Fillable Printable SC SSBCI Loan Participation Program Master Loan Participation Agreement

SC SSBCI Loan Participation Program Master Loan Participation Agreement

SC SSBCI LOAN PARTICIPATION PROGRAM

Agreement No. _______

MASTER LOAN PARTICIPATION AGREEMENT

BUSINESS DEVELOPMENT CORPORATION OF SC (BDC)

_________________________________________________

(PARTICIPATING LENDER NAME)

_____________________________________________________

(PARTICIPATING LENDER ADDRESS)

_____________________________________________________

(PARTICIPATING LENDER CITY/STATE/ZIP + 4)

ATTN: ___________________________________________________

(PARTICIPATING LENDER CONTACT/TITLE)

PHONE: ________________________________________________

(PARTICIPATING LENDER)

FAX: ___________________________________________________

(PARTICIPATING LENDER)

FEIN: ___________________________________________________

(PARTICIPATING LENDER)

MASTER LOAN PARTICIPATION AGREEMENT

This Loan Participation Agreement (the"Agreement")is entered into as of___________, by and between

____________________(the "Lender"), and the Business Development Corporation of SC (BDC), having

its principal office at 111 Executive Center Drive, Suite 225, Columbia, SC 29210

RECITALS

Whereas the State of South Carolina through the SC Jobs Economic Development Authority(JEDA) has

created the SC SSBCILoan Participation Program(as hereinafter defined) under the authoritygranted to

it by the federal State Small Business Credit Initiative ("SSBCI") of the Small Business Jobs Act of 2010

(Title III of Public Law 111-240); the Allocation Agreementdated July 6, 2011, as amended, between the

United States Treasury (the "US Treasury") and the State of South Carolina; and

Whereasthe purpose of the SC SSBCILoan Participation Program(the “Program") is to foster economic

development in South Carolina byenhancing the availabilityof credit to small and medium-sized

businesses from private sources of capital; and

Whereas,in pursuit of those goals, JEDA has entered into a contract withBDC to offer the Program; and

the BDCmay be willing,from time to time, to purchase participation interests in loans, including

principal and interest payable there under, made by the Lender to certain Program-eligible businesses.

Now therefore, in consideration of the premises and the agreements contained herein, the Lender and the

BDC hereby agree as follows:

1. DEFINITIONS

Inaddition to the words and terms defined elsewhere is this Agreement, each of the followingwords and

terms used in this Agreement shall have the following meaning unless the context or use indicates a

different meaning. Definitions shall be applicable to both the singularand plural forms of the terms as the

context may require:

"AllocatedFunds" meansfunds awarded to the State ofSouth Carolina on account of the Allocation

Agreementdated July6, 2011, as amended, between the USTreasuryand the State of South

Carolina.

"Borrower" means the recipient of a Loan from the Lender for which a Participation Certificate has been

or will be issued bythe Lender and acknowledged bythe BDC, and all successors and assigns of such

Borrower; provided such Borrower:

(a)Is:

1. a for-profit corporation, limited liability company, partnership, joint venture, sole

proprietorship, state-designatedcharitable, religious, or othernon-profit or eleemosynary

institution, government-owned corporation, consumer or marketing cooperatives, or faith-based

organization and,

2. the loan proceeds will be used for a business purposein the State of South Carolina, said

business purpose includes, but is not limited to, start up costs, working capital, business

procurement, franchise fees, equipment, inventory, as well as the purchase, construction

renovation or tenant improvements ofaneligible place of business that isnot for passive real

estate investment purposes.The definition of business purposeexcludes activities that relate to

acquiringorholding passive investments such as commercial real estate ownership, the purchase

of securities; and lobbying activities as defined in Section 3 (7) of the Lobbying Disclosure Act of

1995, P.L. 104-65, as amended.

(b)is not:

1.a business engaged in speculative activities that develop profits fromfluctuationsin price

rather than through normal course of trade, such as wildcatting for oil and dealing in

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commodities futures, unless those activities are incidental to the regular activities of the

Borrower and part of a legitimate riskmanagement strategyto guard against price

fluctuations related to the regular activities of the Borrower;

2.a business that earns morethan half of its annual net revenue fromlending activities;

unless the Borrower is a non-bank or non-bank holding company certified as a

Community Development Financial Institution (CDFI);

3.a business engaged in pyramid sales, where a participant's primary incentive is based on

the sales made by an ever-increasing number of participants;

