Exhibit 10.3

COLLATERAL MANAGEMENT AGREEMENT

This Collateral Management Agreement (this “Agreement”) is made as of
November 9, 2016, by and between CM Finance SPV LLC, a limited liability company
formed under the laws of the State of Delaware (the “Borrower”), and CM
Investment Partners, L.L.C. a Delaware limited liability company (the
“Collateral Manager”).

RECITALS:

The Borrower intends to purchase one or more Term Loans and Bonds outstanding
under the respective Debt Obligation Agreements referred to herein (the Term
Loans and Bonds so acquired, collectively, the “Debt Obligations” and, together
with the Eligible Investments, the “Collateral”).

The Borrower intends to borrow Loans pursuant to a Loan Agreement, dated as of
the date hereof, among the Borrower, the financial institutions and other
lenders from time to time party hereto as Lenders (the “Lenders”) and Citibank,
N.A., a national banking association, as administrative agent for the Lenders
(in such capacity, together with its successors in such capacity, the
“Administrative Agent”) (as amended, supplemented or otherwise modified from
time to time, the “Loan Agreement”).

The Borrower wishes to use the proceeds of Loans hereunder to finance a portion
of the cost of purchasing the Debt Obligations.

The Borrower has requested that Citibank, N.A., as Initial Lender (the “Initial
Lender”), make the Loans to the Borrower, and the Initial Lender is willing to
make the Loans to the Borrower, all on the terms and conditions set forth in the
Loan Agreement.

Capitalized terms used but not otherwise defined in this Agreement shall have
the meanings given to them in the Loan Agreement;

Pursuant to the Security Agreement, the Borrower has pledged the Collateral to
the Administrative Agent as security for the Loans;

The Borrower wishes to enter into this Agreement, pursuant to which the
Collateral Manager agrees to perform, on behalf of the Borrower, certain duties
with respect to the Collateral securing the Loans in the manner and on the terms
set forth herein and to provide such additional services as are consistent with
the terms of this Agreement and the Loan Agreement; and

The Collateral Manager has the capacity to provide the services required hereby
and is prepared to perform such services upon the terms and conditions set forth
herein.

NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the
parties hereto agree as follows:

 

  1. Definitions

In the event of any conflict or inconsistency between any term defined herein
and any term defined in the Loan Agreement, the defined term as set forth in the
Loan Agreement shall govern.

 

1

--------------------------------------------------------------------------------

“Change-in-Control” means an event that will occur if any Person or “group”
acquires any “beneficial ownership” (as such terms are defined under Rule 13d-3
of, and Regulation 13D under, the Securities Exchange Act of 1934, as amended),
either directly or indirectly, of any equity interests or any interest
convertible into any equity interests in the Collateral Manager having more than
fifty percent (50%) of the voting power for the election of managers or
directors of the Collateral Manager under ordinary circumstances.

“Collateral Management Fee” shall have the meaning set forth in Section 2(j).

 

  2. General Duties of the Collateral Manager

Subject to and in accordance with the terms of the Loan Agreement and this
Agreement, the Collateral Manager shall provide services to the Borrower as
follows:

(a) The Collateral Manager agrees to supervise and direct the investment and
reinvestment of the Collateral, and shall perform on behalf of the Borrower the
duties that have been expressly delegated to the Collateral Manager in this
Agreement and in the Loan Agreement and Support Documents (and the Collateral
Manager shall have no obligation to perform any other duties under the Loan
Agreement or otherwise) and, to the extent necessary or appropriate to perform
such duties, the Collateral Manager shall have the power to execute and deliver
all necessary and appropriate documents and instruments on behalf of the
Borrower with respect thereto.

(b) The Collateral Manager shall (i) select all the Debt Obligations satisfying
all the applicable criteria set forth in the Loan Agreement and which shall be
acquired by the Borrower and pledged to the Security Agent pursuant to the
Security Agreement and (ii) facilitate the acquisition, disposition and
settlement of the Debt Obligations by the Borrower in accordance with the Loan
Agreement, the Security Agreement and the Account Control Agreement, including
the delivery of Collateral in accordance with the Security Agreement.

(c) The Collateral Manager shall monitor the Collateral, on behalf of the
Borrower, on an ongoing basis and shall use commercially reasonable efforts to
provide to the Borrower all reports, schedules and other data which the Borrower
are required to prepare, deliver or furnish under the Loan Agreement and the
Support Documents, in the form and containing all information required thereby
and on or before the date required under the Loan Agreement or the Support
Documents, as applicable, and to deliver them to the parties entitled thereto
under the Loan Agreement or the Support Documents, as applicable. The Collateral
Manager shall, on behalf of the Borrower, be responsible for obtaining, to the
extent practicable, any information concerning whether a Debt Obligation is a
Bond, a Specified Debt Obligation, an Excess Concentration Debt Obligation or a
Debt Obligation as to which a Debt Obligation Event, Debt Obligation Bankruptcy
Event and/or a Debt Obligation Failure to Pay Event has occurred.

 

2

--------------------------------------------------------------------------------

(d) The Collateral Manager shall use commercially reasonable efforts to furnish
officer’s certificates, certificates relating to the Borrowing Base, and notices
in each case, as may be required under the Loan Agreement, including providing
any certifications, and the Collateral Manager shall have the power to execute
and deliver all necessary and appropriate documents and instruments on behalf of
the Borrower with respect thereto.

(e) The Collateral Manager shall direct the Collateral Administrator to:
(i) make payments on behalf of the Borrower under the Loan Agreement and the
Support Documents, and (ii) deposit into the Interest Collection Account and the
Principal Collection Account, as applicable, proceeds from the Debt Obligations,
in each case, when required under the Loan Agreement.

