TCPC BlackRock TCP Capital Corporation

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

 

BLACKROCK TCP CAPITAL CORP.

(Exact name of registrant as specified in its charter)

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Registrant’s telephone number, including area code (310) 566-1000

Not applicable

(Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company   ☐

 

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.   ☐

 

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Agreement and Plan of Merger

 

On September 6, 2023, BlackRock TCP Capital Corp., a Delaware corporation (NASDAQ: TCPC) (“TCPC”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with BlackRock Capital Investment Corporation, a Delaware corporation (NASDAQ: BKCC) (“BCIC”), Project Spurs Merger Sub, LLC, a Delaware limited liability company and wholly-owned indirect subsidiary of TCPC (“Merger Sub”), and, solely for the limited purposes set forth therein, (x) BlackRock Capital Investment Advisors, LLC, a Delaware limited liability company and investment adviser to BCIC (“BCIA”), and (y) Tennenbaum Capital Partners, LLC, a Delaware limited liability company and investment adviser to TCPC (“TCP”).  The Merger Agreement provides that, subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), BCIC will merge with and into Merger Sub, with Merger Sub continuing as the surviving company and as a wholly-owned subsidiary of Special Value Continuation Partners LLC, a Delaware limited liability company and wholly owned direct consolidated subsidiary of TCPC (the “Merger”).

 

The boards of directors of both BCIC and TCPC, in each case, on the recommendation of a special committee (such company’s “Special Committee”) comprised solely of all of the independent directors of BCIC or TCPC, as applicable, have approved the Merger Agreement and the transactions contemplated thereby. The parties to the Merger Agreement intend the Merger to be treated as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.

 

Merger Consideration

 

At the Effective Time, each share of common stock, par value $0.001 per share, of BCIC (“BCIC Common Stock”) issued and outstanding immediately prior to the Effective Time (other than shares owned by TCPC or any of its consolidated subsidiaries or by BCIC as treasury stock (the “Cancelled Shares”)) will be converted into the right to receive a number of shares of common stock, par value $0.001 per share, of TCPC (“TCPC Common Stock”) equal to the Exchange Ratio (as defined below), plus any cash (without interest) in lieu of fractional shares.

 

As of a mutually agreed date no earlier than 48 hours (excluding Sundays and holidays) prior to the Effective Time (such date, the “Determination Date”), each of BCIC and TCPC will deliver to the other a calculation of its net asset value (“NAV”) as of such date (such calculation with respect to BCIC, the “Closing BCIC Net Asset Value” and such calculation with respect to TCPC, the “Closing TCPC Net Asset Value”), in each case using a pre-agreed set of assumptions, methodologies and adjustments. Based on such calculations, the parties will calculate the “BCIC Per Share NAV”, which will be equal to (i) the Closing BCIC Net Asset Value divided by (ii) the number of shares of BCIC Common Stock issued and outstanding as of the Determination Date (excluding any Cancelled Shares), and the “TCPC Per Share NAV”, which will be equal to (A) the Closing TCPC Net Asset Value divided by (B) the number of shares of TCPC Common Stock issued and outstanding as of the Determination Date. The “Exchange Ratio” will be equal to the quotient (rounded to four (4) decimal places) of (i) the BCIC Per Share NAV divided by (ii) the TCPC Per Share NAV, each calculated as of the Determination Date.

 

BCIC and TCPC will update and redeliver the Closing BCIC Net Asset Value or the Closing TCPC Net Asset Value, respectively, in the event that the closing of the Merger is delayed or there is a more than de minimis change to such calculation between the Determination Date and the closing of the Merger and if needed to ensure that the calculation is determined within 48 hours (excluding Sundays and holidays) prior to the Effective Time.

 

Representations, Warranties and Covenants

 

The Merger Agreement contains customary representations and warranties by each of BCIC, TCPC, BCIA and TCP. The Merger Agreement also contains customary covenants, including, among others, covenants relating to the operation of each of BCIC’s and TCPC’s businesses during the period prior to the closing of the Merger. BCIC and TCPC have agreed to convene and hold stockholder meetings for the purpose of obtaining the approvals required of BCIC’s and TCPC’s stockholders, respectively, and have agreed that each of the BCIC board of directors and TCPC board of directors will, subject to certain exceptions, recommend that BCIC and TCPC stockholders, respectively, approve the applicable proposals.