4.a business engaged in activities that are prohibited by federal law or applicable law in the

jurisdiction where thebusiness is located orconducted, includingthe production,

servicing, or distribution of otherwise legal products that are to be used in connection

with an illegal activity, such as selling drug paraphernalia or operatinga motel that

knowingly permits illegal prostitution; or

5.a business engaged in gambling enterprises, unless the Borrower earns less than 33

percent of its annual net revenue from lottery sales; and

(c)is not an executive officer, director or principalshareholder of the Lenderor a company which

controls the Lender, or a subsidiaryor affiliate of the Lender; nor a member of the immediate

family of an executive officer, director or principal shareholder of the Lenderora company

which controls the Lender, or a subsidiary or affiliate of the Lender; nor an entity controlled by an

executive officer, director or principal shareholderof the Lender or a companywhich controls the

Lender, or a subsidiary or affiliate ofthe Lender; nor a member ofthe immediate family ofan

entity controlled byan executive officer, director or principalshareholderof the Lender or a

company which controls the Lender, ora subsidiary or affiliate of the Lender. For purposes of

this paragraph,the terms "executive officer,""director," "principalshareholder,""immediate

family", and “related interest”refer to the same relationship to a financial institution lender as the

relationship described in part 215 of title 12 of the Code ofFederal Regulations, or any successor

to such part.

"Closing Documents" means all documents executed or delivered by the Borrower or the Lender with

respect to a Loan, including withoutlimitation a copyof the Note, the loan agreement, any security

agreement, any financingstatement or UniformCommercial Code filing, anyguaranty, any mortgage or

assignment of rents, any pledge agreements, and any other document that secures repayment of the Loan.

"Commitment Letter" is acontingent commitment letter prepared by the BDC notifyingthe Lender that

the BDC is willing to purchasea Participation interest in a loan, and sets forth any special conditions

related to the Participation that are binding.All commitments are contingentupon the Lender and

Borrower meeting all requirements and providingadequate support documentation sufficient to comply

with applicable laws and regulations to allow the BDC to file the Loan Documents in order to obligate

and obtain funds. (A sample Commitment Letter isattached as Exhibit A). The Commitment Letter,

together with any approved revisions, will also set forth other terms and conditions specific to an

individual Participation and are binding on the Lender and the Borrower.

"Lender" means a financial institution with which the BDChas entered into an agreement or contract to

provide loans to small businesses, in which the BDCpurchases an undivided interest in the otherwise

qualifying loan.

"Lender Rate" meansan interest rate set by the Lender, either fixed, adjustable, orvariable (determined

by the promissory note) used in calculating the amount of interest shared by the Lender and the BDCpro

rata on a given Loan, which rate shall initially be that referenced in the CommitmentLetter related to

such Loan. If the Lender Rate is adjustable or variable, the BDC rate shall be adjusted upwards or

downwards everytime the interest rate charged the Borrower is adjusted, so that the pro rata share shall

always be the same as it was on the Purchase Date.

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"Loan" means a loan made by the Lender to a Borrower in which BDC has or will have a Participation.

"Loan Documents" means the Closing Documents, the Participation Certificate, the Commitment Letter,

and all other documents executed or delivered by the Borrower, guarantor, or Lender with respect to a

Loan, includingwithoutlimitation the Borrower's application, business plan, and historical and projected

financial statementsand anyfinancial statementsand reports delivered by the Borrower to the Lender on

an ongoing basis, the Lender's financial, repayment and collateral analysis, credit reports, and all periodic

reports required to be delivered to BDC by the Lender under this Agreement.

"Note" means the promissory note of the Borrower payable to the order of the Lender evidencing the

Loan.

"Participation" means, with respect to a Loan, BDC’s undivided participation interest in such Loan, the

Loan Documents and all of the Lender's right, title and interest pertainingto the Loan and all proceeds

arising therefromincluding, without limitation, anycollateral for such Loan and anyguaranties,

mortgages, orother securityinterests obtained in connection therewith, expressed as a percentage and

calculated from time to time by reference to the outstanding principal balance of the Loan.

"Participation Amount" means, with respect to a Loan, that portion of the original principal amount of

the Loan purchased by BDC fromthe Lender, minus the aggregate principal amount repaid, as of any

date, on that portion of such Loan purchased by BDC from the Lender.

"Participation Certificate" means the documentevidencingBDC‘s Participation with respect to a Loan

made between the Lenderand the Borrower. A sample Participation Certificate is attached hereto as

Exhibit B.

