture, purchase agreement, guarantee, letter of credit or other arrangement providing for or otherwise relating to any Indebtedness or any extension of credit (or commitment for any extension of credit) to, or guarantee by, the Borrower or any of its Subsidiaries outstanding on the date hereof, and the aggregate principal or face amount outstanding or that is, or may become, outstanding under each such arrangement is correctly described in Part A of Schedule 3.11 .
(b)      Liens . Part B of Schedule 3.11 is a complete and correct list, as of the date hereof, of each Lien securing Indebtedness of any Person outstanding on the date hereof covering any property of the Borrower or any of the Subsidiary Guarantors, and the aggregate Indebtedness secured (or that may be secured) by each such Lien and the property covered by each such Lien is correctly described in Part B of Schedule 3.11 .
SECTION 2.12.      Subsidiaries and Investments .
(a)      Subsidiaries . Set forth on Schedule 3.12(a) is a list of the Borrower’s Subsidiaries as of the date hereof.
(b)      Investments . Set forth on Schedule 3.12(b) is a complete and correct list, as of the date hereof, of all Investments (other than Investments of the types referred to in clauses (b) , (c) and (d) of Section 6.04 ) held by the Borrower or any of the Subsidiary Guarantors in any Person on the date hereof and, for each such Investment, (x) the identity of the Person or Persons holding

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such Investment and (y) the nature of such Investment. Except as disclosed in Schedule 3.11 , each of the Borrower and any of the Subsidiary Guarantors owns, free and clear of all Liens (other than Liens created pursuant to this Agreement or the Security Documents and Permitted Liens), all such Investments.
SECTION 2.13.      Properties .
(a)      Title Generally . Each of the Borrower and the Subsidiary Guarantors has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.
(b)      Intellectual Property . Each of the Borrower and its Subsidiaries (other than any Financing Subsidiary) owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries (other than any Financing Subsidiary) does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 2.14.      Affiliate Agreements . As of the date hereof, the Borrower has heretofore delivered to the Administrative Agent (to the extent not otherwise publicly filed with the Securities and Exchange Commission) true and complete copies of each of the Affiliate Agreements (including and schedules and exhibits thereto, and any amendments, supplements or waivers executed and delivered thereunder). As of the date of hereof, each of the Affiliate Agreements is in full force and effect.
SECTION 2.15.      OFAC .
(a)      Each of the Borrower and its Subsidiaries or, to the knowledge of the Borrower, any director, officer, employee, agent, or affiliate of the Borrower or any of its Subsidiaries is in compliance with the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto.
(b)      Neither the Borrower nor any of its Subsidiaries, and to the knowledge of the Borrower, any director or officer or any employee, agent, or affiliate of the Borrower or any of its Subsidiaries (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 that violates Section 2 of such executive order, (iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order, (iv) is located in any country or territory to the extent that such country or territory itself, or such country’s or territory’s government, is the subject of any Sanction or (v) is the subject of any Sanctions.

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(c)      The Borrower  will not, directly or indirectly, use the proceeds of the Loans or Letters of Credit, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or, to the Borrower's knowledge, any other Person, (i) 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 (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans or Letters of Credit, whether as underwriter, advisor, investor, or otherwise).
SECTION 2.16.      Patriot Act . Each of the Borrower and its Subsidiaries is in compliance with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001).
SECTION 2.17.      Foreign Corrupt Practices Act . Each of the Borrower and its Subsidiaries is in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, as amended and the Borrower and each Subsidiary has policies, procedures and internal controls reasonably designed to ensure compliance with the United States Foreign Corrupt Practices Act of 1977, as amended. No part of the proceeds of the Loans or Letters of Credit will be used, directly or indirectly, by the Borrower or any of its Subsidiaries, or to the actual knowledge of any Obligor, by any other Person, 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 the United States Foreign Corrupt Practices Act of 1977, as amended.
SECTION 2.18.      Collateral Documents . The provisions of the Security Documents are effective to create in favor of the Collateral Agent for the benefit of the Lenders a legal, valid and enforceable first priority Lien (subject to Liens permitted by Section 6.02 ) on all right, title and interest of the Borrower and each Subsidiary Guarantor in the Collateral described therein to secure the Secured Obligations except for any failure to make any filing that would not constitute an Event of Default under Section 8.01(p) . Except for filings completed prior to the Effective Date and as contemplated hereby and by the Security Documents, no filing or other action will be necessary to perfect such Liens except for any failure to make any filing that would not constitute an Event of Default under Section 8.01(p) .
SECTION 2.19.      Anti-Money Laundering . None of the Borrower or its Subsidiaries has violated or is violating any Anti-Money Laundering Laws. The Borrower will not, directly or indirectly, use the proceeds of the Loans or Letters of Credit or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or, to the Borrower’s knowledge, any other Person, in any manner that would result in a violation of any Anti-Money Laundering Laws by any person, including any person participating in the Loans of Letters of Credit.
SECTION 2.20.      EEA Financial Institutions . No Obligor is an EEA Financial Institution.
ARTICLE III     

CONDITIONS

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SECTION 3.01.      Effective Date . The effectiveness of this Agreement and of the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until completion of each of the following conditions precedent (unless a condition shall have been waived in accordance with Section 9.02 ):
(a)      Documents . The Administrative Agent shall have received each of the following documents, each of which shall be satisfactory to the Administrative Agent (and to the extent specified below to each Lender) in form and substance:
(i)      Executed Counterparts . From each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page to this Agreement) that such party has signed a counterpart of this Agreement.
(ii)      Opinions of Counsel to the Borrower and Subsidiary Guarantors . A favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of (A) Latham & Watkins LLP, New York counsel for the Borrower and the Subsidiary Guarantors and (B) Venable LLP, Maryland counsel for the Borrower, in each case, in form and substance reasonably acceptable to the Administrative Agent (and the Borrower hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent).
(iii)      Corporate Documents . Such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Borrower, the authorization of the Transactions and any other legal matters relating to the Borrower, this Agreement or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.
(iv)      Officer’s Certificate . A certificate, dated the Effective Date and signed by the President, the Chief Executive Officer, a Vice President or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in the lettered clauses of the first sentence of Section 4.02 .
(v)      Guarantee and Security Agreement . The Guarantee and Security Agreement, duly executed and delivered by each of the parties to the Guarantee and Security Agreement.
(vi)      Control Agreement . A Control Agreement, duly executed and delivered by the Borrower, the Administrative Agent and State Street Bank and Trust Company.
(vii)      Borrowing Base Certificate . A Borrowing Base Certificate showing a calculation of the Borrowing Base as of March 21, 2014.
(b)      Liens . The Administrative Agent shall have received results of a recent lien search in each relevant jurisdiction with respect to the Borrower and the Subsidiary Guarantors, confirming that each financing statement in respect of the Liens in favor of the Collateral Agent created pursuant to the Security Documents upon filing on the date hereof will be prior to all other

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financing statements or other interests reflected therein (other than any financing statement or interest in respect of liens permitted under Section 6.02 or liens to be discharged on or prior to the Effective Date pursuant to documentation satisfactory to the Administrative Agent and revealing no liens on any of the assets of the Borrower or the Subsidiary Guarantors except for liens permitted under Section 6.02 or liens to be discharged on or prior to the Effective Date pursuant to documentation satisfactory to the Administrative Agent). All UCC financing statements and similar documents required to be filed in order to create in favor of the Collateral Agent, for the benefit of the Lenders, a first priority perfected security interest in the Collateral (to the extent that such a security interest may be perfected by a filing under the Uniform Commercial Code) shall have been properly filed in each jurisdiction required (or arrangements for such filings acceptable to the Collateral Agent shall have been made).
(c)      Consents . The Borrower shall have obtained and delivered to the Administrative Agent certified copies of all consents, approvals, authorizations, registrations, or filings required to be made or obtained by the Borrower and all Subsidiary Guarantors in connection with the Transactions and any transaction being financed with the proceeds of the Loans, and such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect and all applicable waiting periods shall have expired and no investigation or inquiry by any Governmental Authority regarding the Transactions or any transaction being financed with the proceeds of the Loans shall be ongoing.
(d)      Fees and Expenses . The Borrower shall have paid in full to the Administrative Agent all documented fees and expenses related to this Agreement owing on the Effective Date that the Borrower has agreed to pay in connection with this Agreement.
(e)      Patriot Act . The Administrative Agent and the Lenders shall have received, sufficiently in advance of the Effective Date, all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act (Title III of Pub. L. 107‑56 (signed into law October 26, 2001)).
(f)      Other Documents . The Administrative Agent shall have received such other documents as the Administrative Agent or any Lender may reasonably request in form and substance reasonably satisfactory to the Administrative Agent.
SECTION 3.02.      Each Credit Event . The obligation of each Lender to make any Loan, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is additionally subject to the satisfaction of the following conditions:
(a)      the representations and warranties of the Borrower set forth in this Agreement and in the other Loan Documents shall be true and correct in all material respects (or, in the case of any portion of any representations and warranties already subject to a materiality qualifier, true and correct in all respects) on and as of the date of such Loan or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, or, as to any such representation or warranty that refers to a specific date, as of such specific date;

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(b)      at the time of and immediately after giving effect to such Loan or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing; and
(c)      either (i) the aggregate Covered Debt Amount (after giving effect to such extension of credit) shall not exceed the Borrowing Base reflected on the Borrowing Base Certificate most recently delivered to the Administrative Agent or (ii) the Borrower shall have delivered an updated Borrowing Base Certificate demonstrating that the Covered Debt Amount (after giving effect to such extension of credit) shall not exceed the Borrowing Base after giving effect to such extension of credit as well as any concurrent acquisitions of Investments or payment of outstanding Loans or Other Covered Indebtedness.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in the preceding sentence.
ARTICLE IV     

AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired, been terminated, Cash Collateralized or backstopped and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:
SECTION 4.01.      Financial Statements and Other Information . The Borrower will furnish to the Administrative Agent and each Lender:
(a)      within 90 days after the end of each fiscal year of the Borrower, the audited consolidated balance sheet and statement of operations, changes in net assets and cash flows of the Borrower and its Subsidiaries as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Ernst & Young, LLP or other independent public accountants of recognized national standing to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied; provided that the requirements set forth in this clause (a)  may be fulfilled by providing to the Administrative Agent and the Lenders the report of the Borrower to the SEC on Form 10-K for the applicable fiscal year;
(b)      within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, the consolidated balance sheet and statement of operations, changes in net assets and cash flows of the Borrower and its Subsidiaries as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for (or, in the case of the statements of assets and liabilities, operations, changes in net assets and cash flows, as of the end of) the corresponding period or periods of the previous fiscal

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year, all certified by a Financial Officer of the Borrower as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; provided that the requirements set forth in this clause (b)  may be fulfilled by providing to the Lenders the report of the Borrower to the SEC on Form 10-Q for the applicable quarterly period;
(c)      concurrently with any delivery of financial statements under clause (a) or (b) of this Section, a certificate of a Financial Officer of the Borrower (i) certifying that such statements are consistent with the financial statements filed by the Borrower with the Securities and Exchange Commission, (ii) certifying as to whether the Borrower has knowledge that a Default has occurred during the applicable period and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance with Sections 6.01 , 6.02 , 6.04 and 6.07 and (iv) stating whether any change in GAAP as applied by (or in the application of GAAP by) the Borrower has occurred since the Effective Date and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;
(d)      as soon as available and in any event not later than 20 days after the end of each monthly accounting period (ending on the last day of each calendar month) of the Borrower and its Subsidiaries, a Borrowing Base Certificate as at the last day of such accounting period;
(e)      promptly but no later than five Business Days after the Borrower shall at any time have knowledge that there is a Borrowing Base Deficiency, a Borrowing Base Certificate as at the date the Borrower has knowledge of such Borrowing Base Deficiency indicating the amount of the Borrowing Base Deficiency as at the date the Borrower obtained knowledge of such deficiency and the amount of the Borrowing Base Deficiency as of the date not earlier than one Business Day prior to the date the Borrowing Base Certificate is delivered pursuant to this paragraph;
(f)      promptly upon receipt thereof copies of all significant reports submitted by the Borrower’s independent public accountants in connection with each annual, interim or special audit or review of any type of the financial statements or related internal control systems of the Borrower or any of its Subsidiaries delivered by such accountants to the management or board of directors of the Borrower;
(g)      promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any of the Subsidiary Guarantors with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, as the case may be;
(h)      within forty-five (45) days after the end of each fiscal quarter of the Borrower, any report that the Borrower receives from the Custodian listing the Portfolio Investments, as of the end of such fiscal quarter, held in a deposit account or securities account maintained with the Custodian; provided that the Borrower shall use its commercially reasonable efforts to cause the Custodian to provide such report;

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(i)      within forty-five (45) days after the end of the first three (3) fiscal quarters of each fiscal year of the Borrower and ninety (90) days after the end of each fiscal year of the Borrower, a schedule setting forth in reasonable detail with respect to each Portfolio Investment where there has been a realized gain or loss in the most recently completed fiscal quarter, (i) the cost basis of such Portfolio Investment, (ii) the proceeds received with respect to such Portfolio Investment representing repayments of principal during the most recently ended fiscal quarter, and (iii) any other amounts received with respect to such Portfolio Investment representing exit fees or prepayment penalties during the most recently ended fiscal quarter;
(j)      within forty-five (45) days after the end of the first three (3) fiscal quarters of each fiscal year of the Borrower and ninety (90) days after the end of each fiscal year of the Borrower, a schedule setting forth in reasonable detail with respect to each Portfolio Investment, (i) the aggregate amount of all capitalized paid-in-kind interest for such Portfolio Investment during the most recently ended fiscal quarter and (ii) the aggregate amount of all paid-in-kind interest collected during the most recently ended fiscal quarter;
(k)      within forty-five (45) days after the end of the first three (3) fiscal quarters of each fiscal year of the Borrower and ninety (90) days after the end of each fiscal year of the Borrower, a schedule setting forth in reasonable detail with respect to each Portfolio Investment, (i) the amortized cost of each Portfolio Investment as of the end of such fiscal quarter, (ii) the fair market value of each Portfolio Investment as of the end of such fiscal quarter, and (iii) the unrealized gains or losses as of the end of such fiscal quarter;
(l)      within forty-five (45) days after the end of the first three (3) fiscal quarters of each fiscal year of the Borrower and ninety (90) days after the end of each fiscal year of the Borrower, a schedule setting forth in reasonable detail with respect to each Portfolio Investment the change in unrealized gains and losses for such quarter. Such schedule will report the change in unrealized gains and losses by Portfolio Investment by showing the unrealized gain or loss for each Portfolio Investment as of the last day of the preceding fiscal quarter compared to the unrealized gain or loss for such Portfolio Investment as of the last day of the most recently ended fiscal quarter; and
(m)      promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any of its Subsidiaries, or compliance with the terms of this Agreement and the other Loan Documents, as the Administrative Agent or any Lender may reasonably request.
(n)      The Borrower and each Lender acknowledge that certain of the Lenders may be Public Lenders and, if documents or notices required to be delivered pursuant to this Section 5.01 or otherwise are being distributed through IntraLinks/IntraAgency, SyndTrak or another relevant website or other information platform (the “ Platform ”), any document or notice that the Borrower has indicated contains Non-Public Information shall not be posted by the Administrative Agent on that portion of the Platform designated for such Public Lenders. The Borrower agrees to clearly designate all information provided to the Administrative Agent by or on behalf of the Borrower or any of its Subsidiaries which is suitable to make available to Public Lenders. If the Borrower has not indicated whether a document or notice delivered pursuant to this Section 5.01