The Merger Agreement provides that each of BCIC and TCPC may not solicit proposals relating to alternative transactions, or, subject to certain exceptions, enter into discussions or negotiations or provide information in connection with any proposal for an alternative transaction. However, the BCIC board of directors may, subject to certain conditions and in some instances payment by the party submitting the superior proposal of a termination fee of approximately $9.4 million, change its recommendation to the stockholders of BCIC, terminate the Merger Agreement and enter into an agreement with respect to a superior proposal if the BCIC Special Committee determines in its reasonable good faith judgment, after consultation with its outside legal counsel and, in the case of financial matters, its financial advisor, that the failure to take such action would be reasonably likely to be inconsistent with the BCIC’s directors’ fiduciary duties under applicable law (taking into account, among other factors, any changes to the Merger Agreement proposed by TCPC). In addition, the TCPC board of directors may, subject to certain conditions and in some instances payment by the party submitting the superior proposal of a termination fee of approximately $22.4 million, change its recommendation to the stockholders of TCPC, terminate the Merger Agreement and enter into an agreement with respect to a superior proposal if the TCPC Special Committee determines in its reasonable good faith judgment, after consultation with its outside legal counsel and, in the case of financial matters, its financial advisor, that the failure to take such action would be reasonably likely to be inconsistent with the TCPC directors’  fiduciary duties under applicable law (taking into account, among other factors, any changes to the Merger Agreement proposed by BCIC).

 

Conditions to the Merger

 

Consummation of the Merger, which is expected to occur in the first fiscal quarter of 2024, is subject to certain closing conditions, including (1) requisite approvals of BCIC’s and TCPC’s stockholders, (2) authorization of the shares of TCPC Common Stock to be issued as consideration in the Merger for listing on the Nasdaq Global Select Market, (3) effectiveness of the registration statement for the TCPC Common Stock to be issued as consideration in the Merger, (4) the absence of certain legal impediments to the consummation of the Merger, (5) required regulatory approvals (including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended), (6) determinations of closing NAV in accordance with the terms of the Merger Agreement, (7) the effectiveness of the Eighth Amendment, by and among BCIC, as borrower, certain of its subsidiaries, as guarantors, the lenders party thereto and Citibank, N.A., as administrative agent, which amends that certain Second Amended and Restated Senior Secured Revolving Credit Facility, dated as of February 19, 2016, and the occurrence of the Extension Amendments Effective Date thereunder and (8) subject to certain exceptions, the accuracy of the representations and warranties and compliance with the covenants of each party to the Merger Agreement.

 

Termination

 

The Merger Agreement also contains certain termination rights in favor of BCIC and TCPC, including if the Merger is not completed on or before August 31, 2024 or if the requisite approvals of BCIC or TCPC stockholders are not obtained. The Merger Agreement provides that, upon the termination of the Merger Agreement under certain circumstances, a third party acquiring BCIC may be required to pay TCPC a termination fee of approximately $9.4 million. The Merger Agreement provides that, upon the termination of the Merger Agreement under certain circumstances, a third party acquiring TCPC may be required to pay BCIC a termination fee of approximately $22.4 million.

 

Expenses

 

TCP has agreed to cover 50% of the transaction costs incurred by TCPC in connection with the Merger Agreement and BCIA has agreed to cover 50% of the transaction costs incurred by BCIC in connection with the Merger Agreement, in each case, up to an aggregate cap of $6 million (or, if the closing of the Merger does not occur because the requisite approvals of the stockholders of BCIC or TCPC was not obtained, up to an aggregate cap of $3 million).

 

General

 

The foregoing summary description of the Merger Agreement and the transactions contemplated thereby is subject to and qualified in its entirety by reference to the Merger Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and the terms of which are incorporated herein by reference.

 

The Merger Agreement has been filed as Exhibit 2.1 to this Current Report on Form 8-K in order to provide investors and security holders with information regarding its terms. It is not intended to provide any other information about the parties thereto or their respective subsidiaries and affiliates. The Merger Agreement contains representations, warranties, covenants and agreements that were made only for purposes of the Merger Agreement and as of specific dates; were solely for the benefit of the parties to the Merger Agreement (except as may be expressly set forth in the Merger Agreement); may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors and security holders should not rely on such representations, warranties, covenants or agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any of the parties to the Merger Agreement or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties, covenants and agreements may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by the parties to the Merger Agreement.

Amended and Restated Investment Advisory Agreement

On September 6, 2023, TCPC entered into the Second Amended and Restated Investment Advisory Agreement, by and between TCPC and TCP (the “Amended Advisory Agreement”), which will be effective at, and subject to the occurrence of the closing of the Merger.  The Amended Advisory Agreement provides that, as of the Effective Time, TCP will reduce the base management fee rate from 1.50% to 1.25% on assets equal to or below 200% of the net asset value of TCPC (for the avoidance of doubt, the base management fee rate on assets that exceed 200% of the net asset value of TCPC would remain 1.00%) with no change to the basis of calculation.

The description above is only a summary of certain material provisions of the Amended Advisory Agreement and does not purport to be complete and is qualified in its entirety by reference to the provisions in such Amended Advisory Agreement, a copy of which is attached hereto as Exhibit 10.1.