(f) The Collateral Manager shall maintain and cause to be maintained all the
documentation evidencing the Debt Obligations held in the Custodial Account (as
defined in the Account Control Agreement) for the benefit of the Security Agent
for the ratable benefit of the Secured Parties (as defined in the Security
Agreement).

(g) The Collateral Manager may, in its sole discretion, subject to and in
accordance with the provisions of the Loan Agreement, the Support Documents, and
this Agreement and prior to the occurrence of an Event of Default, direct the
Security Agent in writing to take the following actions with respect to any Debt
Obligations (collectively, the “Managed Assets”), as applicable:

(i) retain such Managed Asset;

(ii) sell or otherwise dispose of such Managed Asset in the open market or
otherwise;

(iii) acquire, as security for the Loans in substitution for or in addition to
any one or more Managed Assets included in the Collateral, one or more
additional Managed Assets;

(iv) if applicable, tender such Managed Asset if such Managed Asset is subject
to a tender offer, voluntary redemption, exchange offer, conversion or other
similar action (each, an “Offer”);

(v) if applicable, consent to any proposed amendment, modification or waiver
pursuant to an Offer;

(vi) retain or dispose of any securities or other property (other than Cash)
received pursuant to an Offer;

(vii) waive any default with respect to any defaulted Debt Obligation;

(viii) vote to accelerate the maturity of any defaulted Debt Obligation;

(ix) amend, waive, consent, or vote with respect to any Managed Asset;

 

3

--------------------------------------------------------------------------------

(x) exercise any other rights or remedies with respect to any Managed Asset and
as provided in the related Debt Obligation Agreement including
without limitation the negotiation of any workout or restructuring and the
acceptance of any security or other consideration issued in a plan of
reorganization, bankruptcy or other proceeding involving any thereof, or take
any other action consistent with the terms of the Loan Agreement which it
reasonably believes to be in the best interests of the Borrower; and

(xi) exercise any other rights or remedies with respect to such Managed Asset.

(h) Except as expressly otherwise permitted in Section 6(e) and by the Loan
Agreement, the Collateral Manager shall cause any purchase or sale of any
Managed Asset to be effected on an arm’s length basis.

(i) In connection with taking or omitting any action under the Loan Agreement or
this Agreement, the Collateral Manager may consult with counsel and may rely in
good faith on the advice of such counsel or any opinion of counsel selected in
good faith with reasonable care.

(j) The Borrower shall pay to the Collateral Manager, for services rendered
under this Agreement, the Collateral Management Fee in an amount equal to
0.15% per annum (calculated on the basis of a 360-day year consisting of twelve
30-day months) of the sum of aggregate outstanding amount of the Debt
Obligations and Eligible Investments at the beginning of the Interest Period
relating to such Payment Date, payable in arrears on each Payment Date, to the
extent of funds available for such purpose in accordance with Section 3.7(i)(3)
of the Loan Agreement except that no such amount shall be payable to the
Collateral Manager if irrevocably waived by the Collateral Manager by written
notice to the Borrower, the Collateral Administrator and the Administrative
Agent.

The Collateral 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 Borrower in accordance with this Agreement. The
Collateral Manager hereby accepts and agrees to perform all of the duties
delegated to it under this Agreement.

 

  3. No Joint Venture

Nothing in this Agreement shall be deemed to create a joint venture or
partnership between the parties with respect to the arrangements set forth in
this Agreement. For all purposes herein, the Collateral Manager shall be deemed
to be an independent contractor and, unless otherwise provided herein or
specifically authorized by the Borrower, from time to time, shall have no
authority to act for or represent the Borrower.

 

  4. Brokerage

The Collateral 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 may provide. In this regard, the Collateral Manager may effect
transactions which cause the Borrower to pay a commission in excess of a
commission which another broker would have charged; provided,

 

4

--------------------------------------------------------------------------------

however, that the Collateral Manager shall have first determined that such
commission is reasonable in relation to the value of the brokerage, research,
performance measurement service and other services performed by that broker.

 

  5. Expenses

The Collateral Manager shall be responsible for the ordinary expenses incurred
in the performance of its obligations under this Agreement; provided, however,
that any extraordinary expenses incurred by the Collateral Manager in the
performance of such obligations, including, but not limited to: (i) any
reasonable expenses incurred by it (whether for its own account or paid for or
advanced by the Collateral Manager on behalf of the Borrower) to employ outside
lawyers or consultants reasonably necessary in connection with the acquisition,
holding, monitoring, marking to market, enforcement, amendment, default,
evaluation, transfer, workout, restructuring, bankruptcy or disposition of any
Debt Obligation, (ii) any reasonable expenses incurred by it in obtaining advice
from counsel with respect to its obligations under this Agreement and the
provisions of the Loan Agreement applicable to it, and (iii) any other
commercially reasonable out-of-pocket fees and expenses incurred in connection
with the acquisition, holding, monitoring, marking to market, enforcement,
amendment, default, evaluation, transfer, workout, restructuring, bankruptcy or
disposition of any Debt Obligation, including, without limitation, any and all
rating agency expenses, news and quotation subscription expenses, travel costs
and expenses incurred by the Collateral Manager or its officers (on a pro rata
basis) in connection with the performance of the Collateral Manager’s
obligations under this Agreement and of software and services costs for record
keeping and fund administration, due diligence costs, legal, tax, accounting,
appraisal, and any rating agency costs to the extent not paid directly by the
Borrower and any extraordinary expenses of any nature or other unusual matters,
shall be reimbursed by the Borrower to the extent funds credited to the
Collection Account are available therefor in accordance with and subject to the
limitations contained in the Loan Agreement. Other than as stated above, the
Borrower will bear, and will pay directly in accordance with the Loan Agreement,
all other costs and expenses incurred by it in connection with the organization,
operation or liquidation of the Borrower.