“Participation Percentage”means BDC’s undivided participationinterest in such Loan divided by the

amount of the Loan as set forth in the Commitment Letter and the Participation Certificate.

"Project" means the project of the Borrower for which Loan funds are to be used, includingwithout

limitation the Loan, anyequity or any other funds provided by owners, shareholders, banks, or other

financial institutions.

"Prompt Payment" means the time period within which the Lender must forward or remit BDC‘s pro

rata share of the Borrower’s payment of its Loan to BDCin orderto avoid late fees hereunder. If BDC

has one Participation with Lender, payment is considered timelyfor this purpose if the Lenderremits in

immediate funds said payment to BDC within five (5) business days ofreceipt of payment. IfBDC has

more than one Participation with Lender, paymentmaybe combined for allParticipations and remitted

within five (5) business days of the end of each month. In the event a paymentis not remitted to BDC

within five (5) business days of its above mentioned due date, a late fee of the greater of 4%of the total

paymentdue (per payment being withheld) or $50 (per paymentbeing withheld), whichever is greater,

shall be automaticallyassessed. Arrearage will be determined fromthe date the payment should have

been remitted through the date the payment is actuallyremitted. This late fee will be immediately due and

owing. Additionally, any and all late fees due to Lender’s delinquencyshall not be the responsibility of,

and shall not be absorbed by or charged to, the Borrower. In compelling circumstances and upon the

Lender’s written request, BDCmay,within its sole discretion, agreeto waive any late feesdue to a late

payment.

"Purchase Date" means, with respect to a Participation, the date on which such Participation is

purchased.

"Servicing Expenses" means any and all out-of-pocket liabilities, obligations, losses, penalties, expenses

(includingreasonable legal expenses and fees), disbursements, costs and damages, but excluding salaries

and wages of its officers and employees and overhead expenses, incurred by the Lender, or for which the

Lender is responsible, directlyorindirectly, in connection with or arising as a result of (a) the

enforcement of rights or remedies with respect to a Loan or the collection of same (including those arising

due to suits, claims or counterclaims by another partyagainstthe Lender), and (b) the protection of the

interests in any collateral securing the repayment ofthe Loan. “ServicingExpenses” does NOT include

services or products provided by or through the Lender for the benefit of the Borrower, guarantor, or

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other responsible partyto facilitate theircompliance with agreed terms and conditions. The mere fact that

the Lender pays an expense does not in itself qualify it as a “ServicingExpense;” rather there must be a

clear correlation to the enforcementof the Lender’s rights or remedies. Business restructuringexpenses

do not constitute “Servicing Expenses” unless prior written approval is obtained from BDC.

2. APPLICATIONS AND APPROVAL; SALE AND PURCHASE OF PARTICIPATION

2.1 Applications. The Lender shall accept applications fromprospective Borrowers and, iffound

creditworthy by the Lender and meeting the Programrequirements contained in Section 3 below, the

Lender shall submit the Application for Participation in substantially the formattached hereto as Exhibit

D, supporting documents,and the details of the proposed Loan in a formsatisfactoryto BDC, for the

BDC's review and purchaseapproval. The Lender must also obtain and submit to BDC a Certification

executedby the Borrower (with necessaryattachments) in substantially the formattachedhereto as

Exhibit C. BDC expresslyreserves the right, in its sole discretion, to accept or reject any Borrower and/or

any Loan. Once the Lender receives a Commitment Letter, it may consummate the Loan and shall sell a

Participation therein to BDC, pursuant to the terms and conditions set forth herein.

2.2 MaximumBDC Participation Amount. The Lender shall sell, assign and transfer,andBDCshall

purchase and accept, subject to the terms and conditions ofthis Agreement, a Participation of not less

than Fifty Thousand Dollars ($50,000)nor more than One Million Dollars($1,000,000) unless the

President or authorized designee of BDCdocuments the exception in writing.BDC’s Participation is

computed by dividing BDC’s principal balance bythe Loan’s principal balance. The Lender is

responsible for monitoringand ensuring that, at any given time, BDC’s Participation never exceeds its

participation percentage. Inthe event BDC’s Participation is ever greater than BDC’s original

participation percentage, the Lender must immediately pay BDC the excess principal to bring BDC’s

Participation into compliance with the Commitment Letter.