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contains Non-Public Information, the Administrative Agent shall post such document or notice solely on that portion of the Platform designated for Lenders who wish to receive material Non-Public Information with respect to the Borrower, its Subsidiaries and their Securities (as such term is defined in Section 5.13 of this Agreement).
(o)      Notwithstanding anything to the contrary herein, the requirements to deliver documents set forth in Section 5.01(a) , (b) and (g) will be fulfilled by filing by the Borrower of the applicable documents for public availability on the SEC’s Electronic Data Gathering and Retrieval system; provided , that the Borrower shall notify the Administrative Agent (by telecopier or electronic mail) of the posting of any such documents.
SECTION 4.02.      Notices of Material Events . The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:
(a)      the occurrence of any Default;
(b)      the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any of its Affiliates that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;
(c)      the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $15,000,000; and
(d)      any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 4.03.      Existence: Conduct of Business . The Borrower will, and will cause each of its Subsidiaries (other than Immaterial Subsidiaries) to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 .
SECTION 4.04.      Payment of Obligations . The Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including income tax and other material tax liabilities and material contractual obligations, that, if not paid, could reasonably be expected to result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

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SECTION 4.05.      Maintenance of Properties; Insurance . The Borrower will, and will cause each of its Subsidiaries (other than Immaterial Subsidiaries) to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.
SECTION 4.06.      Books and Records; Inspection and Audit Rights . The Borrower will, and will cause each of its Subsidiaries to, keep books of record and account in accordance with GAAP. The Borrower will, and will cause each other Obligor to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties during business hours, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested, in each case, to the extent such inspection or requests for such information are reasonable and such information can be provided or discussed without violation of law, rule, regulation or contract; provided that the Borrower or such Obligor shall be entitled to have its representatives and advisors present during any inspection of its books and records.
SECTION 4.07.      Compliance with Laws . The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations, including the Investment Company Act, and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Without limiting the generality of the foregoing, the Borrower will, and will cause its Subsidiaries to, conduct its business and other activities in compliance in all material respects with the provisions of the Investment Company Act and any applicable rules, regulations or orders issued by the Securities and Exchange Commission thereunder.
SECTION 4.08.      Certain Obligations Respecting Subsidiaries; Further Assurances .
(a)      Subsidiary Guarantors . In the event that the Borrower or any of the Subsidiary Guarantors shall form or acquire any new Subsidiary (other than a Financing Subsidiary, a Foreign Subsidiary, an Immaterial Subsidiary or a Subsidiary of a Foreign Subsidiary) the Borrower will cause such new Subsidiary to become a “Subsidiary Guarantor” (and, thereby, an “Obligor”) under the Guarantee and Security Agreement pursuant to a Guarantee Assumption Agreement and to deliver such proof of corporate or other action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered by the Borrower pursuant to Section 4.01 upon the Effective Date or as the Administrative Agent shall have requested.
(b)      Ownership of Subsidiaries . Unless otherwise agreed in writing by the Required Lenders (not to be unreasonably withheld, conditioned or delayed), the Borrower will, and will cause each of its Subsidiaries to, take such action from time to time as shall be necessary to ensure that each of its Subsidiaries is a wholly owned Subsidiary.

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(c)      Further Assurances . The Borrower will, and will cause each of the Subsidiary Guarantors to, take such action from time to time as shall reasonably be requested by the Administrative Agent to effectuate the purposes and objectives of this Agreement. Without limiting the generality of the foregoing, the Borrower will, and will cause each of the Subsidiary Guarantors to, take such action from time to time (including filing appropriate Uniform Commercial Code financing statements and executing and delivering such assignments, security agreements and other instruments) as shall be reasonably requested by the Administrative Agent: (i) to create, in favor of the Collateral Agent for the benefit of the Lenders (and any affiliate thereof that is a party to any Hedging Agreement entered into with the Borrower) and the holders of any Secured Longer-Term Indebtedness or Secured Shorter-Term Indebtedness, perfected security interests and Liens in the Collateral; provided that any such security interest or Lien shall be subject to the relevant requirements of the Security Documents; provided, further that in the case of any Collateral consisting of voting stock of any Foreign Subsidiary or controlled foreign corporation, such security interest shall be limited to 65% of the issued and outstanding voting stock of such entity, (ii) to cause any bank or securities intermediary (within the meaning of the Uniform Commercial Code) to enter into such arrangements with the Collateral Agent as shall be appropriate in order that the Collateral Agent has “control” (within the meaning of the Uniform Commercial Code) over each bank account or securities account of the Obligors (other than, for the avoidance of doubt, any thereof maintained by any Obligor in its capacity as a servicer for a Financing Subsidiary and other than (i) any payroll account, (ii) withholding tax and fiduciary accounts, and (iii) any account in which the aggregate value of deposits therein, together with all other such accounts under this clause (iii) , does not at any time exceed $100,000), and in that connection, the Borrower agrees to cause all cash and other proceeds of Investments received by any Obligor to be promptly deposited into such an account (or otherwise delivered to, or registered in the name of, the Collateral Agent), (iii) in the case of any Portfolio Investment consisting of a Bank Loan (as defined in Section 5.13 ) that does not constitute all of the credit extended to the underlying borrower under the relevant underlying loan documents and a Financing Subsidiary holds any interest in the loans or other extensions of credit under such loan documents, (x) to cause such Financing Subsidiary to be party to such underlying loan documents as a “lender” having a direct interest (or a participation not acquired from an Obligor) in such underlying loan documents and the extensions of credit thereunder and (y) to ensure that all amounts owing to such Obligor or Financing Subsidiary by the underlying borrower or other obligated party are remitted by such borrower or obligated party directly to separate accounts of such Obligor and such Financing Subsidiary, (iv) in the event that any Obligor is acting as an agent or administrative agent under any loan documents with respect to any Bank Loan that does not constitute all of the credit extended to the underlying borrower under the relevant underlying loan documents, to ensure that all funds held by such Obligor in such capacity as agent or administrative agent is segregated from all other funds of such Obligor and clearly identified as being held in an agency capacity and (v) to cause the closing sets and all executed amendments, consents, forbearances and other modifications and assignment agreements relating to any Portfolio Investment and any other documents relating to any Portfolio Investment requested by the Collateral Agent, in each case, to be held by the Collateral Agent, the Custodian or another custodian pursuant to the terms of a custodian agreement reasonably satisfactory to the Collateral Agent.
SECTION 4.09.      Use of Proceeds . The Borrower will use the proceeds of the Loans or Letters of Credit only for general corporate purposes of the Borrower in the ordinary course of

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business, including in connection with the acquisition and funding (either directly or through one or more wholly-owned Subsidiaries) of leveraged loans, mezzanine loans, high-yield securities, convertible securities, preferred stock, common stock and other Investments; provided that neither the Administrative Agent nor any Lender shall have any responsibility as to the use of any of such proceeds. No part of the proceeds of any Loan will be used in violation of applicable law (including without limitation any of the laws referenced in Section 3.15 , 3.16 , 3.17 or 3.19 ) or, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any Margin Stock. Margin Stock shall be purchased by the Obligors only with the proceeds of Indebtedness not directly or indirectly secured by Margin Stock, or with the proceeds of equity capital of the Borrower.
SECTION 4.10.      Status of RIC and BDC . The Borrower shall at all times maintain its status as a RIC under the Code, and as a “business development company” under the Investment Company Act.
SECTION 4.11.      Investment Policies . The Borrower shall at all times be in compliance in all material respects with its Investment Policies (after giving effect to any Permitted Policy Amendments), except to the extent that the failure to so comply could not reasonably be expected to have a Material Adverse Effect. The Borrower shall promptly advise the Lenders and the Administrative Agent of any material change in its Investment Policies.
SECTION 4.12.      Portfolio Valuation and Diversification Etc .
(a)      Industry Classification Groups . For purposes of this Agreement, the Borrower shall assign each Portfolio Investment to an Industry Classification Group. To the extent that any Portfolio Investment is not correlated with the risks of other Portfolio Investments in an Industry Classification Group, such Portfolio Investment may be assigned by the Borrower to an Industry Classification Group that is more closely correlated to such Portfolio Investment. In the absence of any correlation, the Borrower shall be permitted, upon prior notice to the Administrative Agent and each Lender, to create up to three additional industry classification groups for purposes of this Agreement.
(b)      Portfolio Valuation Etc .
(i)      Settlement Date Basis . For purposes of this Agreement, (A) all initial valuations of investments shall be on a trade date basis and (B) all determinations of whether an investment is to be included as a Portfolio Investment shall be determined on a settlement-date basis (meaning that any investment that has been purchased will not be treated as a Portfolio Investment until such purchase has settled, and any Portfolio Investment which has been sold will not be excluded as a Portfolio Investment until such sale has settled); provided that no such investment shall be included as a Portfolio Investment to the extent it has not been paid for in full.
(ii)      Determination of Values . The Borrower will conduct reviews of the value to be assigned to each of its Portfolio Investments as follows:

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(A)      Quoted Investments - External Review . With respect to Quoted Investments, the Borrower shall, not less frequently than once each calendar week, determine the market value of such Quoted Investments which shall, in each case, be determined in accordance with one of the following methodologies (as selected by the Borrower):
(w)    in the case of public and 144A securities, the average of the bid prices as determined by two Approved Dealers selected by the Borrower,
(x)    in the case of bank loans, the bid price as determined by one Approved Dealer selected by the Borrower,
(y)    in the case of any Portfolio Investment traded on an exchange, the closing price for such Portfolio Investment most recently posted on such exchange, and
(z)    in the case of any other Portfolio Investment, the fair market value thereof as determined by an Approved Pricing Service.
The Borrower may elect to treat and value a Portfolio Investment as an Unquoted Investment provided such treatment does not result in the Value of such Portfolio Investment determined pursuant to Section 5.12(b)(ii)(B) exceeding the Value of such Portfolio Investment determined pursuant to Section 5.12(b)(ii)(A) by more than five percent.
(B)      Unquoted Investments- External Review . With respect to Unquoted Investments, the Borrower shall use a standardized template designed to approximate fair market values based on observable market inputs, updated credit statistics and unobservable inputs to determine a preliminary value.  Preliminary valuation conclusions will be documented and reviewed by a valuation committee of the Borrower comprised of senior management members.  The Board of Directors of the Borrower will engage one or more third party valuation firms to provide positive assurance on portions of the Unquoted Investment portfolio each quarter (such that each Unquoted Investment is reviewed at least once annually).   The Audit Committee of the Board of Directors will review the third party assessments  and provide the Board of Directors with any valuation change recommendations.  The Board of Directors will discuss any valuation change recommendation with the External Manager and third party valuation firms to determine the final fair market valuation (collectively, the procedures described in this clause (B) , the “ Borrower Unquoted Investment Valuation Policy ”). Upon any modification of the Borrower Unquoted Investment Valuation Policy pursuant to a Permitted Valuation Policy Amendment as set forth herein, this clause (B) shall be deemed to be modified to reflect such Permitted Valuation Policy Amendment without any further action by the parties hereto, and such modified Borrower Unquoted Investment Valuation Policy shall be deemed to be the Borrower Unquoted Investment Valuation Policy thereafter.