Notwithstanding anything to the contrary in this Agreement, the Loan Agreement,
or any Support Document, the Collateral Manager agrees for the benefit of the
Lenders, the Administrative Agent, the Security Agent and the Collateral
Administrator that any obligations of the Borrower to pay any amounts to the
Collateral Manager under this Agreement (including, without limitation, this
Section 5, Section 2(j) and Section 9 hereof) shall be subordinate and junior to
the obligations of the Borrower to pay amounts to the Lenders, the
Administrative Agent, the Security Agent and the Collateral Administrator when
due under the Loan Agreement and the relevant Support Document(s) in accordance
with Section 3.7 of the Loan Agreement, and all amounts due to the Lenders, the
Administrative Agent, the Security Agent and the Collateral Administrator in
accordance therewith shall be paid in full in cash or, to the extent the
Lenders, the Administrative Agent, the Security Agent or the Collateral
Administrator, as applicable, consents, other than in cash before any payment or
distribution is made to the Collateral Manager. The Lenders, the Administrative
Agent, the Security Agent and the Collateral Administrator shall constitute
express third party beneficiaries of this Agreement for purposes of this
Section 5.

 

5

--------------------------------------------------------------------------------

  6. Services to Other Companies or Accounts; Conflicts of Interest

(a) The members, Affiliates and associates of the Collateral Manager are in no
way prohibited from, and intend to, spend substantial business time in
connection with other businesses or activities, including, but not limited to,
managing investments, advising or managing entities other than the Borrower,
whose investment objectives are the same as or overlap with those of the
Borrower, participating in actual or potential investments of the Borrower
providing consulting, merger and acquisition, structuring or financial advisory
services, including with respect to actual, contemplated or potential
investments of the Borrower, or acting as a director, officer or creditors’
committee member of, adviser to, or participant in, any corporation,
partnership, trust or other business entity. Such Affiliates or associates may,
and expect to, receive fees or other compensation from third parties for any of
these activities, which fees will be for the benefit of their own account and
not the Borrower. These fees can relate to actual, contemplated or potential
investments of the Borrower and may be payable by entities in which the Borrower
directly or indirectly, has invested or contemplates investing.

(b) In addition, the members, Affiliates and associates of the Collateral
Manager may manage Affiliates of the Borrower (including, but not limited to,
other funds, investment vehicles, accounts or advisory clients of the Collateral
Manager or any of its Affiliates, collectively the “Other CM Funds”)). The
investment policies, fee arrangements and circumstances of the Borrower may
differ from such Other CM Funds. For example, the Borrower may desire to retain
an asset at the same time that one or more Other CM Funds desire to sell it.
Similarly, the Other CM Funds which are in a liquidation phase may take priority
as to sales of investments in which the Borrower is also an investor. These
procedures could in certain circumstances adversely affect the price paid or
received by the Borrower or the size of the position purchased or sold by the
Borrower.

(c) Although the Borrower intends to operate so that the Debt Obligations are
not “plan assets” under ERISA, some of the Other CM Funds may hold or will hold
“plan assets” subject to ERISA. For those plan assets, certain members,
Affiliates and/or associates of the Collateral Manager are classified as
“fiduciaries” under ERISA. ERISA imposes certain general and specific
responsibilities and restrictions on fiduciaries with respect to plan assets. As
a result, the Collateral Manager may adopt certain procedures to address other
conflicts in order to satisfy ERISA requirements, if applicable. The foregoing
procedures could in certain circumstances affect adversely the price paid or
received by the Borrower or the size of the position purchased or sold by the
Borrower (including prohibiting the Borrower from purchasing a position) or may
limit the rights that the Borrower may exercise with respect to an investment.

(d) Members, Affiliates and associates of the Collateral Manager may have the
ability, under certain circumstances, to take certain actions that would be
inconsistent with the objectives of the Borrower. In such circumstances, the
Collateral Manager and its members, Affiliates and associates will act in good
faith and in a manner believed by them to be equitable, provided that the
Collateral Manager and its members, Affiliates and associates may adopt certain
procedures to address other conflicts in order to satisfy ERISA requirements, if
applicable. The foregoing procedures could in certain circumstances adversely
affect the price

 

6

--------------------------------------------------------------------------------

paid or received by the Borrower or the size of the position purchased or sold
by the Borrower (including prohibiting the Borrower from purchasing a position)
or may limit the rights that the Borrower may exercise with respect to an
investment.

(e) The Collateral Manager shall not direct the Borrower to purchase any Debt
Obligation for inclusion in the Collateral directly from the Collateral Manager
or any of its Affiliates as principal or any account or portfolio for which
Collateral Manager or any of its Affiliates serve as investment advisor, or
direct the Administrative Agent to sell directly any Debt Obligation to the
Collateral Manager or any of its Affiliates as principal or any account or
portfolio for which the Collateral Manager or any of its Affiliates serve as
investment advisor, unless the Collateral Manager shall have certified to the
Borrower and the Administrative Agent with respect to each such transaction that
(i) such transaction will be consummated on terms prevailing in the market,
(ii) the terms of such transaction are substantially as advantageous to the
Borrower as the terms the Borrower would obtain in a comparable arm’s length
transaction with a non-Affiliate, and (iii) such transaction complies with the
Investment Advisers Act of 1940, as amended (the “Advisers Act”), to the extent
applicable. In accordance with the foregoing, the Collateral Manager may, in one
or more transactions, effect client cross-transactions where the Collateral
Manager causes a transaction to be effected between the Borrower and another
collateralized debt obligation vehicle, collateralized loan obligation vehicle,
fund or another investment vehicle or account managed or advised by it or one or
more of its Affiliates, but neither it nor the Affiliate will receive any
commission or similar fee in connection with such cross-transaction. If consent
of the Borrower to any such transaction is required under the Advisers Act, the
Collateral Manager will obtain the prior written, informed consent of the
Borrower. In addition, with the prior authorization of the Borrower, which may
be revoked at any time, the Collateral Manager may enter into agency
cross-transactions where it or any of its Affiliates acts as broker for the
Borrower and for the other party to the transaction, to the extent permitted
under applicable law.