2.3 The BDCCommitment. Upon receiptfromthe Lender of an Application for Participation withthe

applicable documents, BDC, in its sole discretion, shall determine whether it will purchase a Participation

interest in the loan. BDCshall make every attempt to make its determination within thirty (30) days of

receipt of the Application for Participation and applicable documents. If BDC approves the Application

for Participation, it will issue and send, via electronic communication, a Commitment Letter to the

Lender, which shall remain in effect for thirty(30) days. The Lender shall, within thirty(30) days after

the Commitment Letter isissued, sign it and return the original to BDC or the Commitment Letter shall

expire. If the Lender does not close the Loan within one hundred twenty (120) days after the Commitment

Letter is issued, BDC’s commitment will expire, unless a written extension of time is granted by BDC.

BDC, in its sole discretion,may grant an extension of time provided that no material change in either the

scope of the Project, the financial condition of the Borrower (includingguarantors), or its abilityto repay

the Loan as originally approved has occurred. IfBDCdeclines the Applicationfor Participation, it will

make every attempt to so advise the Lender within thirty (30) days of receipt of the application.

2.4 Purchase and Funding of Participation. Upon the closing ofa Loan for which the Lender has

received a Commitment Letter, the Lender shall notifyBDC’s authorized designee of the closingand

shall deliver all ClosingDocuments to BDC within fifteen (15) business days of the closing, otherwise

BDC’s Participation shall be void, unless the fifteen dayperiod is waived or extended in writing by BDC.

BDCshall acknowledge the Participation Certificate (a sample of which is attached as Exhibit B) by

havingits President or authorized designee executetheCertificate andreturn itto the Lender. BDCshall

process the ParticipationCertificate and any other documents necessary to fund its Participation, and then

simultaneouslyor as soon as practicable shall initiate the actions to cause deliveryofits Participation

Amount to the Lender. The Participation will be considered funded on the date BDC funds are transferred

to the Lender. Interest willbegin to accrue onthe date of closing. The Lender will be responsible for the

timely movement/distribution of BDC’s funds to the Borrower.

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3. SSBCI PROGRAM REQUIREMENTS

Obligations of BDC will cease immediately withoutpenalty or further paymentbeing requiredif the

Allocated Funds for the Programare no longer available (whether theyhave all been otherwise utilized or

BDCno longer has access to them). BDCand the Lender acknowledge that the Programwill be funded,

in whole or in part, by State Small BusinessCreditInitiative Programfunds, asavailable, and as such,

both BDC and the Lenderagree that the use of fundspursuantto this Agreement shall be governed by,

and not be in derogation of, any rules, regulations, or guidelines for the Program promulgated or issued

by the USTreasury or the State of South Carolina. As to each Loan in which BDC purchases a

Participation, the Lender agrees that it will have determined to the best of its knowledge and belief that all

of the following are true and correct:

(A)The proceeds of the Loan will not be used:

(i)to repay delinquent federal or state income taxes unless the Borrower has a payment plan

in place with the relevant taxing authority;

(ii)to repay taxes held in trust or escrow (e.g., payroll or sales taxes);

(iii)to reimbursefunds owed to any owner, including any equity injection or injection of

capital for the business’ continuance;

(iv)to purchase any portion of the ownership interest of any owner of the business; or

(v)to refinance a loan previouslymade to the Borrower by the Lender;

(B)No principal ofthe Borrower or the Lender has been convicted of a sex offense against a minor

(as such terms are defined in Section 111 of the Sex Offender Registration and Notification Act

(42 U.S.C. § 16911));

(C)The Lender is in material compliance with all federal and state laws, rules, and regulations

pertaining to the making of loans (including 31 C.F.R. § 103.121);

(D)The Borrower is ready to implement the Project and has the financial abilityto carry out the

Project;

(E)The Borrower is responsible and creditworthy;

(F)The Loan Documents are in an amount and form, and contain such terms and provisions with

respect to property insurance, repairs, alterations, payment of taxes and assessments, delinquency

charges, default remedies, additional security, and other matters, adequate to protect the State’s

interest in ensuring repayment;

(G)Guarantors are responsible and creditworthy.

4. COMPENSATION TO LENDER

The Borrower shall pay interest to the Lender at the rate agreed upon between the Lender and the

Borrower. All application fees, origination fees and interest collected by the Lender, with respect to the

Loan, will be shared pro rata with BDC, unless waived by BDC.