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(C)      Internal Review . The Borrower shall conduct internal reviews of all Portfolio Investments at least once each calendar week which shall take into account any events of which the Borrower has knowledge that materially and adversely affect the value of the Portfolio Investments. If the value of any Portfolio Investment as most recently determined by the Borrower pursuant to this Section 5.12(b)(ii)(C) is lower than the value of such Portfolio Investment as most recently determined pursuant to Section 5.12(b)(ii)(A)  or (B) , such lower value shall be deemed to be the “Value” of such Portfolio Investment for purposes hereof.
(D)      Failure to Determine Values . If the Borrower shall fail to determine the value of any Portfolio Investment as at any date pursuant to the requirements of the foregoing sub-clauses (A) , (B)  or (C) , then the “Value” of such Portfolio Investment as at such date shall be deemed to be zero.
(E)      Testing of Values .
(x)     For the second calendar month immediately following the end of each fiscal quarter (the last such fiscal quarter is referred to herein as, the “ Testing Quarter ”), the Administrative Agent shall cause an Approved Third-Party Appraiser selected by the Administrative Agent to value such number of Unquoted Investments (selected by the Administrative Agent) that collectively have an aggregate Value approximately equal to the Calculation Amount. If there is a difference between the Borrower’s valuation and the Approved Third-Party Appraiser’s valuation of any Unquoted Investment, the Value of such Unquoted Investment for Borrowing Base purposes shall be established as set forth in sub-clause (F) below.
(y)    For the avoidance of doubt, the valuation of any Approved Third-Party Appraiser selected by the Administrative Agent would not be as of, or delivered at, the end of any fiscal quarter. Any such valuation would be as of the end of the second month immediately following any fiscal quarter (the “ Administrative Agent Appraisal Testing Month ”) and would be reflected in the Borrowing Base Certificate for such month ( provided that such Approved Third-Party Appraiser delivers such valuation at least seven (7) Business Days before the 20 th day after the end of the applicable monthly accounting period and, if such valuation is delivered after such time, it shall be included in the Borrowing Base Certificate for the following monthly period and applied to the then applicable balance of the related Portfolio Investment). For illustrative purposes, if the given fiscal quarter is the fourth quarter ending on December 31, 2014, then (A) the Administrative Agent would initiate the testing of Values (using the December 31, 2014 Calculation Values for purposes of determining the scope of the testing under clauses (E)(x) during the month of February with the anticipation of receiving the valuations from the applicable Approved Third-Party Appraiser(s) on or after February 28, 2014 and (B)(xx) if such valuations were received before the

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7 th Business Day before March 20, 2014, such valuations would be included in the March 20, 2014 Borrowing Base Certificate covering the month of February, or (yy) if such valuations were received after such time, they would be included in the April 20, 2014 Borrowing Base Certificate for the month of March.
For the avoidance of doubt, all calculations of value pursuant to this Section 5.12(b)(ii)(E) shall be determined without application of the Advance Rates.
For the avoidance of doubt, any values determined by the Approved Third-Party Appraiser pursuant to this Section 5.12(b)(iii) or Section 5.12(b)(iv) shall be used solely for purposes of determining the “Value” of a Portfolio Investment under this Agreement and shall not be deemed to be the fair value of such asset as required under ASC 820 and the Investment Company Act.
(F)      Valuation Dispute Resolution . Notwithstanding the foregoing, the Administrative Agent shall at any time have the right in its reasonable discretion to request any Unquoted Investment included in the Borrowing Base be independently valued by an Approved Third-Party Appraiser selected by the Administrative Agent in its reasonable discretion. There shall be no limit on the number of such appraisals requested by the Administrative Agent and the costs of any such valuation shall be at the expense of the Borrower. If the difference between the Borrower’s valuation pursuant to Section 5.12(b)(ii)(B) and the valuation of any Approved Third-Party Appraiser selected by the Administrative Agent pursuant to Section 5.12(b)(ii)(E) or (F) is (1) less than 5% of the value thereof, then the Borrower’s valuation shall be used, (2) between 5% and 20% of the value thereof, then the valuation of such Portfolio Investment shall be the average of the value determined by the Borrower and the value determined by the Approved Third-Party Appraiser retained by the Administrative Agent and (3) greater than 20% of the value thereof, then the Borrower and the Administrative Agent shall select an additional Approved Third-Party Appraiser and the valuation of such Portfolio Investment shall be the average of the three valuations (with the Administrative Agent’s Approved Third-Party Appraiser’s valuation to be used until the third valuation is obtained).
(G)      The Value of any Portfolio Investment for which the Approved Third-Party Appraiser’s value is used shall be the midpoint of the range (if any) determined by the Approved Third-Party Appraiser. The Approved Third-Party Appraiser shall apply a recognized valuation methodology that is commonly accepted by the business development company industry for valuing Portfolio Investments of the type being valued and held by the Obligors.
(H)      For the avoidance of doubt, the Value of any Portfolio Investment determined in accordance with this Section 5.12 (including in accordance with Section 5.12(b)(ii)(D) ) shall be the Value of such Portfolio Investment for purposes of this Agreement until a new Value for such Portfolio Investment is subsequently determined in good faith in accordance with this Section 5.12.

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(I)      In addition, the Values determined by the Approved Third-Party Appraiser shall be deemed to be “Information” hereunder and subject to Section 9.13 hereof.
(c)      RIC Diversification Requirements . The Borrower will, and will cause its Subsidiaries (other than Subsidiaries that are exempt from the Investment Company Act) at all times to, subject to applicable grace periods set forth in the Code, comply with the portfolio diversification requirements set forth in the Code applicable to RIC’s, to the extent applicable.
SECTION 4.13.      Calculation of Borrowing Base . For purposes of this Agreement, the “ Borrowing Base ” shall be determined, as at any date of determination, as the sum of the Advance Rates multiplied by the Value of each Portfolio Investment (excluding any Cash Collateral held by the Administrative Agent pursuant to Section 2.05(k) or the last paragraph of Section 2.09(a) ); provided that:
(a)      the Advance Rate applicable to that portion of the aggregate Value of the Portfolio Investments (other than Cash and Cash Equivalents) in a consolidated group of corporations or other entities (collectively, a “ Consolidated Group ”), in accordance with GAAP, that exceeds, (i) if the Leverage Ratio is at Leverage Level I, 6%, (ii) if Leverage Ratio is at Leverage Level II, 4%, or (iii) if the Leverage Ratio is at Leverage Level III, 3%, in each case of the aggregate principal amount of all pledged Portfolio Investments shall be 50% of the Advance Rate otherwise applicable; provided that, with respect to the Portfolio Investments in a single Consolidated Group designated by the Borrower to the Administrative Agent such applicable percentage figure shall be increased to (i) if the Leverage Ratio is at Leverage Level I, 7.5%, (ii) if the Leverage Ratio is at Leverage Level II, 5%, or (iii) if the Leverage Ratio is at Leverage Level III, 4%;
(b)      the Advance Rate applicable to that portion of the aggregate Value of the Portfolio Investments (other than Cash and Cash Equivalents) of all issuers in a Consolidated Group exceeding, (i) if the Leverage Ratio is at Leverage Level I, 12%, (ii) if the Leverage Ratio is at Leverage Level II, 8%, or (iii) if the Leverage Ratio is at Leverage Level III, 6%, in each case of the aggregate principal amount of all pledged Portfolio Investments shall be 0%;
(c)      the Advance Rate applicable to that portion of the aggregate Value of the Portfolio Investments in any single Industry Classification Group that exceeds, (i) if the Leverage Ratio is at Leverage Level I, 20%, (ii) if the Leverage Ratio is at Leverage Level II, 17.5%, or (iii) if the Leverage Ratio is at Leverage Level III, 15%, in each case of the aggregate principal amount of all pledged Portfolio Investments shall be 0%; provided that, with respect to the Portfolio Investments in a single Industry Classification Group from time to time designated by the Borrower to the Administrative Agent such applicable percentage figure shall be increased to, (i) if the Leverage Ratio is at Leverage Level I, 30%, (ii) if the Leverage Ratio is at Leverage Level II, 25%, or (iii) if the Leverage Ratio is at Leverage Level III, 20%, in each case and, accordingly, only to the extent that the Value for such single Industry Classification Group exceeds such applicable percentage of the aggregate principal amount of all pledged Portfolio Investments shall the Advance Rate applicable to such excess Value be 0%;

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(d)      no Portfolio Investment may be included in the Borrowing Base unless the Collateral Agent maintains a first priority, perfected Lien (subject to Permitted Liens) on such Portfolio Investment and such Portfolio Investment has been Delivered (as defined in the Guarantee and Security Agreement) to the Collateral Agent, and then only for so long as such Portfolio Investment continues to be Delivered as contemplated therein; provided that in the case of any Portfolio Investment in which the Collateral Agent has a first-priority perfected security interest pursuant to a valid Uniform Commercial Code filing (and for which no other method of perfection with a higher priority is possible), such Portfolio Investment may be included in the Borrowing Base so long as all remaining actions to complete “Delivery” are satisfied within 7 days of such inclusion;
(e)      the portion of the Borrowing Base attributable to Non-Core Assets shall not exceed, (i) if the Leverage Ratio is at Leverage Level I, 20%, (ii) if the Leverage Ratio is at Leverage Level II, 10%, or (iii) if the Leverage Ratio is at Leverage Level III, 5%;
(f)      the portion of the Borrowing Base attributable to Equity Interests shall not exceed, (i) if the Leverage Ratio is at Leverage Level I, 10%, (ii) if the Leverage Ratio is at Leverage Level II, 7.5%, or (iii) if the Leverage Ratio is at Leverage Level III, 5% (it being understood that in no event shall Equity Interests of Financing Subsidiaries be included in the Borrowing Base);
(g)      the portion of the Borrowing Base attributable to Non-Performing Portfolio Investments shall not exceed (i), if the Leverage Ratio is at Leverage Level I, 15%, (ii) if the Leverage Ratio is at Leverage Level II, 7.5%, or (iii) if the Leverage Ratio is at Leverage Level III, 5%, and the portion of the Borrowing Base attributable to Portfolio Investments that were Non-Performing Portfolio Investments at the time such Portfolio Investments were acquired shall not exceed (i), if the Leverage Ratio is at Leverage Level I, 5%, (ii) if the Leverage Ratio is at Leverage Level II, 2.5%, or (iii) if Leverage Ratio is at Leverage Level III, 0%;
(h)      the portion of the Borrowing Base attributable to Portfolio Investments invested outside the United States, Canada, the United Kingdom, Australia, Germany, France, Belgium, the Netherlands, Luxembourg, Switzerland, Denmark, Finland, Norway and Sweden shall not exceed 5% without the consent of the Administrative Agent;
(i)      the portion of the Borrowing Base attributable to Senior Assets shall not be less than, (i) if the Leverage Ratio is at Leverage Level II, 45%, or (ii) if the Leverage Ratio is at Leverage Level III, 50% (for the avoidance of doubt, this clause shall not be applicable if the Leverage Ratio is at Leverage Level I); and
(j)      the portion of the Borrowing Base attributable to Non-Core Assets, Performing Cash Pay High Yield Securities and Performing Cash Pay Mezzanine Investments shall not exceed, (i) if the Leverage Ratio is at Leverage Level I or Leverage Level II, 30%, or (ii) if the Leverage Ratio is at Leverage Level III, 10%.
For the purposes of calculating all limits under clauses (a) through (j) above, the aggregate principal amount of all pledged Portfolio Investments and the Borrowing Base shall be calculated before giving effect to any haircuts under clauses (a) through (j) in this Section 5.13 .

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As used herein, the following terms have the following meanings:
“ Advance Rate ” means, as to any Portfolio Investment and subject to adjustment as provided in Section 5.13(a) , (b)  and (c) , the following percentages with respect to such Portfolio Investment; provided that the Advance Rate applicable to any Portfolio Investment (other than Cash and Cash Equivalents) shall be (a) 90% of the Advance Rate otherwise applicable if the Value of such Portfolio Investment is marked below 80% of par value and (b) 80% of the Advance Rate otherwise applicable if the Value of such Portfolio Investment is marked below 60% of par value:
Leverage Ratio
Leverage Level I
Leverage Level II
Leverage Level III
Portfolio Investment
Quoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Cash, Cash Equivalents and Short-Term U.S. Government Securities
100%
N/A
100%
N/A
100%
N/A
Long-Term U.S. Government Securities
95%
N/A
95%
N/A
95%
N/A
Performing First Lien Bank Loans
85%
75%
85%
75%
85%
75%
Performing First Lien Unitranche Loans
80%
70%
77.5%
67.5%
75%
65%
Performing Second Out Loans
80%
70%
75%
65%
70%
60%
Performing Last Out Loans
77.5%
67.5%
72.5%
62.5%
67.5%
57.5%
Performing Second Lien Bank Loans
75%
65%
70%
60%
65%
55%
Performing Cash Pay High Yield Securities
70%
60%
65%
55%
60%
50%
Performing Cash Pay Mezzanine Investments
65%
55%
60%
50%
55%
45%
Performing Non-Cash Pay High Yield Securities
60%
50%
55%
45%
50%
40%
Performing Non-Cash Pay Mezzanine Investments
55%
45%
50%
40%
45%
35%
Non-Performing First Lien Bank Loans
45%
45%
40%
40%
35%
35%
Non-Performing First Lien Unitranche Loans
40%
40%
35%
35%
30%
30%
Non-Performing Second Out Loans
40%
40%
35%
35%
30%
30%

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Non-Performing Last Out Loans
40%
35%
35%
30%
30%
25%
Non-Performing Second Lien Bank Loans
40%
30%
35%
25%
30%
20%
Non-Performing Cash Pay High Yield Securities
30%
30%
25%
25%
20%
20%
Non-Performing Mezzanine Investments
30%
25%
25%
20%
20%
15%
Performing Common Equity (and zero cost or penny warrants with performing debt)
30%
20%
25%
20%
20%
15%
Non-Performing Common Equity
0%
0%
0%
0%
0%
0%
Structured Finance Obligations and Finance Leases
0%
0%
0%
0%
0%
0%

“ Bank Loans ” means debt obligations (including term loans, revolving loans, debtor-in-possession financings, the funded and unfunded portion of revolving credit lines and letter of credit facilities and other similar loans and investments including interim loans and senior subordinated loans) which are generally under a loan or credit facility (whether or not syndicated).
“ Capital Stock ” of any Person means any and all shares of corporate stock (however designated) of and any and all other Equity Interests and participations representing ownership interests (including membership interests and limited liability company interests) in, such Person.
“ Cash ” has the meaning assigned to such term in Section 1.01 of the Credit Agreement.
“ Cash Equivalents ” has the meaning assigned to such term in Section 1.01 of the Credit Agreement.
“ Cash Pay High Yield Securities ” means High Yield Securities as to which, at the time of determination, not less than 2/3rds of the interest (including accretions and “pay-in-kind” interest) for the current monthly, quarterly, semiannual or annual period (as applicable) is payable in cash.
“ Cut-off Date ” means (a) for Investments that are Portfolio Investments as of the Fourth Amendment Effective Date, the Fourth Amendment Effective Date, and (b) for Investments that become Portfolio Investments after the Fourth Amendment Effective Date, the first date on which such Investment becomes a Portfolio Investment; provided that, it shall also be a Cut-Off Date with respect to any Portfolio Investment on each of (y) the date of any waiver, modification

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or amendment that extends the stated maturity date of such Portfolio Investment and (z) the date of any material restructuring with respect to such Portfolio Investment that results in a change in pricing thereof or the release of all or substantially all of the underlying collateral with respect to such Portfolio Investment.
“ Finance Lease ” means any transaction representing the obligation of a lessee to pay rent or other amounts under a lease which is required to be classified and accounted for as a capital lease on the balance sheet of such lessee under GAAP.
“ First Lien Bank Loan ” means a Bank Loan that is entitled to the benefit of a first lien and first priority perfected security interest (subject to Liens for “ABL” revolvers and customary encumbrances) on a substantial portion of the assets of the respective borrower and guarantors obligated in respect thereof and is not subject to superpriority rights of other lenders following an event of default (other than with respect to a Senior Working Capital Facility, trade claims, capitalized leases or similar obligations).
“ First Lien Unitranche Loan ” means a Bank Loan that is a First Lien Bank Loan that (a) has a total net leverage ratio greater than 5.25 to 1.00 as of its Cut-off Date and (b) whose Obligor does not also have a Second Lien Bank Loan outstanding.
“ High Yield Securities ” means debt Securities and Preferred Stock, in each case (a) issued by public or private issuers, (b) issued pursuant to an effective registration statement or pursuant to Rule 144A under the Securities Act (or any successor provision thereunder) or other exemption to the Securities Act and (c) that are not Cash Equivalents, Mezzanine Investments or Bank Loans.
“ Last Out Loan ” means a Bank Loan that is a First Lien Bank Loan for which, as of its Cut-off Date (a) the “first out” portion has a net leverage greater than 3.25 to 1.00 but less than or equal to 5.00 to 1.00 and (b) net total leverage is greater than 5.25 to 1.00 but less than or equal to 7.50 to 1.00. An Obligor’s investment in the last out portion shall be treated as a Last Out Loan for purposes of determining the applicable Advance Rate for such Portfolio Investment under this Agreement.
“ Leverage Level I ” means, at any date of determination, the Borrower maintaining a Leverage Ratio that is less than or equal to 0.90 to 1.00.
“ Leverage Level II ” means, at any date of determination, the Borrower maintaining a Leverage Ratio that is greater than 0.90 to 1.00 but less than 1.30 to 1.00.
“ Leverage Level III ” means, at any date of determination, the Borrower maintaining a Leverage Ratio that is greater than or equal to 1.30 to 1.00.
“ Leverage Ratio ” means (a) one (1) divided by (b) the Asset Coverage Ratio minus one (1).