(f) The Collateral Manager shall not direct the Borrower to purchase any Debt
Obligation for inclusion in the Collateral if the obligor on such Debt
Obligation is the Collateral Manager or any of its Affiliates or any other fund
or account managed by the Collateral Manager or its Affiliates.

 

  7. Standard of Care

The Collateral Manager shall comply with all the terms and conditions of the
Loan Agreement specifically made applicable to the Collateral Manager as
specified therein affecting the duties and functions that have been delegated to
it thereunder and hereunder and, subject to Section 8 of this Agreement, shall
perform its obligations hereunder and thereunder in good faith and with
reasonable care, using a degree of skill and attention no less than that which
the Collateral Manager exercises with respect to assets comparable to the Debt
Obligations, if any, that it manages for itself and exercises with respect to
assets comparable to the Debt Obligations that it manages for others, and in a
manner which the Collateral Manager reasonably believes to be consistent with
practices and procedures followed by prudent institutional managers of national
standing relating to assets of the nature and character of the Debt Obligations,
except as expressly provided otherwise in this Agreement and/or the Loan
Agreement. To the extent not inconsistent with the foregoing, the Collateral
Manager shall follow its customary standards, policies and procedures in
performing its duties under the Loan Agreement and hereunder.

 

7

--------------------------------------------------------------------------------

  8. Limitation of Liability

None of the Collateral Manager, its Affiliates, any officer, director, partner,
member, employee, or stockholder of any of such Persons or any other Person that
serves or provides advisory services and resources at the request of the
Collateral Manager on behalf of the Borrower as an officer, director, partner,
member, employee or agent of any other entity (each, an “Indemnified Person”)
shall be liable to the Administrative Agent, any Lender or the Borrower for
damages arising from any action taken or omitted to be taken by such Person or
for damages arising from any action taken or omitted to be taken by the
Administrative Agent, any Lender or other Person with respect to the Borrower;
unless such damages are the result of gross negligence, willful misconduct or
bad faith by such Indemnified Person. The Collateral Manager shall indemnify and
hold harmless the Borrower and its Affiliates in the case of any damages
resulting from the gross negligence or willful misconduct of the Collateral
Manager, unless such actions or the damages result from the gross negligence,
willful misconduct or bad faith of the Borrower or any of its Affiliates (other
than the Collateral Manager).

 

  9. Indemnification

(a) To the fullest extent permitted by law, the Borrower shall indemnify, defend
and hold harmless each Indemnified Person, against all losses, claims, damages
or liabilities, whether or not matured or unmatured or whether or not asserted
or brought due to contractual or other restrictions (including legal or other
expenses reasonably incurred in investigating or defending against any such
loss, claim, damage or liability), joint or several (collectively, “Losses”), to
which an Indemnified Person may become subject by reason of any acts or
omissions or any alleged acts or omissions arising out of such Indemnified
Person’s or any other Indemnified Person’s activities in connection with the
conduct of the business or affairs of the Borrower and/or a Debt Obligation
(including in connection with this Agreement), or caused by or arising out of or
in connection with, the incurrence of the Loans, unless such Loss results from
the gross negligence or willful misconduct of such Person. Notwithstanding
anything contained herein to the contrary, the obligations of the Borrower under
this Section 9(a) are limited recourse obligations of the Borrower payable
solely out of the amounts credited to the Collection Account in accordance with
Section 3.7(i) of the Loan Agreement. Any indemnification rights provided for in
this Section 9(a) shall be retained by any resigned or replaced Collateral
Manager and by all former Indemnified Persons.

(b) Expenses incurred by an Indemnified Person in defense or settlement of any
claim that may be subject to a right of indemnification hereunder may be
advanced by the Borrower prior to the final disposition thereof upon receipt of
a written undertaking by or on behalf of the Indemnified Person to repay such
amount to the extent that it shall be determined ultimately that such
Indemnified Person is not entitled to be indemnified hereunder. The right of any
Indemnified Person to the indemnification provided herein shall be cumulative
of, and in addition to, any and all rights to which such Indemnified Person may
otherwise be entitled by contract or as a matter of law or equity and shall
extend to such Indemnified Person’s successors, assigns and legal
representatives.

 

8

--------------------------------------------------------------------------------

(c) The indemnification rights provided for in this Section 9 shall survive the
termination of this Agreement. Notwithstanding anything else herein, nothing
contained in this Section or elsewhere in this Agreement shall be construed as
relieving any person for any liability (including liability under applicable
U.S. federal securities laws which, under certain circumstances, impose
liability even on persons that act in good faith), to the extent that such
liability may not be waived under, or such indemnification would be in violation
of, applicable law.