Fee Waiver Agreement

The description above is only a summary of certain material provisions of the Fee Waiver Agreement and does not purport to be complete and is qualified in its entirety by reference to the provisions in such Fee Waiver Agreement, a copy of which is attached hereto as Exhibit 10.2.

ITEM 7.01

REGULATION FD DISCLOSURE

On September 6, 2023, TCPC and BCIC issued a joint press release announcing entry into the Merger Agreement. A copy of the press release is furnished herewith as Exhibit 99.1.

 

On September 6, 2023, TCPC and BCIC provided a joint investor presentation in connection with entry into the Merger Agreement. A copy of the investor presentation is furnished herewith as Exhibit 99.2.

The information disclosed under this Item 7.01, including Exhibits 99.1 and 99.2 hereto, is being “furnished” and is not deemed “filed” by TCPC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor is it deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Forward-Looking Statements

 

Some of the statements in this Current Report on Form 8-K constitute forward-looking statements because they relate to future events, future performance or financial condition of BCIC or TCPC or the Merger. The forward-looking statements may include statements as to: future operating results of BCIC and TCPC and distribution projections; business prospects of BCIC and TCPC and the prospects of their portfolio companies; and the impact of the investments that BCIC and TCPC expect to make. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this Current Report on Form 8-K involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with (i) the timing or likelihood of the Merger closing; (ii) the expected synergies and savings associated with the Merger; (iii) the ability to realize the anticipated benefits of the Merger, including the expected accretion to net investment income and the elimination or reduction of certain expenses and costs due to the Merger; (iv) the percentage of BCIC and TCPC stockholders voting in favor of the proposals submitted for their approval; (v) the possibility that competing offers or acquisition proposals will be made; (vi) the possibility that any or all of the various conditions to the consummation of the Merger may not be satisfied or waived; (vii) risks related to diverting management’s attention from ongoing business operations; (viii) the risk that stockholder litigation in connection with the Merger may result in significant costs of defense and liability; (ix) changes in the economy, financial markets and political environment, including the impacts of inflation and rising interest rates; (x) risks associated with possible disruption in the operations of BCIC and TCPC or the economy generally due to terrorism, war or other geopolitical conflict (including the current conflict between Russia and Ukraine), natural disasters or public health crises and epidemics; (xi) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); (xii) conditions in BCIC’s and TCPC’s operating areas, particularly with respect to business development companies or regulated investment companies; and (xiii) other considerations that may be disclosed from time to time in BCIC’s and TCPC’s publicly disseminated documents and filings. BCIC and TCPC have based the forward-looking statements included in this Current Report on Form 8-K on information available to them on the date hereof, and they assume no obligation to update any such forward-looking statements. Although BCIC and TCPC 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 they may make directly to you or through reports that BCIC and TCPC in the future may file with the Securities and Exchange Commission (“SEC”), including the Joint Proxy Statement and the Registration Statement (each as defined below), annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

 

Additional Information and Where to Find It

 

In connection with the Merger, BCIC and TCPC plan to file with the SEC and mail to their respective stockholders a joint proxy statement on Schedule 14A (the “Joint Proxy Statement”), and TCPC plans to file with the SEC a registration statement on Form N-14 (the “Registration Statement”) that will include the Joint Proxy Statement and a prospectus of TCPC. The Joint Proxy Statement and the Registration Statement will each contain important information about BCIC, TCPC, the Merger and related matters. This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. STOCKHOLDERS OF BCIC AND TCPC ARE URGED TO READ THE JOINT PROXY STATEMENT AND REGISTRATION STATEMENT, AND OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT BCIC, TCPC, THE MERGER AND RELATED MATTERS.

 

Investors and security holders will be able to obtain the documents filed with the SEC free of charge at the SEC’s website, http://www.sec.gov and, for documents filed by TCPC, from TCPC’s website at http://www.tcpcapital.com

 

Participants in the Solicitation

 

BCIC, its directors, certain of its executive officers and certain employees and officers of BlackRock Capital Investment Advisors, LLC and its affiliates may be deemed to be participants in the solicitation of proxies in connection with the Merger. Information about the directors and executive officers of BCIC is set forth in its proxy statement for its 2023 Annual Meeting of Stockholders, which was filed with the SEC on March 15, 2023. TCPC, its directors, certain of its executive officers and certain employees and officers of  Tennenbaum Capital Partners, LLC and its affiliates may be deemed to be participants in the solicitation of proxies in connection with the Merger. Information about the directors and executive officers of TCPC is set forth in its proxy statement for its 2023 Annual Meeting of Stockholders, which was filed with the SEC on April 6, 2023. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the BCIC and TCPC stockholders in connection with the Merger will be contained in the Joint Proxy Statement when such document becomes available. These documents may be obtained free of charge from the sources indicated above.