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“ Long-Term U.S. Government Securities ” means U.S. Government Securities maturing more than one month from the applicable date of determination.
“ Mezzanine Investments ” means debt Securities (including convertible debt Securities (other than the “in-the-money” equity component thereof)) and Preferred Stock in each case (a) issued by public or private issuers, (b) issued without registration under the Securities Act, (c) not issued pursuant to Rule 144A under the Securities Act (or any successor provision thereunder), (d) that are not Cash Equivalents and (e) contractually subordinated in right of payment to other debt of the same issuer.
“ Non-Core Assets ” means, collectively, Performing Non-Cash Pay High Yield Securities, Performing Non-Cash Pay Mezzanine Investments, Non-Performing First Lien Bank Loans, Non-Performing First Lien Unitranche Loans, Non-Performing Second Out Loans, Non-Performing Last Out Loans, Non-Performing Second Lien Bank Loans, Non-Performing High Yield Securities, Non-Performing Mezzanine Investments and Equity Interests.
“ Non-Performing Cash Pay High Yield Securities ” means Non-Performing High Yield Securities that are Cash Pay High Yield Securities.
“ Non-Performing Common Equity ” means Capital Stock (other than Preferred Stock) and warrants of an issuer having any debt outstanding that is non-Performing.
“ Non-Performing First Lien Bank Loans ” means First Lien Bank Loans other than Performing First Lien Bank Loans.
“ Non-Performing First Lien Unitranche Loans ” means First Lien Unitranche Loans other than Performing First Lien Unitranche Loans.
“ Non-Performing High Yield Securities ” means High Yield Securities other than Performing High Yield Securities.
“ Non-Performing Last Out Loans ” means Last Out Loans other than Performing Last Out Loans.
“ Non-Performing Mezzanine Investments ” means Mezzanine Investments other than Performing Mezzanine Investments.
“ Non-Performing Portfolio Investment ” means Portfolio Investments for which the issuer is in default of any payment obligations of principal or interest in respect thereof after the expiration of any applicable grace period.
“ Non-Performing Second Lien Bank Loans ” means Second Lien Bank Loans other than Performing Second Lien Bank Loans.
“ Non-Performing Second Out Loans ” means Second Out Loans other than Performing Second Out Loans.

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“ Performing ” means (a) with respect to any Portfolio Investment that is debt, the issuer of such Portfolio Investment is not in default of any payment obligations in respect thereof after the expiration of any applicable grace period and (b) with respect to any Portfolio Investment that is Preferred Stock, the issuer of such Portfolio Investment has not failed to meet any scheduled redemption obligations or to pay its latest declared cash dividend, after the expiration of any applicable grace period.
“ Performing Cash Pay High Yield Securities ” means Cash Pay High Yield Securities which are Performing.
“ Performing Cash Pay Mezzanine Investments ” means Mezzanine Investments (a) as to which, at the time of determination, not less than 2/3rds of the interest (including accretions and “pay-in-kind” interest) for the current monthly, quarterly, semi-annual or annual period (as applicable) is payable in cash and (b) which are Performing.
“ Performing Common Equity ” means Capital Stock (other than Preferred Stock) and warrants of an issuer all of whose outstanding debt is Performing.
“ Performing First Lien Bank Loans ” means First Lien Bank Loans which are Performing.
“ Performing First Lien Unitranche Loans ” means First Lien Unitranche Loans which are Performing.
“ Performing Last Out Loans ” means Last Out Loans which are Performing.
“ Performing Non-Cash Pay High Yield Securities ” means Performing High Yield Securities other than Performing Cash Pay High Yield Securities.
“ Performing Non-Cash Pay Mezzanine Investments ” means Performing Mezzanine Investments other than Performing Cash Pay Mezzanine Investments.
“ Performing Second Lien Bank Loans ” means Second Lien Bank Loans which are Performing.
“ Preferred Stock ,” as applied to the Capital Stock of any Person, means Capital Stock of such Person of any class or classes (however designated) that ranks prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to any shares (or other interests) of other Capital Stock of such Person, and shall include, without limitation, cumulative preferred, non-cumulative preferred, participating preferred and convertible preferred Capital Stock.
“ Second Lien Bank Loan ” means a Bank Loan that is entitled to the benefit of a second lien and second priority perfected security interest (subject to customary encumbrances) on specified assets of the respective borrower and guarantors obligated in respect thereof.

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“ Second Out Loan ” means a Bank Loan that is a First Lien Bank Loan, a portion of which is, in effect, subject to superpriority rights of other lenders following an event of default (such portion, a “second out” portion), for which, as of its Cut-Off Date (a) the “first out” portion does not exceed a net leverage of 3.25 to 1.00 and (b) net total leverage does not exceed 5.25 to 1.00. An Obligor’s investment in the second out portion shall be treated as a Second Out Loan for purposes of determining the applicable Advance Rate for such Portfolio Investment under this agreement.
“ Securities ” means common and preferred stock, units and participations, member interests in limited liability companies, partnership interests in partnerships, notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, including debt instruments of public and private issuers and tax-exempt securities (including warrants, rights, put and call options and other options relating thereto, representing rights, or any combination thereof) and other property or interests commonly regarded as securities or any form of interest or participation therein, but not including Bank Loans.
“ Securities Act ” means the United States Securities Act of 1933, as amended.
“ Senior Assets ” means, collectively, Performing First Lien Bank Loans, Performing First Lien Unitranche Loans, Performing Second Out Loans, Cash, Cash Equivalents, Short-Term U.S. Government Securities and Long-Term U.S. Government Securities.
“ Senior Working Capital Facility ” means, with respect to a First Lien Bank Loan, a working capital facility incurred by the obligor of such First Lien Bank Loan; provided that as of the related Cut-Off Date (a) the sum of the outstanding principal balance and unfunded commitments of such working capital facility do not exceed 20% of the sum of (x) the outstanding principal balance and unfunded commitments of such working capital facility, plus (y) the outstanding principal balance of the such First Lien Bank Loan, plus (z) the outstanding principal balance of any other debt for borrowed money incurred by such obligor that is pari passu with such First Lien Bank Loan, and (b) the ratio of (x) the sum of the committed amount of such working capital facility to (y) “EBITDA” of the related Obligor shall not exceed 1.00 to 1.00.
“ Short-Term U.S. Government Securities ” means U.S. Government Securities maturing within one month of the applicable date of determination.
“ Structured Finance Obligation ” means any obligation issued by a special purpose vehicle, secured directly by, referenced to, or representing ownership of, a pool of receivables or other financial assets of any obligor, and which entitle the holders thereof to receive payments that depend on the cash flow from such receivables or other financial assets, including collateralized debt obligations and mortgaged-backed securities. For the avoidance of doubt, if an obligation satisfies the definition of “Structured Finance Obligation”, such obligation shall not (a) qualify as any other category of Portfolio Investment and (b) be included in the Borrowing Base.
“ U.S. Government Securities ” has the meaning assigned to such term in Section 1.01 .
“ Value ” means, with respect to any Portfolio Investment, the lower of:

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(i) the most recent internal market value as determined pursuant to Section 5.12(b)(ii)(C)  and
(ii) the most recent external market value as determined pursuant to Section 5.12(b)(ii)(A)  and (B) .
ARTICLE V     

NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired, been terminated, Cash Collateralized or backstopped and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:
SECTION 5.01.      Indebtedness . Subject to the last sentence of this Section 6.01 , the Borrower will not, nor will it permit any of the Subsidiary Guarantors to, create, incur, assume or permit to exist any Indebtedness, except:
(a)      Indebtedness created hereunder;
(b)      Secured Longer-Term Indebtedness and Unsecured Longer-Term Indebtedness so long as (i) no Default exists at the time of the incurrence thereof, (ii) the aggregate amount of such Secured Longer-Term Indebtedness and Unsecured Longer-Term Indebtedness, taken together with other then-outstanding Indebtedness, does not exceed the amount required to comply with the provisions of Section 6.07(b) , and (iii) prior to and immediately after giving effect to the incurrence of any Secured Longer-Term Indebtedness, the Covered Debt Amount does not or would not exceed the Borrowing Base then in effect;
(c)      Other Permitted Indebtedness;
(d)      Guarantees of Indebtedness otherwise permitted hereunder or any other Loan Document;
(e)      Indebtedness of any Obligor owing to any other Obligor or, if such Indebtedness is subject to subordination terms and conditions that are satisfactory to the Administrative Agent, any other Subsidiary of the Borrower;
(f)      repurchase obligations arising in the ordinary course of business with respect to U.S. Government Securities;
(g)      obligations payable to clearing agencies, brokers or dealers in connection with the purchase or sale of securities in the ordinary course of business;
(h)      Secured Shorter-Term Indebtedness and Unsecured Shorter-Term Indebtedness so long as (i) no Default exists at the time of the incurrence thereof, (ii) the aggregate amount (determined at the time of the incurrence of such Indebtedness) of such Indebtedness does

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not exceed the greater of (A) $50,000,000 and (B) 5% of Shareholders’ Equity, (iii) the aggregate amount of such Indebtedness, taken together with other then-outstanding Indebtedness, does not exceed the amount required to comply with the provisions of Sections 6.07(b) , and (iv) prior to and immediately after giving effect to the incurrence of any such Indebtedness, the Covered Debt Amount does not or would not exceed the Borrowing Base then in effect;
(i)      obligations (including Guarantees) in respect of Standard Securitization Undertakings;
(j)      Permitted SBIC Guarantees; and
(k)      other Indebtedness not to exceed $5,000,000 at any time.
SECTION 5.02.      Liens . The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof except:
(a)      any Lien on any property or asset of the Borrower existing on the date hereof and set forth in Part B of Schedule 3.11 ; provided that (i) no such Lien shall extend to any other property or asset of the Borrower or any of the Subsidiary Guarantors, and (ii) any such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;
(b)      Liens created pursuant to this Agreement (including Section 2.19 ) or any of the Security Documents (including Liens in favor of the Designated Indebtedness Holders (as defined in the Guarantee and Security Agreement));
(c)      Liens on an Obligor’s direct ownership interests in any Financing Subsidiary (other than TCG BDC SPV LLC) in connection with Standard Securitization Undertakings;
(d)      Liens on any Equity Interest included in the Investments of the Obligor in favor of creditors of the issuer of such Equity Interest; provided, that unless such Equity Interest is not intended to be included in the Collateral, the documentation creating or governing such Lien does not prohibit the inclusion of such Equity Interest in the Collateral (such Equity Interests, the “ Special Equity Interests ”)
(e)      Liens securing Indebtedness or other obligations in an aggregate principal amount not exceeding $10,000,000 at any one time outstanding (which may cover Investments, but only to the extent released from the Lien in favor of the Collateral Agent pursuant to Section 10.03 of the Guarantee and Security Agreement), so long as at the time of incurrence of such Indebtedness or other obligations, the aggregate amount of Indebtedness permitted under clauses (a) , (b) and (h) of Section 6.01 , does not exceed the lesser of (i) the Borrowing Base and (ii) the amount required to comply with the provisions of Section 6.07(b) ;
(f)      Permitted Liens;

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(g)      Liens on Equity Interests in any SBIC Subsidiary created in favor of the SBA;
(h)      Liens securing Hedging Agreements permitted under Section 6.04(c) and not otherwise permitted under clause (b) above in an aggregate amount not to exceed $5,000,000 at any time;
(i)      Liens securing repurchase obligations arising in the ordinary course of business with respect to U.S. Government Securities.
SECTION 5.03.      Fundamental Changes . The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, acquire any business or property from, or capital stock of, or be a party to any acquisition of, any Person, except for purchases or acquisitions of Investments and other assets in the normal course of the day-to-day business activities of the Borrower and its Subsidiaries and not in violation of the terms and conditions of this Agreement or any other Loan Document. The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, any part of its assets, whether now owned or hereafter acquired, but excluding (x) assets (other than Portfolio Investments) sold or disposed of in the ordinary course of business (including to make expenditures of cash in the normal course of the day-to-day business activities of the Borrower and its Subsidiaries) and (y) subject to the provisions of clauses (d) and (e) below, Portfolio Investments.
Notwithstanding the foregoing provisions of this Section:
(a)      any Subsidiary Guarantor of the Borrower may be merged or consolidated with or into the Borrower or any other Subsidiary Guarantor; provided that if any such transaction shall be between a Subsidiary Guarantor and a wholly owned Subsidiary Guarantor, the wholly owned Subsidiary Guarantor shall be the continuing or surviving corporation;
(b)      any Obligor may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any wholly owned Subsidiary Guarantor of the Borrower;
(c)      the capital stock of any Subsidiary of the Borrower may be sold, transferred or otherwise disposed of to the Borrower or any wholly owned Subsidiary Guarantor of the Borrower;
(d)      the Obligors may sell, transfer or otherwise dispose of Investments (other than to a Financing Subsidiary) so long as after giving effect to such sale, transfer or other disposition (and any concurrent acquisitions of Investments or payment of outstanding Loans or Other Covered Indebtedness) the Covered Debt Amount does not exceed the Borrowing Base;
(e)      the Obligors may sell, transfer or otherwise dispose of Investments to a Financing Subsidiary so long as (i) after giving effect to such sale, transfer or other disposition (and