 

  10. Term of Agreement; Survival of Certain Terms

(a) This Agreement shall become effective on the date hereof. This Agreement
shall continue in force until the first of the following occurs (i) the payment
in full or redemption in whole of the Loans and the termination of the Loan
Agreement in accordance with its terms; (ii) the liquidation of the Debt
Obligations and the final distribution of proceeds of such liquidation to the
Lenders; or (iii) termination of this Agreement in accordance with subsection
(b) of this Section 10. Sections 8, 9 and 11 shall survive any termination of
this Agreement.

(b) This Agreement may be terminated, and the Collateral Manager may be removed
for cause, on the thirtieth day after the date on which the Administrative
Agent, delivers written notice, setting forth the cause of such removal, to the
Collateral Manager. For purposes of determining “Cause” with respect to
termination of this Agreement pursuant to this Section 11, such term shall mean
the occurrence of any one of the following events (each, a “Collateral Manager
Termination Event”):

(i) the Collateral Manager willfully violates or willfully breaches any material
provision of this Agreement, the Loan Agreement, or any Support Document to
which it is a party (including, without limitation, any breach of a material
representation, warranty or certification of the Collateral Manager hereunder or
thereunder);

(ii) the Collateral Manager breaches any provision of this Agreement, the Loan
Agreement, or any Support Document to which it is a party which violation or
breach (1) has a Material Adverse Effect and (2) if capable of being cured, is
not cured within 30 days of the Collateral Manager becoming aware of such
violation or breach;

(iii) the Collateral Manager is wound up (or has any petition presented for its
winding up, or an order is issued for its winding up, or has a resolution passed
for its winding up) or dissolved or there is appointed over it or a substantial
part of its assets a receiver, administrator, administrative receiver, trustee
or similar officer; or the Collateral Manager (A) ceases to be able to, or
admits in writing its inability to, pay its debts as they become due and
payable, or makes a general assignment for the benefit of, or enters into any
assignment, composition or arrangement with, its creditors generally;
(B) applies for or consents (by admission of material allegations of a petition

 

9

--------------------------------------------------------------------------------

or otherwise) to the appointment of a receiver, trustee, assignee, custodian,
liquidator or sequestrator (or other similar official) of the Collateral
Manager, or of any substantial part of its properties or assets, or authorizes
such an application or consent, or Proceedings seeking such appointment are
commenced without such authorization, consent or application against the
Collateral Manager, and continue undismissed for 60 days; (C) authorizes or
files a voluntary petition in bankruptcy or other similar law affecting
creditors’ rights, or applies for or consents (by admission of material
allegations of a petition or otherwise) to the application of any bankruptcy,
reorganization, arrangement, readjustment of debt, insolvency or dissolution or
similar law, or authorizes such application or consent, or proceedings to such
end are instituted against the Collateral Manager, without such authorization,
application or consent and are approved as properly instituted and remain
undismissed for 60 days or result in adjudication of bankruptcy or insolvency or
the issuance of an order for relief; (D) permits or suffers all or any
substantial part of its properties or assets to be sequestered or attached by
court order (or has a secured party take possession of all or substantially all
of its assets, or has a distress, execution, attachment, sequestration or other
legal process levied against it) and the order remains undismissed for 60 days;
or (E) causes or is subject to any event with respect to which, under the
applicable laws of any jurisdiction, has an analogous effect to any of the
events specified in clauses (A) through (D) hereof;

(iv) the occurrence of any Event of Default under the Loan Agreement which
default is primarily the result of any act or omission of the Collateral Manager
resulting from a breach of its duties under this Agreement or the Loan Agreement
(but not as a result of any default of any Debt Obligation);

(v) the occurrence of any act constituting fraud or criminal negligence in
respect of investment activity by the Collateral Manager or any officer of the
Collateral Manager who has direct responsibility for the investment activities
of the Borrower;

(vi) the occurrence of a Change-in-Control without the prior written consent
from the Administrative Agent; or

(vii) both of Michael C. Mauer and Christopher E. Jansen cease to be actively
involved in and responsible for the management of the Collateral Manager.

If any of the events specified in this subclause (b) of this Section 10 shall
occur, the Collateral Manager shall give prompt written notice thereof to the
Borrower and the Administrative Agent upon the Collateral Manager’s becoming
aware of the occurrence of such event.

 

10

--------------------------------------------------------------------------------

  11. Action Upon Termination

(a) Upon any termination of this Agreement, the Collateral Manager shall as soon
as practicable:

(i) deliver to the Borrower, or to the successor collateral manager if so
directed by the Borrower, all property and documents of the Administrative Agent
or the Borrower or otherwise relating to the Debt Obligations then in the
custody of the Collateral Manager (including, without limitation, all documents
evidencing the Debt Obligations); and

(ii) deliver to the Administrative Agent an accounting with respect to the books
and records delivered to the Administrative Agent or the successor collateral
manager.

Notwithstanding such termination, the Collateral Manager shall remain liable to
the extent set forth herein (but subject to Section 8 hereof) for its acts or
omissions hereunder arising prior to termination, and for any expenses, losses,
damages, liabilities, demands, charges and claims (including reasonable
attorneys’ fees) in respect of or arising out of a breach of the representations
and warranties made by the Collateral Manager in Section 12(c) hereof or from
any failure of the Collateral Manager to comply with the provisions of this
Section 11.

(b) The Collateral Manager agrees that, notwithstanding any termination, it
shall reasonably cooperate in any Proceeding arising in connection with this
Agreement, the Loan Agreement, or any of the Debt Obligations (excluding any
such Proceeding in which claims are asserted against the Collateral Manager or
any Affiliate of the Collateral Manager) upon receipt of appropriate
indemnification and expense reimbursement satisfactory to the Collateral
Manager.