 

No Offer or Solicitation

This Current Report on Form 8-K is not, and under no circumstances is it to be construed as, a prospectus or an advertisement and the communication of this Current Report on Form 8-K is not, and under no circumstances is it to be construed as, an offer to sell or a solicitation of an offer to purchase any securities in BCIC, TCPC or in any fund or other investment vehicle managed by BlackRock  or any of its affiliates.

 

(d) Exhibits.

* Exhibits and schedules to Exhibit 2.1 have been omitted in accordance with Item 601 of Regulation S-K. The registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.

SIGNATURE

 

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.

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1.1	The Merger	2
1.2	Closing	2
1.3	Effective Time	2
1.4	Effects of the Merger	3
1.5	Conversion of Equity Interests	3
1.6	Governing Documents	4
1.7	Directors and Officers	4
1.8	Effect on TCPC Common Stock	4
1.9	Termination of Certain Contractual Obligations	4

2.1	Delivery of Evidence of TCPC Common Stock	4
2.2	Fractional Shares	4
2.3	Paying and Exchange Agent	5
2.4	Delivery of Merger Consideration	5
2.5	No Further Ownership Rights	5
2.6	Net Asset Value Calculation	5
2.7	Termination of Exchange Fund	6
2.8	Withholding Rights	7

3.1	Corporate Organization	7
3.2	Capitalization	8
3.3	Authority; No Violation	8
3.4	Governmental Consents	9
3.5	Reports	9
3.6	BCIC Financial Statements	10
3.7	Broker’s Fees	13
3.8	Absence of Changes or Events	13
3.9	Compliance with Applicable Law; Permits	13
3.10	State Takeover Laws	15
3.11	BCIC Information	15
3.12	Taxes and Tax Returns	15
3.13	Litigation	17

3.14	Employee Matters	17
3.15	Certain Contracts	17
3.16	Insurance Coverage	19
3.17	Intellectual Property	19
3.18	Environmental Matters	19
3.19	Real Property	20
3.20	Investment Assets	20
3.21	Appraisal Rights	20
3.22	Valuation	20
3.23	Opinion of Financial Advisor	20

4.1	Corporate Organization	20
4.2	Capitalization	21
4.3	Authority; No Violation	22
4.4	Governmental Consents	23
4.5	Reports	23
4.6	TCPC Financial Statements	24
4.7	Broker’s Fees	26
4.8	Absence of Changes or Events	27
4.9	Compliance with Applicable Law; Permits	27
4.10	TCPC Information	28
4.11	Taxes and Tax Returns	29
4.12	Litigation	31
4.13	Employee Matters	31
4.14	Certain Contracts	31
4.15	Insurance Coverage	33
4.16	Intellectual Property	33
4.17	Environmental Matters	33
4.18	Real Property	33
4.19	Investment Assets	34
4.20	State Takeover Laws	34
4.21	Valuation	34
4.22	Opinion of Financial Advisor	34

5.1	Organization	34
5.2	Authority; No Violation	35
5.3	Compliance with Applicable Law; Permits	35
5.4	Litigation	36
5.5	Valuation	37

5.6	Advisor Information	37
5.7	Best Interests and No Dilution	37
5.8	Financial Resources	38
5.9	TCPC and BCIC Forbearances	38
5.10	TCPC and BCIC Representations and Warranties	38

6.1	Conduct of Businesses Prior to the Effective Time	38
6.2	Forbearances	38

7.1	Further Assurances	41
7.2	Regulatory Matters	42
7.3	Stockholder Approval	43
7.4	Nasdaq Listing	44
7.5	Indemnification; Directors’ and Officers’ Insurance	44
7.6	No Solicitation	45
7.7	BCIC Takeover Proposals	46
7.8	TCPC Takeover Proposals	49
7.9	Access to Information	51
7.10	Publicity	51
7.11	Takeover Statutes and Provisions	52
7.12	Tax Matters	52
7.13	Stockholder Litigation	53
7.14	No Other Representations or Warranties	53
7.15	Coordination of Dividends	53

8.1	Conditions to Each Party’s Obligations to Effect the Merger	53
8.2	Conditions to Obligations of TCPC and Merger Sub to Effect the Merger	54
8.3	Conditions to Obligations of BCIC to Effect the Merger	56
8.4	Frustration of Closing Conditions	57

9.1	Termination	58
9.2	Termination Fee	60

9.3	Effect of Termination	62
9.4	Fees and Expenses	62
9.5	Amendment	63
9.6	Extension; Waiver	64

11.1	Nonsurvival of Representations, Warranties and Agreements	75
11.2	Notices	75
11.3	Interpretation; Construction	77
11.4	Counterparts	77
11.5	Entire Agreement	77
11.6	Governing Law; Jurisdiction; Waiver of Jury Trial	78
11.7	Assignment; Third-Party Beneficiaries	78
11.8	Specific Performance	78
11.9	Disclosure Schedule	79