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5. OWNERSHIP INTEREST IN PARTICIPATION LOAN, LOAN DOCUMENTS AND

RECORDS, LIENS, SECURITY, GUARANTIES, AND OTHER COLLATERAL

5.1 BDC's Undivided Interest. Upon BDC’s purchase of a Participation in a Loan, and pursuantto the

provisions of Section 2, BDC shall, without the necessity of any written instrument of assignment or other

document, become vested with an undivided equitable ownership interest (proportional to such

Participation fromtime to time) in:(i) the Loan; (ii) the Loan Documents; and (iii) anyother rights and

claims ofthe Lender with respect to the Loan. If the Lender acquires any security interests or liens

grantedby any of the LoanDocuments, BDC shall have an undividedinterest in such security interest or

lien equal to its Participation in the Loan, notwithstanding the fact that the security interest or lien is in the

name of, and/or possession is maintained by, the Lender.

5.2 The Lender as Trustee. All Loan Documentsand the rights conveyed by themexecuted and

delivered in connection with the Loan shall be held bythe Lenderin trust forthe pro rata benefit of the

Lender and BDC, and as servicing agent forBDC. The Lender is authorized toretain the Note and the

Loan Documents in the Lender's name and to deal with parties other than BDC as though the Lender were

an absolute owner of the Loan and the Loan Documents. Any person, firm or corporation maydeal with

the Lender concerningthe Loan in the same manner asif the Participation was not outstandingand the

Lender was the sole owner of the Loan, as limited by Section 6.5, 6.6, and 6.7 of thisAgreement. The

Lender may perform any of its obligations hereunder by or through its agents, employees or attorneys.

5.3 Limits ofBDC's Interest. Although the Lender holds for BDC’s proportional benefit all collateral

securing performance and payment of a Borrower's obligations and liabilities under and in connection

with any Loan, BDC shallhave no interestin any other property taken as security for any other credit,

loan or financial accommodation madeor furnished to the Borrower by the Lender in which BDC has no

Participation. This shall include anyproperty now or hereafter in the Lender's possession or under the

Lender's control or in any deposit held that may be or may become securityfor performance or payment

of a Borrower's or guarantor's obligations and liabilitiesunder and in connectionwith other indebtedness

owingto Lender by reason of the general description contained in any other instrument held by the

Lender or byreason of any right of setoff, counterclaim, banker's lien or otherwise; provided, however, if

such property, deposit, indebtedness or the proceeds thereof shall be applied to the payment orreduction

of principal, interest, fees or any other amounts owingby a Borrower orguarantor in connection with a

Loan, then BDC shallbe entitled to its pro rata share of such payment. All collateral securing

performance and payment of a Borrower's obligations and liabilities under and in connection with any

Loan may be used byLender in connection with other indebtedness owing to Lender, but only if lien

position is specifically subordinate to the Loan.

6. COLLECTIONS, DISBURSEMENTS AND ADMINISTRATION

6.1 Collection and Transfer of Payments.

(A) The Lender, as servicer of the Loan, shallbe obligated to collect, as BDC’s trustee with respect to

BDC's pro rata share thereof, all payments of interest and principal due and payable on theLoan, together

with anycharges, fees, costs, expenses and any and all other amounts due on orin connection with the

Loan Documents, includingwithout limitation all Servicing Expensesincurred by Lender. If the Lender

receives, collects or applies in full an interestpayment with respect to a Loan, the Lender will remit to

BDCits pro rata share. If the Lender receives, collects or applies only a partial payment ofinterest with

respect toa Loan,unless BDC has subordinated with respectto payment, the Lender will remitto BDC

interest on the Participation Amountof such Loan at a rate equal to the amount due BDC under the

preceding sentence multiplied by the Participation Percentage. If the Lender receives, collects or applies a

principalpayment orprepaymentwith respectto a Loan, the Lenderwill remitto BDCits pro rata share

of such amount. Unless the Lender is otherwise entitled to apply payments as provided in Section 9

hereof, the Lender shall promptly remit BDC’s share of payments on account ofprincipal and interest to

BDCwithin five (5)business days of receipt orfive (5)business days of the end of each month if BDC

has more than one Participation.

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(B) Payments are to be made by ACHtransfer fromthe Lender’s account. Paymentsmustbe coordinated

with BDC’s loan servicing representative in BDC AccountingOffice. A Monthly Report/Payment

Distribution Summary and Transmittal must be completed and submitted witheach and every payment

remitted to BDC. IfBDC has more than one Participation with the Lender, the Lender may make one

ACHtransfer combiningpayments into one remittance. The Report/Payment Distribution Summaryand

Transmittal shall disclose information, includingbut not limited to, the date the Lender received payment

from or on behalf of each Borrower, the manner in which the Lenderapportioned said payment between

interest and principal between the Lender and BDC, and the outstandingbalance of the Loan. In the event

that a Borrower fails to remita scheduled payment to the Lender, the Lender, nevertheless, must submit

the Monthly Report/Payment Distribution Summary and Transmittal to BDC indicatingeither that no

payment was received or that no payment was due and owing to BDC.