(c) If any Loans remain outstanding, the Administrative Agent or the Borrower
shall appoint a successor upon the termination of this Agreement. No termination
of this Agreement or any removal or resignation of the Collateral Manager shall
be effective until the date as of which (x) a successor collateral manager
acceptable to the Administrative Agent shall have agreed in writing to assume
all of the Collateral Manager’s duties and obligations pursuant to this
Agreement, (y) such successor collateral manager has entered into a collateral
management agreement that is either substantially in the form of this Agreement
or otherwise in a form approved by the Administrative Agent, and (z) the
appointment of such successor collateral manager is effective in accordance with
the terms of such collateral management agreement. The Administrative Agent
shall constitute an express third party beneficiary of this Agreement for
purposes of this Section 11(c). Upon the acceptance by a successor collateral
manager of such appointment, all rights and obligations of the Collateral
Manager under this Agreement shall terminate, except as provided in Sections 5,
8, 9, 11 and 16.

 

  12. Representations and Warranties

(a) The Borrower hereby represents and warrants to the Collateral Manager as
follows as of the date hereof:

(i) The Borrower is a limited liability company duly organized and validly
existing and in good standing under the laws of the state of Delaware, has the
full power and authority to own its assets and the Debt Obligations proposed to
be owned by it and included in the Collateral and to transact the business in
which it is presently engaged and is duly qualified under the laws of each
jurisdiction where its ownership or

 

11

--------------------------------------------------------------------------------

lease of property or the conduct of its business requires, or the performance of
its obligations under this Agreement, the Loan Agreement, or the Support
Documents would require, such qualification, except for failures to be so
qualified, authorized or licensed that would not in the aggregate have a
material adverse effect on the business, operations, assets or financial
condition of the Borrower.

(ii) The Borrower has the necessary power and authority to execute, deliver and
perform this Agreement, the Loan Agreement, and the Support Documents to which
it is a party and all obligations required hereunder and thereunder, and has
taken all necessary action to authorize this Agreement, the Loan Agreement, and
the Support Documents to which it is a party on the terms and conditions hereof
and thereof, and the execution, delivery and performance of this Agreement, the
Loan Agreement, and the Support Documents to which it is a party and the
performance of all obligations imposed upon it hereunder and thereunder. No
consent of any other Person including, without limitation, partners and
creditors of the Borrower, and no license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority, other than those that may be required under state
securities or “blue sky” laws and those that have been or shall be obtained in
connection with the Loan Agreement is required by the Borrower in connection
with this Agreement, the Loan Agreement or any Support Document to which it is a
party or the execution, delivery, performance, validity or enforceability of
this Agreement, the Loan Agreement or the Support Documents to which it is a
party or the obligations imposed upon it hereunder or thereunder. This Agreement
constitutes, and each of the Loan Agreement and the Support Documents to which
it is a party, when executed and delivered hereunder by all parties hereto,
shall constitute, the legally valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, subject, as to
enforcement, to (A) the effect of bankruptcy, insolvency, or similar laws
affecting generally the enforcement of creditors’ rights, as such laws would
apply in the event of any bankruptcy, receivership, insolvency or similar event
applicable to the Borrower and (B) general equitable principles (whether
enforceability of such principles is considered in a proceeding at law or in
equity).

(iii) The execution, delivery and performance of this Agreement, the Loan
Agreement, and the Support Documents to which it is a party do not violate any
provision of any existing law or regulation binding on the Borrower, or any
order, judgment, award or decree of any court, arbitrator or governmental
authority binding on the Borrower, or its constitutive documents of, or any
securities issued by, the Borrower or of any mortgage, indenture, lease,
contract or other agreement, instrument or undertaking to which the Borrower is
a party or by which the Borrower or

 

12

--------------------------------------------------------------------------------

any of its assets may be bound, the violation of which would have a material
adverse effect on the business, operations, assets or financial condition of the
Borrower, and do not result in or require the creation or imposition of any lien
on any of its property, assets or revenues pursuant to the provisions of any
such mortgage, indenture, lease, contract or other agreement, instrument or
undertaking (other than the lien of the Security Agreement).

(iv) The Borrower is not required to register as an “investment company” under
the Investment Company Act.

(v) The Borrower is not in violation of its constitutive documents or in breach
or violation of or in default under the Loan Agreement or any other contract or
agreement to which it is a party or by which it or any of its assets may be
bound, or any applicable statute or any rule, regulation or order of any court,
government agency or body having jurisdiction over the Borrower or its
properties, the breach or violation of which or default under which would have a
material adverse effect on the validity or enforceability of this Agreement or
the performance by the Borrower of its duties hereunder.

(vi) True and complete copies of the Loan Agreement and the Support Documents
and the Borrower’s constitutive documents have been delivered to the Collateral
Manager.

(vii) The Borrower represents and warrants that it is not a person (A) subject
to an order of the Securities and Exchange Commission issued under
Section 203(f) of the Advisers Act; (B) convicted within the previous ten years
of any felony or misdemeanor involving conduct described in Sections
203(e)(2)(A)-(D) or 203(e)(3) of the Advisers Act; (C) who has been found by the
Securities and Exchange Commission to have engaged, or has been convicted of
engaging, in any of the conduct specified in paragraphs (1), (5) or (6) of
Section 203(e) of the Advisers Act; or (D) is subject to an order, judgment or
decree described in Section 203(e)(4) of the Advisers Act.

The Borrower agrees to deliver a true and complete copy of each amendment to the
documents referred to in paragraph (a)(vi) above to the Collateral Manager as
promptly as practicable after its adoption or execution.