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any concurrent acquisitions of Investments or payment of outstanding Loans or Other Covered Indebtedness) the Covered Debt Amount does not exceed the Borrowing Base and the Borrower delivers to the Administrative Agent a certificate of a Financial Officer to such effect and (ii) either (x) the amount by which the Borrowing Base exceeds the Covered Debt Amount immediately prior to such release is not diminished as a result of such release or (y) the Borrowing Base immediately after giving effect to such release is at least 110% of the Covered Debt Amount;
(f)      the Borrower may merge or consolidate with any other Person so long as (i) the Borrower is the continuing or surviving entity in such transaction and (ii) at the time thereof and after giving effect thereto, no Default shall have occurred or be continuing; and
(g)      the Borrower or the other Obligors may dissolve or liquidate any Immaterial Subsidiary;
(h)      the Obligors may sell, lease, transfer or otherwise dispose of equipment or other property or assets that do not consist of Portfolio Investments so long as the aggregate amount of all such sales, leases, transfer and dispositions does not exceed $5,000,000 in any fiscal year.
SECTION 5.04.      Investments . The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, acquire, make or enter into, or hold, any Investments except:
(a)      operating deposit accounts with banks;
(b)      Investments by the Borrower and the Subsidiary Guarantors in the Borrower and the Subsidiary Guarantors;
(c)      Hedging Agreements entered into in the ordinary course of any Obligor’s financial planning and not for speculative purposes;
(d)      Investments by the Borrower and its Subsidiaries to the extent such Investments are permitted under the Investment Company Act and the Borrower’s Investment Policies as in effect as of the date such Investments are acquired; provided that, if such Investment is not included in the Collateral, then (i) after giving effect to such Investment (and any concurrent acquisitions of Investments in the Collateral or payment of outstanding Loans), the Covered Debt Amount does not exceed the Borrowing Base and (ii) either (x) the amount of any excess availability under the Borrowing Base immediately prior to such Investment is not diminished as a result of such Investment or (y) the Borrowing Base immediately after giving effect to such Investment is at least 110% of the Covered Debt Amount;
(e)      Investments in Financing Subsidiaries so long as, (i) immediately after giving effect to such Investment (and any concurrent acquisitions of Investments or payment of outstanding Loans), either (x) any excess availability under the Borrowing Base immediately prior to such Investment is not diminished as a result of such Investment or (y) the Borrowing Base immediately after giving effect to such Investment is at least 110% of the Covered Debt Amount and (ii) the sum of (x) all Investments under this clause (e) that occur after the Commitment Termination Date and

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(y) all Investments under clause (f) below that occur after the Commitment Termination Date, shall not exceed $10,000,000 in the aggregate;
(f)      additional Investments up to but not exceeding $15,000,000 in the aggregate;
(g)      Investments in Cash and Cash Equivalents;
(h)      Investments described on Schedule 3.12(b) ; and
(i)      Investments in the form of Guarantees permitted pursuant to Section 6.01 .
For purposes of clause (f)  of this Section, the aggregate amount of an Investment at any time shall be deemed to be equal to (A) the aggregate amount of cash, together with the aggregate fair market value of property, loaned, advanced, contributed, transferred or otherwise invested that gives rise to such Investment minus (B) the aggregate amount of dividends, distributions or other payments received in cash in respect of such Investment (calculated at the time such Investment is made); provided that in no event shall the aggregate amount of such Investment be deemed to be less than zero; the amount of an Investment shall not in any event be reduced by reason of any write-off of such Investment nor increased by any increase in the amount of earnings retained in the Person in which such Investment is made that have not been distributed or otherwise paid out.
SECTION 5.05.      Restricted Payments . The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except that the Borrower may declare and pay:
(a)      dividends with respect to the capital stock of the Borrower payable solely in additional shares of the Borrower’s common stock;
(b)      dividends and distributions in either case in cash or other property (excluding for this purpose the Borrower’s common stock) in any taxable year of the Borrower in amounts not to exceed the amount that is determined in good faith by the Borrower to be required to (i) maintain the status of the Borrower as a RIC, and (ii) avoid income taxes or federal excise taxes for such taxable year imposed by Section 4982 of the Code;
(c)      dividends and distributions in each case in cash or other property (excluding for this purpose the Borrower’s common stock) in addition to the dividends and distributions permitted under the foregoing clauses (a)  and (b) , so long as on the date of such Restricted Payment and after giving effect thereto:
(i)      no Default shall have occurred and be continuing or would result therefrom; and
(ii)      the aggregate amount of Restricted Payments made during any taxable year of the Borrower after the date hereof under this clause (c)  shall not exceed the difference of (x) an amount equal to 10% of the taxable income of the Borrower for such taxable year determined under section 852(b)(2) of the Code, but without regard to subparagraphs (A) , (B) or (D)  thereof, minus (y) the amount, if any, by which dividends and distributions made

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during such taxable year pursuant to the foregoing clause (b) (whether in respect of such taxable year or the previous taxable year) based upon the Borrower’s estimate of taxable income exceeded the actual amounts specified in subclauses (i)  and (ii)  of such foregoing clause (b)  for such taxable year.
(d)      other Restricted Payments so long as (i) on the date of such other Restricted Payment and after giving effect thereto (x) the Covered Debt Amount does not exceed 90% of the Borrowing Base and (y) no Default shall have occurred and be continuing or would result therefrom and (ii) on the date of such other Restricted Payment the Borrower delivers to the Administrative Agent and each Lender a Borrowing Base Certificate as at such date demonstrating compliance with subclause (x)  after giving effect to such Restricted Payment. For purposes of preparing such Borrowing Base Certificate, (A) the Value of any Quoted Investment shall be the most recent quotation available for such Portfolio Investment and (B) the Value of any Unquoted Investment shall be the Value set forth in the Borrowing Base Certificate most recently delivered by the Borrower to the Administrative Agent and the Lenders pursuant to Section 5.01(d) ; provided that the Borrower shall reduce the Value of any Portfolio Investment referred to in this sub-clause (B)  to the extent necessary to take into account any events of which the Borrower has knowledge that adversely affect the value of such Portfolio Investment.
Nothing herein shall be deemed to prohibit the direct or indirect payment of Restricted Payments by any Subsidiary of the Borrower to the Borrower or to any other Subsidiary Guarantor.
SECTION 5.06.      Certain Restrictions on Subsidiaries . The Borrower will not permit any of its Subsidiaries (other than Financing Subsidiaries) to enter into or suffer to exist any indenture, agreement, instrument or other arrangement (other than the Loan Documents) that prohibits or restrains, in each case in any material respect, or imposes materially adverse conditions upon, the incurrence or payment of Indebtedness, the declaration or payment of dividends, the making of loans, advances, guarantees or Investments or the sale, assignment, transfer or other disposition of property to the Borrower by any Subsidiary; provided that the foregoing shall not apply to (i) indentures, agreements, instruments or other arrangements pertaining to other Indebtedness permitted hereby (provided that such restrictions would not adversely affect the exercise of rights or remedies of the Administrative Agent or the Lenders hereunder or under the Security Documents or restrict any Subsidiary in any manner from performing its obligations under the Loan Documents) and (ii) indentures, agreements, instruments or other arrangements pertaining to any lease, sale or other disposition of any asset permitted by this Agreement or any Lien permitted by this Agreement on such asset so long as the applicable restrictions only apply to the assets subject to such lease, sale, other disposition or Lien.
SECTION 5.07.      Certain Financial Covenants .
(a)      Minimum Shareholders’ Equity . The Borrower will not permit Shareholders’ Equity at the last day of any fiscal quarter of the Borrower to be less than $625,000,000 plus 25% of the net proceeds of the sale of Equity Interests by the Borrower and its Subsidiaries after the Fifth Amendment Effective Date (other than proceeds of sales of Equity Interests by and among the Borrower and its Subsidiaries).

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(b)      Asset Coverage Ratio . The Borrower will not permit the Asset Coverage Ratio at the last day of any fiscal quarter of the Borrower to be less than 1.50 to 1.00 at any time.
(c)      Liquidity Test . The Borrower will not permit (a) the sum of (i) the aggregate Value of the Portfolio Investments that are Cash (excluding Cash Collateral for outstanding Letters of Credit) or that can be converted to Cash in fewer than 10 Business Days without more than a 5% change in price, plus (ii) the aggregate amount of Relevant Available Funds that can be converted to Cash in fewer than 10 Business Days, to be less than (b) 10% of the Covered Debt Amount, for more than 30 consecutive Business Days during any period when the Adjusted Covered Debt Balance is greater than 85% of the Adjusted Borrowing Base.
SECTION 5.08.      Transactions with Affiliates . The Borrower will not, and will not permit any of its Subsidiaries to enter into any transactions with any of its Affiliates, even if otherwise permitted under this Agreement, except (a) transactions in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary (other than a SBIC Subsidiary) than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Borrower and its Subsidiaries not involving any other Affiliate, (c) Restricted Payments permitted by Section 6.05 , (d) the transactions provided in the Affiliate Agreements, (e) transactions described on Schedule 6.08 , (f) any Investment that results in the creation of an Affiliate or (g) transactions between or among the Obligors and any SBIC Subsidiary or any “downstream affiliate” (as such term is used under the rules promulgated under the Investment Company Act) of an Obligor at prices and on terms and conditions not less favorable to the Obligors than could be obtained at the time on an arm’s-length basis from unrelated third parties.
SECTION 5.09.      Lines of Business . The Borrower will not, nor will it permit any of its Subsidiaries (other than Immaterial Subsidiaries) to, engage to any material extent in any business other than in accordance with its Investment Policies. The Borrower will not, nor will it permit any of its Subsidiaries to amend or modify (x) the Investment Policies (other than a Permitted Policy Amendment) or (y) the Borrower Unquoted Investment Policy (other than a Permitted Valuation Policy Amendment).
SECTION 5.10.      No Further Negative Pledge . The Borrower will not, and will not permit any other Obligors to, enter into any agreement, instrument, deed or lease which prohibits or limits in any material respect the ability of any Obligor to create, incur, assume or suffer to exist any Lien upon any of its properties, assets or revenues, whether now owned or hereafter acquired, or which requires the grant of any security for an obligation if security is granted for another obligation, except the following: (a) this Agreement, the other Loan Documents and documents with respect to Indebtedness permitted under Section 6.01(b) or (h) ; (b) covenants in documents creating Liens permitted by Section 6.02 (including covenants with respect to the Designated Indebtedness Obligations or Designated Indebtedness Holders under (and, in each case, as defined in) the Security Documents) prohibiting further Liens on the assets encumbered thereby; (c) customary restrictions contained in leases not subject to a waiver; (d) any such agreement that imposes restrictions on investments or other interests in Financing Subsidiaries (but no other assets of any Obligor); and (e) any other agreement that does not restrict in any manner (directly or

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indirectly) Liens created pursuant to the Loan Documents on any Collateral securing the “Secured Obligations” under and as defined in the Guarantee and Security Agreement and does not require the direct or indirect granting of any Lien securing any Indebtedness or other obligation by virtue of the granting of Liens on or pledge of property of any Obligor to secure the Loans or any Hedging Agreement.
SECTION 5.11.      Modifications of Longer-Term Indebtedness Documents . The Borrower will not consent to any modification, supplement or waiver of:
(a)      any of the provisions of any agreement, instrument or other document evidencing or relating to any Secured Longer-Term Indebtedness or Unsecured Longer-Term Indebtedness that would result in such Indebtedness not meeting the requirements of the definition of “Secured Longer-Term Secured Indebtedness” and “Unsecured Longer-Term Indebtedness”, as applicable, set forth in Section 1.01 of this Agreement, unless (i) in the case of Secured Longer-Term Indebtedness, such Indebtedness would have been permitted to be incurred as Secured Shorter-Term Indebtedness at the time of such modification, supplement or waiver and the Borrower so designates such Indebtedness as “Secured Shorter-Term Indebtedness” (whereupon such Indebtedness shall be deemed to constitute “Secured Shorter-Term Indebtedness” for all purposes of this Agreement) or (ii) the case of Unsecured Shorter-Term Indebtedness, such Indebtedness would have been permitted to be incurred as Unsecured Shorter-Term Indebtedness at the time of such modification, supplement or waiver and the Borrower so designates such Indebtedness as “Unsecured Shorter-Term Indebtedness” (whereupon such Indebtedness shall be deemed to constitute “Unsecured Shorter-Term Indebtedness” for all purposes of this Agreement); or
(b)      any of the Affiliate Agreements, unless such modification, supplement or waiver is not materially less favorable to the Borrower than could be obtained on an arm’s-length basis from unrelated third parties, in each case, without the prior consent of the Administrative Agent (with the approval of the Required Lenders).
SECTION 5.12.      Payments of Longer-Term Indebtedness . The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, purchase, redeem, retire or otherwise acquire for value, or set apart any money for a sinking, defeasance or other analogous fund for the purchase, redemption, retirement or other acquisition of or make any voluntary payment or prepayment of the principal of or interest on, or any other amount owing in respect of, any Secured Longer-Term Indebtedness or Unsecured Longer-Term Indebtedness (other than the refinancing of Secured Longer-Term Indebtedness or Unsecured Longer-Term Indebtedness with Indebtedness permitted under Section 6.01 ), except for (a) regularly scheduled payments, prepayments or redemptions of principal and interest in respect thereof required pursuant to the instruments evidencing such Indebtedness, (it being understood that none of: (w) the conversion features under convertible notes; (x) the triggering and/or settlement thereof; or (y) any cash payment made in respect thereof, shall constitute a “regularly scheduled payment, prepayment or redemption of principal and interest” within the meaning of this clause (a) ); (b) payments and prepayments thereof required to comply with requirements of Section 2.10(c), (c) so long as no Default shall exist or be continuing, any payment that, if treated as a Restricted Payment for purposes of Section 6.05(d) , would be permitted to be made pursuant to the provisions set forth in Section 6.05(d) ; and (d) voluntary payments or