	BlackRock Capital Investment Corp.
	50 Hudson Yards
	New York, NY  10001
	Attention:	Laurence Paredes
	Email:	laurence.paredes@blackrock.com

	Vedder Price PC
	222 North LaSalle Street
	Suite 2600
	Chicago, Illinois  60601
	Attention:	Bruce Rosenblum
		Deborah B. Eades
	Email:	brosenblum@vedderprice.com
		deades@vedderprice.com

	BlackRock TCP Capital Corp.
	2951 28th Street, Suite 1000
	Santa Monica, CA 90405,
	Attention: CEO

	Dechert LLP
	1900 K Street NW
	Washington DC, United States
	20006-1110
	Attention:	Harry Pangas
		Eric Siegel
	Email:	harry.pangas@dechert.com
		eric.siegel@dechert.com

	Tennenbaum Capital Partners, LLC
	2951 28th Street, Suite 1000
	Santa Monica, CA 90405
	Attention: Rajneesh Vig, Managing Director

	BlackRock Capital Investment Advisors, LLC
	50 Hudson Yards
	New York, NY  10001
	Attention:	Laurence Paredes
	Email:	laurence.paredes@blackrock.com

	Skadden, Arps, Slate, Meagher & Flom LLP
	One Manhattan West
	New York, New York, United States
	10001-8602
	Attention:	David Hepp
		Michael Hoffman
		Matthew Collin
	Email:	david.hepp@skadden.com
		michael.hoffman@skadden.com
		matthew.collin@skadden.com

	MERGER SUB:
	PROJECT SPURS MERGER SUB, LLC
	By its Managing Member:
	SPECIAL VALUE CONTINUATION PARTNERS, LLC
	By its Member:
	BLACKROCK TCP CAPITAL CORP.
	By:	/s/ Erik Cuellar
		Name:	Erik Cuellar
		Title:	Authorized Signatory

 

SECOND AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT

 

dated as of September 6, 2023

 

BY AND BETWEEN

 

BlackRock TCP Capital Corp.

a Delaware Corporation

 

AND

 

Tennenbaum Capital Partners, LLC

a Delaware limited liability company

 

TABLE OF CONTENTS

 

SECOND AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT

 

This Second Amended and Restated Investment Management Agreement (this “Agreement”), dated as of September 6, 2023, is made by and between BlackRock TCP Capital Corp. (the “Company”), a Delaware corporation which has elected to be treated as a business development company under the Investment Company Act of 1940 (the “1940 Act”), and Tennenbaum Capital Partners, LLC (the “Investment Manager”), a Delaware limited liability company registered as an investment adviser under the Investment Advisers Act of 1940 (the “Advisers Act”).

 

WHEREAS, on August 1, 2018, the Company and the Investment Manager entered into an Investment Management Agreement, pursuant to which the Investment Manager agreed to furnish certain investment management services to the Company (the “Original Agreement”);

 

WHEREAS, on February 9, 2019, the Company and the Investment Manager entered into an Amended and Restated Investment Management Agreement, pursuant to which the Investment Manager agreed to furnish certain investment management services to the Company and which amended and restated the Original Agreement in its entirety (the “Amended Agreement”);

 

WHEREAS, the Company and the Investment Manager have entered into an Agreement and Plan of Merger (the “Merger Agreement”) with BlackRock Capital Investment Corporation (“BCIC”), BlackRock Capital Investment Advisors, LLC, and Project Spurs Merger Sub, LLC (“Merger Sub”), pursuant to which BCIC will merge with and into Merger Sub with Merger Sub surviving (the “Merger”);

 

WHEREAS, the Company and the Investment Manager desire to amend and restate the Amended Agreement in its entirety, to be effective as of the Commencement Date (as defined below).

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree that the Amended Agreement is hereby amended and restated in its entirety to read as follows (and that, as of the Commencement Date (as defined below), the Amended Agreement shall be deemed of no further force and effect whatsoever):

 

1.           General Duties of the Investment Manager.  Subject to the direction and control of the Company’s Board of Directors (the “Board”) and subject to and in accordance with the terms of the Company’s certificate of incorporation (the “Certificate of Incorporation”), the policies adopted or approved by the Board, as the same shall be amended from time to time, the conditions of any exemptive order obtained by or for the benefit of the Company from the Securities and Exchange Commission (the “SEC”) and this Agreement, the Investment Manager agrees to supervise and direct the investment and reinvestment of the assets and perform the duties set forth herein, and shall have such other powers with respect to the investment and leverage related functions of the Company as shall be delegated from time to time to the Investment Manager by the Board.  The Investment Manager is hereby granted, and shall have, full power to take all actions and execute and deliver all necessary and appropriate documents and instruments on behalf of the Company in accordance with the foregoing.  The Investment Manager shall endeavor to comply in all material respects with the 1940 Act and all rules and regulations thereunder, all other applicable federal and state laws and regulations and the applicable provisions of any other agreements to which the Company is subject.  Subject to the foregoing and the other provisions of this Agreement, and subject to the direction and control of the Board, the Investment Manager is hereby appointed as the Company’s agent and attorney-in-fact with authority to negotiate, execute and deliver all documents and agreements on behalf of the Company and to do or take all related acts, with the power of substitution, to acquire, dispose of or otherwise take action with respect to or affecting the Investments (as defined in Section 4(b) hereof), including, without limitation:

 

 

 

 

 

 

 

 

 

 

 

 

3.            No Joint Venture.

 

 

 

 

4.           Limitations Relating to Investments.

 

 

 

 

 

 

5.           Brokerage.  The Investment Manager shall effect all purchases and sales of securities in a manner consistent with the principles of best execution, taking into account net price (including commissions) and execution capability and other services which the broker or other intermediary may provide.  In this regard, the Investment Manager may effect transactions which cause the Company to pay a commission in excess of a commission which another broker or other intermediary would have charged; provided, however, that the Investment Manager shall have first determined that such commission is reasonable in relation to the value of the brokerage or research services performed by that broker or other intermediary or that the Company is the sole beneficiary of the services paid for by such broker or other intermediary.

 

6.           Compensation.

 

 

 

 

 

The ordinary income component will be the amount, if positive, equal to 20% of the cumulative ordinary income before incentive compensation through February 8, 2019, and 17.5% thereafter, less cumulative ordinary income incentive compensation previously paid.  Notwithstanding the foregoing provision, the Company will pay an ordinary income Incentive Fee only to the extent the cumulative total return of the Company after incentive compensation and including such payment would equal or exceed a 7% annual return on daily weighted average contributed common equity.

 

 

The capital gains component will be the amount, if positive, equal to 20% of the cumulative realized capital gains (computed net of cumulative realized losses and cumulative unrealized capital depreciation) through February 8, 2019, and 17.5% thereafter, less cumulative capital gains incentive compensation previously paid or distributed.  The capital gains component will be paid in full prior to payment of the ordinary income component.  Notwithstanding the foregoing provision, the Company will pay a capital gains Incentive Fee only to the extent the cumulative total return of the Company after incentive compensation and including such payment would equal or exceed a 7% annual return on daily weighted average contributed common equity.

 

 

 

 

 

 

 

7.          Expenses.  The Company will be responsible for paying the compensation of the Investment Manager and any placement agent of any of its securities, due diligence and negotiation expenses, fees and expenses of custodians, administrators (including the Investment Manager or an affiliate in its capacity as administrator), transfer and distribution agents, counsel and directors, insurance, filings and registrations, proxy expenses, expenses of communications to investors, interest, taxes, portfolio transaction expenses, indemnification, litigation and other extraordinary expenses and all such other expenses as the Investment Manager is not responsible for (such as for services the Investment Manager is required to supervise rather than provide) and as are approved by the directors as being reasonably related to the organization, offering, capitalization, operation, regulatory compliance or administration of the Company and any portfolio investments.  Expenses associated with the general overhead of the Investment Manager will not be covered by the Company.

 

In addition, the Company shall pay, and shall reimburse the Investment Manager and its affiliates for, any costs and expenses that, in the good faith judgment of the Board, are incurred in the financing or operation of the Company as a business development company, including, without limitation, fees and expenses of offering the Company’s shares or debt instruments and enhancing or assuring the credit quality thereof; fees and expenses relating Investments including the structuring, negotiation, acquisition, syndication, holding, restructuring, recapitalization and disposition thereof or relating to proposed Investments which are not consummated; reasonable premiums for insurance protecting the Company, the Investment Manager, any of its affiliates and any of its employees and agents; legal, compliance, administrative, custodial and accounting expenses; auditing expenses; appraisal expenses; expenses relating to organizing companies through or in which investments will be made; costs and expenses of preparing and maintaining the books and records of the Company and entities through which it invests; costs and expenses that are classified as extraordinary expenses under generally accepted accounting principles; taxes or other governmental charges payable by the Company; costs and expenses incurred in connection with any actual or threatened litigation, and any judgments or settlements paid in connection with litigation, involving the Company, a company in which the Company invests in or a Person entitled to indemnification from the Company; expenses (including legal fees and expenses) incurred in connection with the bankruptcy or reorganization of any Investment; costs of reporting to the Company’s shareholders, creditors and regulatory authorities; costs of responding to regulatory inquiries; costs of shareholder meetings and the solicitation of shareholder consents; costs incurred in valuing assets; costs of winding up and liquidating the Company; and interest, distributions and fees under the agreements governing any indebtedness incurred by the Company and its shares.