6.2 Loan Servicing and Application of Payments.

(A) In its handlingof the Loan and any collateral securityrights under the Loan Documents, theLender

shall exercise the same care and due diligence it exercises when it processes loans and collateral security

rights on its own behalf and within the covenants and requirements in Sections 6.5, 6.6, and 6.7. Except

for the express warranties contained herein, the Loan and Participation shall be for the amounts specified

in the CommitmentLetter.Exceptas provided for in Section 18.1, a Participation ora Loan maynot be

transferred by BDC orthe Lender(asapplicable), in whole or in part, without the written consent of the

other party which consent shall not be unreasonablywithheld. In no event shall the Lender reduceits

ownership to less than the agreed upon percentage of the initial participation. Itis also understood that

the Lender shall have no independent responsibilityfor the performance ofa Borrower's obligation, nor

for any failure or delayin exercising any rights or powers giventhe Lender bythe Loan Documents,

beyond undertakingthe same care that the Lender exercises in the making and handling of loans and

credits for its own account.

(B) Allsecurity evidenced by the Loan Documents and anyadditional security given by a Borrower shall

be held bythe Lenderprimarily as security for the Loan and shall notbe used orapplied toward payment

of other obligations of the Borrower to the Lender, as long as the Loan remains unpaid and as long as this

Agreement remains in effect; provided however, that nothing herein shall preventthe Lender from

collectingpayments fromthe Borrower for other indebtedness, or foreclosingupon othersecurity that is

not securinga Loan covered under this Agreement, ifthe other loans or credits are in default, are

separatelystated on the books ofthe Lender, and the securityor other collateral is segregatedatall times,

and provided that any such action triggers an event of default under the Loan Documents.

respect to a Loan, and shall in all cases provide such notice to BDCno later than the date on which the

first payment affected by the rate change is delivered to BDC.

6.3 Lender's Late Payments to BDC.

(A) If the Lenderfails to make Prompt Paymentto BDC for it’s pro rata share of any payment the Lender

receives from, or on behalfof, the Borrowerwith respect to a Loan, the Lender shall pay BDC a late fee

and/or interest as described in Section 1 (Prompt Payment) of this Agreement.

(B) Ifall or partof any paymentmade to the Lender is rescinded or mustotherwise be returned to a

Borrower foranyreason (other than the Lender's negligence or misconduct), and if the Lender has, prior

thereto, paid to BDC its pro rata share of such payment, the Lendershall, after telephone notice to BDC

and confirmed later in writing, subtract the appropriate portion of such rescinded or returned payment

from BDC's next payment hereunder.

6.4 Application of Monies. Except as providedin Section 6.7, all monies collected or received bythe

Lender in connection with any Loan (other than the fees) shall be applied and distributed in the following

order of priority: (i) to the paymentof all Servicing Expenses (ifany); (ii) to the paymentof accrued and

unpaid interest on the Note; and (iii) to the paymentof principal on the Note. Before any distribution to

BDC, with respect to any such application beingmade, the amount thereof shall be adjusted to the extent

that any amount is owed by either party to the other, in accordance with the terms hereof.

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6.5 Lender's Powers. BDC authorizes the Lender, and the Lender hereby agrees, to act as agent for BDC

subject to the limitations contained herein, including the provisions of Sections 6.2(B), 6.6 and 6.7 hereof:

(i) to negotiate, control, manage and service the Loan; (ii) to enforce or to refrain from enforcing the Loan

Documents;(iii) to give consents, commitments or waivers in connection with the Loan Documents; (iv)

to acquire additionalsecurity for the Loan; (v) to take or refrain fromtaking anyaction and make any

determination provided for herein or in the Loan Documents; and (vi) to exercise all such powers asare

incidentalthereto. The Lender acknowledges its status as trustee and represents that it has the power to

performthe services listed in this Section. In acting under this Agreement, the Lender agrees to exercise

the same degree of care in administering each Loan as it would use in managing its own loans in which no

Participation has been issued. The Lender agreesthat the exercise of thesefiduciary responsibilities as

trustee for BDCincludes the full and complete pursuit of amounts owed in relation to anyunpaid portion

of the entire Loan until released fromthatresponsibility in writing byBDC, while BDC retains an

undivided interest in the Loan and anyrelated Loan Documents. Further, the Lender agrees that it will

take no independent action, unless agreed to in advance and in writing by BDC, that directly, or indirectly

by nature of a proceedingor process, releases the Borrower or any guarantor or other responsible party or

entity, in full or in partial satisfaction, froma continuingresponsibility to repay the Loan and/or other

applicable charges/fees in relation to debt collection activities, until all amounts due are paid in full.