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prepayments of Secured Longer-Term Indebtedness and Unsecured Longer-Term Indebtedness, so long as both before and after giving effect to such voluntary payment or prepayment (i) the Borrower is in pro forma compliance with the financial covenants set forth in Section 6.07 , (ii) if such payment were treated as a “Restricted Payment” for purposes of determining compliance with Section 6.05(d) , such payment would be permitted to be made under Section 6.05(d) and (iii) no Default shall exist or be continuing.
SECTION 5.13.      Accounting Changes . The Borrower will not, nor will it permit any of its Subsidiaries to, make any change in (a) accounting policies or reporting practices, except as permitted under GAAP or required by law or rule or regulation of any Governmental Authority, or (b) its fiscal year.
SECTION 5.14.      SBIC Guarantee . The Borrower will not, nor will it permit any of its Subsidiaries to, cause or permit the occurrence of any event or condition that would result in any recourse to any Obligor under any Permitted SBIC Guarantee.
SECTION 5.15.      Negative Pledge on TCG BDC SPV LLC . The Borrower will not create, incur, assume or suffer to exist any Lien upon its Equity Interest in TCG BDC SPV LLC except for any Lien created under the Security Documents.
ARTICLE VI     

EVENTS OF DEFAULT
If any of the following events (“ Events of Default ”) shall occur and be continuing:
(a)      the Borrower shall (i) fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise (including, for the avoidance of doubt, any failure to pay all principal on the Loans in full on the Final Maturity Date) or (ii) fail to deposit any amount into the Letter of Credit Collateral Account as required by Section 2.09(a)  on the Commitment Termination Date;
(b)      the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a)  of this Article) payable under this Agreement or under any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five or more Business Days;
(c)      any representation or warranty made (or deemed made pursuant to Section 4.02) by or on behalf of the Borrower or any of its Subsidiaries in or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof, shall prove to have been incorrect when made or deemed made in any material respect;

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(d)      the Borrower shall fail to observe or perform any covenant, condition or agreement contained in (i)  Section 5.02 , Section 5.03 (with respect to the Borrower’s existence) or Sections 5.08(a) and (b) , Section 5.09 or in Article VI or any Obligor shall default in the performance of any of its obligations contained in Sections 3 and 7 of the Guarantee and Security Agreement or (ii)  Sections 5.01(d) and (e) and, solely with respect to this clause (ii) , such failure shall continue unremedied for a period of five or more days after notice thereof by the Administrative Agent (given at the request of any Lender) to the Borrower;
(e)      a Borrowing Base Deficiency shall occur and continue unremedied for a period of five or more Business Days after delivery of a Borrowing Base Certificate demonstrating such Borrowing Base Deficiency pursuant to Section 5.01(e) ; provided that it shall not be an Event of Default hereunder if the Borrower shall present the Administrative Agent with a reasonably feasible plan acceptable to the Required Lenders in their sole discretion to enable such Borrowing Base Deficiency to be cured within 30 Business Days (which 30-Business Day period shall include the five Business Days permitted for delivery of such plan), so long as such Borrowing Base Deficiency is cured within such 30-Business Day period;
(f)      the Borrower or any Obligor, as applicable, shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a) , (b) , (d) , or (e)  of this Article) or any other Loan Document and such failure shall continue unremedied for a period of 30 or more days after notice thereof from the Administrative Agent (given at the request of any Lender) to the Borrower;
(g)      the Borrower or any of its Subsidiaries shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable, taking into account any applicable grace period;
(h)      any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or shall continue unremedied for any applicable period of time sufficient to enable or permit the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity (for the avoidance of doubt, after giving effect to any applicable grace period); provided that this clause (h)  shall not apply to (1) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; or (2) convertible debt that becomes due as a result of a conversion or redemption event, other than as a result of an “event of default” (as defined in the documents governing such convertible Material Indebtedness);
(i)      an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue

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undismissed and unstayed for a period of 60 or more days or an order or decree approving or ordering any of the foregoing shall be entered;
(j)      the Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (i)  of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(k)      the Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;
(l)      one or more judgments for the payment of money in an aggregate amount in excess of $25,000,000 shall be rendered against the Borrower or any of its Subsidiaries or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days following the entry of such judgment during which execution shall not be vacated, discharged, bonded pending appeal, effectively stayed or liability for such judgment amount shall not have been admitted by an insurer of reputable standing, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) to enforce any such judgment;
(m)      an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;
(n)      a Change in Control shall occur;
(o)      the Borrower shall cease to be managed by the External Manager or an Affiliate thereof in the business of managing or advising clients;
(p)      the Liens created by the Security Documents shall, at any time with respect to Portfolio Investments having an aggregate Value in excess of 5% of the aggregate Value of all Portfolio Investments, not be valid and perfected (to the extent perfection by filing, registration, recordation, possession or control is required herein or therein) in favor of the Administrative Agent, free and clear of all other Liens (other than Liens permitted under Section 6.02 or under the respective Security Documents) except to the extent that any such loss of perfection results from the failure of the Collateral Agent to maintain possession of the certificates representing the securities pledged under the Loan Documents;

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(q)      except for expiration or termination in accordance with its terms, any of the Loan Documents shall for whatever reason be terminated or cease to be in full force and effect in any material respect, or the enforceability thereof shall be contested by the Borrower or any other Obligor; or
(r)      the Borrower or any of its Subsidiaries shall cause or permit the occurrence of any condition or event that would result in any recourse to any Obligor under any Permitted SBIC Guarantee;
then, and in every such event (other than an event with respect to the Borrower described in clause (i)  or (j)  of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (i)  or (j)  of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
In the event that the Loans shall be declared, or shall become, due and payable pursuant to the immediately preceding paragraph then, upon notice from the Administrative Agent or Lenders with LC Exposure representing more than 50% of the total LC Exposure demanding the deposit of Cash Collateral pursuant to this paragraph, the Borrower shall immediately deposit into the Letter of Credit Collateral Account cash in an amount equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (i)  or (j)  of this Article.
ARTICLE VII     

THE ADMINISTRATIVE AGENT
SECTION 7.01.      Appointment of the Administrative Agent . Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Collateral Agent as its agent

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hereunder and under the other Loan Documents and authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.
SECTION 7.02.      Capacity as Lender . The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such Person and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
SECTION 7.03.      Limitation of Duties; Exculpation . The Agents shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Agents shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agents are required to exercise in writing by the Required Lenders; provided, however, that the Agents shall not be required to take any action that, in their opinion or the opinion of their counsel, may expose the Agents to liability or that is contrary to any Loan Document or applicable law, including, for the avoidance of doubt, any action that may be in violation of the automatic stay or that may effect a forfeiture, modification or termination of a property interest in violation of any applicable bankruptcy/insolvency laws and the Agents shall in all cases be fully justified in failing or refusing to act under this Agreement or any other Loan Document unless they first receive further assurances of their indemnification from the Lenders that the Agents reasonably believe they may require, including prepayment of any related expenses and any other protection they require against any and all costs, expenses and liabilities they may incur in taking or continuing to take any such discretionary action at the direction of the Required Lenders, (c) except as expressly set forth herein and in the other Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or in the absence of its own fraud, gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein or therein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent, (d) in no event shall the Agents

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be required to expend or risk any of their own funds or otherwise incur any liability, financial or otherwise, in the performance of their duties under the Loan Documents or in the exercise of any of their rights or powers under this Agreement, (e) the Agents shall be entitled to take any action or refuse to take any action which the Agents regard as necessary for the Agents to comply with any applicable law, regulation or court order, and (f) the Administrative Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of the Administrative Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, any act of God or war, civil unrest, local or national disturbance or disaster, any act of terrorism, or the unavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility).
SECTION 7.04.      Reliance . The Administrative Agent 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 (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
SECTION 7.05.      Sub-Agents . The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a count of competent jurisdiction determines in a final and non-appealable judgment that the Administrative Agent acted with fraud, gross negligence or willful misconduct in the selection of such sub-agents.
SECTION 7.06.      Resignation; Successor Administrative Agent . The Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the right, with the consent of the Borrower not to be unreasonably withheld (or, if an Event of Default has occurred and is continuing, in consultation with the Borrower), to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent’s resignation shall nonetheless become effective and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and (2) the Required Lenders shall perform the duties of the Administrative Agent (and all payments and

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communications provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly) until such time as the Required Lenders appoint a successor agent as provided for above in this paragraph. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.
Any resignation by JPMCB as Administrative Agent pursuant to this Section shall also constitute its resignation as Issuing Bank and Swingline Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Bank and Swingline Lender, (b) the retiring Issuing Bank and Swingline Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor Issuing Bank shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring Issuing Bank to effectively assume the obligations of the retiring Issuing Bank with respect to such Letters of Credit.
SECTION 7.07.      Reliance by Lenders . Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. The Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter, and the Administrative Agent shall have no responsibility with respect to the accuracy of or the completeness of any information provided to Lenders.
Each Lender, by delivering its signature page to this Agreement or any Assignment and Assumption and funding any Loan shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be approved by the Administrative Agent, Required Lenders or Lenders.

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SECTION 7.08.      Modifications to Loan Documents . Except as otherwise provided in Section 9.02(b)  or (c) of this Agreement or the Security Documents with respect to this Agreement, the Administrative Agent may, with the prior consent of the Required Lenders (but not otherwise), consent to any modification, supplement or waiver under any of the Loan Documents; provided that, without the prior consent of each Lender, the Administrative Agent shall not (except as provided herein or in the Security Documents) release all or substantially all of the Collateral or otherwise terminate all or substantially all of the Liens under any Security Document providing for collateral security, agree to additional obligations being secured by all or substantially all of such collateral security, or alter the relative priorities of the obligations entitled to the benefits of the Liens created under the Security Documents with respect to all or substantially all of the Collateral, except that no such consent shall be required, and the Administrative Agent is hereby authorized, to release any Lien covering property that is the subject of either a disposition of property permitted hereunder or a disposition to which the Required Lenders have consented.
SECTION 7.09.      Bankruptcy Proceedings . In case of any bankruptcy or other insolvency proceeding involving the Borrower as described under clause (j) of Article VII (a “Bankruptcy Proceeding”), the Agents shall be entitled, but not obligated, to intervene in such Bankruptcy Proceeding to (i) file and prove a claim for the whole amount of principal, interest and unpaid fees in respect of the Loans, issued letters of credit and all other obligations that are owing and unpaid under the terms of this Agreement and other Loan Documents and to file such documents as may be necessary or advisable in order to have the claims of the Lenders and the Agents (including any claim for reasonable compensation, expenses, disbursements and advances of any of the foregoing entities and their respective agents, counsel and other advisors) allowed in such Bankruptcy Proceedings, and (ii) to collect and receive any monies or other property payable or deliverable on account of any such claims and to distribute the same to the Lenders under the terms of this Agreement. Further, any custodian, receiver, assignee, trustee, liquidator or similar official in any such Bankruptcy Proceeding is (x) authorized to make payments or distributions in a bankruptcy proceeding directly to the Administrative Agent on behalf of all of the Lenders to whom any amounts are owed under this Agreement and the other Loan Documents, unless the Administrative Agent expressly consents in writing to the making of such payments or distributions directly to such Lenders and (y) required to pay to the Agents any amount due for the reasonable compensation, expenses, disbursements and advances of the Agents and their agents and counsel, and any other amounts due the Agents under this Agreement and the other Loan Documents.
ARTICLE VIII     

MISCELLANEOUS
SECTION 8.01.      Notices; Electronic Communications .
(a)      Notices Generally . All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or email, as follows:

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(i)      if to the Borrower, to it at:
TCG BDC, Inc.
520 Madison Avenue
New York, NY 10022
Attention: David Heilbrunn and Tom Hennigan
Telecopy Number: (212) 813-4812 (with a copy via electronic mail to David Heilbrunn@carlyle.com and Tom.Hennigan@carlyle.com)

(ii)      if to the Administrative Agent or Swingline Lender, to it at:
JPMORGAN CHASE BANK, N.A.
500 Stanton Christiana Rd.
NCC5 / 1 st Floor
Newark, DE 19713
Attention: Loan & Agency Services Group, William Tanzilli
Tel: 1 302 552 6955
Fax: 302 634 8459
Email: william.tanzilli@chase.com

(iii)      if to the Issuing Bank, to it at the address provided in writing by the Issuing Bank to the Administrative Agent and the Borrower
(iv)      if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. Notices delivered through electronic communications to the extent provided in paragraph (b)  below, shall be effective as provided in said paragraph (b) .
(b)      Electronic Communications . Notices and other communications to the Lenders and the Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant to Section 2.06 if such Lender or the Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

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(i) Notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i)  of notification that such notice or communication is available and identifying the website address therefor.
Each party hereto understands that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution and agrees and assumes the risks associated with such electronic distribution, except to the extent caused by the fraud, willful misconduct or gross negligence of Administrative Agent, any Lender or their respective Related Parties, as determined by a final, non-appealable judgment of a court of competent jurisdiction. The Platform and any electronic communications media approved by the Administrative Agent as provided herein are provided “as is” and “as available”. None of the Administrative Agent or its Related Parties warrant the accuracy, adequacy, or completeness of the such media or the Platform and each expressly disclaims liability for errors or omissions in the Platform and such media. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects is made by the Administrative Agent and any of its Related Parties in connection with the Platform or the electronic communications media approved by the Administrative Agent as provided for herein.
(c)      Private Side Information Contacts . Each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable law, including United States federal and state securities laws, to make reference to information that is not made available through the “Public Side Information” portion of the Platform and that may contain Non-Public Information with respect to the Borrower, its Subsidiaries or their Securities for purposes of United States federal or state securities laws. In the event that any Public Lender has determined for itself to not access any information disclosed through the Platform or otherwise, such Public Lender acknowledges that (i) other Lenders may have availed themselves of such information and (ii) neither Borrower nor Administrative Agent has any responsibility for such Public Lender’s decision to limit the scope of the information it has obtained in connection with this Agreement and the other Loan Documents.
(d)      Documents to be Delivered under Sections 5.01 and 5.12(a) . For so long as a SyndTrak or equivalent website is available to each of the Lenders hereunder, the Borrower may satisfy its obligation to deliver documents to the Administrative Agent or the Lenders under Sections 5.01 and 5.12(a)  by delivering either an electronic copy or a notice identifying the website where such information is located for posting by the Administrative Agent on SyndTrak or such equivalent

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website; provided that the Administrative Agent shall have no responsibility to maintain access to SyndTrak or an equivalent website.
SECTION 8.02.      Waivers; Amendments .
(a)      No Deemed Waivers Remedies Cumulative . No failure or delay by the Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender in exercising any right or power hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank, the Swingline Lender and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b)  of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan, Swingline Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, the Swingline Lender, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.
(b)      Amendments to this Agreement . Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall:
(i)      increase the Commitment of any Lender without the written consent of such Lender,
(ii)      reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby,
(iii)      postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby,
(iv)      change Section 2.17(b) , (c)  or (d)  in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender affected thereby, or
(v)      change any of the provisions of this Section or the definition of the term “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender affected thereby;