 

On behalf of the Company, the Investment Manager may advance payment of any such fees and expenses of the Company, and the Company shall reimburse the Investment Manager therefor within 30 days following written request from the Investment Manager.  Nothing in this Section 7 shall limit the ability of the Investment Manager to be reimbursed by any Person (including issuers or obligors of securities, instruments or obligations owned by the Company) for out-of-pocket expenses incurred by the Investment Manager in connection with the performance of services hereunder.  The Investment Manager shall maintain complete and accurate records with respect to costs and expenses and shall furnish the Board with receipts or other written vouchers with respect thereto upon request of the Board.

 

8.           Services to Other Companies or Accounts.

 

 

 

 

9.           Duty of Care and Loyalty.  Except as otherwise required by law, none of the Investment Manager, or any its affiliated persons, directors, officers, employees, shareholders, managers, members, assigns, representatives or agents (each, an “Indemnified Person” and, collectively, the “Indemnified Persons”) shall be liable, responsible or accountable in damages or otherwise to the Company, any shareholder or any other person for any loss, liability, damage, settlement cost, or other expense (including reasonable attorneys’ fees) incurred by reason of any act or omission or any alleged act or omission performed or omitted by such Indemnified Person (other than solely in such Indemnified Person’s capacity as a shareholder, if applicable) in connection with the establishment, management or operations of the Company or the management of its assets (including those in connection with serving on boards of directors of, or creditors’ committees for, any Investment); provided that the foregoing exculpation shall not apply to any act or failure to act that arises out of the bad faith, willful misfeasance, gross negligence or reckless disregard of an Indemnified Person’s duty to the Company or such shareholder, as the case may be (such conduct, “Disabling Conduct”).  Subject to the foregoing, all such Indemnified Persons shall look solely to the assets of the Company for satisfaction of claims of any nature arising in connection with the affairs of the Company.  If any Indemnified Person is made a party to any suit or proceeding to enforce any such liability, subject to the foregoing exception, such Indemnified Person shall not, on account thereof, be held to any personal liability.

 

10.         Indemnification.

 

 

 

 

 

11.          Term of Agreement; Events Affecting the Investment Manager; Survival of Certain Terms.

 

 

 

 

 

12.          Power of Attorney; Further Assurances.

 

In addition to the power of attorney granted to the Investment Manager in Section 1 of this Agreement, the Company hereby makes, constitutes and appoints the Investment Manager, with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead, in accordance with the terms of this Agreement (a) to sign, execute, certify, swear to, acknowledge, deliver, file, receive and record any and all documents which the Investment Manager reasonably deems necessary or appropriate in connection with its investment management duties under this Agreement and as required by the 1940 Act and (b) to (i) subject to any policies adopted by the Board with respect thereto, exercise in its discretion any voting or consent rights associated with any securities, instruments or obligations included in the Company’s assets, (ii) execute proxies, waivers, consents and other instruments with respect to such securities, instruments or obligations, (iii) endorse, transfer or deliver such securities, instruments and obligations and (iv) participate in or consent (or decline to consent) to any modification, work-out, restructuring, bankruptcy proceeding, class action, plan of reorganization, merger, combination, consolidation, liquidation or similar plan or transaction with regard to such securities, instruments and obligations.  To the extent permitted by applicable law, this grant of power of attorney is irrevocable and coupled with an interest, and it shall survive and not be affected by the subsequent dissolution or bankruptcy of the Company; provided that this grant of power of attorney will expire, and the Investment Manager will cease to have any power to act as the Company’s attorney-in-fact, upon termination of this Agreement in accordance with its terms.  The Company shall execute and deliver to the Investment Manager all such other powers of attorney, proxies, dividend and other orders, and all such instruments, as the Investment Manager may reasonably request for the purpose of enabling the Investment Manager to exercise the rights and powers which it is entitled to exercise pursuant to this Agreement.  Each of the Investment Manager and the Company shall take such other actions, and furnish such certificates, opinions and other documents, as may be reasonably requested by the other party hereto in order to effectuate the purposes of this Agreement and to facilitate compliance with applicable laws and regulations and the terms of this Agreement.

 

13.         Amendment of this Agreement.  No provision of this Agreement may be amended, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the amendment, waiver, discharge or termination is sought.  Any amendment of this Agreement shall be subject to the 1940 Act.  The Company shall promptly provide a copy of any such amendment or waiver to any party entitled thereto.

 

14.          Notices.  Unless expressly provided otherwise herein, any notice, request, direction, demand or other communication required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received if sent by hand or by overnight courier, when personally delivered, if sent by telecopier, when receipt is confirmed by telephone, or if sent by registered or certified mail, postage prepaid, return receipt requested, when actually received if addressed as set forth below:

 

 

BlackRock TCP Capital Corp.

2951 28th Street, Suite 1000

Santa Monica, CA 90405, Attention: CEO

 

Tennenbaum Capital Partners, LLC

2951 28th Street, Suite 1000

Santa Monica, CA 90405

Attention: Rajneesh Vig, Managing Director

 

Either party to this Agreement may alter the address to which communications or copies are to be sent to it by giving notice of such change of address in conformity with the provisions of this Section 14.

