Each indemnification agreement provides that Solar Capital shall indemnify the director who is a party to the agreement (an Indemnitee), including the advancement of legal expenses,
if, by reason of his or her corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding, to the maximum extent permitted by Maryland law and the 1940 Act.
Certain Relationships and Transactions
We have entered into the Advisory Agreement with Solar Capital Partners. Mr. Gross, our Chairman,
Co-Chief
Executive Officer and President, and Mr. Spohler, our
Co-Chief
Executive Officer, Chief Operating Officer and board member, are managing members and senior
investment professionals of, and have financial and controlling interests in, Solar Capital Partners. In addition, Mr. Peteka, our Chief Financial Officer, Treasurer and Secretary, serves as the Chief Financial Officer for Solar Capital
Partners.
Solar Capital Partners and its affiliates may also manage other funds in the future that may have investment mandates that are
similar, in whole and in part, with ours. For example, Solar Capital Partners presently serves as investment adviser to Solar Senior Capital Ltd., a publicly-traded BDC, which focuses on investing primarily in senior secured loans, including first
lien and second lien debt instruments, and SCP Private Credit Income BDC LLC, an unlisted BDC, which focuses on investing primarily in senior secured loans, including
non-traditional
asset-based loans and
first lien loans. In addition, Michael S. Gross, our Chairman and
Co-Chief
Executive Officer, Bruce Spohler, our
Co-Chief
Executive Officer and Chief Operating Officer,
and Richard L. Peteka, our Chief Financial Officer, serve in similar capacities for Solar Senior Capital Ltd and SCP Private Credit Income BDC LLC.
Solar Capital Partners and certain investment advisory affiliates may determine that an investment is appropriate for us and for one or more
of those other funds. In such event, depending on the availability of such investment and other appropriate factors, Solar Capital Partners or its affiliates may determine that we should invest
side-by-side
with one or more other funds. Any such investments will be made only to the extent permitted by applicable law and interpretive positions of the SEC and its staff, and consistent with Solar
Capital Partners allocation procedures.
Related party transactions may occur among Solar Capital Ltd., Crystal Financial LLC,
Equipment Operating Leases LLC, Loyer Capital LLC and NEF Holdings LLC. These transactions may occur in the normal course of business. No administrative fees are paid to Solar Capital Partners by Crystal Financial LLC, Equipment Operating Leases
LLC, Loyer Capital LLC or NEF Holdings LLC.
In addition, we have adopted a formal code of ethics that governs the conduct of our officers
and directors. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the Maryland General Corporation Law.
Regulatory restrictions limit our ability to invest in any portfolio company in which any affiliate currently has an investment. The Company
obtained an exemptive order from the SEC on July 28, 2014 (the Exemptive Order). The Exemptive Order permitted us to participate in negotiated
co-investment
transactions with certain
affiliates, each of whose investment adviser is Solar Capital Partners, in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, and
pursuant to the conditions to the Exemptive Order. On June 13, 2017, the Company, Solar Senior Capital Ltd., and Solar Capital Partners received an exemptive order that supersedes the Exemptive Order (the New Exemptive Order) and
extends the relief granted in the Exemptive Order such that it no longer applies to certain affiliates only if their respective investment adviser is Solar Capital Partners, but also applies to certain affiliates whose investment adviser is an
investment adviser that controls, is controlled by or is under common control with Solar Capital Partners and is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. The terms and conditions of the New Exemptive
Order are otherwise substantially similar to the Exemptive Order. We believe that it will be advantageous for us to
co-invest
with funds managed by Solar
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