6.6 Lender's Covenants with Respect to the Loans.

(A)The Lender hereby covenants with respect to each Loan that it shall not, without BDC’s prior

written consent or approval:

(i)consent to or accept any cancellation, termination, revision, or settlement of any

Loan Document, or agree to anytransfer or termination of any instrument now or

hereafter assigned to it as security for the Loan;

(ii)release, partially or fully, any collateral given as securityforthe Loan or any

guarantor of the Loan;

(iii)extend the maturitydate of the Loan orthe date ofanyinterest orprincipal

payment there under;

(iv)reduce the amount of any payment of principal or the applicable Lender Rate;

(v)increase the maximum amount of the Loan or the obligations of the Lender or BDC

pursuant to any Loan Document;

(vi)require the acceptance of a new note evidencingthe Loan, in substitution for the

Note;

(vii)waive or consent to the modification ofanyLoan Document that would cause the

Loan to no longer be in compliance with the requirements of Section 3; or

(viii)consent to any amendment or modification to a LoanDocument that would be, in

the judgment of a prudent financial manager, material to the Loan.

(B)In the event that Lender seeks BDC’s consentor approval forany ofthe matters enumerated

above BDC shall make every effort to respond to the Lender's request within ten (10)

business days after such request. Such response may be by telephone, to be confirmed in

writing promptly thereafter.

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(C)Upon the occurrence of any default by the Borrower or guarantor under any of the Loan

Documents, the Lender shall consult in good faith with BDC. Notwithstanding the foregoing,

if such a default is caused by the nonpayment ofprincipal orinterest, by the bankruptcy of

the Borroweror a guarantor, or by the occurrence of an event that would have a material

adverse effect on the repaymentofthe Loan or thecollateral securingthe Loan (in the

Lender's reasonable judgment), the Lendershall not waive such default withoutthe written

consent of BDC.

6.7 Subordination after Default. The Lender and BDC may agree to the subordination of amounts (both

principal and interest)owed to BDCunder certaincircumstances. Such subordination shall be effective

only ifnoted on both the relevant Commitment Letter and Participation Certificate. If the Lender and

BDCso agree, the amounts owed bythe Lenderto BDC with respect to a Participation shall be

subordinatedto amounts owed by the Borrowerto the Lender from and after the occurrence ofall of the

following events: (i) the occurrence of any default under any ofthe applicableLoan Documents; (ii)

notice thereof to BDC; (iii)acceleration of the applicable Loan; and (iv) commencement and continuation

of foreclosure proceedings and other collection efforts, which shall include enforcingall guaranties with

respect thereto.

However, in any foreclosure proceeding where the Lender is the successful bidder at the foreclosure sale

and the sale results in a loss to either the Lender and/or BDC, or if Lender otherwise acquires title to such

property in lieu of a foreclosure, such as by a deed in lieu of foreclosure, and in any such casethe Lender

subsequently sells the foreclosedor otherwise acquiredpropertywithin twelve (12) months thereafter for

a gain or profit in excess of the value of the loan, the Lender is obligated to remit a pro rata share of said

gain or profit equal to BDC Participation Amount within thirty (30) calendar days thereafter. This also

applies to any situation where the Lender takesjudicialor non-judicial ownership of collateral assets for

subsequent disposition.

Intentional breach of any of Lender’sCovenants or requirements specified in Sections 6.5, 6.6, or 6.7

renders all subordination null and void as of the date of the breach. Unless a new subordination agreement

is executed in writingby the Lenderand BDC, any amounts recovered upon the Borrower’s default are to

be distributed on a pro rata basis equal to BDC Participation Amount, plus recovered interest and fees if

any.

