Special Custody and Pledge Agreement, dated as of June 4, 2013, by and between Corporate Capital Trust, Inc., BNP Paribas Prime Brokerage, Inc. and State Street Bank and Trust Company

AGREEMENT (hereinafter “Agreement”), dated as of June 4, 2013, among State Street Bank and Trust Company, a Massachusetts trust company, in its capacity as custodian hereunder (“Custodian”), Corporate Capital Trust, Inc. (the “Fund”), and BNP Paribas Prime Brokerage, Inc. (the “Counterparty”).

 

WHEREAS, the Fund provides Collateral (as defined herein) to Counterparty to secure obligations owing by the Fund to the Counterparty under the Committed Facility Agreement dated as of date hereof, as amended (the “Committed Facility Agreement”), and the account agreement included in the U.S. PB Agreement dated as of the date hereof with the Counterparty (the “Account Agreement” and together with the Committed Facility Agreement, the “40 Act Financing Agreements”); and

WHEREAS, Counterparty is required to comply with applicable laws and regulations pertaining to extensions of credit and borrowing of securities, including the margin regulations of the Board of Governors of the Federal Reserve System and of any relevant securities exchanges and other self-regulatory associations (collectively, the “Margin Rules”) and Counterparty’s internal policies; and

 

WHEREAS, to facilitate extensions of credit and the borrowing of securities from the Counterparty, the Fund and Counterparty desire to establish and evidence procedures for compliance with the Margin Rules; and

WHEREAS, Custodian has acted as custodian of certain assets of Fund pursuant to a custody agreement dated as of March 24, 2011 (the “Custody Agreement”).

NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, it is agreed as follows:

(1)           As used herein, capitalized terms have the following meanings unless otherwise defined herein:

“Adequate Performance Assurance” shall mean such Collateral placed in the Special Custody Account (as such term is hereinafter defined) as is adequate under the terms of the Committed Facility Agreement and, to the extent such Committed Facility Agreement (i) has been terminated or the commitment therein has expired or (ii) is otherwise inapplicable to any portion of the Collateral, the Account Agreement.

“Advice from Counterparty” means a notice or entitlement order (as defined in Section 8-102 of the UCC (as defined herein)) delivered by an Authorized Representative of Counterparty to the Fund or Custodian, as applicable hereunder, communicated: (i) in writing; (ii) by a facsimile-sending device; or (iii) in cases of calls for additional Collateral (as such term is hereinafter defined) or notices referred to in paragraph 8 hereof, by telephone to a person designated by the Fund or Custodian in writing as authorized to receive such advice or, in the event that no such person is available, to any officer of the Fund or Custodian and confirmed in writing promptly thereafter.  A duly-authorized officer of Counterparty will certify to Custodian, on Appendix A attached, the names and signatures of those employees of Counterparty who are authorized to sign Advices from Counterparty (each, an “Authorized Representative of Counterparty”), which certification may be amended from time to time.

“Business Day” means a day on which Custodian, the Fund and the Counterparty are open for business.

 

(2)           (a)           Upon instructions from the Fund, Custodian, in its capacity as a Securities Intermediary as defined in Revised Article 8 of the Uniform Commercial Code as in effect from time to time in the State of New York (the “UCC”), to the extent the same may be applicable, or in applicable federal law or regulations, shall segregate Collateral on its books and records as an account for Counterparty entitled “BNP Paribas Prime Brokerage, Inc., Pledgee of Corporate Capital Trust, Inc.” (“Special Custody Account”) and shall hold therein for the Counterparty as pledgee upon the terms of this Agreement all Collateral.  The Custodian hereby agrees that any Collateral except U.S. cash held in the Special Custody Account shall be treated as a financial asset for purposes of the UCC to the extent the same may be applicable, and Custodian shall elect to hold such Collateral that is U.S. cash as a deposit in its capacity as a “bank” as such term is defined in Section 9-102(a)(8) of the UCC, which deposit account shall constitute part of, and be maintained in the same manner as, the Special Custody Account.  The Fund agrees to instruct Custodian through Instructions from Fund as to the cash and specific securities which Custodian is to identify on its books and records as pledged to the Counterparty as Collateral in the Special Custody Account.

(8)           The occurrence of any of the following constitutes a default by the Fund hereunder (a “Fund Default”):  (a) a Default (as defined in the Committed Facility Agreement), (b) an Event of Default (as defined in the Account Agreement), or (c) Fund’s Insolvency.  Upon Counterparty’s determination that a Fund Default has occurred, if Counterparty wishes to declare such default, Counterparty shall notify the Fund in an Advice from Counterparty of such Fund Default.  After transmittal by Counterparty of such Advice from Counterparty, if such Fund Default is then continuing, Counterparty may thereupon take Default Action or any other action permitted pursuant to the 40 Act Financing Agreements, including without limitation, the conversion of any convertible securities or exercise of Fund’s rights in warrants (if any) held in the Account and the Special Custody Account, the buy-in of any securities of which the Account may be short, and the sale of any or all property or securities in the Account and the Special Custody Account to the extent necessary to satisfy Fund’s obligations to Counterparty (in which event such Collateral shall be delivered to Counterparty as directed in an Advice from Counterparty). Any sale of Collateral made hereunder shall be made in accordance with the provisions of the New York Uniform Commercial Code (including, without limitation section 9-610(b) of the New York Uniform Commercial Code). Fund shall be liable to Counterparty for any deficiency which may exist after the exercise by Counterparty of its rights and remedies as aforesaid. Any surplus resulting from the sale of Collateral shall be transmitted to Custodian.  Counterparty shall notify Fund of any deficiency remaining thereafter in an Advice from Counterparty.  Any such sale of Collateral held in the Special Custody Account shall be made only after such Collateral has been withdrawn from the Special Custody Account by Counterparty.