 

15.         Binding Nature of Agreement; Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns as provided herein.

 

16.         Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.  The express terms hereof control and supersede any course of performance or usage of the trade inconsistent with any of the terms hereof.

 

17.         Costs and Expenses.  The costs and expenses (including the fees and disbursements of counsel and accountants) incurred in connection with the negotiation, preparation and execution of this Agreement, and all matters incident thereto, shall be borne by the Company.

 

18.         Books and Records.  In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Investment Manager hereby agrees that all records which it maintains for the Company in its capacity as Investment Manager are the property of the Company and further agrees to surrender promptly to the Company any such records upon the Company’s request.  The Investment Manager further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records maintained by it in its capacity as Investment Manager that are required to be maintained by Rule 31a-1 under the 1940 Act.

 

19.         Titles Not to Affect Interpretation.  The titles of sections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

 

20.         Provisions Separable.  The provisions of this Agreement are independent of and separable from each other, and, to the extent permitted by applicable law, no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

 

21.         Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York and, to the extent inconsistent therewith, the 1940 Act.

 

22.         Execution in Counterparts.  This Agreement may be executed in separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

 

[Remainder of page intentionally left blank.]

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

 

[Signature Page to Second Amended and Restated Investment Management Agreement]

 

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FEE WAIVER AGREEMENT

 

This FEE WAIVER AGREEMENT (this “Agreement”), dated as of September 6, 2023, is made by and between Tennenbaum Capital Partners, LLC, a Delaware limited liability company (the “Investment Manager”), and BlackRock TCP Capital Corp., a Delaware corporation (the “Company”).

 

WHEREAS, the Company has elected to be treated as a business development company  under the Investment Company Act of 1940 (the “1940 Act”); and

 

WHEREAS, the Investment Manager serves as investment manager to the Company pursuant to a Second Amended and Restated Investment Management Agreement between the Company and the Investment Manager, dated September 6, 2023, as may be amended and restated from time to time (the “Investment Management Agreement”) pursuant to which the Investment Manager provides investment management services to the Company in consideration for a Base Management Fee and an Incentive Fee (in each case as defined in the Investment Management Agreement and, collectively, the “Management Fee”); and

 

WHEREAS, the Company and the Investment Manager have entered into an Agreement and Plan of Merger (the “Merger Agreement”) with BlackRock Capital Investment Corporation (“BCIC”), BlackRock Capital Investment Advisors, LLC, and Project Spurs Merger Sub, LLC (the “Merger Sub”), pursuant to which BCIC will merge with and into the Merger Sub with the Merger Sub surviving (the “Merger”); and

 

WHEREAS, the Investment Manager has agreed to waive all or a portion of the Management Fee for each of the first four fiscal quarters ending after the Closing (as defined the Merger Agreement), the first of which will be the quarter in which the Closing occurs unless, for the avoidance of doubt, such quarter ends on the Closing date (each, a “Covered Quarter”), to the extent necessary to ensure that the adjusted net investment income of the Company on a per share basis (determined by dividing the adjusted net investment income of the Company by the weighted average outstanding shares of the Company during the relevant Covered Quarter) (such amount, the “Per Share NII”) in each Covered Quarter is not less than $0.32 per share (the “NII Floor”); and

 

WHEREAS, the Investment Manager has agreed to exclude from the calculation of Per Share NII and the Incentive Fee amortization or accretion of any purchase premium or purchase discount to interest income or any gains or losses resulting solely from accounting adjustments to the cost basis of the BCIC assets acquired in the Merger as required under ASC 805; and

 

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

 

 

 

 

 

 

 

 

 

 

 

 

If to the Company:

 

BlackRock TCP Capital Corp.

2951 28th Street, Suite 1000

Santa Monica, CA 90405, Attention: CEO

If to the Investment Manager:

 

Tennenbaum Capital Partners, LLC

2951 28th Street, Suite 1000

Santa Monica, CA 90405

Attention: Rajneesh Vig, Managing Director

 

Either party to this Agreement may alter the address to which communications or copies are to be sent to it by giving notice of such change of address in conformity with the provisions of this Section 3.2.

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the day and year first above written.

 

 

 

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Enhanced scale – The combined company will have enhanced scale and a larger asset base, including total assets of approximately $2.4 billion, and net assets of approximately $1.1 billion, based on June 30, 2023 financials.

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Experienced direct lending team – BlackRock’s USPC team, with more than 23 years’ experience in direct lending across multiple market cycles, will continue to manage the combined company’s portfolio and investments post-merger, as they have been doing for both companies on a standalone basis.

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Positioned for enhanced growth and returns – This transaction positions the combined company to better capitalize on the current lender-friendly investment environment to originate new loans with attractive spreads and lender protections.