The Borrower agrees to conduct its activities hereunder and under the Loan
Agreement in compliance with all applicable laws and regulations of the
jurisdictions in which the activities contemplated hereunder will occur
(including, without limitation, campaign finance laws and laws respecting gifts
or other contributions to political figures or to officials from or associated
with governmental agencies affiliated with investors). The Borrower further
acknowledges that notwithstanding anything herein to the contrary, it shall not
receive any fee hereunder with respect to any investor to the extent the payment
of such fee violates any applicable law or regulation, which violation cannot be
cured.

 

13

--------------------------------------------------------------------------------

(b) The Collateral Manager hereby represents and warrants (and, with respect to
clause (vi), covenants) to the Borrower as follows as of the date hereof:

(i) The Collateral Manager is a limited liability company duly organized and
validly existing and in good standing under the laws of the State of Delaware
and has full power and authority to own its assets and to transact the business
in which it is currently engaged and is duly qualified and in good standing
under the laws of each jurisdiction where its ownership or lease of property or
the conduct of its business requires, or the performance of this Agreement would
require such qualification, except for those jurisdictions in which the failure
to be so qualified, authorized or licensed would not have a material adverse
effect on the business, operations, assets or financial condition of the
Collateral Manager or on the ability of the Collateral Manager to perform its
obligations under, or a Material Adverse Effect.

(ii) The Collateral Manager has full power and authority to execute, deliver and
perform this Agreement and all obligations required hereunder and under the
provisions of the Loan Agreement applicable to the Collateral Manager, and has
taken all necessary action to authorize this Agreement on the terms and
conditions hereof and the execution, delivery and performance of this Agreement
and all obligations required hereunder and under the terms of the Loan Agreement
applicable to the Collateral Manager. No consent of any other Person, including,
without limitation, any partners or creditors of the Collateral Manager, and no
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority is
required by the Collateral Manager in connection with this Agreement, or the
execution, delivery, performance, validity or enforceability of this Agreement
or the obligations required hereunder, or under the terms of the Loan Agreement
applicable to the Collateral Manager. This Agreement has been, and each
instrument and document required hereunder or under the terms of the Loan
Agreement shall be, executed and delivered by a duly authorized officer of the
Collateral Manager, and this Agreement constitutes, and each instrument and
document required hereunder or under the terms of the Loan Agreement when
executed and delivered by the Collateral Manager hereunder or under the terms of
the Loan Agreement shall constitute, the valid and legally binding obligations
of the Collateral Manager enforceable against the Collateral Manager in
accordance with their terms, subject to (A) the effect of bankruptcy, insolvency
or similar laws affecting generally the enforcement of creditors’ rights and
(B) general equitable principles.

 

14

--------------------------------------------------------------------------------

(iii) The execution, delivery and performance of this Agreement and the
performance by the Collateral Manager of the terms of the Loan Agreement
applicable to it will not violate any provision of any existing law or
regulation binding the Collateral Manager, or any order, judgment, award or
decree of any court, arbitrator or governmental authority binding on the
Collateral Manager, or the organizational documents of, or any securities issued
by, the Collateral Manager or constitute, with or without giving notice or lapse
of time or both, a default under or result in a breach of any of the terms or
provisions of any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Collateral Manager is a party or by which
the Collateral Manager or any of its assets may be bound, the violation of which
would have a material adverse effect on the ability of the Collateral Manager to
perform its obligations under or a Material Adverse Effect, and will not result
in or require the creation or imposition of any lien on any of its property,
assets or revenues pursuant to the provisions of any such mortgage, indenture,
lease, contract or other agreement, instrument or undertaking.

(iv) There is no charge, investigation, action, suit or proceeding before or by
any court pending or, to the best knowledge of the Collateral Manager,
threatened that, if determined adversely to the Collateral Manager, would have a
material adverse effect upon the performance by the Collateral Manager of its
duties under, or a Material Adverse Effect.

(v) The Collateral Manager is not in violation of its constitutive documents or
in breach or violation of or in default under any contract or agreement to which
it is a party or by which it or any of its property may be bound, or any
applicable statute or any rule, regulation or order of any court, government
agency or body having jurisdiction over the Collateral Manager or its
properties, the breach or violation of which or default under which would have a
Material Adverse Effect on the validity or enforceability of this Agreement or
the provisions of the Loan Agreement applicable to the Collateral Manager, or
the performance by the Collateral Manager of its duties hereunder or thereunder.

(vi) The Collateral Manager shall not cause the Borrower to engage in any
activities other than entering into and performing its obligations under, or as
contemplated by, this Agreement, the Loan Agreement and the Support Documents.

The Collateral Manager’s representations and warranties in Sections 11(b)(iii)
are given on the assumptions that there shall be no misrepresentations or breach
of covenants by the Lenders and do not address the consequences of such
misrepresentations or breach, and that none of the assets of the Borrower are or
will be (or are or will be deemed for purposes of ERISA or Section 4975 of the
Code, or any substantially similar applicable federal, state, local or non-US
law, to be) “plan assets” subject to ERISA or Section 4975 of the Code (or any
substantially similar law).

 

15

--------------------------------------------------------------------------------

  13. Amendment

This Agreement may not be modified or amended without the prior written consent
of the Administrative Agent and in writing executed by the parties hereto.
Failure on the part of either party to insist upon strict compliance by the
other with any of the terms, covenants or conditions hereof shall not be deemed
a waiver of such term, covenant or condition.

 

  14. Assignment

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors. Any assignment of the Collateral
Manager’s obligations or transfer of the Collateral Manager’s rights under this
Agreement as determined by reference to the Advisers Act, shall require the
consent of the Borrower and the Administrative Agent. The Administrative Agent
shall constitute an express third party beneficiary of this Agreement for
purposes of this Section 14.