6.8 Retention ofCounsel.In the event of actual or threatened litigation affectinga Loan or the security

for such Loan, and if the Lender is of the opinion that the services of an attorneyshould be retained to

protect those interests,theLender may, followingten (10) business days'prior written notice to BDC

(unless, in the judgmentofthe Lender, immediate action is required, whereuponanyreasonableformof

notice to BDC shall be acceptable), retain counsel to representthe Lender. The Lender shall seek to cause

the Borrower to paythe reasonable fees and expenses of such counsel in accordance with the terms and

conditions of the Loan Documents, but ifthe Borrowerfails to pay such fees and expenses, then the

Lender shall pay all reasonable costs thereof as ServicingExpenses. BDCshall not have any right in

connection with such litigation to retain other counsel, except at the sole cost and expense of BDC.

7. REPURCHASE BY LENDER OF THE PARTICIPATION

7.1 Repurchase by Lender. At any time during which the Loan is outstanding, the Lender shall have the

unconditional right, within its sole and exclusive discretion, to repurchase the Participation in the Loan,

upon written notice to BDC.

7.2 Price Payable by the Lender. The purchase price to be paid by the Lender to BDC under Sections

6.6(B) and 7.1 hereof shall be an amount equal to the Participation Amount, together with any accrued

interest thereon and fees (if any).

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7.3 Consummation of Repurchase. Anysuch repurchase shall occur on a date selected bythe Lender,

which date shall be no later than (a) ten (10) business days after the giving of written notice by the Lender

of the exercise of its option to repurchase, or(b)twenty-five (25) business daysafter the Lender begins

foreclosure proceedings. The purchase pricepaid bythe Lender to BDC shall be paid on such date in

immediately available funds, and concurrently therewith BDC shall execute, and deliver to the Lender,

document(s) reassigning to the Lenderthe Participation, without recourse, covenant or warranty, express

or implied (except that BDC shall warrant its ownership of the Participation, the amount ofindebtedness

outstanding thereunder and its authority and capacity to execute such documents).

8. LENDER'S RIGHT OF OFFSET

To the extent that at any time a Borrower, guarantoror any other party makesany paymentunder the

relevant Loan Documents to the Lender by exercise of a right of offset of any kind, includingany right

applyingto deposits, accounts, moneys orother property of such Borrower or guarantordeposited ator

held by the Lender (but excludingany property securing the Loan pursuant to the Loan Documents), such

payments shall be applied to reduce the Loan. Immediately thereafter,the Borrower’s outstanding balance

shall be automatically readjusted to reflect such payment, and the Lendershall purchase fromBDC as

much of the Participation Amountso as to return the Lender'sand BDC's respective interests to the

percentages existing prior to the offset.

9. SUBORDINATION OF BDC'S PARTICIPATION TO SERVICING EXPENSES

Subject to the terms and conditions of this Agreement, each Participation shall be subordinated in

paymentuntil such time as the Lender's Servicing Expenses (if any) with respect to the applicable Loan

have been paid in full. Accordingly, and in consideration thereof, Servicing Expenses shall be the sole

responsibility of the Lender, and the Lenderhereby indemnifies BDC foranyand allliability for

Servicing Expenses. In allother events, subjectto theterms of this Agreement, payments made on the

Participation shall be pari passu with amounts retained by the Lender with respect to the Borrower’s

outstandingbalance, pro rata in accordancewith their respectivepercentage interests.

10. BOOKKEEPING ENTRIES

The Lender will reduce, for the purpose of recordingthe value ofits assets in its financial books and

records,the value of any Loan asset by the amountof BDC’sParticipation Amount. The Lender shall,

within ten (10) business days after a request by BDCorUS Treasury, allow BDC or US Treasury to

examine the Lender's books and records concerning the Loan.

11. ACKNOWLEDGEMENTS AND AGREEMENTS BY THE PARTIES

BDC and the Lender acknowledge and agree with respect to each Loan that:

(A)The Lender is expected to exercise due diligence in determining (i) the accuracyof any

statement, warranty, representation or certification made by the Borrower and/or any

guarantors in, or in connection with, any document relevant to the Loan, and (ii) the financial

condition of the Borrower and any guarantor with respect to the Loan or the performance or

observance of any obligations by the Borrower or any guarantor with respect to the Loan.

(B)The sale of a Participation does not constitute the sale of a "security"underor as defined in

the Securities Act of 1933 and the Securities Exchange Act of 1934.

(C)The relationship between the Lender and BDC is and shall be that of a seller and purchaser of

a propertyinterest and nota debtor-creditor relationship. ThisAgreement is notintended to

constitute, norshall it be construed to establish, a partnership or jointventure between the

Lender and BDC.

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