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provided further that (x) no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be and (y) the consent of Lenders holding not less than two-thirds of the Revolving Credit Exposure and unused Commitments will be required (A) for any adverse change affecting the provisions of this Agreement relating to the determination of the Borrowing Base (excluding changes to the provisions of Section 5.12(b)(ii)(E) and (F) , but including changes to the provisions of Section 5.12(c)(ii) and the definitions set forth in Section 5.13 ), and (B)  for any release of any material portion of the Collateral other than for fair value or as otherwise permitted hereunder or under the other Loan Documents.
For purposes of this Section, the “scheduled date of payment” of any amount shall refer to the date of payment of such amount specified in this Agreement, and shall not refer to a date or other event specified for the mandatory or optional prepayment of such amount. In addition, whenever a waiver, amendment or modification requires the consent of a Lender “affected” thereby, such waiver, amendment or modification shall, upon consent of such Lender, become effective as to such Lender whether or not it becomes effective as to any other Lender, so long as the Required Lenders consent to such waiver, amendment or modification as provided above.
Anything in this Agreement to the contrary notwithstanding, no waiver or modification of any provision of this Agreement or any other Loan Document that could reasonably be expected to adversely affect the Lenders of any Class in a manner that does not affect all Classes equally shall be effective against the Lenders of such Class unless the Required Lenders of such Class shall have concurred with such waiver or modification; provided , however , for the avoidance of doubt, in no other circumstances shall the concurrence of the Required Lenders of a particular Class be required for any waiver, amendment or modification of any provision of this Agreement or any other Loan Document.
(c)      Amendments to Security Documents . No Security Document nor any provision thereof may be waived, amended or modified, nor may the Liens thereof be spread to secure any additional obligations (including any increase in Loans hereunder, but excluding any such increase pursuant to a Commitment Increase under Section 2.08(e)  to an amount not greater than the Maximum Commitment Increase Amount) except pursuant to an agreement or agreements in writing entered into by the Borrower, and by the Collateral Agent with the consent of the Required Lenders; provided that, (i) without the written consent of each Lender, no such agreement shall release all or substantially all of the Obligors from their respective obligations under the Security Documents and (ii) without the written consent of each Lender, no such agreement shall release all or substantially all of the collateral security or otherwise terminate all or substantially all of the Liens under the Security Documents, alter the relative priorities of the obligations entitled to the Liens created under the Security Documents (except in connection with securing additional obligations equally and ratably with the Loans and other obligations hereunder) with respect to all or substantially all of the collateral security provided thereby, or release all or substantially all of the guarantors under the Guarantee and Security Agreement from their guarantee obligations thereunder, except that no such consent shall be required, and the Administrative Agent is hereby authorized (and so agrees with the Borrower) to direct the Collateral Agent under the Guarantee

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and Security Agreement, to (1) release any Lien covering property (and to release any such guarantor) that is the subject of either a disposition of property permitted hereunder or a disposition to which the Required Lenders have consented and (2) release from the Guarantee and Security Agreement any “Subsidiary Guarantor” (and any property of such Subsidiary Guarantor) that is designated as a “Financing Subsidiary” in accordance with this Agreement or which ceases to be consolidated on the Borrower’s financial statements and is no longer required to be a “Subsidiary Guarantor”, so long as (A) after giving effect to any such release under this clause (2) (and any concurrent acquisitions of Portfolio Investments or payment of outstanding Loans) the Covered Debt Amount does not exceed the Borrowing Base and the Borrower delivers a certificate of a Financial Officer to such effect to the Administrative Agent, (B) either (I) the amount of any excess availability under the Borrowing Base immediately prior to such release is not diminished as a result of such release or (II) the Borrowing Base immediately after giving effect to such release is at least 110% of the Covered Debt Amount and (C) no Event of Default has occurred and is continuing.
(d)      Replacement of Non-Consenting Lender . If, in connection with any proposed change, waiver, discharge or termination to any of the provisions of this Agreement as contemplated by this Section 9.02 , the consent of the Required Lenders shall have been obtained but the consent of one or more Lenders (each a “ Non-Consenting Lender ”) whose consent is required for such proposed change, waiver, discharge or termination is not obtained, then (so long as no Event of Default has occurred and is continuing) the Borrower shall have the right, at its sole cost and expense, to replace each such Non-Consenting Lender or Lenders with one or more replacement Lenders pursuant to Section 2.18(b) so long as at the time of such replacement, each such replacement Lender consents to the proposed change, waiver, discharge or termination.
SECTION 8.03.      Expenses; Indemnity; Damage Waiver .
(a)      Costs and Expenses . The Borrower shall pay (i) all reasonable and documented costs and expenses incurred by the Administrative Agent, the Collateral Agent and their Affiliates, including the reasonable and documented fees, charges and disbursements of one outside counsel for the Administrative Agent and the Collateral Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Loan Documents and any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and documented expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, (iii) all documented expenses incurred by the Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender, including the reasonable and documented fees, charges and disbursements of one outside counsel for the Administrative Agent, the Issuing Bank and the Swingline Lender as well as additional counsel should any conflict of interest arise, in connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such documented expenses incurred during any workout, restructuring or negotiations in respect thereof and (iv) and all documented costs, expenses, taxes, assessments and other charges incurred in connection with any

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filing, registration, recording or perfection of any security interest contemplated by any Security Document or any other document referred to therein.
(b)      Indemnification by the Borrower . The Borrower shall indemnify the Administrative Agent, the Issuing Bank, the Swingline Lender and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable and documented fees and disbursements of one outside counsel for all Indemnitees (and, if reasonably necessary, of one local counsel in any relevant jurisdiction for all Indemnitees) unless, in the reasonable opinion of an Indemnitee, representation of all Indemnitees by such counsel would be inappropriate due to the existence of an actual or potential conflict of interest) in connection with any investigative, administrative or judicial proceeding or hearing commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any fees or expenses incurred by Indemnitees in enforcing this indemnity), whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and laws, statutes, rules or regulations relating to environmental, occupational safety and health or land use matters), on common law or equitable cause or on contract or otherwise and related expenses or disbursements of any kind (other than Taxes or Other Taxes which shall only be indemnified by the Borrower to the extent provided in Section 2.16 ), including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan, Swingline Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit) or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and whether brought by the Borrower or a third party and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the fraud, willful misconduct, bad faith or gross negligence of such Indemnitee or in connection with a claim against such Indemnitee by the Borrower or its Subsidiaries where there has been a breach in bad faith by such Indemnitee under this Agreement or any other Transaction Document, if there has been a final and nonappealable judgment against such Indemnitee on such claim as determined by a court of competent jurisdiction. Notwithstanding the foregoing, it is understood and agreed that indemnification for Taxes is subject to the provisions of Section 2.16 .
The Borrower shall not be liable to any Indemnitee for any special, indirect, consequential or punitive damages arising out of, in connection with, or as a result of the Transactions asserted by an Indemnitee against the Borrower or any other Obligor; provided that the foregoing

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limitation shall not be deemed to impair or affect the obligations of the Borrower under the preceding provisions of this subsection.
(c)      Reimbursement by Lenders . To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a)  or (b)  of this Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.
(d)      Waiver of Consequential Damages, Etc . To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, 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 agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, except to the extent caused by the fraud, willful misconduct or gross negligence of such Indemnitee, as determined by a final, non-appealable judgment of a court of competent jurisdiction.
(e)      Payments . All amounts due under this Section shall be payable promptly after written demand therefor.
SECTION 8.04.      Successors and Assigns .
(a)      Assignments Generally . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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(b)      Assignments by Lenders .
(i)      Assignments Generally . Subject to the conditions set forth in clause (ii)  below, any Lender may assign to one or more assignees (other than natural persons, any Defaulting Lender or any Person listed in the Prohibited Assignees and Participants Side Letter) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans and LC Exposure at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:
(A)      the Borrower; provided that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, or, if an Event of Default has occurred and is continuing, any other assignee; provided , further , that the Borrower shall be deemed to have consented to any such assignment unless it shall have objected thereto by written notice to the Administrative Agent within ten Business Days after having received notice thereof; and
(B)      the Administrative Agent and the Issuing Bank: provided that no consent of the Administrative Agent or Issuing Bank shall be required for an assignment by a Lender to an Affiliate of such Lender.
(ii)      Certain Conditions to Assignments . Assignments shall be subject to the following additional conditions:
(A)      except in the case of an Assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans and LC Exposure of a Class, the amount of the Commitment or Loans and LC Exposure of such Class of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such Assignment is delivered to the Administrative Agent) shall not be less than U.S. $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent; provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;
(B)      each partial assignment of any Class of Commitments or Loans and LC Exposure shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement in respect of such Class of Commitments, Loans and LC Exposure;
(C)      the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption in substantially the form of Exhibit A hereto, together with a processing and recordation fee of U.S. $3,500 (which fee shall not be payable in connection with an assignment to a Lender or to an Affiliate of a Lender), for which the Borrower and the Guarantors shall not be obligated; and

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(D)      the assignee, if it shall not already be a Lender of the applicable Class, shall deliver to the Administrative Agent an Administrative Questionnaire.
(iii)      Effectiveness of Assignments . Subject to acceptance and recording thereof pursuant to paragraph (c)  of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14 , 2.15 , 2.16 and 9.03 with respect to facts and circumstances occurring prior to the effective date of such assignment). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e)  of this Section. Notwithstanding anything to the contrary herein, in connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions set forth in Section 9.04(b)(ii) or otherwise, the parties to the assignment shall make such additional payments to Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of Borrower and Administrative Agent, the Applicable Percentage of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to Administrative Agent, Issuing Bank, Swingline Lender and each Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full Applicable Percentage of all Loans and participations in Letters of Credit and Swingline Loans. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
(c)      Maintenance of Registers by Administrative Agent . The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in New York City a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount (and stated interest) of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “ Registers ” and each individually, a “ Register ”). The entries in the Registers shall be conclusive absent manifest error, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Registers pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Registers shall be available for inspection

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by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d)      Acceptance of Assignments by Administrative Agent . Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b)  of this Section and any written consent to such assignment required by paragraph (b)  of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(e)      Special Purpose Vehicles . Notwithstanding anything to the contrary contained herein, any Lender (a “ Granting Lender ”) may grant to a special purpose funding vehicle (an “ SPC ”) owned or administered by such Granting Lender, identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make; provided that (i) nothing herein shall constitute a commitment to make any Loan by any SPC, (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall, subject to the terms of this Agreement, make such Loan pursuant to the terms hereof, (iii) the rights of any such SPC shall be derivative of the rights of the Granting Lender, and such SPC shall be subject to all of the restrictions upon the Granting Lender herein contained, and (iv) no SPC shall be entitled to the benefits of Sections 2.14 (or any other increased costs protection provision), 2.15 or 2.16 . Each SPC shall be conclusively presumed to have made arrangements with its Granting Lender for the exercise of voting and other rights hereunder in a manner which is acceptable to the SPC, the Administrative Agent, the Lenders and the Borrower, and each of the Administrative Agent, the Lenders and the Obligors shall be entitled to rely upon and deal solely with the Granting Lender with respect to Loans made by or through its SPC. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by the Granting Lender.
Each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States or any State thereof, in respect of claims arising out of this Agreement; provided that the Granting Lender for each SPC hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage and expense arising out of their inability to institute any such proceeding against its SPC. In addition, notwithstanding anything to the contrary contained in this Section, any SPC may (i) without the prior written consent of the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to its Granting Lender or to any financial institutions providing liquidity and/or credit facilities to or for the account of such SPC to fund the Loans made by such SPC or to support the securities (if any) issued by such SPC to fund such Loans (but nothing contained herein shall be construed in derogation of the

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obligation of the Granting Lender to make Loans hereunder); provided that neither the consent of the SPC or of any such assignee shall be required for amendments or waivers hereunder except for those amendments or waivers for which the consent of participants is required under paragraph (f)  below, and (ii) disclose on a confidential basis (in the same manner described in Section 9.13(b) ) any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of a surety, guarantee or credit or liquidity enhancement to such SPC.
(f)      Participations . Any Lender may sell participations to one or more banks or other entities (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement and the other Loan Documents (including all or a portion of its Commitments and the Loans and LC Disbursements owing to it); provided that (i)  such Lender’s obligations under this Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents and (iv) no Person listed in the Prohibited Assignees and Participants Side Letter may be a Participant. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement or any other Loan Document; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b)  that affects such Participant. Subject to paragraph (g)  of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14 , 2.15 and 2.16 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b)  of this Section; provided that such Participant shall not be entitled to receive any greater payment under Sections 2.14 , 2.15 or 2.16 , with respect to any participation, than its participating Lenders would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation; provided , further , that no Participant shall be entitled to the benefits of Section 2.16 unless the Borrower is notified of the participation granted to such Participant and such Participant shall have complied with the requirements of Section 2.16 as if such Participant is a Lender. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender; provided such Participant agrees to be subject to Section 2.17(d)  as though it were a Lender hereunder. 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 loans or other obligations under the Loan 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 other information relating to a Participant’s interest in any commitments, loans, letters of credit or is other obligations under any Loan Document) to any person except to the extent that such disclosures are 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

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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.
(g)      Limitations on Rights of Participants . A Participant shall not be entitled to receive any greater payment under Section 2.14 , 2.15 or 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with paragraphs (e)  and (f)  of Section 2.16 as though it were a Lender and in the case of a Participant claiming exemption for portfolio interest under Section 871(h) or 881(c) of the Code, the applicable Lender shall provide the Borrower with satisfactory evidence that the participation is in registered form and shall permit the Borrower to review such register as reasonably needed for the Borrower to comply with its obligations under applicable laws and regulations.
(h)      Certain Pledges . Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any such pledge or assignment to a Federal Reserve Bank or any other central bank having jurisdiction over such Lender, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.
(i)      No Assignments to Natural Persons, the Borrower or Affiliates . Anything in this Section to the contrary notwithstanding, no Lender may assign or participate any interest in any Loan or LC Exposure held by it hereunder to any natural person or the Borrower or any of its Affiliates or Subsidiaries without the prior consent of each Lender.
SECTION 8.05.      Survival . All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.14 , 2.15 , 2.16 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination, Cash Collateralization or backstop of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