The Collateral Manager hereby acknowledges that, pursuant to Section 2 of the
Security Agreement, the Borrower is assigning all of its right, title and
interest in, to and under this Agreement to the Security Agent as the security
agent of the Lenders and the Collateral Manager agrees that all of the
representations, covenants and agreements made by the Collateral Manager in this
Agreement are also for the benefit of the Security Agent.

 

  15. Entire Agreement; Unenforceability; Counterparts

This instrument contains the entire agreement between the parties relating to
the subject matter hereof. The invalidity or unenforceability of any provision
hereof, or of the application of any provision hereof to any circumstances,
shall in no way affect the validity or enforceability of any other provision, or
the application of such provision to any other circumstances. Descriptive
headings are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement. This Agreement (and each
amendment, modification and waiver in respect of this Agreement) may be executed
and delivered in counterparts (including by facsimile transmission or e-mail),
each of which will be deemed an original, and all of which together constitute
one and the same instrument. Delivery of an executed counterpart signature page
of this Agreement by e-mail (PDF) shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

  16. Non-Petition; Limited Recourse

(a) The Collateral Manager agrees not to cause the filing of a petition in
bankruptcy or to institute any reorganization, arrangement, insolvency,
moratorium or liquidation proceedings against the Borrower for the nonpayment of
the fees or other amounts payable by the Borrower to the Collateral Manager
under this Agreement until the payment in full of all Loans issued under the
Loan Agreement and the expiration of a period equal to one year and a day, or,
if longer, the applicable preference period and one day, following such payment.
Nothing in this Section 16 shall preclude, or be deemed to stop, the Collateral
Manager from taking any action prior to the expiration of the aforementioned
period in (A) any case or proceeding voluntarily filed or commenced by the
Borrower or (B) any involuntary insolvency proceeding filed or commenced by a
Person other than the Collateral Manager.

 

16

--------------------------------------------------------------------------------

(b) Notwithstanding any other provision of this Agreement, all of the
obligations of the Borrower under this Agreement, the Loan Agreement, and the
Support Documents are limited recourse obligations payable solely from
Collateral granted to the Security Agent pursuant to the Security Agreement. No
recourse shall be had for the payment of any amount owing in respect of this
Agreement against any other asset of the Borrower or against any officer,
director, employee, partner, member, shareholder or incorporator of the
Borrower. The obligations of the Borrower under this Agreement are limited
recourse obligations of the Borrower payable solely from amounts credited to the
Collection Account pursuant to Section 3.7(i) of the Loan Agreement, and
following the reduction thereof to zero and realization of all other Collateral
and application of such proceeds in accordance with the Loan Agreement, all
obligations and all claims against the Borrower hereunder or arising in
connection herewith shall be extinguished and shall not thereafter revive. This
Section 16(b) shall survive the termination of this Agreement.

 

  17. Notices

Any request, demand, authorization, direction, instruction, order, notice,
consent, waiver or other documents provided or permitted by this Agreement to be
made upon, given, delivered, e-mailed or furnished to, or filed with:

(a) the Borrower shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed, first class
postage prepaid, hand delivered, sent by overnight courier service or by
facsimile in legible form, to the Borrower addressed to it at c/o CM Finance
Inc., 601 Lexington Avenue, 26th Floor, New York, New York, 10022, Attention:
Rocco Del Guercio or at any other address previously furnished in writing to the
other parties hereto by the Borrower, as the case may be, with a copy to the
Collateral Manager at its address below;

(b) the Collateral Manager shall be sufficient for every purpose hereunder if in
writing and mailed, first class postage prepaid, hand delivered, sent by
overnight courier service or by facsimile in legible form, to the Collateral
Manager addressed to it at 601 Lexington Avenue, 26th Floor, New York, New York,
10022, Attention: Rocco Del Guercio, Email: mm@CMFN-INC.com or at any other
address previously furnished in writing to the parties hereto.

 

  18. Governing Law

This Agreement shall be construed in accordance with, and this Agreement and any
matters arising out of or relating in any way whatsoever to this Agreement
(whether in contract, tort or otherwise), shall be governed by, the law of the
State of New York.

 

17

--------------------------------------------------------------------------------

  19. Third Party Beneficiaries

Nothing in this Agreement, expressed or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, any benefit or any legal
or equitable right, remedy or claim under this Agreement except, with respect to
the Administrative Agent, as otherwise expressly provided in this Agreement.

 

  20. Written Disclosure Statement.

The Borrower shall provide, if reasonably available to it, and the Borrower
shall use its reasonable efforts to cause each of the Lenders and the
Administrative Agent to provide, to the Collateral Manager all information
reasonably requested by the Collateral Manager in connection with regulatory
matters, including without limitation any information that is necessary or
advisable in order for the Collateral Manager (or its parent or Affiliates) to
complete its Form ADV, Form PF, any other form required by the Securities and
Exchange Commission, or to comply with any requirement of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, as amended from time to time, and any
other laws or regulations applicable to the Collateral Manager from time to
time. The Borrower acknowledges receipt of Part II of the Collateral Manager’s
Form ADV more than 48 hours prior to the date of execution of this Agreement.

 

  21. Waiver of Jury Trial

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

[remainder of page intentionally left blank; signature page follows]

 

18

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, we have set our hands as of the day and year first written
above.

 

CM FINANCE SPV LTD. By:  

 

  Name:   Title:

Signature Page - Collateral Management Agreement

--------------------------------------------------------------------------------

CM INVESTMENT PARTNERS, L.L.C. By:  

 

Name:   Title:  

Signature Page - Collateral Management Agreement