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SECTION 8.06.      Counterparts; Integration; Effectiveness; Electronic Execution .
(a)      Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract between and among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01 , this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page to this Agreement by telecopy electronically (e.g. pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.
(b)      Electronic Execution of Assignments . The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
SECTION 8.07.      Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 8.08.      Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to Administrative Agent for further application in accordance with the provisions of Sections 2.17(d) and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of Administrative Agent, the Issuing Bank, and the Lenders, and (y) the Defaulting Lender shall provide promptly to Administrative Agent a statement describing in reasonable detail the amounts owing to such Defaulting Lender hereunder

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as to which it exercised such right of setoff. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.
SECTION 8.09.      Governing Law; Jurisdiction; Etc .
(a)      Governing Law . This Agreement shall be construed in accordance with and governed by the law of the State of New York.
(b)      Submission to Jurisdiction . The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive 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 and any Loan Document, 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 the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Borrower or its properties in the courts of any jurisdiction.
(c)      Waiver of Venue . The Borrower 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 (b)  of this Section. 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)      Service of Process . Each party to this Agreement (i) irrevocably consents to service of process in the manner provided for notices in Section 9.01 and (ii) agrees that service as provided in the manner provided for notices in Section 9.01 is sufficient to confer personal jurisdiction over such party in any proceeding in any court and otherwise constitutes effective and binding service in every respect. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
SECTION 8.10.      WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS

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REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS. THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 8.11.      Judgment Currency . This is an international loan transaction in which the specification of Dollars or any Foreign Currency, as the case may be (the “ Specified Currency ”), and payment in New York City or the country of the Specified Currency, as the case may be (the “ Specified Place ”), is of the essence, and the Specified Currency shall be the currency of account in all events relating to Loans denominated in the Specified Currency. The payment obligations of the Borrower under this Agreement shall not be discharged or satisfied by an amount paid in another currency or in another place, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on conversion to the Specified Currency and transfer to the Specified Place under normal banking procedures does not yield the amount of the Specified Currency at the Specified Place due hereunder. If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in the Specified Currency into another currency (the “ Second Currency ”), the rate of exchange that shall be applied shall be the rate at which in accordance with normal banking procedures the Administrative Agent could purchase the Specified Currency with the Second Currency on the Business Day next preceding the day on which such judgment is rendered. The obligation of the Borrower in respect of any such sum due from it to the Administrative Agent or any Lender hereunder or under any other Loan Document (in this Section called an “ Entitled Person ”) shall, notwithstanding the rate of exchange actually applied in rendering such judgment be discharged only to the extent that on the Business Day following receipt by such Entitled Person of any sum adjudged to be due hereunder in the Second Currency such Entitled Person may in accordance with normal banking procedures purchase and transfer to the Specified Place the Specified Currency with the amount of the Second Currency so adjudged to be due; and the Borrower hereby, as a separate obligation and notwithstanding any such judgment, agrees to indemnify such Entitled Person against, and to pay such Entitled Person on demand, in the Specified Currency. the amount (if any) by which the sum originally due to such Entitled Person in the Specified Currency hereunder exceeds the amount of the Specified Currency so purchased and transferred.
SECTION 8.12.      Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 8.13.      Treatment of Certain Information; No Fiduciary Duty; Confidentiality .
(a)      Treatment of Certain Information . The Borrower acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to the Borrower or one or more of its Subsidiaries (in connection with this Agreement or otherwise) by any Lender or by one or more subsidiaries or affiliates of such Lender and the Borrower hereby authorizes each Lender to share any information delivered to such Lender by the Borrower and its Subsidiaries pursuant to this Agreement, or in connection with the decision of such Lender

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to enter into this Agreement, to any such subsidiary or affiliate, it being understood that any such subsidiary or affiliate receiving such information shall be bound by the provisions of paragraph (b)  of this Section as if it were a Lender hereunder. Such authorization shall survive the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof. Each Lender shall use all information delivered to such Lender by the Borrower and its Subsidiaries pursuant to this Agreement, or in connection with the decision of such Lender to enter into this Agreement, in connection with providing services to the Borrower. The Administrative Agent, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”), may have economic interests that conflict with those of the Borrower or any of its Subsidiaries, their stockholders and/or their affiliates. The Borrower, on behalf of itself and each of its Subsidiaries, agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and the Borrower or any of its Subsidiaries, its stockholders or its affiliates, on the other. The Borrower and each of its Subsidiaries each acknowledge and agree that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower and its Subsidiaries, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower or any of its Subsidiaries, any of their stockholders or affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise the Borrower or any of its Subsidiaries, their stockholders or their affiliates on other matters) or any other obligation to the Borrower or any of its Subsidiaries except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of the Borrower or any of its Subsidiaries, their management, stockholders, creditors or any other Person. The Borrower and each of its Subsidiaries each acknowledge and agree that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Borrower and each of its Subsidiaries each agree that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Borrower or any of its Subsidiaries, in connection with such transaction or the process leading thereto.
(b)      Confidentiality . Each of the Administrative Agent, the Lenders, the Swingline Lender and the Issuing Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and other representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority), (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement

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of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement (other than to any Person listed in the Prohibited Assignee and Participant Side Letter) or (y) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (vii) with the consent of the Borrower, (viii) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the Issuing Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower or (ix) on a confidential basis to (x) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided hereunder or (y) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the credit facilities provided hereunder.
For purposes of this Section, “ Information ” means all information received from the Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any of their respective businesses or Investments, other than any such information that is available to the Administrative Agent any Lender or the Issuing Bank on a nonconfidential basis prior to disclosure by the Borrower or any of its Subsidiaries; provided that, in the case of Information received from the Borrower or any of its Subsidiaries after the date hereof; such Information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
SECTION 8.14.      USA PATRIOT Act . Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107‑56 (signed into law October 26, 2001)), it is required to obtain, verify and record information that identifies the Borrower and each other Obligor, which information includes the name and address of the Borrower and each other Obligor and other information that will allow such Lender to identify the Borrower and each other Obligor in accordance with said Act.
SECTION 8.15.      Interest Rate Limitation . Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the “ Maximum Rate ”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the obligations hereunder.

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SECTION 8.16.      Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a)      the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b)      the effects of any Bail-in Action on any such liability, including, if applicable:
(i)      a reduction in full or in part or cancellation of any such liability;
(ii)      a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii)      the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.
SECTION 8.17.      German Bank Separation Act . Solely for so long as Deutsche Bank AG New York Branch, or any Affiliate thereof, is a Lender, if any such Lender is subject to the GBSA (as defined below) (any such Lender, a “ GBSA Lender ”) and such GBSA Lender shall have determined in good faith based on advice of counsel (which determination shall made in consultation with the Borrower) that, due to the implementation of the German Act on the Ring-fencing of Risks and for the Recovery and Resolution Planning for Credit Institutions and Financial Groups ( Gesetz zur Abschirmung von Risiken und zur Planung der Sanierung und Abwicklung von Kreditinstituten und Finanzgruppen ) of 7 August 2013 (commonly referred to as the German Bank Separation Act ( Trennbankengesetz ) (the “ GBSA ”), whether before or after the date hereof, or any corresponding European legislation (such as the proposed regulation on structural measures improving the resilience of European Union credit institutions) that may amend or replace the GBSA in the future or any regulation thereunder, or due to the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of the GBSA or any corresponding future European legislation or any regulation thereunder, the arrangements contemplated by this Agreement or the Loans have, or will, become illegal, prohibited or otherwise unlawful, then, and in any such event, such GBSA Lender shall give written notice to the Borrower and the Administrative Agent of such determination (which written notice shall include a reasonably detailed explanation of such illegality, prohibition or unlawfulness, including, without limitation, evidence and calculations used in the determination thereof, a “ GBSA Initial Notice ”), whereupon until the fifth Business Day after the date of such GBSA Initial Notice, such GBSA Lender shall use commercially reasonable efforts to transfer to the extent permitted under applicable law such

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arrangements, Commitments and/or Loans to an affiliate or other third party in accordance with Section 9.04. If no such transfer is effected in accordance with the preceding sentence, such GBSA Lender shall give written notice thereof to the Borrower and the Administrative Agent a (“ GBSA Final Notice ”), whereupon (i) all of the obligations owed to such GBSA Lender hereunder and under the Loans shall become due and payable, and the Borrower shall repay the outstanding principal of such obligations together with accrued interest thereon and all other amounts due and payable to the GBSA Lender, on the fifth Business Day immediately after the date of such GBSA Final Notice (the “ Initial GBSA Termination Date ”) and, for the avoidance of doubt, such repayment shall not be subject to the terms and conditions of Section 2.17(c) or Section 2.17(d) to the extent that there are no outstanding amounts then due and payable to the other Lenders on such fifth Business Day and (ii) the Commitments of such GBSA Lender shall terminate on the Initial GBSA Termination Date; provided that, notwithstanding the foregoing, if, prior to such Initial Termination Date, the Borrower in good faith reasonably believes that there is a mistake, error or omission in the grounds used to determine such illegality, prohibition or unlawfulness under the GBSA or any corresponding future European legislation or any regulation thereunder, then the Borrower may provide written notice (which written notice shall include a reasonably detailed explanation of the basis of such good faith belief, including, without limitation, evidence and calculations used in the determination thereof, a “ GBSA Consultation Notice ”) to that effect, at which point the obligations owed to such GBSA Lender hereunder and under the Loans shall not become due and payable, and the Commitments of such GBSA Lender shall not terminate, until the Business Day immediately following the tenth Business Day immediately after the Initial GBSA Termination Date (the period from, and including, the date of the GBSA Consultation Notice until the tenth Business Day immediately thereafter being the “ GBSA Consultation Period ”). In the event that the Borrower and such GBSA Lender cannot in good faith reasonably agree during the GBSA Consultation Period whether the arrangements contemplated by this Agreement or the Loans have, or will, become illegal, prohibited or otherwise unlawful under the GBSA or any corresponding future European legislation or any regulation thereunder, then all of the obligations owed to such GBSA Lender hereunder and under the Loans shall become due and payable, and the Commitments of such GBSA Lender shall terminate, on the Business Day immediately following the last day of such GBSA Consultation Period. For the avoidance of doubt, during the GBSA Consultation Period, (i) the Commitments and Revolving Credit Exposure of any GBSA Lender shall be subject to Section 2.18 , and the Borrower shall have all rights to replace such GBSA Lender in accordance with Section 2.18(b) , in each case, as though such GBSA Lender were a “Defaulting Lender” for purposes of this Agreement and (ii) no GBSA Lender shall be required to fund its pro rata share of any Borrowing. To the extent any Swingline Exposure or LC Exposure exists at the time a GBSA Lender’s Loans are repaid in full pursuant to this Section 9.17 , such Swingline Exposure or LC Exposure shall be reallocated as set forth in Section 2.19(a) , treating for this purpose such GBSA Lender as a Defaulting Lender.
SECTION 8.18.      Acknowledgment Regarding Any Supported QFCs . To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedging Agreements or any other agreement or instrument that is a QFC (such support, “ QFC Credit Support ” and each such QFC, a “ Supported QFC ”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act

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(together with the regulations promulgated thereunder, the “ U.S. Special Resolutions Regimes ”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
In the event a Covered Entity that is a party to a Supported QFC (each, a “ Covered Party ”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC or such QFC Credit Support, and any rights in property securing such Supported QFC and such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.





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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

TCG BDC, INC.
By: /s/ Erik Barrios
Name: Erik Barrios
Title: CCO & Secretary
  

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JPMORGAN CHASE BANK, N.A. , as Administrative Agent, Swingline Lender, Issuing Bank and a Lender
By: /s/ Diego E. Nunes     
Name: Diego E. Nunes
Title: Executive Director


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LENDERS :    


STATE STREET BANK AND TRUST COMPANY ,
as a Lender
 

By: /s/ John Doherty
Name: John Doherty
Title: Vice President

    


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LENDERS :    


MUFG UNION BANK, N.A. ,
as a Lender
 

By: /s/ Jacob Ulevich
Name: Jacob Ulevich
Title: Director

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LENDERS :    


BANK OF AMERICA, N.A. ,
as a Lender
 

By: /s/ Manisha Kumar
Name: Manisha Kumar
Title: Vice President

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LENDERS :    


CITIBANK, N.A. ,
as a Lender
 

By: /s/ Eros Marshall
Name: Eros Marshall
Title: Director

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LENDERS :    


DEUTSCHE BANK AG NEW YORK BRANCH ,
as a Lender
 

By: /s/ Virginia Cosenza
Name: Virginia Cosenza
Title: Vice President


By: /s/ Ming K. Chu
Name: Ming K. Chu
Title: Director

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LENDERS :    


BARCLAYS BANK PLC ,
as a Lender
 

By: /s/ Ronnie Glenn
Name: Ronnie Glenn
Title: Director

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LENDERS :    


CIT FINANCE LLC ,
as a Lender
 

By: /s/ Robert L. Klein
Name: Robert L. Klein
Title: Director

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LENDERS :    


MORGAN STANLEY BANK, N.A. ,
as a Lender
 

By: /s/ Michael King
Name: Michael King
Title: Authorized Signer



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Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
CERTIFICATION
I, Michael A. Hart, certify that:
 
1.
I have reviewed this quarterly report on Form 10-Q of TCG 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 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: August 6, 2019
 
/s/ Michael A. Hart
Michael A. Hart
Chief Executive Officer
(Principal Executive Officer)




Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
CERTIFICATION
I, Thomas M. Hennigan, certify that:
 
1.
I have reviewed this quarterly report on Form 10-Q of TCG 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 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: August 6, 2019
 
/s/ Thomas M. Hennigan
Thomas M. Hennigan
Chief Financial Officer
(Principal Financial Officer)




Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER, SECTION 906
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Hart, the Chief Executive Officer (Principal Executive Officer) of TCG BDC, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
•
the Form 10-Q of the Company for the quarter ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
•
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Dated: August 6, 2019
 
/s/    Michael A. Hart
Michael Hart
Chief Executive Officer
(Principal Executive Officer)
 
*
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.




Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER, SECTION 906
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Thomas M. Hennigan, the Chief Financial Officer (Principal Financial Officer) of TCG BDC, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
•
the Form 10-Q of the Company for the quarter ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
•
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Dated: August 6, 2019
 
/s/ Thomas M. Hennigan
Thomas M. Hennigan
Chief Financial Officer
(Principal Financial Officer)
 
*
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.